Nicolai Tangen is to sell his shareholding in the $20bn hedge fund he founded in order to become chief executive of Norway’s $1tn oil fund after a fierce row between the Scandinavian country’s politicians and its central bank.

Mr Tangen will sell his entire holding in AKO Capital, a London-based hedge fund, to the charity he set up, AKO Foundation. He will also sell out of all his personal fund investments, with his assets — which he said would be about NKr7bn ($780m) — held as bank deposits.

“I have taken these actions to remove any doubt about which hat I am now wearing. I want to be CEO of the oil fund, and have only one objective: creating wealth for future generations,” Mr Tangen said at a hastily arranged press conference on Monday evening.

The storm has been the deepest crisis in the oil fund’s 24-year history, as politicians from across the Norwegian spectrum have criticised the country’s central bank — which houses it — for failing to eliminate Mr Tangen’s conflicts of interest.

They were also deeply concerned about some of AKO’s funds being based in the Cayman Islands, something leftwing politicians in particular were worried could compromise the oil fund’s fight against tax havens.

The political watchdog raised the temperature this month by accusing Norges Bank of breaking “guidelines, rules, and laws” by not placing Mr Tangen’s name on the public list of applicants and by failing to inform the finance minister that he had asked to keep his shares in AKO.

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Mr Tangen had originally said his holding in AKO would be reduced from 78 per cent to 43 per cent and would be placed in a blind trust but that he would take over the stake once his five-year period as chief executive of the fund ended.

The 54-year-old is set to take over as only the third chief executive of the fund on Tuesday next week.

Norway’s finance minister welcomed the revised agreement between Mr Tangen and Norway’s central bank. But he said the process of appointing a new chief executive had “created a lot of debate”, and the government would now examine if changes were needed.

Mr Tangen and Oystein Olsen, governor of Norges Bank, both insisted their original agreement was good enough but conceded they had to change it after pressure from all nine parties in Norway’s parliament.

Mr Tangen admitted that had he known he would have to sell out of AKO he would not have applied for the job in December. He joked that he had asked if he could hold his NKr7bn in cash at Norges Bank but was not allowed, and that after the entire process Mr Olsen now “owes me a beer”.

The question now is whether the revised agreement is enough to restore confidence and trust in both central bank and oil fund. One leftwing politician had called Mr Tangen “a walking conflict of interest”, while another suggested both he and Mr Olsen should resign.

Mr Olsen told the Financial Times that “the critics that we have faced will not disappear completely” but that “over time” confidence should return to the central bank and fund.

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Via Financial Times