CEO Wants People to Peek Under Hood of World’s No. 1 Wealth Fund

(Bloomberg) — Norway’s $1.2 trillion sovereign wealth fund, built from its oil wealth, is akin to a black box for many of the country’s 5.4 million citizens. Chief Executive Officer Nicolai Tangen is out to change that.

Soaring inflation, turbulent financial markets and geopolitical uncertainty are weighing on the returns of the world’s biggest rainy-day fund. The CEO has started a communications overhaul to ensure that citizens, who collectively own the fund, understand why.

“We are in really volatile times with a lot of risks, with potential decline in the value of the fund,” Tangen said in an interview at the fund’s Oslo headquarters. “Therefore it’s particularly important that the owners know what’s going on.”

His communications blitz features a podcast with global CEOs, school visits and pushing the fund’s staff to the limelight, allowing them to explain what they do. Citing the Norwegian health authority’s handling of the pandemic, with a better outcome than most developed peers, Tangen said the way to build trust is to let people hear directly from the specialists.

“We’ve opened up the fund significantly,” Tangen said. “In the old days, there were four people who could speak on behalf of the fund. Now there are 575.”

The more people know about the fund, the more confidence they have in how it’s managed, said Norges Bank Investment Management, as it’s formally called, citing a survey conducted last year.

With holdings in some 9,000 companies in over 70 countries, the oil fund is one of Norway’s most visible exports. It held more than 3,000 company meetings last year and voted on about 120,000 items at general meetings, seeking to push companies to meet climate and humanitarian targets. It’s now publishing its voting intentions ahead of time, an exercise adopted after Tangen became the CEO.

“We basically feel that we’ve got no secrets,” said Tangen, 56, who has overseen the fund for two years.

The fund lost $174 billion or 14.4% in the first half of 2022, its biggest ever loss in currency terms for half a year, and a further $43 billion in the third quarter. Tangen and his team focused on defensive positioning at the start of 2021 to weather the effects of faster inflation, a move that has seen the fund outperform its benchmark for eight quarters straight, including by 0.14 percentage points in the third quarter.

In addition to boosting visibility, Tangen’s plan is intended to attract new talent and drive performance. He’s already making an impression: applications for the graduate and internship programs jumped by 65% ​​and 37%, respectively, in 2022 from a year earlier.

In March, the fund released the first episode of its podcast In Good Company. The show has Tangen interviewing top executives from companies included in the fund’s portfolio, such as Goldman Sachs Group Inc.’s David Solomon and fashion giant H&M AB’s Helena Helmersson to introduce his countrymen to global leaders he says they’d never otherwise hear from. Young people in particular have discovered the show.

“We didn’t know what the audience was going to be in the beginning, but it’s younger than I had expected,” he said. “The majority is between 24 and 36 years old, more male than female.”

In the interviews, Tangen draws on a decades-long career in finance that’s been punctuated by a number of educational detours, including a stint studying art history and social psychology. He has also studied Russian at the Norwegian Armed Forces’ School of Intelligence and Security and his own background includes interrogation training.

That’s something the fund trains all its analysts in, he said. “Now you call it interviewing, but, I mean, it’s basically interrogation. There is a methodology here.”

Tangen likes to bring up topics such as corporate culture, leadership and “psychological safety” with the executives, and in a cheerfully inquisitive tone, quizzes them on tough subjects. With Mark Schneider, the chief executive of chocolate and breakfast cereals maker Nestle SA, he raised the subject of childhood obesity. The eighteenth episode airs Wednesday and sees the former hedge-fund manager chatting amicably with low-cost carrier Ryanair Holdings Plc’s Michael O’Leary.

“Is it good news for the climate that you fly people to Estonia for 10 euros ($10.3)?” Tangen asks, and O’Leary retorts that “people would still fly” and “the Poles think nothing of driving 24 hours across the European continent. We need to convert them to flying on greener, cleaner aircraft and then at much lower airfares.”

–With assistance from Stephen Treloar.

(Updates with CEO quote on interrogation starting in thirteenth paragraph.)

©2022 Bloomberg LP

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