Nicolai Tangen

The largest sovereign wealth fund in the world is the Sovereign Wealth Fund of Norway. It's overseen by Nikolai Tangent, a former Norwegian hedge fund manager who now has a chance to oversee the largest sovereign wealth fund in the world by far. I had a chance in Davos to sit down with Tangent to ask him what it's like to be responsible for a fund that large. Tell us what norgous investment management really does and what your job is.

Well, the job is to run the Norwegian someone Wealth Fund and it has many facets. Of course, one is to lead the investment activity. It is also to develop the organization. There is a quite a comprehensive kind of framework around. It's working with the board, the Ministry, the supervisory board. There is a Council of Ethics which keeps us out of ethical investments and so on. So a lot of things involved in the world.

So every sovereign wealth fund has somebody running it, presumably, but virtually no other sovereign wealth on that I'm aware of, as somebody who was a superstar private sector investor, a member of the Giving Pledge, and somebody who's made a lot of money in the private sector. How did you come to do this job and leave your job running a very successful hedge fund.

Yeah, that's interesting. So I had been running this company called Ako Capital for fifteen years and I thought, you know, what kind of the learning is plateauing, and I need to move on in life and do some other things. So I actually was starting to apply to go back to university and then this job came up, and I thought, wow, it combines as management, it combines you know, developing an organization, and also to do something good for the country. So he was just perfect.

So where did Norway get all of this money? I mean one point seven trillion dollars is a lot of money. Where did you get all this money?

Well, you know, we'd been drilling on the Norwegian shelf for a long time and and actually this was in sixty nine in the in the autumn, like a cold day like today, and they were they were on the last well. And this was Phillips operating a platform called Ocean Viking. And then two o'clock in the morning, this platform chief was told to wake up, you know, the guy in charge, and he's just like, hey, why do

So if Leif Erickson had not gone to North America and just stayed in Norway, it would have been better for Norway, right, because he could have discovered the oil there and not have gone to look for riches in North America.

Could be KULDB.

So let's talk about the current investment environment. As we talked today, President Trump has been inaugurated in the United States. Are you worried about some of the America first policies that he has said he's going to pursue, or as in a global investment manager, doesn't really make a.

Difference to you, Well, it's a complex question because we are a global investor, right. So if we then first disregard all types of policies which can impact society and just look at it from a pure financial point of view, I think in the short term it'd be really good for our companies in America. There'd be less regulation, there'll be more more growth, so that's positive. Now, of course, if there are a lots of tariffs or European companies

So let's talk for a moment about enorgious investment management. When was it actually set up? That oil was discovered in what nineteen sixty nine? All right, so when was this organization set up?

It was set up in ninety six and the first deposit there was like two billion in Norwegian growner. It's grown to twenty thousand billion, so good growth.

So now the money that comes in from the oil and you invested, does that money go to every citizen in Norway every year or does it just stay in the central reserve for the use of the government.

Well, I would say that a couple of clever things that the politicians did at the time. They also established what is called the spending rule, so you can only spend three percent of the fund every year, and three percent of the fund goes into the budget. Now the fund is now so large that it accounts for twenty five percent or between twenty and twenty five percent of the state budget. But I think it's very good to have that rule in.

Place, right, So twenty five percent of a government's budget comes from what you do every year.

Yeah, and my seven hundred colleagues.

How many people actually work for you? Yeah?

Well, so we got roughly seven hundred we have. We got one hundred in New York and fourteen London, we got fourteen Singapore and the rest would be in Oslo.

So the people pay an enormous amount of attention to your investment success. Does everybody in Norway look every day in the newspapers and see how you're doing, because that will affect Norway's government.

Well, not only every day, we have it on a website. We have a ticker which shows the real value of the fund at all times, and it's updated thirteen times every second.

So that's a lot of pressure every hour on people attention to what you're doing.

Absolutely.

So your job, though, is to oversee several hundred people making investment decisions. Do they come to you if it's a really big investment decision and say we're going to put one hundred million dollars in something, or is it you're just doing strategic things and you're not making individual investment decisions.

Well, it's since it's such a large funt, you need to be pretty index there in what you're doing. And we have a very good investment mandate which we get from the Ministry of Finance, and then we follow that and then we have decentralized the various investment mandates within the firm.

So do people in Norway or the government criticize you saying you bought too much apple stock, or you didn't buy enough apple stock, or you don't get those kind of criticisms.

That's exactly right. So we always make mistakes, and that's always in the papers because either either you have too much or you have too little, or you know, when you own a bit of nine thousand companies across the world, there is always something going wrong somewhere and we always own it, and so we are always criticizing.

So today, if I was looking for some good investment ideas, Let's suppose somebody's watching and say, what is the largest sovereign wealth fund in the world, thinking is a good idea? What would you say A couple of good ideas?

No, I think if you're a long term investlerg we are you want to be widely diversified across as a classes, across geographies. It's very very tough to do this tactical asset education. I think that's nearly impossible. The best thing to do is always to do the opposite of everybody else. And what would that be today? Well, if you were to do the opposite of everybody else, you'd be to sell the US tech stocks, you know, buy China, sell private credit, you know, just buy stuff which is out

What about artificial intelligence? Is that a good area and invest in that? Oh?

It has been fantastic and we have made a lot of money for the fund.

You know.

The biggest contributors so the last few years have of course been the big American AI companies. And I pulled people in ORGUS just before Christmas when I ask them how much more efficient are you now because of the new tools, and on average people thought they were fifteen percent more efficient really good.

So in Vidio is still a good stock to buy.

Well that I don't know, but.

For sure they make good products. When you look at your investment team, did they come in every week and say here's some ideas we have and do you tell them yes, no, yes, no? Or you just listen to what they recommend?

Well, they would decide, I think, you know, in order to really judge how they're doing, they need to be toky accountable and you can't interfere in the investment process. So I don't interfere in the investment process.

Well, as we talk today in the United States, at least ESG and DEI seem to be in less favor than they were maybe two or three years ago. Is that the case in Norway? No, So you don't really care what the US is doing in this regard.

Well, there is clearly a backlash against ESG right, but the policies we have they are anchored in the Parliament and so we have not changing. In one mind, we think it's important with client reporting, We think diversity is good and so on.

In most Scandinavian countries, and I think certainly in Norway there's concerned about climate change and there's a lot of interest in renewable energy, but you make your money from non renewable energy. So is there an incongruity when you're making all this money from carbon carbonized kind of chemicals and fuels, but you really don't believe in that to some extent, How do you square that?

Well, we believe in it, and we do think that in particular, the gas that Norway produces, which is very high proportional of the gas supply in Europe, is very important and it continues to be a big part of the energy supply and and important for security for many many years to come.

Let's talk about your own background. You weren't just working your way up in the government of nord just investment management. You were very successful, as I said earlier, in the private sector. Where were you born.

I was born in a small town in southern Norway, Christiansand which not many people have heard about.

And were your parents' investment managers?

No, my mother worked in the public sector with museums and art and my father was an entrepreneur.

Where did you go to school?

I started off in Norway. I studied Russian in the Intelligence service. I went to Wharton, did business undergrad and then I have done some degrees afterwards. I've done one in art history and one in social psychology.

Is it unusual for somebody in Norway to go to college at Wharton School in Philadelphia?

It's great school, but it's pretty pretty It's not so common.

So when you went to Wharton and you said you're from Norway, to people in Wharton say where is that?

Or yeah, of course?

And did they make fun of Norway? Did they say you were a Viking or something like that? Yeah, okay, well I was okay, okay. So you graduate from Wharton and you get other degrees, you set up your own head.

I mean, the cool thing is, you know, you come from Norway, which is like a very agilitarian society and it's all about being very humble and so on, and then you come to Wharton, which is just like the opposite. It's like I remember, you know, I went to clubs one day and it's just like, hey, what do you guys want to do? I just want to conquer the world,

So you didn't find a lot of humility at Wharton, not so much. So okay, so you graduated, didn't Did you go into the private sector right away?

Yeah? I went then became an analyst with a stolkworking firm. I went there, worked there for five years. Then I joined my largest client, which was a hedge fund and one of the earliest hedge funds in Europe.

Where was it, London? When did you say I'm going to set up my own hedge fund?

Well, so that was a bit afterwards because I had worked for these hedge fund for five years and made some money, and I took a break. So I did it a master's in art history, but realized that wasn't very good at it.

So how do you know you're not good at art history? I mean, you don't measure it the way you do investments.

Wow, you get feedback from the professor that you're not the brightest thing. Okay, So I thought, Hey, I'm better at looking at stokes and paintings and so let's set up these erm instead.

But you built a art collection, so you must know something about art.

Yeah, but it's easier to buy art than write about art.

Okay. So you set up your own hedge fund eventually. Yeah, and how big was it before you stopped it?

Just under twenty billion dollars, So it was one of the largest funds in Europe. No, I'm really proud of what we did there. We had many of the largest endowments and universities in the world investing with us, so it was a fantastic thing.

So you have twenty billion dollar hedge fund and your averaging rates of return I assume that are in double digit kinds of areas, right, And so when you up this opportunity to run norgeous investment management to do, say to your family, guess what, I'm not going to be making that much money anymore and we have to live work conservatively. Yeah, and what did they say? They were happy with that?

Yeah, Wow, I've good enough money to buy food and shoes.

But usually hedge fund managers don't say they need to have enough money to buy the food. They want to buy airplanes and art and and other things.

Yeah, And I think that's a misconstrued perception of what happens is you know, in my mind, happiness is about learning. That's how you measure happiness is how much you have learned. You know, some people say, you know, you measure success by how many who has got the most money when they die? And I just think that's totally failure. I mean, the person's got the most money when he when he or she dies, that they have they have lost. They haven't, they haven't got it.

Oh, I didn't realize that. So well you were?

You done this?

All right? So I lot something I gotta learn. But okay, so all right, so you set up your hedge fund. But when you left your hedge fund, did you have other people running? Is it still around?

Absolutely? So it was a fantastic thing. It's been a great transition to the next generation. Really readied. They are doing better than ever and it's just a total win win. So but when I when I left for the for the position in Norway, I had to to give away my ownership stake, so I gave it to a charitable foundation. And so the stake in the hedge fund is funding that charitable fundation.

So you did so well that you actually joined the giving pledge right, which means you've got a net worth of at least a billion dollars or so are you the only person in Dorway that signed the giving pledge. It is one more, one more. Okay, So when you go to the giving pledge meetings, do you say, guess what, I'm giving away money now? But I'm I'm really ranting running the Norway Sovereign Wealth Fund? Or you don't. People don't talk to you about what you do now?

No, No, they talk about that too.

So you ever go to reunions at Wharton and say, I wasn't that.

I was on the board. I was on the board.

You working for some time now, and but they I guess they asked for contributions from time to time.

Yeah, and okay, but all that I did, I did give them a building.

But all the people in your class who are bragging about how great they were and they were to conquer the world, did you ever show up and say, look, you're the guy who actually did it, and you didn't brag about during that.

You didn't say that I never felt that I conquered the world.

For five years, you've been running this fund and done pretty well. Obviously, now your term is up. You have another five year term you could get, and you're apply.

I applied last week.

You applied. Okay, you have to apply or you already have the job.

No, it's it has to be you have to apply again. So I updated my CV and applied.

Wow, okay, did anybody else apply or yeah?

I think so. I mean, I don't know, it's I don't know. I mean, I'm when it comes to this, I'm very very humble. I if they find anybody else who's better at doing that job, he or she should get that job. Right, it's a very important position in the country. And so I have applied. I hope I will get an extension. So if not, I to do something else.

So you're willing to do another five years, and your compensation as the person running it is modest, I assume compared to what you used to make.

Yeah, it's a well paid job, but it's, of course it's a public sexual job.

Any thought about going into politics and running for government positions, prime minister or something like that. No, you don't want to go into that. No interest in that. And what about any thing after you're finished. That's suppose you do another five years and for ten years of this you probably would say that's enough.

Well, I'm going to spend the rest of my life, hopefully doing good things. You know, I'd love to go back to university at some stage you do no degree, learn some more things.

Art history, but you're not that good at that, so you would do something else. You think, okay, but you have a big art collection. Still in what area do you collect art?

We have the biggest collection of Nordic Modernist art and we've given that to a museum which opened last year. New York Times recently said he was one of the fifty most important places to go in twenty twenty five. So you will have to go, of course.

So if somebody is watching this and they've never been to Norway, what would you say about what is great about Norway that would deserve their visiting? What is Washington? Can you see in Norway? Well?

The nature, the nature is unrivaled. I mean, it's just like Switzerland with a little of c around it, right, and it's absolutely beautiful. You really close to the fjord, you close the mountains. He's good for skiing, he's good for hiking. It's perfect and not too many people, so it's not so crowded.

How many total people are there in five million? Five million? So when Alfred Nobel was awarding his developing his Nobel prizes. He had the prizes being given by people in Sweden, the Swedish academies, but he didn't think the Swedes were peaceful, loving people, so he said, the Peace Prize is given by people in Norway, So the Norway is very peaceful. Yes, And you have no interest in getting into international diplomatic things or like something like that. No, okay, And your

Thankfully, I mean thank God for that, because I think in my mind, you just don't want to follow your parents. You want to create your own destiny. You wanna you don't want to be measured against the success of your parents.

You know.

I don't really believe in the inheritance. I think to inherent a little money, it's not a good thing. If you are successful, it's just because you inherited a little money, and if you fail, you are a total failure because you started with a lot of money and you didn't manage to do it. So I just think it's so, you know, let them do what they want.

So today, are you worried about your borders because of what's going on in Russia and Ukraine? Is that something you worry about in terms of the impact of Russia Ukraine on your investment appetite for things like that.

I'm not worried about Russia invading Norway anytime soon. We are a member of it of NATO, we do border to Russia. But now since Finland and Sweat join NATO, we feel stronger than before.

So today, what would you say your biggest investment concerns are? You're running one point seven trillion dollar fun for the average person to not manage that much money, what should they be worrying about? And what are you worrying about now?

I think you know, I think you've got two things. One you have the known and knowns right so and there at the top of my list would be two things. One is inflation, because I think there is an argument in a tate tight labor market when you potentially decline the supply or to reduce the supply of labor in the US you put on tariffs. These things can be

So I suppose I'm one of the people interviewing you for your real application to at this job for the next five years. What would you say is the reason that you deserve the job. You've done pretty well, or you like the job, or people are happy, or your rate of return has been very good. What would you say is the reason you should get this job?

The organization has done well, is a real teamwork. We built a really great team. You know, we have done a lot of great things. Were now the most transparent fund in the world. We've done a lot of things like that, right, And there's always lower risk to take the incumbent than changing. But as I said, you know, these are just pros and cons, and well other people out there who are really really excellent.

Right, So what do you do for outside activities? Are you a skier or you're some other kind of out well.

I spend a lot of time in nature. I walk in the forest, I do cross country skiing. I pick mushrooms in the autumn. Do what mushrooms? Not the magic run?

What do you pick them? Or you grow them or what? Oh?

You walk around in the forest and you pick wild mushrooms and you go home and you cook them and you make you know, like chanto el spaghetti.

Wow, that's an unusual I have. Wow. Okay, So generally you just like me as a very happy person, and I generally don't find that many happy people in the investment world are always worried about something else. But you're pretty happy. So how did you get to be so happy?

Well, first of all, you have to figure out what is it that makes you happy? And I do think people mistake that quite often. You know, they just tried to make more money to buy more things. That's not where true happiness comes from. It comes from spending time with friends and family and learning and in ternsally and you know, as you know, I also do a podcast, and I learned a lot through that podcast.

If you're giving advice to somebody that's watching this about how to be a good investment manager, what is the single most important piece of investment advice you could give somebody? Learn?

Learn, Learn, And the combination of being stubborn and agile. You know, you have to stick with your guns, you have to believe in what you do. You have to be able to contrariant. But when things change, you have to change your mind. And that's the variest combination in investment management.

So you think humility is better than arrogance and a good investor, well.

You need to be confidently confident. Humility is the magic.

Have you ever met Warren Buffett? No? Really, and no interest in meeting if he's called advice, But he hasn't called you for ideas or anything like that.

No, no, but he I haven't met him. Well I briefly. I met him briefly.

Okay, So is there one person that is a role model for you? If it's not Warren Buffett, maybe it is even though you haven't met him. Is there anybody you would say is somebody you have as a role model in the investment area?

Well, I think it's difficult to not mention Bill Gates as a role model if you are a philanthropist, because you make a lot of money and then you are very organized and structured in the way you give it away. I think that's really impressive.

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