Nicolai Tangen, the new head of Norway’s NOK10.7trn (€963bn) sovereign wealth fund, has revealed more about his plans in a speech to parliamentarians, from talent development to building on the use of external asset managers.
In the annual parliamentary hearing on the Government Pension Fund, Tangen spoke to the Standing Committee of Finance and Economic Affairs about the management of the fund’s largest component – the Government Pension Fund Global (GPFG) – which is run by Norges Bank Investment Management (NBIM).
Tangen, NBIM’s chief executive officer since 1 September, said he had three priorities for the organisation – return, communication and talent development.
“Our task is to generate the highest return possible. And that is something I and all my colleagues in the GPFG are really passionate about,” Tangen said, according to a text of the speech.
On the second priority, he said this meant communication upwards through the governance structure, internal communication in the management organisation, as well as communication outwards to the Norwegian public and to global markets.
“My third priority is talent development. I want to develop the GPFG into a more diverse and colourful organisation,” he said, adding that he thought this would result in more creativity, and a more dynamic workplace.
“And this is what we need to make use of the opportunities to generate returns ahead,” he said.
Renewable energy hesitations
On the topic of investment in unlisted infrastructure for renewable energy, a new asset class for which NBIM received a mandate last year, Tangen said his organisation had built up a specialist group in this area and was ready to start investing in a professional manner.
“But in our experience so far, there are many investors looking for these investments and pricing is thus not always as attractive for us,” he said.
“In the near term, finding projects that meet these requirements may be demanding,” he warned.
Tangen also said in the presentation that the GPFG should build on its current use of external managers, with the outsourcing of asset management having increased profits for the oil fund.
“It has also allowed us to avoid some companies with reputational risk,” he said.
“By taking advantage of the GPFG’s distinctive characteristics, and our knowledge and experience, we gain far more from the GPFG’s external managers than we pay for their services. And this is something I believe we should build on further,” the CEO said.
Tangen said external equity managers had contributed a net excess return to the GPFG of NOK60bn since the fund began.