Norges Bank


Follow-up of agreement with NBIM CEO

Norges Bank's letter of 1 October 2020 to the Ministry of Finance.

At its meeting on 24 August, the Executive Board endorsed amendments to Nicolai Tangen’s management agreement with Gabler Investments AS (Gabler), so that “his fund investments are liquidated and the proceeds held as bank deposits”. The Ministry of Finance was notified about the amendments in a letter of the same date. In this letter, Norges Bank provides a brief account of some adjustments to the framework for managing Tangen’s assets.

The Executive Board’s decision of 24 August entailed an obligation for Gabler to redeem all fund units under management by 1 October and for the assets to be held as bank deposits. The value of the redeemed fund investments is close to NOK 5 billion. In addition, reference is made to Tangen’s cash deposits in foreign banks with an estimated value equivalent to NOK 2.9 billion at 31 July 2020. In all, these bank deposits amount to close to NOK 8 billion.

There is a limited number of banks with a sufficient rating and solvency that are relevant candidates for holding personal bank deposits of the scale involved. Moreover, there are extensive and time-consuming procedures associated with anti-money laundering rules, which banks implement in the case of large deposits. Overall, it has therefore proved to be difficult to spread the deposits sufficiently to avoid substantial exposure to individual banks.

Norges Bank has considered alternative investments that, at the same time, comply with the guidelines issued by the Supervisory Council and the recommendation of the Storting Standing Committee on Finance and Economic Affairs, as well as the requirements laid down by the Minister of Finance at a meeting with Norges Bank on 21 August. A natural alternative is investments in close substitutes for bank deposits in terms of return, risk and liquidity. In addition, these investments must not overlap with NBIM’s mandate. Against this background, the plan is to allow Tangen to hold, in addition to bank deposits, investments in:

  • Norwegian and foreign government securities with original maturity of up to 12 months. 
  • Other securities issued by public authorities (including international institutions) with original maturity of up to 12 months.

The purpose of investments in such securities is to spread the assets and prevent undesirable exposure to individual banks, not to earn higher returns. At the same time, these are deep and liquid markets where individual investors cannot influence market prices. The maturity restrictions (12-month maximum) prevent overlap with the GPFG’s benchmark index. The GPFG’s investments in government bonds by and large feature substantially longer maturities.

The assets can be invested directly in government securities or via funds. The assets cannot be invested in equity instruments or corporate bonds, including bank bonds.

Gabler will be charged with managing the assets from the sale of Tangen’s AKO Fund. The assets in Gabler will be managed under a discretionary mandate so that Tangen will not have any influence on individual investments. Use of discretionary investment mandates is in line with NBIM’s guidelines.

There are no plans to continue the blind trust arrangement with a proxy who represents Tangen vis-à-vis the investment manager. With an investment mandate that only permits bank deposits and short-dated government securities, a blind trust will no longer be needed.

The investment mandates shall contain reporting requirements giving Norges Bank the right to obtain necessary information about how the investments are managed. As usual, the Supervisory Council will have access to all information requested. Any amendments to or new discretionary investment mandates require the prior approval of Norges Bank.

The investment of Tangen’s assets will be subject to certain restrictions. For example, investment mandates shall contain provisions to prevent the assets from being deposited in banks or invested in funds administered or domiciled in low-tax jurisdictions[1]. Further, fund managers that have been awarded mandates on behalf of the GPFG may not be used.[2] Moreover, the assets may not be invested in fixed-income securities excluded from the GPFG’s investment universe (cf Section 2-1, second paragraph, of the GFPG mandate).

Tangen’s bank deposits will also be subject to certain restrictions. For example, deposits in NBIM’s depository bank, currently Citibank Group, will be excluded. This restriction applies to all NBIM employees. In addition, a maximum limit will be imposed on the amount that can be deposited in a single bank in order to avoid excessive exposure. The limit is set at NOK 400 million in an individual bank at the time of deposit (about 5 percent of total portfolio). The Executive Board may make an exemption from this limit for Tangen’s depository bank.

The amendments will be implemented as soon as possible. Norges Bank will approve any amendments to agreements and undertakings submitted in connection with Nicolai Tangen’s employment contract.



Øystein Olsen                             Jon Nicolaisen

Governor                                  Deputy Governor


Copy to: Supervisory Council


[1] Defined in accordance with the NOKUS rules.

[2] Cf Section 2.2.2 of Gabler’s current investment mandate of 16 June 2020: “Further, fund managers that have been awarded mandates on behalf of the Government Pension Fund Global (the “GPFG”) may not be included in the Portfolio.”


Published 1 October 2020 13:30