New CEO of Norway’s $1 Trillion Fund Faces Make-Or-Break Moment

Norway is about to reveal whether the man chosen to run its $1 trillion wealth fund has passed a key test to prove he won’t be bogged down by conflicts of interest.

On Wednesday, the entity that asked London-based hedge-fund manager Nicolai Tangen to become chief executive of the fund will meet to discuss how to get him past the finish line.

The Executive Board of Norges Bank, which manages the fund, needs to prove to its watchdog that Tangen’s handling of his personal wealth — an estimated $865 million — won’t be an issue. It also needs to address his firm’s use of tax havens and how that affects the transparency around his assets.

Norges Bank’s Supervisory Council, the watchdog’s formal name, earlier this month demanded contractual proof that the new CEO can meet its standards before he starts in September. The watchdog doesn’t have formal power to block the appointment. But it’s named by Parliament, and crossing it could have political ramifications.

Tangen has been the subject of controversy since the fund announced he was its pick for CEO back in March. His selection came as a surprise after his name wasn’t on an official list of candidates. Then, a local tabloid published details of a lavish event Tangen hosted, and to which he’d invited several top Norwegian officials, including the outgoing CEO of the wealth fund, raising more questions about the process.

Norges Bank’s handling of Tangen’s recruitment has been “embarrassing,” according to Karin Thorburn, a professor of finance at the Norwegian School of Economics. But she also says it’s obvious that neither Norges Bank nor Tangen wants to throw in the towel.

“I believe they will be able to solve it somehow,” she said by phone. “It seems like Tangen is very motivated for the job, and Norges Bank very motivated to bring him on.”

Norges Bank has argued it couldn’t tackle all the issues related to Tangen’s wealth before announcing his appointment, because it might have compromised his privacy. Still, it has acknowledged that Tangen’s name should have been included in the official list of candidates.

Read: At World’s Biggest Wealth Fund, Top Hire Slammed by Watchdog

Despite the controversy, Tangen’s credentials as an investor capable of leading the world’s biggest sovereign wealth fund are largely undisputed. Knut Kjaer, the founding CEO of the fund, has described Tangen as a “global talent from the world of finance,” and says Norway is lucky to have found him.

Norges Bank, which is led by Governor Oystein Olsen, promised to make Tangen’s contract public once it’s signed, though it’s not yet clear when that will be. Tangen declined to comment, when contacted by email.

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