Pension fund boards remain concerned that an activist, ethical investment stance will damage return prospects, according to a survey conducted by IPE.According to the Focus Group survey for the October issue of IPE magazine, 29% of respondents said the risk of negative publicity due to divestment was the biggest ESG risk facing boards – despite one respondent from Eastern Europe admitting it had divested from Russia for its being a “potential military threat” to its host country.However, two-thirds of the pension funds surveyed – 35 in total, with nearly €1.2trn in combined assets – agreed that the greatest ESG risk facing a board was that of underperformance due to ethical investment decisions.Only one of the respondents thought the risk of lower return due to ethical decisions and the public backlash from any such decision cancelled each other out. One UK pension fund said: “At the end of the day, the vast majority of our members want their pension to be safe. ESG is a second-order issue.“We incorporate ESG because we believe over the longer term it will provide better financial returns, but there will be short-term volatility.”A Danish fund stated that integration of ESG and good returns went “hand in hand”, but added that, while it could live with the potential negative publicity, “lower returns means the board is not living up to its responsibility”.Respondents were also asked if they had been subject to any pressure to amend investment policy, with 26% saying they had come under pressure from members and 34% saying they had come under pressure from external groups, such as NGOs.However, of the 60% that said they had been approached, one in four said they had been approached by both members and NGOs.The remaining 40% said they had not come under pressure from either outside groups or beneficiaries.In light of a recent campaign calling on ABP to offload its Israeli banking holdings, following the example set by PFZW, the respondents were also asked whether they thought pension funds should ignore pressure and only look at financial reasons for investment – or whether they should reflect member wishes.One-third of respondents said decisions should only be taken on investment grounds, while 27% agreed funds should accurately reflect the wishes of members.Nevertheless, 9% of respondents said a regulator or governments should weigh in on such topics, spelling out what level of attention should be played to member concerns.As far as divestment is concerned, one of the respondents, an Eastern European scheme, said it did believe in divestment in some cases.“We decided that it was inappropriate to invest in [a] country that is hostile and a potential military threat to our country].”For more details on October’s Focus Group, see the current issue of IPE
Under the new draft, a minimum guarantee will have to be made – but by the pension fund itself rather than the employers.Buchem told IPE that a pure DC plan including the possibility of total loss “would not have matched the idea of the German second pillar”.He said it was therefore important that a minimum guarantee be re-introduced and “absolutely” welcomed the new proposal.Because of this change, the government’s revised draft is “likely to succeed”, he added.The amendment also means that, for the first time, pension plans themselves will have to become members in the solvency protection fund PSVaG.Its director, Hans Melchior, declined to comment on this proposal.Details are still being negotiated, and Buchem noted that it “remains to be seen whether the PSVaG in its current form is suitable” to take on this unique new “constellation” of pension funds and employers being members of the same protection scheme.Buchem said, depending on how well the new collective pension plans were received, they could accrue large amounts of assets in future, presenting “a whole new challenge” for the PSVaG.And all employers, “including those opting not to join a Tariffonds, would have to pay in the event of an insolvency”, he added.According to Buchem, the contributions to the PSVaG from these new Tariffonds might be based on their asset allocation.Further, given their similarity to existing Pensionsfonds with a minimum guarantee, they might be allowed a similar discount to those vehicles.It also remains to be seen whether these new plans will be set up as completely new entities, which would entail a minimum start-up cost and separate administrative structures.On the other hand, they might be included in existing Pensionskassen or Pensionsfonds, but all these details are yet to be debated, Buchem said.Click here for more details on the new proposal by the German government on industry-wide pension plans The German government could produce a legal framework for industry-wide pension funds as early as this year, Uwe Buchem, Mercer’s market business lead for retirement in Germany, Austria and Switzerland, has said.The new industry-wide arrangements would be similar to the so-called Dutch model insofar as they would be set down in collective bargaining agreements, hence their “working title” in German – Tariffonds.The German pension industry’s response to a first draft of paragraph 17b of the law governing occupational pensions has been lukewarm at best.The government’s revised proposal, however, has addressed many of the industry’s major concerns, such as the introduction of pure defined contribution (DC) schemes, which would have been a first in the country’s second-pillar system.
Danish labour-market pension funds PensionDanmark and PKA are investing DKK200m (€26.8m) apiece in fund aimed at directing money into projects and businesses helping to increase food production in developing countries, the pension funds said.The newly established investment fund, called the Danish Agribusiness Fund (DAF), will back projects where Danish agricultural and food production companies are either co-investors or suppliers of technology and know-how, the pension funds said.The total capital commitment to the new fund is DKK700m with DKK211m coming from IFU, the Danish investment fund for developing countries, and DKK89m from the Danish government.In a second closing, the fund expects to raise a further DKK100m. Torben Möger Pedersen, chief executive of PensionDanmark, said: “As with the Danish Climate Investment Fund (Klimainvesteringsfonden), the Danish Agribusiness Fund is a good example of how public and private capital can work together to solve global societal challenges in a way that benefits Danish businesses and investors.”Two years ago, PensionDanmark and PKA invested in the Danish Climate Investment Fund, set up to invest in renewable energy projects in emerging economies.The DAF will be run by IFU, which has had experience of around 1,200 investments in more than 100 developing countries in Africa, Asia, Latin America and parts of Europe.The new fund will invest equity capital in projects in these regions.PKA said the fund would be run on commercial terms and ensure its investors a competitive return.In other Nordic news, Oslo Pensjonsforsikring (OPF) said it was buying Herøya Industripark, a large industrial facility on the southern Norwegian coast.Although the NOK78bn (€8bn) Norwegian local public sector pension fund did not say how much it paid for the asset, it said the seller – aluminium and hydroelectric power company Norsk Hydro – was expected to make a book gain of approximately NOK350m from the deal.Norsk Hydro is selling the industrial park because, over the years, it has shed many of the business sectors it used to be in and now has no production facilities left at Herøya, once its biggest production site.There are now approximately 80 companies operating at the site, with 2,500 staff.Kjetil Houg, investment director at OPF, said: “Herøya Industripark is a good addition to our portfolio and we look forward to taking part in the ownership and development of one of the core areas for the onshore processing industry in Norway.”Norsk Hydro said it had been in talks with several bidders for the industrial park since June last year.The park will be operated and developed by a property management to be created using the 16 Norsk Hydro staff directly affected by the sale.This new company will then work with OPF, as well as other owners who have experience managing and developing industrial and business parks in Norway, OPF said.Norwegian real estate company FG Eiendom will also have a central role as a partner of the property management company, it said.
ABP, the €359bn pension fund for Dutch civil servants, has said it will stick with its strategic investment mix of 40% fixed income and 60% securities for the next three years.In its 2015 annual report, it said it made only marginal adjustments to its investment portfolio, including the reduction of its hedge fund portfolio from 6% to 5%.ABP combined its various hedge fund strategies into a single unit to reduce costs, which dropped from 558 basis points to 444bps over the course of the year.It returned 13% on the asset class but said almost 12 percentage points was due to the appreciation of the US dollar against the euro, adding that quantitative equity strategies were delivering the best results. The pension fund also increased its allocation to long-term government bonds to 2.7% to improve its protection against low interest rates.It said the change would enable it to reduce the use of derivatives as hedging instrument.Its first investments – in Dutch and German long Treasuries – delivered 2.3%.ABP said it would divest its 0.9% allocation to ‘alternative inflation’ due to “insufficient opportunities in the market”.The portfolio consisted of bonds and loans to organisations involved in infrastructure, real estate, telecoms, energy, water and environmental services.Private equity, returning 24.8%, was the best performing asset class.ABP attributed the result to several IPOs and sales to strategic buyers, combined with the appreciation of the US dollar against the euro.It said it would increase the allocation to its internally managed private equity portfolio but did not provide further details.At year-end, the allocation was 5.1%.The pension fund credited the performance of its alternatives, as well as the 7.5% return on its 30% equity portfolio, for its overall net return of 2.7%.Developed-market equities produced 11.7%, an outperformance of 0.6 percentage points, “thanks to fundamental and European-focused strategies”.Emerging market equities, however, lost 4.7% over the period.ABP also lost 0.5 percentage points of return on its 25% interest hedge, as well as 3.5 percentage points on part of its currency hedge.The pension fund reported a return of 16.9% on real estate – with listed property companies and funds delivering the best results – and 5.8% on credit.Its opportunities fund, which includes intellectual property and energy-related investments, returned 10%.The scheme attributed the 20% loss on commodities not only to energy but also metals and agriculture.
The Dutch financial sector, government and supervisors have welcomed new guidelines for measuring the impact of investment in the 17 sustainable development goals (SDGs) set out by the United Nations.The guidelines – drawn up through a joint effort of the financial sector – have been endorsed by the Platform for Sustainable Financing, established by regulator De Nederlandsche Bank last year.The sector organisations represented in the forum – including the Pensions Federation, the Association of Insurers (VvV) and the Dutch Fund and Asset Management Association – are now to discuss the recommendations with their members.A significant amount of funding is needed in order to achieve the SDGs by 2030, but currently it is difficult to establish the exact impact of investments. The guidelines provide a limited number of indicators for measuring impacts. Investments are expected to be scaled up ultimately from millions to billions of euros. The platform’s working group that produced the suggestions will flesh out the guidelines.APG and PGGM have already plotted investment routes to the UN’s sustainable development goals. Last year, the two asset managers – which cater for the €389bn civil service scheme ABP and the €187bn healthcare pension fund PFZW, respectively – as well as asset managers MN and Kempen Capital Management, announced that they wanted to contribute to the UN’s SDGs.PFZW said it wanted to have invested €20bn in projects linked to the SDGs by 2020, while ABP said its aim was to have a €58bn stake in this category of investment by then.Pension assets now 181% of GDPFinance minister Jeroen Dijsselbloem said that combined assets of Dutch pension funds had risen from 90% to 181% of the Netherlands’ GDP between 1997 and 2016.In the same period, liabilities increased from 77% to 178%, he said. Dijsselbloem was answering MPs’ questions about the country’s annual budget.Dijsselbloem added that, during the past 20 years, total liabilities had exceeded assets four times, in 2002, 2003, 2008 and 2011.The difference was largest between 2007 and 2008, when a €200.6bn (40.8%) funding surplus transformed into a €38.6bn (6%) funding gap, the minister said.His overview also showed that the discount rate for liabilities – based on interest rates with a 20-year duration – had dropped from 5% at the end of 2007 to 1.2% at 2016-end.The minister reiterated his view that raising interest rates was a bad idea.Next week the Dutch parliament is to debate a bill to increase the discount rate as long as the European Central Bank continues its policy of monetary easing. The bill was tabled by Martin van Rooijen, MP for the party for the elderly, 50Plus. Deutsche Bank scheme considers futureThe board of the €390m Dutch pension fund of Deutsche Bank has said it plans to consult its 800 active participants, as well as its sponsor, works council (OR) and accountability body (VO), about the future of the scheme.The company pension fund is facing a decreasing number of participants and increasingly stringent and expensive regulation. Last year, its costs for pensions provision had risen to €660 per participant.Although the board said the scheme’s current situation was not worrying, it underlined the importance of an early assessment of its future for the mid-term, also taking the expected reform of the pension system into account.At August-end, funding of the pension fund stood at 118.2%. The Deutsche Bank scheme is a collective defined contribution arrangement.TenCate to transfer to sector schemeThe €415m company scheme TenCate is to transfer its pensions to sector scheme Mitt at the end of the year.The scheme said the employer would made an additional contribution of €10m to ease the transition to Mitt, the €2.7bn industry-wide pension fund for the fashion, interior design, carpet and textile industries, where its 800 active participants will accrue new pension rights.Last year, TenCate’s board concluded that continuing independently was not an option for the longer term, following the textile firm’s plans to increase the independence of its businesses.As a consequence, the pension fund would have had to deal with more employers, each of which could decide to place their pension arrangements elsewhere.The board also cited rising costs for implementing different pension plans combined with a dropping number of participants and increasing difficulties finding new board members.At August-end, funding of Mitt and TenCate stood at 99.5% and 98.9% respectively, a difference that could be bridged by the sponsor’s additional contribution.Mitt’s cost of pensions administration of €96 per participant was less than one-third that of the TenCate scheme. Asset management costs at both pension funds were roughly the same.
The average funding level of Ireland’s largest pension schemes has hardly budged since 2010 despite company contributions of nearly €10bn, according to a consultancy.Irish schemes were on average 85% funded according to their most recent annual reports, one percentage point lower than in 2010, LCP said in a new report.The estimated aggregate deficit stood at €3.6bn as at 31 December 2016, up from €2.6bn a year earlier. The consultancy attributed the low funding levels to the sharp and prolonged fall in euro-zone bond yields in the period to 30 September 2016.LCP said it estimated that the combined deficit for the companies analysed had fallen to €3.3bn by 31 October this year. Source: LCP IrelandTotal funded pension scheme liabilities, expressed as a proportion of market capitalisation, increased over the year from 22% in 2015 to 25% in 2016. Bank of Ireland’s was the highest, at 102%.There was evidence of some divergence in the assumptions used by companies in their valuation exercise, “as different interpretations are taken of the appropriate market yield at the valuation date,” said LCP.Irish schemes continued to have a relatively high allocation to equities. The figure fell to 41% over the course of 2016, but that compared with 26% for the defined benefit schemes of FTSE 100 companies.The average allocation to bonds remained at 36% while the allocation to other asset classes – including property, cash, and hedge funds – increased from 21% to 23%.LCP’s report examined the defined benefit pension schemes of 26 of the largest Irish companies, comprising 11 of the largest Irish quoted companies by market capitalisation; 11 semi-state/state-controlled companies with defined benefit pension schemes, and four companies listed on other exchanges that operate significant defined benefit pension schemes in Ireland. Deficits in 2016 would have been higher had some individual companies not carried out liability management exercises. For example, Bord na Mona cut accrued benefits for existing members and paid significant one-off contributions, while Kerry Group closed its Irish pension schemes to future accrual and carried out a transfer value exercise. Companies paid more than €1.07bn into their pension schemes during 2016, after contributions of €1.16bn in 2015 and €1.27bn in 2014. In total, they had paid €9.6bn into schemes between 2010 and 2016.
The pension fund, the UK’s biggest, said it was not releasing the size of the deal, and it would not specify the maturity of the notes other than to say they had a duration of more than 25 years.Commenting on the new deal, Ben Levenstein, head of private credit in the private markets group at USS Investment Management, said: “The investment generates high-quality, long-term, inflation-linked cashflows which closely align with USS’s investment strategy to ensure secure, long-term returns for the scheme and its members.”Adrian Hunt, group treasurer for Yorkshire Water, said completion and execution of the transaction had been made straightforward on account of “[t]he expertise and professionalism that USS brought to bear to the transaction”.The deal was important for Yorkshire Water in the run-up to an upcoming price review by the UK’s water regulator, Ofwat, according to Hunt.The price review, which will cover the entire regulated water sector, will happen next year. In connection with this the regulator is introducing a change to how the utilities’ revenues and regulated assets are indexed, switching from the retail prices index (RPI) to the consumer prices index (CPI).Universities and the staff union UCU are in mediated talks to resolve a dispute about plans to stop defined benefit accrual at USS. Local Pensions Partnership launches inaugural fixed income fundThe £13bn Local Pensions Partnership (LPP) has launched a £320m fixed income fund, its first asset-pooling vehicle dedicated to the asset class.The fund will mainly invest in higher credit quality, highly liquid fixed income across geographies, instrument types and maturities. It will have a strong focus on capital preservation, according to a statement from LPP.The fund allows LPP’s two “full-service clients”, the Lancashire County Pension Fund and the London Pensions Fund Authority, to pool their fixed income investments. A spokesman for LPP said the £320m represented the two pension funds’ strategic allocation to fixed income, which was currently at 2.5% but could go up to 5% and 15%, respectively.It is the fourth fund that LPP has launched since it started operations in 2016.It already runs a £1.3bn credit fund, a £1.5bn global infrastructure fund, a £1.8bn private equity structure, and a £5bn global equity fund.Susan Martin, LPP’s chief executive, said the fund was provided “a significant new investment vehicle for our clients”.“It also demonstrates our in-house investment capabilities in launching a brand new fund, from investment strategy design to manager sourcing and selection.”LGPS Central tenders £2.5bn active equities mandateLGPS Central, the company set up to manage £40bn of assets on behalf of nine UK public pension funds, is looking for global active equity managers to manage £2.5bn of investments.It intends to shortlist between 10 and 15 managers. The estimated start date is 1 October.Successful applicants will need to demonstrate a “consistent, robust, repeatable, investment process” with responsible investment at the heart of it, according to tender documentation.Other requirements include “low, fully transparent costs” and a concentrated portfolio.LGPS Central received regulatory approval in January and has plans to launch three equity sub-funds next month. The £60bn (€67bn) Universities Superannuation Scheme (USS) has invested in inflation-linked notes backed by Yorkshire Water inflation swap cash flows, its second such transaction.The notes are issued by a special purpose vehicle, Aysgarth Finance, which was set up by Yorkshire Water and USS at the time of first transaction.This was in 2015, when the pension fund for the higher education sector invested about £150m in a series of inflation-linked notes with a final maturity of 2063.A spokeswoman for USS said the transaction announced today was a variation of the first deal.
Keva, Finland’s biggest pension fund, has reappointed the UK arm of FactSet to provide a fixed income analysis tool.FactSet – headquartered in the US state of Connecticut – provides performance attribution and analysis for all aspects of the public sector fund’s bond allocation.At the end of 2017, fixed income made up 42.8% of Keva’s €51.9bn investment portfolio, according to the fund’s website. CIPAV, a €5.7bn French multi-sector pension fund, has launched a search for a “flexible allocation” manager.It has not set a specific size for the mandate as the tender refers to a “framework agreement” with no minimum or maximum fund size.CIPAV said it wanted managers investing in EU and OECD countries only. The contract would be for five years initially. “We have not set performance targets or risk limits,” the pension provider said. “The objective of the fund is to deliver stable and positive returns irrespective of the market conditions.” Respondents must have at least €300m already invested in the strategy. CIPAV expressed a preference for a French fund structure, although it said it would consider other regulated alternative investment fund options.Managers should send in responses by midday on 21 September, Central European Time.FRR adds BlackRock to transition manager rosterFrance’s biggest pension fund, FRR, has appointed BlackRock as a transition manager to aid major portfolio allocation shifts.The €34bn fund renewed a similar mandate for Russell Investments last month.FRR has been active in tendering asset management mandates this year, and is currently seeking managers for a €2.3bn allocation to US equities.It has also targeted French and European small cap allocations worth a combined €1.7bn, and was considering increasing its impact investments.Finland’s public sector fund appoints fixed income analysis provider
Michael D’Arcy, Irish financial services and insurance ministerMichael D’Arcy, the Irish minister for financial services and insurance told conference delegates that the government wanted to put Ireland “at the forefront of policy developments at EU level”.He introduced a new strategy for the fund management industry, promising new initiatives to ensure companies and the government were “fully equipped” to make Ireland a leader in the industry. This included a new Investment Limited Partnership Bill to improve the country’s private equity and unlisted assets sectors.Pat Lardner, chief executive of the Irish Funds Industry Association, said the bill would “provide a further boost in Irish funds industry efforts to establish Ireland as a European domicile for funds that want to invest across infrastructure, renewables and private equity”.Further readingIrish government wants to lead in green finance Finance minister Paschal Donohoe told delegates at December’s IPE conference in Dublin that Ireland should set itself apart as a leader in green finance Exchange-traded funds (ETFs), asset performance and Brexit-related transfers have all played a part in boosting assets managed in Ireland to a record €2.64trn, according to the Central Bank of Ireland (CBI).The Irish Funds Industry Association this week hosted its 21st Annual Global Funds Conference in Dublin, where it reported a 9% increase in assets during the first quarter of 2019.Ireland’s growing asset management industryChart MakerQ1 net sales of Irish funds hit €32.3bn, the vast majority of which (€25.7bn) came from sales of ETFs. Adding the effect of positive market performance, Ireland-based ETFs grew by 17% in the first three months of the year, with combined assets hitting €429.8bn. According to the association, the CBI authorised 1,117 new funds in 2018, its highest ever annual total, while the number of new management companies registered since the start of 2018 rose by 29%.“This reflects ongoing Brexit contingency planning, but also a more general trend as global managers choose Ireland as their EU base and launchpad to provide solutions to a range of European and global clients,” the association said in a press release.According to research by New Financial published earlier this year, Dublin was the most popular choice of location among nearly 300 companies to have selected an EU base as part of Brexit contingency planning. The research showed 100 firms selected the Irish capital – including at least 20 major asset managers.Fund management and administration companies employ 16,000 people across Ireland and contribute €837m in tax to the Irish Exchequer, according to a recent report from economic consultancy Indecon.Number of funds and sub-funds domiciled in IrelandChart Maker
But the scandal has encompassed many other issues, including Norges Bank’s mishandling of the appointment process, its failure to satisfy the public that Tangen’s fortune will not create conflicts of interest in his new role and Tangen’s use of tax havens such as the Cayman Islands.In the letter signed by the council’s leader Julie Brodtkorb, and Jan Frode Jakobsen, director of the office of the supervisory council, the panel said the accession of a new SWF CEO should happen in a way that maintains high confidence in Norges Bank and the GPFG – both in the Norwegian population and among international market players.“It is important that Norges Bank does not manage this in a way that weakens confidence,” the council wrote.“Doubts about the employment relationship, potential conflicts of interest and uncertainty about tax ethics could pose persistent challenges if these issues are not resolved quickly and clearly,” it said.Part of the problem has been Tangen’s absence from the published list of applicants until two days before his appointment was announced – an error the bank’s executive board has already admitted.Addressing this, Brodtkorb and Jakobsen wrote: “There is great public interest in hiring for the position of chief executive of NBIM. In the Supervisory Board’s opinion, Norges Bank has not handled transparency about the applicant list as should be expected.”When he was appointed, Norges Bank said Tangen would step down from all positions associated with his asset management firm AKO Capital and the associated charitable AKO Foundation, so the entities’ investments would be made independently of him.However, the supervisors said documents planted doubt that enough distancing was taking place.“The supervisory board believes it is very unfortunate that on the one hand it has been stated that Tangen is breaking all ties to the AKO system, while submitted documentation from Tangen’s lawyer shows that he is still the principal owner and has voting control in AKO Capital,” they wrote.Documents from lawyer also said that 100% tax exemption for Tangen’s donations to AKO Foundation was essential for the organisation going forward, the panel said.“The supervisory council believes these circumstances show that Tangen is not breaking all ties to the AKO system,” the panel wrote.“The supervisory council believes these circumstances show that Tangen is not breaking all ties to the AKO system”Norges Bank Supervisory CouncilThe bank’s overseers also said the executive board should have said sooner whether Slyngstad did break the rules by accepting hospitality and a private flight from Tangen.“When it comes to the question of cost coverage for Slyngstad’s participation in the seminar, the supervisory board believes that, for reasons of clarity to all employees, the executive board should have responded earlier about whether this was in breach of Norges Bank’s ethical regulations,” they wrote.Slyngstad himself has already apologised in an internal message to all staff at NBIM for this, admitting he made a mistake.The supervisors concluded their letter saying they would discuss the matter further after the executive board’s scheduled 27 May meeting to conclude work on resolving possible conflicts of interest with Tangen’s private property and ownership interests.Responding to this morning’s letter, the executive board said it was now working on Tangen’s employment contract and would take the comments into account in that work.Øystein Olsen, Norges Bank governor, addressed the council’s remark that it was unfortunate not all conflicts of interest between Tangen’s finances and his future role leading NBIM had been clarified before his employment, saying:“In our letter of 29 April 2020, the executive board addresses why specific solutions to ensure sufficient distance could not be in place until after the employment had been made public.”In that late-April letter, the executive board said the need for confidentiality had meant details of how the separation between Tangen and his assets was to be achieved would have to be worked out after the appointment was announced.Among other criticisms levelled at Norges Bank’s executive board in yesterday’s letter, the supervisory council also said the bank’s ethical guidelines seemed “unclear when it comes to practical application.”Looking for IPE’s latest magazine? 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The supervisory council of Norway’s central bank has issued a sharp reprimand to Norges Bank’s executive board over its mismanaged recruitment of hedge fund magnate Nicolai Tangen as the next head of the Government Pension Fund Global (GPFG).In a four-page letter, the 15-strong panel of overseers say: “Confusion in this matter and the possible future organisation of the personal interests of the CEO of Norges Bank Investment Management (NBIM), carry the risk of violations of laws, rules and guidelines.”The panel, which ensures the bank’s rules are observed and consists of 15 members chosen by the Storting (Norway’s parliament) was responding to the executive board’s letter of 29 April which dealt with multiple concerns about Tangen’s appointment made public a month earlier.The hiring has aroused heated debate in Norway since it came out that Yngve Slyngstad, the current head of NBIM – which runs the GPFG sovereign wealth fund – had attended an extravagant seminar hosted by Tangen last autumn and also been flown home at the tycoon’s expense.