John Collingridge
Tue, 27 June 2023
Photograph: Graeme Robertson/The Guardian
For a prolific art collector, Nicolai Tangen is remarkably relaxed about the prospect of masterpieces created by robots. The threat of AI-made paintings, impossible to distinguish from human brushstrokes, has sparked soul-searching and paranoia in the art world, but not with Tangen.
“Hey, if it creates better art that’s fantastic,” says the Norwegian philanthropist, art historian and boss of the world’s biggest sovereign wealth fund. “If you create something which is even more aesthetically pleasing, what’s wrong about that?”
Tangen’s own gallery, a converted grain silo in the Norwegian seaside resort of Kristiansand, will open later this year to display one of the world’s biggest collections of Nordic modernist art. Tangen has amassed more than 5,000 works by 300 artists. Originals and copies will hang side by side. “There are a couple of cases where we think the art is really beautiful. And we basically made a copy of what we had and hung it there instead. Is it less beautiful to look at? No it’s not. So it’s just about the mindset you have.”
We will have a lot of stranded assets because of AI, if you’re on the wrong side of that you will be decimated quickly
Tangen is less relaxed about the impact artificial intelligence will have on the more than 9,000 companies that the £1.1tn Norwegian sovereign wealth fund – colloquially known as the oil fund – invests in. The wave of disruption has already started scything through the stock market: last month almost £1bn was wiped off the value of the educational publisher Pearson after a US rival warned of a significant spike in student interest in ChatGPT, the generative AI program.
“AI is so unbelievably huge. Bill Gates says it is more important than the computer, internet and so on,” Tangen says. “We will have a lot of stranded assets because of AI, because if you’re on the wrong side of that you will be decimated quickly. So I think over the next couple of quarters we’re going to start to see victims of this; share prices will be creamed. This is so fast.”
Tangen is deploying AI across the fund, using predictive models to reduce the 36m trades that it does every year – central to his target of improving the fund’s efficiency by 10% a year. He wants to see “proper, worldwide regulation” so that AI is developed ethically. “How can you make sure that it’s not disadvantaging you because of race or those kinds of things?” he says.
Tangen, 56, barrel-chested in an open-necked blue shirt, is sitting in the Mayfair offices of Norges Bank Investment Management (NBIM), the investment arm of the Oslo-based sovereign wealth fund.
The fund was built on Norway’s decision to invest its North Sea oil and gas revenues into a fund to benefit its citizens in perpetuity, following the discovery of a vast offshore oilfield in 1969. That decision (which the UK failed to copy with its own North Sea gas wealth), has paid off handsomely since the first proceeds were deposited in the fund in 1996.
A ticker on the fund’s home page climbs by the second. It owns 1.4% of the world’s listed companies and Tangen uses that influence at shareholder votes – and by quizzing the bosses of those companies on his podcast, In Good Company.
The fund recently chastised the US oil companies ExxonMobil and Chevron, backing motions from the climate activist group Follow This at their shareholder meetings urging them to do more to tackle the climate crisis. But notably it also backed BP’s board, despite its boss Bernard Looney’s decision to water down its climate change ambitions.
Is there an inherent hypocrisy at the heart of Norges’s lectures on decarbonisation, and Norway’s rapid adoption of electric cars? The country gets rich off the proceeds of oil and gas, with devastating consequences for global heating and the climate crisis.
People who want to die with a lot of wealth, they have completely misunderstood the whole thing
“I always get that question [about hypocrisy] in the UK and Sweden,” says Tangen. “I don’t think it is; I don’t think it’s unethical to develop oil and gas. You’re just developing the resources you have. And then our job is to invest it in the best possible way, to really generate returns in a responsible way. So that’s what we do. Oil and gas, and in particular gas, is a part of the energy solution for very many years to come.”
Why not give the strongest possible signal to the dirtiest giant oil companies and sell up completely?
“You can do two things when you have these situations,” he says. “You can either divest. Now who ends up as shareholders of those companies? Well, the people who don’t care. Or you can stay and try to convince them, work with them.
“And I kind of think it’s a bit like in a marriage. Yes, you can divorce straightaway. Or you can stay, and try to have a dialogue with your partner.”
Would dialogue stretch to debating climate change on his podcast with the Swedish environmental campaigner Greta Thunberg?
“Well, I generally interview people who run companies when we invest. She doesn’t run a company where we invest,” he says awkwardly. “I think it’s fantastic that we have young people who care, who engage themselves and put some of these topics on the table. That’s just a general statement.”
Will future generations look back favourably on how we, and Norway, have used the planet’s natural resources? A pause stretches for almost 20 seconds before Tangen answers. “I don’t know.”
It has been a painful year for Norges: the fund lost 1.63tn kroner (£118bn) in 2022 as stocks and bonds crumbled after Russia invaded Ukraine and central banks increased interest rates amid surging inflation.
“I was the biggest loser that the world has ever seen,” he laughs. “No person in the history of the world has ever lost that much money.” But, he adds, the fund lost less than the rest of the market, and Norwegians have been accepting of the loss.
“There’s surprisingly good understanding in Norway that things go up and down. And I think it’s because we have roots back to hunter-gatherers, fishermen, where we have big volatility in our industry, and in our income.
“I walk through town or sit at a restaurant or in the ski slopes, and everybody wants to talk about the fund. And they love it and they feel a really big part of it.”
From the age of 14 it was Tangen’s mission to work in the City. “London, finance, bang. It just was my dream. I just had this idea that London was the financial centre of the world and that’s where you make it.”
He turned that dream into reality: Tangen worked at the Mayfair hedge fund Egerton Capital, and in 2005 he set up his own fund, AKO Capital, named after his children. By 2020 the Sunday Times Rich List put his wealth at £550m.
But in between he was able to take a career break, aged 36, to study art history at the Courtauld Institute of Art in London. “I had a period where I minimised my earnings,” he smiles. “I started collecting art pretty seriously, just wanting to put all my knowledge into it.”
During 30 years living in London, he has witnessed its rise and fall, especially since Brexit. “I love the Brits. But it is having some challenges on the back of Brexit.”
Can London reclaim its preeminence as a financial centre? “I think it’s very tough to say.”
In 2020, Tangen joined Norges as chief executive, not before transferring his stake in his hedge fund to the AKO Foundation, a charitable fund that supports causes ranging from the educational charity Teach First to galleries including the Tate and British Museum.
Tangen has vowed to give away all his money before he dies. “I want to die with zero. People who want to die with a lot of wealth, they have completely misunderstood the whole thing. I have hardly met a really happy person who has inherited a lot of money. You take away the whole meaning of life from your kids. I think it’s the worst thing you can do to a kid.”
His three children have come to terms with their evaporating inheritance, he says. “They’re OK with it. It didn’t go down so well within the politicians and the other wealthy people in the country.”
CV
Age 56
Family Married with three grownup children.
Education Finance at the Wharton School, Pennsylvania; Russian studies at the Norwegian Armed Forces School of Intelligence and Security; master’s in history of art from the Courtauld Institute; master’s in social psychology at the London School of Economics.
Pay £550,000
Last holiday London
Best advice he’s been given “Always go for the most difficult thing.”
Biggest career mistake “I don’t think I’ve made many of those.”
Phrase he overuses “Onwards and upwards.”
How he relaxes “I have a 10- to 15-minute nap in the afternoon every day on a sofa in the office. That really re-energises me. It is scientifically proven - fighter pilots do it, for instance, and it really can increase your flying time.”
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