what is causing this noise?

What you describe sounds like classic "tappet" noise. Your description of the noise only lasting for a while after starting the engine from a cold start condition. BMW have a service bulletin describing this problem and how to check to determine if the lifters are indeed bad. First and foremost I would drive the car and change the oil when it is hot. BMW insist on using 5/30W Synthetic oil, a lot of time lifter noise is attributed to to high a viscosity engine oil, If the engine oil viscosity is to high, the oil takes to long to reach the lifters on a cold start because it is "too thick:. I like a product called Risolene. Substitute it for one quart of engine oil. This product is high detergentcy, low viscosity and may clean out slugged or restricted lifters.