You are the CEO of nauseous or nauseous, depending on your pronunciation. Investment management, which is the largest sovereign wealth fund in the world by far, about $1. 7 trillion.
So tell us what nervous investment management really does and what your job is. Well, the job is to run the Norwegian Someone wealth fund, and it has many facets. Of course.
One is to lead the investment activity. It is also to develop the organization. There is a quite a comprehensive kind of framework around.
It's working with with the board, the ministry, the supervisory board, the Research Council ethics, which keeps us out of an ethical investment and so on. So a lot of things involved in the role. So every sovereign wealth fund has somebody running it, presumably, but virtually no other sovereign wealth fund that I'm aware of has somebody who is a superstar, private sector investor, a member of the Giving Pledge and somebody who's made a lot of money in the private sector.
How did you come to do this job and leave your job running a very successful hedge fund? Yeah, that's interesting. So I have been running this company called Eco Capital for 15 years, and I thought, you know, what kind of the learning is plateauing and I need to move on in life and and do some other things.
So I, I actually was starting to apply to go back to university. And then this job came up and I thought, Wow. It combines asset management.
It combines, you know, developing an organization and also to do something good for the country. So it was just perfect. So where did Norway get all of this money?
I mean, $1. 7 trillion is a lot of money. Yeah.
Where did you get all this money? Well, you know, we've been drilling on the Norwegian Shell for a long time. And and actually, this was in 69 and in the autumn, like a cold day like today.
And they they were the last. Well, and this was Phillips operating a platform called Ocean Viking. And then 2:00 in the morning, the platform chief was told to wake up.
You know, the guy in charge and is just like, Hey, still. So why do you why do you wake up at two in the morning? It was like, you know what?
We found some light and it was the biggest fine the world had ever seen offshore. And and then this was announced to the Norwegian population on the day before Christmas Eve 69. And so that's that's where it started.
So if Leif Ericson had not gone to North America and just stayed in Norway, it would have been better for Norway, right? Because he'd have discovered the oil there and not have gone to look for riches in North America. Could be.
Could be. So let's talk about the current investment environment. As we talk today, President Trump has been inaugurated in the United States.
Are you worried about some of the America First policies that he has said he is going to pursue or as an a global investment manager doesn't really make a difference to you? Well, it's it's a complex question because we are we are a global investor, Right. So if we then first disregard all types of policies which can impact society and just look at it from a pure financial point of view, I think in the short term it be be really good for our companies in America.
They will less regulation, they'll be more, you know, more growth. So so that's positive. Now, of course, if there are lots of tariffs or European companies will be hit by it, so that'd be a negative.
And then, of course, also there is a big question whether whether the policies will be inflationary, which will be bad news in the in the longer term. So let's talk for a moment about Norges Investment Management. When was it actually set up that oil was discovered in, what, 1969?
All right. So when was this organization set up? It was set up in 96 and the first deposit there was like 2 billion Norwegian kroner.
It's grown to 20,000 billion. So good growth. So now the money that comes in from the oil and you invest it.
There's that money. Go to every citizen in Norway every year. Or does it just stay in the central reserve for the use of the government?
Well, I would say there are a couple of clever things that the politicians did at the time. They also established what is called the spending rule. So you can only spend 3% of the fund every year and 3% of the fund goes into the budget.
Now, the fund is now so large that it accounts for 25% or between 20 and 25% of the state budgets. But I think it's very good to have that rule in place. So 25% of the government's budget comes from what you do every every year.
And my 700 colleagues, how many people actually work for you now? Well, so we got roughly 700. We have we got 100 in New York and 40 in London.
We got 40 in Singapore, and the rest would be in Oslo. So people pay an enormous amount of attention to your investment success. Everybody in Norway look every day in the newspapers and see how you're doing, because that will affect Norway's government or not.
Not only every day. We have it on our websites. We have a ticker which shows the real value of the fund at all times and is updated 13 times every second.
So that's a lot of pressure. Every hour people are paying attention to what you're doing. Absolutely.
So your job, though, is to oversee several hundred people making invest decisions so they come to you. If it's a really big investment decision and say we're going to put $100 million in something or is it you're just doing strategic things and you're not making individual investment decisions? Well, it's since it's such a large fund, you need to be pretty index in there and what you're doing.
And we have a very good investment mandate, which we get from the Ministry of Finance, and then we follow that. And then we have then we have decentralised the various investment mandates within the fund. So the people in Norway or the Government criticise you saying you bought too much Apple stock or you didn't buy enough Apple stock or you don't get those kind of criticisms.
That's exactly right. So we always make mistakes and that's always in the papers because either either you have too much or you have too little, or, you know, when you when you own a bit of 9000 companies across the world, there is always something going wrong somewhere and we always own it. And so we are always criticizing.
So if you own a piece of 9000 companies and you only invest, I think in publicly traded companies, if you own that many companies, are you not really an index fund? And are you going to get better rates of return than any index fund is going to get? Well, we are in a way, we are a very index near fund and we have had better returns than the index over the years.
We will perform by some 20 basis points per year for 28 years or so, and we are doing it at lower costs than index funds. We are we are super cost efficient. So you're getting roughly rates of return of five or 6% a year.
I assume something like that six, seven, six or 7% a year, and that's roughly on average 20 basis points over than what the index funds are typically doing. Yeah, Why? I'm just curious, as somebody who's been in private equity, why don't you go into the to the private equity world?
Because over the last 20 or 30 years, private equity has done pretty well, private investments. How come you resist that? Yeah.
So the the fund or the board have suggested to the ministry several times that we think private equity would be a good thing. So far the answer has been no. And we are there is a political process going on where they will now make a decision on that.
The reasons have been fees. Which fees aren't high enough or no, are they? Yes, Some people think they are too high.
Why? Yeah, too high. Transparency hasn't been good enough.
There hasn't been enough kind of ESG considerations and so on. And so those have been those have been the historic reasons. Now, you know, the world the world is clearly changing.
There are a few companies listed on the stock exchange. The private market is much bigger. You get probably better fees than we did in the past and so on.
So so these are considerations that that the minister will make as we talk today in the United States, at least, ESG and DTI seem to be in less favor than they were maybe two or three years ago. Is that the case in Norway? No.
So you don't really care what the U. S. is doing in this regard?
Well, there is clearly a backlash against a big right. But the policies we have, they are anchored in in the parliament. And so we are not changing my mind.
We think it's important with the kind of reporting. We think diversity is good and so on. So in most Scandinavian countries, I think certainly in Norway, there's concerned about climate change and there's a lot of interest in renewable energy.
But you make your money from non-renewable energy. So is there an incongruity when you're making all this money from. Carbon is a carbonized kind of chemicals and fuels.
But you really don't believe in that to some extent. How do you square that? Well, we we believe in it.
And we do think that in particular, the gas that Norway produces, which is a very high proportion of the gas supply in Europe, is very, very important. And it continues to be a big part of the energy supply and an important for security for many, many years to come. Let's talk about your own background.
You weren't just working your way up in the government of nor just investment management. You were very successful, as I said earlier, in the private sector. Where were you born?
I was born in a small town in in southern Norway, Christmas Island, which not many people have heard about. And were your parents investment managers? No.
No. My mother worked in the public sector with museums and art, and my father was an entrepreneur. And where did you go to school?
I started off in Norway. I studied Russian in the intelligence service. I went to Wharton, did business undergrad, and then I have done some degrees afterwards.
I'd done one in art history and one in social psychology. Is it unusual for somebody in Norway to go to college at Wharton School in Philadelphia? It's great school, but it's pretty, pretty.
It's not so common. So when you went to Wharton and you said you're from Norway, two people in Wharton say, where is that? Yeah, of course.
And they make fun of Norway. Did they say you were a Viking or something like that? Yeah, I was.
Okay. Okay. So you graduate from Wharton and you get other degrees.
You set up your own hedge. I mean, the cool thing is, you know, you come from Norway, which is like a very egalitarian society, and it's all about being marriageable and so on. And then you come to Wharton, which is like the opposite.
It's like I remember, like, you know, I went to two clubs one day and is it like, Hey, what do you guys want to do? I just want to conquer the world and everybody abroad. I didn't say that, but somebody else said and, you know, people applauded and it was just like a mindset, totally different.
So you didn't find a lot of humility at Wharton? Not so much. So, okay, So you graduated then.
Did you go into the private sector right away? Yeah, I went, then became an analyst with a stockbroking firm. I went there for five years.
Then I joined my largest client, which was a hedge fund and one of the earliest hedge funds in Europe. Where was it based? London.
All right. So you worked out of London. When did you say, I'm going to set up my own hedge fund?
Well. So that was a bit afterwards because I had worked for these hedge funds for five years and made some money and I took a break. So I did had a masters in art history and but realised I wasn't very good at it.
So how do you know you're not good at art history? I mean, you don't measure it the way you do investments. Well, you get feedback from the professor that you are.
You're not the brightest thing. Okay? So I thought, Hey, I'm better looking at stocks than paintings, and so let's set up these firm instead.
But you've built a big art collection, so you must know something about art. Yeah, but it's easier to buy art than to write about art. Okay, so you set up your own hedge fund eventually.
Yeah. And how big was it before you stopped it? Just under $20 billion.
So it was one of the largest funds in Europe. And now I'm really proud of what we did there. We had many of the largest endowments and universities in the world investing with us.
So it was a fantastic. So you have $20 billion hedge fund and you're averaging rates of return, I assume, that are in double digit kinds of areas. Right.
And so when you got this opportunity to run for just investment management, did you say to your family, guess what, I'm not going to be making much money anymore and we have to live, work conservatively. Yeah. And what did they say?
They were happy with that. Yeah. Wow.
I guess. I mean, I mean, it's not like. I mean, we.
I got enough money to buy food and shoes. Yeah. Yeah, But usually hedge fund managers don't say they need to have enough money to buy the food.
They want to buy airplanes and art and and other things. Yeah. And I think that's the misconstrued perception of what happens is, you know, in my in my mind, happiness is about learning.
That's how you measure happiness is how much you have learnt. You know, some people say, you know, you measure success by who's got the most money when they die. And I just think that's totally a failure.
I mean, the person who's got the most money when he or she dies that they have, they have lost. They haven't, they haven't got it. Oh, I didn't realize that.
So. Well, are you are you that this. All right.
So I that's something I had to learn, but okay. So. All right, you set up your hedge fund, but when you left your hedge fund, did you have other people running it?
Is it still around? Absolutely silly. So it was a fantastic thing.
It's been a great transition to the next generation really read and I it's they are doing better than ever and it's just a total win win. So when I when I left for the for the position in Norway, I had to to give away my ownership stake. So I gave it to a charitable foundation.
And so the stake in that fund is funding that charitable foundation. So you did so well that you actually joined the Giving Pledge. Yeah.
Right. Which means you've got a net worth of at least $1,000,000,000 or so. Are you the only person in Norway that signed the Giving Pledge?
There's one more. One more. Okay.
So when you go to the Giving Pledge meetings, do you say, guess what? I'm giving away money now. But I'm I'm really running running the Norway sovereign wealth fund or, you know, people don't talk to you about what you do now.
No, no. They talk about that, too. And that's what we meant.
That's correct. So for five years, you've been running this fund and done pretty well. Obviously, now your term is up.
You have a another five year term you could get and you're applying. I applied last week. You applied.
Okay. You have to apply. You already have the job.
Oh, it's it has to be you have to apply again. So I updated my CV and applied. Wow.
Okay. Did anybody else apply or. Yeah, I think so.
I mean, I don't know. It's I don't know. I mean, I'm when it comes to this, I'm very, very humble.
I if they find anybody else who's better at doing that job, he or she should get the job right. It's a very important position in the country. And so I have applied.
I hope I will get an extension. If not, I need to do something else. So you're willing to do another five years?
Yeah. And your compensation as the person running it is modest, I assume, compared to what you used to make. Yeah, it's a well-paid job, but it's, it's of course, it's a public sector job.
So any thought about going into politics and running for government positions, Prime Minister or something like that? No, you don't want to go into that. Not no interest in that.
And what about any thing after you're finished that's supposed to do another five years? Yeah. After ten years of this, you probably would say that's enough.
Well, I'm going to spend the rest of my life hopefully doing good things. You know, I'd love to go back to university at some stage, to my degree, learn some more things. Art history, but you're not that good at that.
So you would do something else. Something. Okay.
But you have a big art collection still. And what area of you collect art? Well, we we have the we have the biggest collection of Nordic modernist art.
And we given that museum which opened last year. New York Times recently said it was one of the 50 most important places to go in 2025. So you all have to go, of course.
So if somebody is watching this and they've never been to Norway, what would you say about what is great about Norway that would deserve their visiting? What is or why should you see in Norway? Well, the nature of the nature is unrivaled.
I mean, it's just like Switzerland with a lot of sea around it. Right. And is absolutely beautiful.
You really close to to the fjord, you close to the mountains is good for skiing, is good for hiking is perfect. And not too many people. So it's not so crowded.
Or how many total people are there in 5 million by million. So when Alfred Nobel was awarding his developing his Nobel Prizes, he had the prizes being given by people in Sweden, the Swedish Academy. But he didn't think the Swedes were peaceful, loving people.
So he said the Peace Prize is given for by people in Norway. Yeah. So in Norway is a very peaceful.
Yes. And you have no interest in getting involved in international diplomatic things or something like that? No.
And your children, are they interested in investing? No, thankfully. I mean, thank God for that, because I think in my mind you just don't want to follow your parents.
You want to you want to create your own destiny. You want to you don't want to be measured against the success of your parents. You know, I don't really believe in inheritance.
I think to inherit a lot of money, it's not a good thing if you are successful. It's just because you inherit a lot of money and if you fail, you are a total failure because you started with a lot of money and you didn't manage to do anything. So I just think it's so, you know, let them do what they want.
So do you ever go to reunions at Wharton and say, I wasn't I wasn't abroad. I wasn't abroad. You were there for some time now.
And but they I guess they ask for contributions from time to time. Yeah. And okay.
But I did I did give them a building. But all the people in your class who are bragging about how great they were and they want to conquer the world. Did you ever show up and say, Look, you're the guy that actually did it and you didn't brag about You say that I never felt that I conquered the world.
I know. Hey, so today, if I was looking for some good investment ideas, let's suppose I'm just watching. Say, what is the largest sovereign wealth fund in the world?
Thinking it was a good idea? What would you say are a couple of good ideas? I think if you are a long term investor like we are, you want to be widely diversified across asset classes, across geographies.
It's very, very tough to do this tactical asset allocation. I think that's nearly impossible. The best thing to do is always to do the opposite of everybody else.
And what will that be today? Well, if you were to do the opposite of everybody else, it would be to sell the U. S.
tech stocks, you know, by China, sell private credit, you know, just buy stuff, which is out of fashion, but is very, very tough to do because if you are a contrarian and you are different from your benchmarks and so on, there will be periods where you underperform and everybody is going to question your sanity. What about artificial intelligence? Is that a good area to invest in?
AI has been fantastic and we have made a lot of money for the fund. You know, the biggest contributors of the last few years have, of course, been the big American AI companies. And I polled people in in August, just before Christmas when I asked them how much more efficient are you now because of the new tools?
And on average, people thought they were 15% more efficient. Really good. So India is still a good stock to buy?
Well, that I don't know. But for sure they make a. Good product.
So today, when you look at your investment team that they come in every week and say, here are some ideas we have. And do you tell them yes, no, yes, no, or you just listen to what they recommend? Well, they would decide, I think, you know, in order to really judge how they're doing, they need to be totally accountable.
And you can't interfere in the investment process. So I don't interfere in their investment process. So are your employees mostly Norwegian or are they from all nationalities?
50, 50, 50? And what about the you have Americans as well invest, of course. Of course.
They are good people. Right. And what about pushing for more private equity allocations?
You're not ready for that yet. I we're not pushing. We have we have given our advice to the to the government and we'll see what they come up with.
Right. So today, are you worried about your borders because of what's going on in Russia and Ukraine? Is that something you worry about in terms of the impact of Russia, Ukraine, on your investment appetite for things like that?
No, it's not really it's not really. You know, we have real tragedies many places in the world. But I'm not I'm not worried about Russia invading Norway anytime soon.
We are member of NATO. We do border to Russia. But now, since Finland and Sweden joined Nito, we feel stronger than before.
Okay, So today, what would you say your biggest investment concerns are? You're running $1. 7 trillion fund for the average person, not managing that much money.
What should they be worrying about and what are you worrying about? Well, I think, you know, I think you've got two things. One, you have the known unknowns, right?
So and they're at the top of my list would be two things. One is inflation, because I think there is an argument in a tightly tight labor market when you potentially decline the supply or you reduce the supply of of of labor in the U. S.
, you put on tariffs. These things can be inflationary. And there could be a moment where, given the high level of government debt, that the investors suddenly decide, you know what, we want a much higher coupon to lend to, you know, to governments.
And so you could see a step up in in interest rates, which could be negative for financial markets and of course, all the all the AI related stocks. The epicenter here is Taiwan. So you need to watch that.
And then but then the thing is that the really the thing that really scares us when it happens is the unexpected, you know? Whether it be a meltdown of nuclear reactors in Japan or a Covid or financial crisis is the stuff you cannot model which really derails markets. And they come about every so often and there will be another one coming up.
So let's suppose I'm one of the people interviewing you for your re hour application to have this job for next five years. What would you say is the reason that you deserve the job? You've done pretty well or you like the job or people are happy or your rate of return has been very good.
What would you say is the reason you should get this job? I mean, this. It's a bit obtuse to market myself for a job on TV.
But while you're too modest for that. But what would you say? You know, the organization.
The organization has done well. It's a real teamwork. We built a really great team.
You know, we are we have done a lot of great things. We are now the most transparent fund in the world. We've done a lot of things like that.
Right. And there's always a lower risk to take the incumbent than than changing. But but as I said, you know, these are just pros and cons and there are a lot of people out there who are really, really excellent.
Now, sovereign wealth fund leaders. So they get together from time to time and exchange ideas like we do. Yeah, we do.
We do. It is great. Actually.
There is a lot of a lot of cooperation between the large funds and when you see the other people running these big funds, do you ever say, how did they get this job? Or you say, Boy, they're really smart. Oh, they're generally really smart.
Not how they got this job. They're all pretty good. They're generally really smart.
Okay. And today, what would you say you're most proud of having achieved in your five years? You know, there are so many there are so many things that can go wrong when you run a large fund like that.
And I would say there haven't been any major disasters. And that's that's good. And that's because of the great team we have working together.
You ever thought of running a Norwegian tracking fund that basically let people invest their money, just tracks your fund and they could do that? No. There'd be some talks about it.
But no, that's not going to happen. And I'm never going to run money again after this job. This is my last money job.
You're not going to go back and manage money again? No. Why not just you've made enough money?
No, it's not that. It's just like I've had this job. I think it's the most fun job in in global finance.
And I just don't think there is anything else out there. All right, so what do you do for outside activities? Are you a skier or you're some other kind of outsource?
Well, I suppose I spend a lot of time in nature. I walk in a forest, I. I do cross-country skiing.
I pick mushrooms in the autumn. You do what? Mushrooms.
Not the magic words, the ones you know how to run it. What do you pick em or you grow them or what? Oh, you walk around in the forest and you pick wild mushrooms and you go home and you cook them and you make, you know, like chanterelle spaghetti.
Wow. That's an unusual outlet. And then I sail.
I do a lot of sailing. Singing. It's Alex Haley, sailing your sailor.
And are you doing competitions or things? Well, I did. I did competition in the past.
You know, I did like Sydney Hobart's and all that kind of stuff, but. And you're sailing. Do the people give you a right away because you're running the biggest sovereign wealth fund?
And I'll give you a little bit of a head start or something. Oh, wow. Okay.
So generally you strike me as a very happy person and I generally don't find that many happy people in the investment world. They're always worried about something else. But you're pretty happy.
So how did you get to be so happy? I think it has to do with how you define well. First of all, you have to figure out what is it that makes you happy, right?
And I do think people mistake. That's quite often, you know, you just try to make more money. I do buy more things.
That's not where true happiness comes from. It comes from spending time with friends and family and and learning where in terms of learning, you know, I also ask, you know, I also do a podcast and I learn a lot through that podcast. Okay.
Well, what are you going to be on it? As I'm saying, I will. But where did you meet your wife?
At a nightclub. A nightclub? A nightclub?
Yeah. But we were introduced through some friends. And interestingly, wasn't just a regular pick up.
It was just there was. It was organised every night. Okay.
But. But the thing was, that first time I asked, I asked her, she said no. And, and so that's just like why I never take no for an answer.
But you didn't say I'm going to be the I'm running or. Oh, no, this was the way before. I know, But you didn't say something before.
I was really poor. You're not. You're not wealthy then?
Oh, I had no money. Just lots of debt. Maybe that's why she said no.
Okay. All right. So today, if you're giving advice to somebody that's watching this about how to be a good investment manager, what is the single most important piece of investment advice you could give somebody?
Learned, learned, done. And the combination of being stubborn and agile, you know, you have to stick with your guns. You have to believe in what you do.
You have to be able to be contrarian. But when things change, you have to change your mind. And that's the rarest combination in investment management.
So you think humility is better than arrogance and a good investor? Well, you need to be confidently confident. Humility is the magic.
Have you ever met Warren Buffett? No. Really and no interest in meeting these and cordial advice.
But he hasn't called you for ideas or anything like that? No. Oh, no, he.
I haven't met him. Well, I. Well, I briefly.
I met him briefly. Okay. So is there one person that is a role model for you?
If it's not Warren Buffett, maybe it is. Even though you haven't met him, is there anybody you would say is somebody that you have as a role model in the investment area? Well, I think it's difficult to not mention Bill Gates as a role model if you are a philanthropist because you make a lot of money and then you are very organized and structured in the way you give it away.
I think that's really impressive. Okay. So look, it's an incredible career and I would just urge you to consider private equity as something you might do in the future.
Okay. Thanks. I hear you.
Appreciate it.
