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.
The memo will raise questions over why Mr Slyngstad has not resigned over what has become the biggest scandal in the fund’s 24-year history.
The governor of Norway’s central bank — which houses the fund — agreed this week it would cover the costs of November’s private jet flight from Philadelphia to Oslo as well as hotel and food costs at the seminar paid for by Nicolai Tangen, the founder of hedge fund AKO Capital, who is due to replace Mr Slyngstad as chief executive of the fund.
The scandal has shone a harsh light on the recruitment process that led to Mr Tangen being unveiled at the end of March. Oystein Olsen, governor of Norges Bank, is facing serious questions about why Mr Tangen was never put on a public list of applicants as well as whether the central bank sufficiently examined the hedge fund manager’s background and investment links.
Mr Slyngstad, who said at the weekend that the private jet flight was the first time he had not taken a scheduled flight as chief executive, has tried to quell growing anger among NBIM employees.
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.”
Mr Tangen this week disclosed that he spent about $3m on the closed seminar at the Wharton business school, where he studied and sits on the board, which included hiring two private aircraft to fly guests from London and Oslo as well as concerts by Sting and Gregory Porter.