sovereign wealth fund? nicolai tangen, welcome to hardtalk. thank you very much. you currently manage a sovereign wealth fund which is worth roughly 1.4 trillion dollars. an unimaginable sum of money. which is not your money, it is actually the people of norway's money why should they trust you to manage it for them? should they trust you to manage well, in a way you should ask the people that hired me. but i think the reason i think i got the job was because i have been running capitalfor 30 years. i've been in that business for a very long time. and also seen some ups and downs, you know? i'm sure you have. running capital is sort of a jargon phrase but in essence you founded and ran a hedge fund, now that was worth billions of dollars in its own right. but we associate hedge funds with risk—taking, with financial instruments, we don't necessarily associate it with the steady as she goes notion of a sovereign wealth fund. yeah. i think it's more about having the right attitude towards risk. it's not necessary taking risk as being conscious about what risk is. so during the time i ran ako capital we were running with a lot lower risk than the actual market risk. when you were appointed it's stirred a storm of controversy inside norway not least because you were seen as a candidate who hadn't officially been put before the norwegian public. there was a list of names in the shortlist, yours was on it and then miraculously, it was announced that you get the job. why was it handled that way? well, in a way you have to probably ask the central bank how it was handled that way. the reason why there was controversy was because it's a very important job. and it's a job that all norwegians have a conscious relationship to. the other thing was of course, i was a completely unknown entity. nobody knew about me. not least because it was a principle of transparency yet your name was never put forward on a list of candidates. and that juast seemed very odd to norwegians. yet, it did. it also seemed odd that in the month before the competition to get the job you had flown the elite of norwegian society, including parliamentarians, some government ministers, a whole lot of important people to a special conference in the united states, private jets were supplied, sting provided the entertainment, it cost you personally millions of dollars. and lo and behold you got the job a few months later. that was a little strange, was in it? it was strange. the thing was that the invitation .net this was a fantastic seminar that i put together and it always been my dream to put together a seminar where we discussed all kinds of things from social psychology to economics and music and all kinds of things that i'm interested in, art and so on. and it was planned for a couple of years in advance. the invitations went out a year and a half before. so of course had nothing to do with thatjob. the unfortunate thing is... was that for you it was knowing the job was becoming available when you flew these dignitaries to the united states. no, thejob discussion started afterwards. i should also say that one third of the people in the seminar were norweigen and two thirds were from the uk and elsewhere. there's another issue and it's aboutjudgement. i think it's one that if i may say so come up probably still norwegians as themselves to this day. you seem to believe that after you got the job but before you are actually installed in the post, you seem to believe it was going to be acceptable for you to keep a substantial stake in your hedge fund company, a company that obviously owns shares in a huge number of companies, millions of dollars worth of shares. you didn't see a conflict of interest there but many norwegian politicians said that if that was the case you would be a walking conflict of interest. can you see that? it's very interesting because we made a structure which is equivalent to the type of structure you have in the uk. when politicians take a position they put their assets into some kind of blind trust of which you have no control. that works in nearly all countries and we had expected that to work in norway too. and we thought it was a completely watertight type of structure but it didn't work. so therefore we had to... wasn't there in an incident where actually the oil fund, the sovereign wealth fund had to stop a trade in rolls royce shares because they were actually being sold by somebody representing your hedge fund? and you'd already been appointed to thejob. and it did look like a profound conflict of interest with them again, did you not see it? there was a particular case there which i didn't know about. i was not part of the capital. it didn't look at, did it? well, you can always conscrew these type of relationships afterwards but there was no correlation whatsoever. i suppose itjust comes back to the fundamentally important position you now have inside your own country. because every single norwegian has a stake in this fun for the view of a calculator that anybody can look at online where they can figure out what the fund is worth at any given time, roughly one point four trillion today. and then they could work out what their own individual notion or stake is and for each norwegian in a country of five billion and $700,000. so they really care that they can trust you. they really do, yes, absolutely. so one final thought then on this and your suitability for thejob. it transpired that in your own personal life and in your role as running the hedge fund, you haven't taken advantage of the tax advantages that come in some tax havens in the cayman island and jersey were two that you use. you then have joined the sovereign wealth fund which is absolutely committed to ethical behaviour in all of the companies that invest in. do you regard tax avoidance is ethical behaviour? there was never any tax avoidance. and we use the same structure as most people who live in the uk do. in other words... a lot of people use trusts and i had a trust which to all types of rules. it's not a question of whether it was legal it's weather in the current climate of business and esg and the responsibility and sustainability agenda, many people around the world think tax avoidance, minimising the legal amount of tax you pay is not right when it leads you to put your money in places like the cayman islands and jersey. i'm asking you, you used to do that, do you think it's right today? when the capital was set up ie the hedge fund, that was how things were done and had large american universities, this is the way they wanted to be structure, that's easiest thing to avoid what they call a double taxation. and that's what we did. i always pay tax to the uk for all my earnings. during the whole. i have been in it. the important things for the sovereign wealth fund is that companies pay tax where the earnings are made in it was also what i've done. it's also important that it's fully transparency and terms of what you pay tax in which i've also done. i've always been completely in compliance with the expectation that the sovereign wealth funds have. it's just that you have made a point and the wealth fund generally have made a point generally that says it wants to be a much more active shareholder. because you hold investments i think it over 9,000 listed companies around the world and your shareholdings run into many of these companies billions of dollars. in percentage terms it might be anything from one to three or 4% of the company you are in therefore you want now to have a voice on the way those companies run themselves. are you telling them that putting tax avoidance strategies together is not acceptable? we are telling them what i mentioned that important things in terms of the expectations we have on tax and transparency, one, you want to pay tax where your earnings are generated, that's very important. but you didn't generate earnings injersey and the cayman islands where you use them for tax purposes. no, i generated the earnings in the fund and in the uk and that's where i paid my full tax all the time. so why did you have these vehicles that were registered from the cayman island and jersey? because what i said which i mentioned earlier is that the clients of large endowments worldwide, that's where they want to be. let's take a bigger picture it look and how you run the fund. the fund has massive stakes in oil and gas companies around the world. i think still to the tune of some 27 billion dollars. now post glascow, cop 26 and the urgent need to de carbonised the world economy, are you sending a message that you will divest from oil and gas? no, we are not. nd i'll tell you why. in 2019 the oil fund divested the pure upstream oil companies. now, that was not for ethical reasons, that was because we wanted to have diversification risk. because the nation is so dependent on oil that it didn't make sense to have pure upstream top. we have kept the integrated oil companies and we think that the way to solve this problem is to have an active dialogue with the companies and be part of this transition, the energy transition. we don't — think somebody needs to own these companies and we don't see any problems byjust selling out of the like of bp and shell and so on. with the gets much more valuable much more powerful to be an active owner and to have a constructive dialogue with these companies. so this notion that since 2004 your fund was going to be so this notion that since 2004 yourfund was going to be an ethical investor and only seems to go so far. i think we still have a big holding in exxon. now, we know from recent reporting in the united states that exxon stands accused by investigators even by american politicians of covering up research from within its own company about the impact of oil on man—made climate change over many years. you haven't even divested from exxon.- many years. you haven't even divested from exxon. well, we own stakes _ divested from exxon. well, we own stakes in _ divested from exxon. well, we own stakes in 9,000 - divested from exxon. well, we i own stakes in 9,000 companies. i understand that. and we have a dialogue with these companies in a constructive manner. where we solve... in what cases an ethical advance or close up we are very ethical investor. we have very strong expectations to the companies we invest in and along the lines of the comments side, we have four expectation documents, we have expectations when it comes to corruption, child labour, tax and transparency and so on. we think we have the most coherent set of expectation of any investor in the world. does it embarrass — investor in the world. does it embarrass you _ investor in the world. does it embarrass you that - investor in the world. does it embarrass you that the - investor in the world. does it embarrass you that the total| embarrass you that the total emissions of the companies in your pond far exceed the total emissions of your country, norway i think by double. that's embarrassing, isn't it? particularly for a country that it tells the world it is absolutely a pioneer and at the forefront of greening its economy. forefront of greening its economy-— forefront of greening its economy. forefront of greening its econom .~ ., forefront of greening its econom . ~ ., ., economy. when you own part of 9,000 companies _ economy. when you own part of 9,000 companies of _ economy. when you own part of 9,000 companies of course - economy. when you own part of. 9,000 companies of course there is emission coming from this was the coffin ) of is emission coming from this was the coffin) of the portfolio has actually halved since 2013. the important thing here is that we have very clear expectations to the company when it comes to how they should behave. we do expect that they have policies according to the paris agreement when it comes to net zero. �* , ., , agreement when it comes to net zero. �*, ., , ., zero. it's not 'ust about the companies _ zero. it's notjust about the companies you _ zero. it's notjust about the companies you invest - zero. it's notjust about the companies you invest in, i zero. it's notjust about the l companies you invest in, it's about your own strategy. the government in norway wants you to commit to investing much more in renewables and renewable infrastructure. as far as i can say you have been imposed for over a year, you've only made one investment decision that meets that ambition. you've bought half a wind farm in the netherland. far from that of the sovereign wealth funds, even oil rich and gas rich states like qatar are doing much more to invest in renewables then you are. in norway. the first of all, there are many arguments here. first of all, we do have energy related mandates and we have hundred 20,000,000,000 that we can invest and already have investment in companies which solve these type of problems. so just to answer... you tell me i'm wrong. so just to answer... you tell me i'm wrong-— so just to answer... you tell me i'm wrong. the renewables investment _ me i'm wrong. the renewables investment i _ me i'm wrong. the renewables investment i could _ me i'm wrong. the renewables investment i could see. - investment i could see. absolutely. so this was added to the mandate last year. and we have already bought 50% of the second largest windmill farm in the world. in terms of acreage it's twice the size of manhattan. it provides equivalent energy to fuel 1,000,000 dutch households. it's not like you can go out on regent street and bite 1,000,000 windmills, you know? these are complex processes, there's takes time there's a lot of competition to get into this progress did not project and i think we do really well. and we are in several other processes. and we are in several other processes-— and we are in several other processes. you think you've done very — processes. you think you've done very well. _ processes. you think you've done very well. i _ processes. you think you've done very well. i think- processes. you think you've done very well. i think your| done very well. i think your problem is that the government in norway has changed. it's gone from set to write to centre left a coalition led by the labour party in the centre party. it's clear the labour party doesn't think that the sovereign wealth fund, that is you and you say you are proud to call it in oilfund by the way which is perhaps significant in itself but the labour politicians are saying you've got to do much more to show you're committed to getting to net zero emissions in your pond by 2050. so getting to net zero emissions in your pond by 2050.- in your pond by 2050. so are ou in your pond by 2050. so are you going — in your pond by 2050. so are you going to _ in your pond by 2050. so are you going to do _ in your pond by 2050. so are you going to do it? _ in your pond by 2050. so are you going to do it? well, - in your pond by 2050. so are you going to do it? well, we | you going to do it? well, we are ready have expectation document saying that this is how we expect the companies to behave and what to be expected to... ., ., ., ., ~ to... you are not walking the walk yet- _ to... you are not walking the walk yet. well, _ to... you are not walking the walk yet. well, we _ to... you are not walking the walk yet. well, we are. - to... you are not walking the walk yet. well, we are. last| walk yet. well, we are. last ear walk yet. well, we are. last year we _ walk yet. well, we are. last year we had _ walk yet. well, we are. last year we had between - walk yet. well, we are. last year we had between three l walk yet. well, we are. last. year we had between three and 4,000 company meetings in most of those meetings we would talk about clients and talk to companies about the expectations that they have. are you worried that a new government in oslo is going to be much tougher on you than the last one was?— last one was? no, i'm not worried — last one was? no, i'm not worried about _ last one was? no, i'm not worried about that - last one was? no, i'm not worried about that at - last one was? no, i'm not worried about that at all. | last one was? no, i'm not - worried about that at all. what they are saying is we should do even more of what we are already doing. we've had climate discussions with companies since 2007. we were one of the first investors in the world who started this work. so this isjust more work. so this is just more of the same and we just love the ambition of being one of the world leaders in terms of responsible investment. [30 world leaders in terms of responsible investment. do you think there _ responsible investment. do you think there is _ responsible investment. do you think there is a _ responsible investment. do you think there is a bigger - think there is a bigger problem, not so much about your sovereign fund this is about norway in general, the country likes to position itself as extremely committed to a sustainable green agenda while at the same time reserving the right to continue notjust us exploit the oil and gas reserves that have opened up but to explore new ones including inside the arctic circle. i'm asking you this is a norwegian citizen as well as the boss of this over and wealth fund. do you think there is a fundamental hypocrisy they are? ., ., �* ~' ~ are? no, i don't think so. when it comes _ are? no, i don't think so. when it comes to _ are? no, i don't think so. when it comes to where _ are? no, i don't think so. when it comes to where we _ are? no, i don't think so. when it comes to where we should i it comes to where we should produce oil and so on and the norwegian oil policy, that is decided by the government and by the politicians. at myjob is to run the financial assets. so it's not within my remit to do that for that well, it doesn't matter to you because the government continues to put substantial finance into your fun for the most years it puts new money into your pond and it is fair to say, most of that new money comes from oil and gas because that's the biggest earner that the government has. it matters to you whether norway remains committed to oil and gas expiration which it does. , ., ., ., does. one point, the norwegian oil and gas _ does. one point, the norwegian oil and gas is — does. one point, the norwegian oil and gas is eager— does. one point, the norwegian oil and gas is eager to _ does. one point, the norwegian oil and gas is eager to be - does. one point, the norwegian oil and gas is eager to be part . oil and gas is eager to be part of the energy solution here. in norway it is. no, on the continent. we are as you know supplying a lot of gas to this country, providing you with potential sources of where you get you to ask from. so we think that's important also going forward.— think that's important also going forward. post cup 26 there are _ going forward. post cup 26 there are many _ going forward. post cup 26. there are many independent observers as well as green groups who say that we will get nowhere near meeting the 1.5 ambition for the world and less we make a commitment to leaving vast reserves of oil and gas in the ground. d0 vast reserves of oil and gas in the ground-— vast reserves of oil and gas in the round. . ., the ground. do you agree? yeah, that is something _ the ground. do you agree? yeah, that is something you _ the ground. do you agree? yeah, that is something you should - the ground. do you agree? yeah, that is something you should as l that is something you should as it norwegian politicians and it's not something i decide. you don't have a view on it when we've just established that your relationship with the door regent government is such that you get much of your new money from a government which gets up money from oil and gas for come you don't have a view on it? �* , for come you don't have a view onit? , ., ., on it? it's absolutely vital to our on it? it's absolutely vital to your future. _ on it? it's absolutely vital to your future. my _ on it? it's absolutely vital to your future. my job - on it? it's absolutely vital to your future. my job is - on it? it's absolutely vital to | your future. my job is actually yourfuture. myjob is actually great to not quite straightforward and pretty simple. to look after the capital, safeguarded for future generations and safeguarded. and try to increase it. in terms of where the money coming in is decided by the politicians and how we spend it is decided by politicians. i also have no view on how we spend that money, it's not my job. spend that money, it's not my “ob. �* , spend that money, it's not my 'ob. �* , ., , spend that money, it's not my “ob. �* , , . spend that money, it's not my “ob. , ,. job. but this way, such as the strenath job. but this way, such as the strength of — job. but this way, such as the strength of the _ job. but this way, such as the strength of the funk - job. but this way, such as the strength of the funk of - job. but this way, such as the strength of the funk of what l strength of the funk of what you call it an oilfund you call it an oil fund because its origins are in oil and gas but not much of your annual expansion comes from non— oil and gas revenues of course because of the successful investment policy over many years. put it this way, norway could well now do without oil and gas, could nick? your soul prospers and your long—time future is so secure you could walk away from oil and gas but you are not prepared to. i should ask your question, do you think it's a good idea that we stop providing gas to the uk? �* ., ,., , uk? i'm not so sure... advocates _ uk? i'm not so sure... advocates a _ uk? i'm not so sure... advocates a fair - uk? i'm not so sure... i advocates a fair question uk? i'm not so sure... - advocates a fair question to ask. countries like the uk have to address it to norway has to address it but norway seems to refuse to address it. it’s address it but norway seems to refuse to address it.— refuse to address it. it's been addressed — refuse to address it. it's been addressed by _ refuse to address it. it's been addressed by the _ refuse to address it. it's been addressed by the politicians l addressed by the politicians and the people in charge of the ministry of oil.— ministry of oil. their conclusion _ ministry of oil. their conclusion is - ministry of oil. their conclusion is for- ministry of oil. their conclusion is for two ministry of oil. their - conclusion is for two full steam ahead, more insulation even inside the arctic.- even inside the arctic. that's what they — even inside the arctic. that's what they have _ even inside the arctic. that's what they have chosen - even inside the arctic. that's what they have chosen to - even inside the arctic. that's what they have chosen to do | what they have chosen to do now. that is not my task. let me ask you — now. that is not my task. let me ask you this, _ now. that is not my task. let me ask you this, because you are one of the most wealthiest men in all of norway. you are known for your philanthropy, your love of art, you want to build a gallery in your hometown which is going to cost millions in the subject of some controversy. do you think that the wells norway has has been good for your society?- good for your society? yes, i think it has _ good for your society? yes, i think it has been. _ good for your society? yes, i think it has been. it - good for your society? yes, i think it has been. it has - good for your society? yes, i | think it has been. it has been for a couple of reasons. when we discovered oil in 69, very early on we decided or politicians to start at the time that they should be well that should be sprayed on the whole population. it should be looked to for every norwegian person. they decide to put it into a fund which they did and i think it's been one of the most amazing stories of that country. it's politically anchored, it had broad political consensus how they should be treated and invested and spent. so i think it's been really nice for the country. so that's wanting, how we safeguard for future generations. it's also a reserve fund and you have seen ours help norway through the pandemic. x�*t�*et ours help norway through the pandemic— pandemic. yet we think of scandinavia _ pandemic. yet we think of scandinavia and _ pandemic. yet we think of scandinavia and societies| scandinavia and societies committed to equality and yet inequality on norway seems to be rising. i see now 1% of the richest 1% in your country own 21% of the wealth. that seems non— scandinavian in a way. do you worry is one of the ritchie two ridges is that rising inequality? i two ridges is that rising inequality?— two ridges is that rising ineuuali ? . ., , inequality? i have a couple questions _ inequality? i have a couple questions there. _ inequality? i have a couple questions there. first - inequality? i have a couple questions there. first of i inequality? i have a couple | questions there. first of all it has nothing to do with my job which is not about how money should be spent within the country. when it comes to me as a person, me as a person i have decided to give away most of my well, i signed a giving pledge. so giving away more than half of my well. and to take thisjob more than half of my well. and to take this job i also put my stake in the hedge fund into a foundation which is giving away the money. so i have made my personal choice. of course that's up to every individual person. it that's up to every individual erson. , y ., that's up to every individual erson. , . , ., person. it is in your chest two choices are — person. it is in your chest two choices are fascinating. - person. it is in your chest two choices are fascinating. one l choices are fascinating. one final thought, choices are fascinating. 0ne finalthought, philosophical and away, you not so longo said in public that you believe that it was right to consider a 100% inheritance tax. that you didn't want your children to inherit your vast wealth. why did you say that? is because after your long experience with money you think can be corrosive, particularly to those who inherit it? one of the most — those who inherit it? one of the most important - those who inherit it? one of the most important things i those who inherit it? one of| the most important things in life is to put forward and figure out what are your dreams and what are your aspirations. and then it is to work towards those dreams and aspirations. that is what makes life fascinating and worth living. and i think by giving young people a lot of money you are taking away the whole purpose and that is why i have that view. i also think that when you look about how unfair the world is and how early it starts, it starts they want, when you're born. it starts with the simulation you get it home from your parents, the type of words you learn, childhood obesity, schools getting a summerjob, help university applications. the whole thing just accelerates and starts so early. and i think to put a lot of money on top of that unfairness, i don't think is great. and that is why i have that view and i still have it. stronger than ever. nicolai tangen it is been a pleasure having you on hardtalk. thank you very much indeed. thank you. hello. for many parts of the uk it's a cold and icy start to the new week. there are changes afoot, it briefly turns milder on tuesday, doesn't last for long, the colder airand was back and front midweek on words. and throughout the week some spells of wet and windy weather at times. this is how monday shapes up, we have a warm front draped across scotland and northern ireland. ahead of it where in the colder air, behind it something milder. 0n the front will see outbreaks of rain, preceded by some hills sleet and snow through the morning across scotland. i of it through the morning a widespread ice risk for much of scotland and england. some patchy rain into northern ireland maybe into the far north of england, further south it stays mostly dry for daylight hours. the best of the sunshine from east anglia down to dorset. cold feeling day here further north, not as cold, 10 celsius to high in belfast and glascow. 0vernight the cloud increases. that mild air pushes its way southwards bringing with it some outbreaks of rain and drizzle. but it won't be nearly so cold, much milder night as we head into tuesday with lows across the northern half of the uk around 6 or 7 c. so this is tuesday, we are in between fronts. notice how the isobars are closer together so the winds will be strengthening. but we are in this warmer air so a much milder day. a lot of cloud, outbreaks of rain the heaviest initially across scotland through the morning. and that rain piles into northern ireland, northern and western scotland, parts of northern england, a few showers further south. by and large the further south you are the drier you'll be. but look at the temperatures, 11 or 12 c on tuesday. it will be in increasingly windy day, these are the average wind strengths but might see some stronger gusts particularly for western coast. now this frontal system will be moving its way pretty swiftly across the uk through tuesday night and into wednesday. bringing all of us a spell of more persistent rain. but also as it clears its way from south east england, behind it we see those blue colours, the colder air starting to follow across. and it's quite a messy picture on wednesday. quite a few showers around, particularly into western and eastern coast. the showers are likely to be wintry across northern and eastern scotland. and it's starting to feel colder again particularly across the northern half of the uk. may still get ten or 11 c further south. thursday should be mainly dry but feeling cold and then more rain arrives on wednesday. goodbye. welcome to newsday, reporting live from singapore. i'm karishma vaswani. the headlines: more countries introduce travel restrictions as the new coronavirus variant spreads. the south african president criticises governments who've cut off his country. the prohibition of travel is not informed by science, nor will it be effective in preventing the spread of this variant. health ministers from the world's seven leading economies will take part in an emergency meeting on monday to discuss how to deal with the 0micron variant. how a kurdish father of three in northern iraq fears his whole family were among those who drowned in the english channel.