consternation when it appointed my guest today, nicolai tangen, as its new boss. is a risk—taking, flamboyant hedge fund manager the right man to steer the world's biggest sovereign wealth fund? nicolai tangen, welcome to hardtalk. thank you very much. you currently manage a sovereign wealth fund which is worth roughly $1.1; trillion — 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? well, in a way, you should ask the people that hired me. but i think the reason i think i got thejob was because i have been running capital for 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 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 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 and why it was handled that way. the reason why there was controversy was because it's a very importantjob 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 thatjust seemed very odd to norwegians. yes, it did. it also seemed odd that in the months 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, wasn't it? it was strange. the thing was that the invitation — 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 1.5 years before, so of course had nothing to do with that job. the unfortunate thing is... didnt it? the unfortunate thing for you 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 norwegian 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 were 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. couldn't 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 an incident where, actually, the oilfund, 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. but, 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. you didn't look at it? well, you can always construe 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 fund and there's a calculator that anybody can look at online where they can figure out what the fund is worth at any given time — roughly 1.4 trillion today — and then they can work out what their own individual notional stake is and, for each norwegian in a country of five billion, it's $700,000, so they really care that they can trust you. --5 —— 5 million. 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 used. you then have joined the sovereign wealth fund which is absolutely committed to ethical behaviour in all of the companies that it invests 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. i live in the uk, i don't bank in the cayman islands... in other words, a lot of people use trusts and i had a trust which was completely legal and was done according to all types of rules. it's not a question of whether it was legal. it's whether 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. in large american universities, this is the way they wanted to be structured. that's the easiest way 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 my whole career, i have been doing it. the important things for the sovereign wealth fund is that companies pay tax where the earnings are made in, and it was also what i've done. it's also important that it's fully transparent in terms of what tax you pay, which i've also done. i've always been completely in compliance with the expectation that the sovereign wealth funds have to companies. it's just that you have made a point — and the wealth fund generally have made a point — that generally, it says it wants to be a much more active shareholder. because you hold investments — i think it's 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 i% to 3% 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, yet you used them for tax purposes. no, i generated the earnings in the ako fund 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 wanted to be. let's take a bigger picture and look now at 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. now, post—glasgow, cop26 and the urgent need to decarbonise the world economy, are you sending a message that you will divest from oil and gas? no, we are not, and 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 companies on 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, where it gets much more valuable. it's 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 �*an ethical investor�* only seems to go so far. i think you 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. well, we own stakes in 9,000 companies. i understand that. and we have a dialogue with these companies in a constructive manner. where we solve... so on what basis are you an ethical investor? we are an ethical investor in many ways. 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 you that the total emissions of the companies in your fund far exceed the total emissions of your country, norway, i think by double. that's embarrassing, isn't it? particularly for a country which tells the world it is absolutely a pioneer and at the forefront of greening its economy. when you own part of 9,000 companies, of course there is emissions coming from this. the carbon footprint 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 targets. it's notjust about the 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 see, you have been in post for over a year, you've only made one investment decision that meets that ambition — you've bought half a wind farm in the netherlands. apart from that of the sovereign wealth funds, even oil—rich and gas—rich states like qatar are doing much more to invest in renewables than you are in norway. first of all, there are many arguments here. first of all, we do have green mandates, we have energy—related mandates and we have 120 billion norwegian kroner 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. the renewables 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. it's — in terms of acreage, it's twice the size of manhattan. it provides equivalent energy to fuel 1 million dutch households. now, there are — it's not like you can go out on regent street and buy a million windmills, you know? these are complex processes. it takes time. there's a lot of competition to get into these projects and i think we've done really well to get into this project and we are in several other processes. you think you've done very well. i think your problem is that the government in norway has changed. it's gone from centre right to centre — it's a coalition led by the labour party and 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 an oil fund, 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 fund by 2050. so are you going to do it? well, we are ready have expectation documents that are saying that this is how we expect the companies to behave and what to we expect them to... you are not walking the walk yet. well, we are. last year, we had between 3,000 and 4,000 company meetings. and in most of those meetings, we would talk about climate 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? 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 is just doing more of the same and we just love the ambition of being one of the world leaders in terms of responsible investing. hmm. do you think there is a bigger problem — not so much about your sovereign fund, this is about norway generally that 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 to exploit the oil and gas reserves that's already opened up, but to explore new ones, including inside the arctic circle. i'm asking you this as a norwegian citizen as well as the boss of the sovereign wealth fund, do you think there is a fundamental hypocrisy there? no, i don't think so. when 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. i totally understand that. and 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 fund and for the most years it puts new money into your fund, 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. absolutely. just one more point — the norwegian 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. post cop26, there are many independent observers as well as green groups who say that we will get nowhere near meeting the 1.5—degree ambition for the world unless we make a commitment to leaving vast reserves of oil and gas in the ground. do you agree? well, again, that is something you should ask the norwegian politicians and it's not something i decide or have a view on. you don't have a view on it when we've just established that your relationship with the government is such that you get much of your new money from a government which gets up money from oil and gas? how come you don't have a view on it? it's absolutely vital to your future. myjob is actually quite straightforward and pretty simple. it's to look after the capital, safeguard it for future generations and safeguard it. 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. so i also have no view on how we spend that money — it's not myjob. put it this way — such as the strength of the fund — of what you call 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, couldn't it? your fund prospers and your long—time future is so secure that 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? i'm not so sure... i think that's a fair question to ask. countries like the uk have to address it like norway has to address it, but norway seems to refuse to address it. it's been addressed by the politicians and the people in charge of the ministry of oil. their conclusion is for more full steam ahead, more exploration, even inside the arctic. that's what they have chosen to do 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 home town which is going to cost millions and is the subject of some controversy. do you think that the wealth norway has has been good for your society? yes, i think it has been. and i think it has been for a couple of reasons. when we discovered oil in �*69, very early on we decided — or politicians at the time decided — that it should be wealth that should be spread over the whole population. it should be looked after for every norwegian person. they decided 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 one thing — how we safeguard for future generations. it's also a reserve fund and you have seen it help norway through the pandemic. yet, we think of 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, as one of the richest, about that rising inequality? i have a couple questions there. first of all, it has nothing to do with myjob, which is not about how money should be spent within the country, 0k? you speak as one of the richest norwegians. when it comes to me as a person, me as a person i have decided to give away most of my wealth, i've signed a giving pledge. so giving away more than half of my wealth. 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 is, and your choices are fascinating. one final thought — a philosophical one. you, not so long ago, 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. yes, i did say that. why did you say that? is it because after your long experience with money, you think can be corrosive, particularly to those who inherit it? one of the most important things in life is to put forward and think 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 the — how unfair the world is and how early it starts, it starts day one, when you're born. it starts with the simulation you get at home from your parents, the type of words you learn, childhood obesity, schools, getting a summerjob, help — getting help for your 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 it's great. and that is why i have that view, and i still have it — stronger than ever. nicolai tangen, it has been a pleasure having you on hardtalk. thank you very much indeed. thank you. hello there. it certainly has been a cold few days across the uk. but in recent hours, things have been changing — more cloud has been rolling its way in from the west, and with that, we've seen some milderair pushing in, these westerly winds bringing those milder conditions for most of us, away from the far north of scotland. so for the majority, tuesday morning is starting with a very different feel — temperatures in liverpool, in plymouth, around 11 celsius. but with that, we have more in the way of cloud, and we have some outbreaks of patchy rain and drizzle. now through the day, that cloud should thin and break a little bit to give some sunny spells, particularly across england and wales. and then through the afternoon, we'll see a band of heavier rain pushing in from the west, getting into parts of northern ireland and western scotland with strengthening winds. but top temperatures 10—12 celsius in most places — it will stay quite chilly in the far north of scotland, just three there in lerwick. now through tuesday night, we're watching this area of low pressure — it's likely to deepen a little as it slides across the uk. so, as well as outbreaks of rain, we do have the potential for some quite strong winds. now it certainly doesn't look like we'll see anything as windy as we have over the weekend, but still, the potential for some really strong winds for western coasts, perhaps for parts of eastern scotland and northeast england, those gusts could touch gale force in places. temperatures between 5—9 celsius — so starting to drop away again, you'll notice, and that is a sign of things to come on wednesday because the winds will be coming down from the north. and that will reintroduce some relatively cold air — probably not as cold as it has been, but yes, a chillier day to come on wednesday. we'll see areas of showers, or longer spells of rain pushing southwards, wintery showers even to quite low levels across the northern half of scotland, so some more snow likely to settle here. temperatures by the afternoon between 3—10 celsius, an increasingly cold feel as we go through the day. now we have those northerly winds, they will ease a little as we get into thursday. as this ridge of high pressure builds in, some dry weatherfor a time. and then, this frontal system pushes in from the west, briefly maybe some snow — but, as milder air works in, that will tend to turn back to rain. so temperatures really up and down this week, quite a chilly day to come on thursday, a slightly milder one likely on friday. welcome to newsday, reporting live from singapore, i'm karishma vaswani. the headlines. more cases of the new coronavirus variant and more travel restrictions but the us president urges people not to panic. this variant is a cause for concern, not a cause for panic. 0ur medical editor will look at what's known so far about the variant. also in the programme: british socialite ghislaine maxwell goes on trial in new york — she's accused of trafficking under—age girls for former loverjeffrey epstein. barbados counts down the hours to becoming a republic when it loses the queen as head of state.