A London Business School audience got a rare chance to quiz the boss of Norway’s $1.8 trillion sovereign wealth fund in a fascinating evening where Nicolai Tangen spoke about the state of global equities (not looking great), his philosophy on market risk (popularity is risk) and why he believes we are living in the most exciting of times (!)

Nicolai Tangen has a global profile for two reasons.

As CEO of Norges Bank Investment Management (NBIM), he heads up Norway’s sovereign wealth fund, officially called the Government Pension Fund Global. This investment fund owns about 1.5% of all public equities and is considered the largest investor in the world. It even owns a quarter of London’s Regent Street iconic properties and buildings through a partnership with The Crown Estate.

It accounts for about a fifth of Norway’s budget every year.

Since Tangen took on the CEO role, the fund’s value has grown an estimated 80%. So, in the world of investing, Tangen is widely considered to be on the ‘A’ list. But Tangen, who used to run a London-based hedge fund called AKO Capital, is probably even better known these days as the podcast host whose guest list is a roll call of the planet’s most illustrious, influential and brilliant CEOs, business thinkers and founders.

We are talking the brains behind Twitter Jack Dorsey, Michael Dell, the boss of Rolls Royce, Disney’s Bob Iger, Nvidia’s founder and CEO Jensen Huang, the CEO of investment giant Schroders, Ruth Porat, Alphabet and Google’s CIO, the bestselling author Malcolm Gladwell, who has a cult-like following for the deeply thoughtful, mindset altering psychological insight he shares in books like the Tipping Point and Outliers and many, many…so many, others. Many of those who are interviewed for ‘In Good Company’ are leaders of companies that Norway’s Government Pension Fund Global has a stake in and Tangen is not shy to put them on the spot and ask tough and probing questions.

 So, it was not surprising in the slightest that Nicolai, invited to be on the other side of the microphone in a live ‘fireside chat’ as part of the Institute of Entrepreneurship and Private Capital’s Summit Series, packed out London Business School’s Nuffield Hall, as students and accomplished business leaders came together to get a rare glimpse into the mechanics of the influential investment fund and the mind of one of the most powerful, determined and successful investing practitioners. See the video for Nicolai’s views on handling rejection (*spoiler – not phased.)       

The world’s most transparent investment fund  

In a wide-ranging and fascinating discussion with LBS Professor of Accounting, Florin Vasvari, Tangen talks about the critical importance of “super transparency” to the fund’s success, explains why the fund will be looking to investment managers who can make long-short trades in the future and describes the Norwegian sovereign wealth fund, which was set up to protect and build on the wealth generated by the country’s rich oil and gas reserves for the benefit of Norway, as one of the most important technology companies in the world.

“We have stakes in almost 9,000 companies and make about 49 million trades a year. So, we need to use technology to keep costs down and keep driving efficiency. Over the past three months, 40% of the firm contributed to the fund’s central code bank. Almost half of the firm’s employees can programme,” Tangen says. “We have been serious about AI from the early days. There’s just an endless amount of activities AI can help with. When I visited our London office, where we have about 140 people, almost everyone had Claude (Anthropic’s Claude AI chatbot) on one of their screens.”

But wait. We are moving too fast. Let’s start from the beginning of the evening. 

Florin Vasvari: Tell us about the fund in terms of its governance structure and growth story

Nicolai Tangen: “To understand the fund, you need to go all the way back to 1969 when, days before Christmas, oil was discovered off the coast of Norway. On the very last well, they found oil. You could say it was a Christmas gift, but actually in many other countries finding such wealth has been a curse, leading to corruption, crowding out of industries and so on. So, the Norwegian politicians decided to make a fund (to manage the surplus revenue from the country’s petroleum sector and safeguard the future of Norway’s economy). The first deposit into the fund was worth NOK 2 billion and the fund has grown to roughly NOK 20,000 trillion now.

So, we say we have struck oil twice, once in the ground and once in the financial markets. We are a team of 700 people, a very small team, whom I call the national money-making team. I think it is a big honour to work in the firm, which we manage in line with the mandate given by the Ministry of Finance. We call it a near-index fund. It has to be because of its importance to the country. Everything we do is anchored in parliament, which gives us stability even when governments change.

FV: Tell us about your commitment to transparency. My research suggests that the fund is the most transparent of all sovereign wealth funds

NT: It is absolutely the most transparent fund in the world. How can I say that? Well, there is actually a world championship in transparency.  Historically, it was won by the Canadians. We felt that it was ok to be beaten by the Canadians in ice hockey but we decided we are going to win the competition for transparency. [Nicolai is referring to the Global Pension Transparency Benchmark, the world’s first global standard for transparency among pension and institutional funds. It ranks 75 investment funds from 15 different countries, looking at four factors: governance and organisation, performance, costs and responsible investing. Norway’s Pension Fund Global was crowned champion in 2024, with a score of 100 out of 100.] Everything is on our website. Transparency is super important to us. There should never be any surprises. It’s the only way that I won’t get sacked and replaced and positions sold off at the exact wrong time.  Having a clearly defined risk budget is also crucial to avoid the above.    

FV: The fund has generated about 6.3% in compound growth in almost 30 years. How do you generate alpha within your governance structure? How do you reduce the natural tendency for human bias?

NT: One way is to continuously improve our traders’ productivity and efficiency using technology. We created an investment simulator so before a trader can put in an order, they run it through the simulator and it will show them their historic success and failure rates with those types of trades. The introduction of this process has resulted in portfolio managers holding their winners for longer and cutting their losers more quickly.  

There is a big focus on improving information flow around the fund and externally. This has helped to improve the quality of applications we get. We work on our people’s psyche using sports psychologists. Why do we do this? If we used regular psychologists, there would be a perception that something is wrong, that our people are sick. But if you are working with a sports psychologist, then you are a hero, even though the process would be the same. Sport is a good lens to look at investing through. At the start of a race, an athlete isn’t thinking about winning; they are thinking about how to optimise every part of the process to get to the result. The result is the function of the process. This way of thinking helps our investment teams reduce stress and come out of tough periods in a more resilient way.

We also try and increase the time horizon for investments. The more long term you are, the fewer the decisions you need to make and the fewer decisions you make, the better they tend to be. If you need to make hundreds of decisions a day, they are not going to be very good, if you make one a month, then they will be better. We work on our investors’ ability to be contrarians. If you follow what everyone’s doing and load up on the most bought stocks you will never lose your job, but to be right contrarian, that’s where the money is.

FV: But if you are wrong contrarian, then you will be fired…?

NT: Absolutely, but the thing is finance is not a popularity contest. My wife says only people without friends say that but I truly believe if you are concerned about having friends and people liking you, then finance is not for you.

FV: In your podcast In Good Company, you interview the most successful CEOs in the world. What’s your sense of leadership style these days? Also, do the insights influence the fund’s asset allocation at all?      

NT: First on leadership. There seems to be a more democratic way of doing things today; flatter structures, broader consensus, something that’s been accelerated by social media I think and that’s more in line with the Scandinavian leadership model. Also, the Indian leadership style is taking affect. The Satya Nadella approach. I was in India a few weeks ago and met about 40 CEOs. There is a level of humbleness. Even the gods there [the deities of Hindu belief] are associated with humility. They treat people well; they have an empathy. They see their companies as part of a bigger mission.

The interviews don’t directly influence asset allocation, but as we actively cover 800 stocks, drilling into leadership style and organisational culture at these companies is important. They are factors we look at in our research. When I was younger, I spent less time on these criteria but they are unbelievably important to the success of a business and fascinating. Two companies can do exactly the same; banks are an extreme version – they offer almost the exact same services, but one can be hugely successful and one can be on the verge of collapse. It’s the same with elevator companies, defence companies, or footwear. It’s got to be about the type of people they hire, succession planning, training and doing the right thing for their employees and their communities. We spend a lot of time on these topics in the podcast.

FV: How do you attract talent?

NT: This is my favourite topic! Well, firstly you have to talk about the mission and we talk a lot about that. We have the podcast, which has been incredible for improving application numbers. We also go to universities to talk to students. We are getting better at sending out more of our sector specialists to talk to people – when I joined, I was delivering 60% of the presentations. Last year, I delivered 10%. With many of our specialists out representing the fund, this has boosted our number of women employees, who make up now 35% of the fund, from 27% when I joined and we just get better applications across the board. We offer our employees mobility and try and give them interesting things to do; we try and see them and acknowledge them.

But come on, there is nothing more fun than investing! Why? Because everything you eat, drink, drive and wear is made by companies. You need to understand technology change, you need to understand consumer preference, you need to understand greed and fear and you need to understand geopolitics, macroeconomics and what is happening with government budgets. These things are not changing once a month, they are changing 1,000 times a second and so there really is nothing more interesting you can do.

When you think about the pace of improvement in human athletic performance between each Olympic Games – maybe 1%, maybe 2% – but technology? We are probably looking at a 1 billion times increase in complexity of software and chips. Is that interesting or not?

To hear more about Nicolai’s views on what humanity must do to thrive in an era of mind-blowing AI-driven complexity, watch the full video here.

Nicolai Tangen was in conversation with Florin Vasvari, Professor of Accounting and Academic Director of the Institute of Entrepreneurship and Private Capital at London Business School.