Excel error costs Norway’s sovereign wealth fund 85 million

An employee at the office of Norway’s sovereign wealth fund, the world’s largest with 1.4 trillion euros under its wing, made a mistake when entering a number into Excel and lost 85 million euros in one go.

Errors of this type are not common, but they are not exceptional: when controls and processes are not sufficiently protected, an employee can easily be taken to the streets for incorrectly placing numbers in an Excel spreadsheet where millions of euros are at stake.

Norges Bank Investment Management (NBIM) said at the time: “In February this year, a calculation error was discovered in the index by which we measure ourselves. This error resulted in a slight overstatement of US fixed income. relative to global fixed income.”

When this was discovered, we immediately set about correcting it, but because the fund is so large, the return was 0.7 basis points.” Financial Times in this week’s article.

After the mistake, an investigation began. Analysts discovered that it was one of their employees who made a mistake with the simplest thing in the world: entering a date. “My worst nightmare. It was a manual error. My mistake. I used the wrong date – December 1 instead of November 1, which is clearly stated in our mandate,” the employee admitted in a report prepared by the foundation.

The Norwegian Ministry of Finance only realized the error several months later, when they were informed that the figures they had presented did not match. The employee made the calculations again, identified the error, and the company tried to correct it as quickly as possible. But in such large funds, a minimal mistake results in losses of millions of euros.

NBIM, Norway’s wealth management fund.

NBIM is a fund that invests the country’s post-sale gas and oil revenues abroad. The company is attached to the Norwegian central bank and currently has a market capitalization of €1.5 trillion. They invest in 8,859 companies in 72 different countries.

The fund achieved unprecedented results in 2023 after recording catastrophic losses in 2022. Last year, NBIM increased the value of its assets by 16.1%, the organization said in a note compiled by Europe Press.

“Despite high inflation and geopolitical turmoil, the stock market was very strong in 2023 compared to a weak 2022,” said Nikolai Tangen, the fund’s CEO. He also highlighted the “very strong performance” of technology stocks, the so-called “Magnificent Seven”, which have driven the fund’s strong performance.

Tangen eventually learned of the problem, but his reaction was unexpected. Perhaps for a fund that manages billions of euros, 85 million is not that much money. According to the report, NBIM’s risk manager attributed the error to himself (rather than to the employee who made it) and reported it to Tangen.

The CEO quickly sent an email reassuring the boss and the employee who had made the Excel error: “These are the things that get paid for. We are running a complex operation, and what surprises me most is that historically we have had very few or no problems of this nature.” “You are both super professionals and significant contributors to the success of NBIM.”