Trillion-Dollar Wealth Fund CEO Apologizes For Scandal That Rocked Norway's Financial Elite

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by Tyler Durden
Friday, Apr 24, 2020 - 03:45 AM

Now that is an apology.

At the beginning of this week, a scandal erupted in Norway that shook the rarefied world of central bankers and other members of Scandinavia's financial elite: The outgoing CEO of Norway's massive $1 trillion+ sovereign wealth fund - one of the largest piles of oil 'blood money' in the world - had apparently accepted a ride on a private plane, and other 'inducements' like food and a show, during a seminar organized by his successor, who, at the time of the trip, hadn't yet been picked.

We suspect that many Americans - having endured a surfeit of political scandals involving chartered flights and senior officials in the Trump Administration - would view CEO Yngve Slyngstad's transgression as relatively minor. But in Norway, it was a huge scandal, casting a pallor over Slyngstad's incredibly successful tenure at the helm of the fund, and stoking suspicions about his successor, a billionaire hedge fund manager and probably one of the country's best known money managers named Nicolai Tangen.

As the FT reported, Slyngstad's behavior infuriated many of his underlings and colleagues at Norway's central bank, who claim that the central bank's strict rules prohibiting the acceptance of such gifts have made it impossible for them to accept even a coffee - anyone but Slyngstad would have been dismissed immediately for accepting a gift worth even a fraction of the value of a private flight.

So in a last ditch attempt to save his reputation and good name from such an embarrassing blemish,  Slyngstad has published a memo apologizing to his colleagues and all of Norway for accepting the gift, saying he's "ashamed" and "sorry" for "letting the reputation of the Norges Bank down."

The chief executive of Norway’s $1tn oil fund has admitted he “really screwed up” and damaged its reputation by accepting a paid flight by the hedge fund manager due to succeed him. Yngve Slyngstad, who is set to step down in September after 12 years in charge of Norges Bank Investment Management, told employees in an internal memo that he was “embarrassed to give myself a fail this time”. “I am truly sorry for letting you down, for letting the reputation of Norges Bank Investment Management down, and for letting our organisational culture down,” he said in the message, seen by the Financial Times.

After another few sentences of self-flagellation, Slyngstad offered a colorful analogy: his lapse in judgment was like that of a mountain climber. "It is while climbing down, when you are tired and think that you have made it, that you fall."

Many feel that had they taken such a flight they would have been dismissed immediately because of the fund’s strict compliance rules. Several NBIM employees have previously told the FT they could not even accept a paid coffee. "One could try to justify the chartered flight with the time saved on travelling. But not really,” Mr Slyngstad said in the message to NBIM employees. “The reputational loss for Norges Bank Investment Management from this return flight on a private plane would have justified weeks of travel. It was not in line with our modest profile or our brand." He added: "It was a lack of good judgment and a classic example of how not to be professional, disregarding all my years of experience and caution. This is like mountain climbing. It is while climbing down, when you are tired and think that you have made it, that you fall."

We're definitely stealing that line.