Long-term asset manager and active owner in listed Nordic companies
Industrivärden’s mission is to conduct long-term asset management that creates value through active ownership. The long-term goal is to increase net asset value and thereby generate a return for Industrivärden’s shareholders that exceeds the market cost of capital. Taking into account the risk profile of the portfolio’s investments, the shareholders are to be given a total return which over time is higher than the average for the Stockholm Stock Exchange.
Operations are built upon a structured process of continuous analysis and evaluation of existing and potential new holdings. Active ownership is exercised primarily through involvement in nomination processes for board elections, through board representation, through evaluation of company boards, CEOs and executive managements, and by monitoring and – where necessary, through a company’s board – influencing the portfolio companies’ overall development. Through these measures Industrivärden contributes to the portfolio companies’ growth in value over time.
Industrivärden is a major investor in and active owner of Handelsbanken, Sandvik, Volvo, Essity, Skanska, ICA Gruppen, Ericsson, SCA and SSAB.
Industrivärden was established by Handelsbanken in 1944 as a means of gathering shareholdings that the bank had acquired following the stock market crash in the 1930s and distributing them to the bank’s shareholders. This business proved to be successful and evolved over time into an effective asset management business with diversified ownership. Industrivärden today is a knowledgeable, responsible and financially stable owner that takes an active ownership role, and in doing so creates a competitive advantage for the value development of its portfolio companies as well as Industrivärden itself.
To conduct long-term asset management that creates value through active ownership. This mission is based on Industrivärden’s relative strengths, including a long-term investment perspective, depth of knowledge and experience in active ownership, a strong position of influence, financial strength and an extensive network.
Industrivärden’s asset management is built upon a structured investment process of continuous analysis and evaluation of existing and potential new holdings. Taking into account continuity and long-term perspective, the expected return potential for existing investments shall be weighed against the return potential for prospective new investments. Industrivärden also strives to take a distinct and active ownership role in order to increase the value of its shareholdings.
Industrivärden invests in listed Nordic companies with good return potential, where it can exercise active influence through a strong position of trust and ownershipbased positions of influence. For new investments, the portfolio company should have a minimum market cap of approximately SEK 3 billion. Industrivärden’s investment criteria are to invest in companies with proven business models and clear potential for profitable growth. Investments must also have an attractive valuation and provide a good balance of risk and return.
Active ownership in practice
Active ownership is exercised mainly through involvement in nomination committees for board elections, through board representation, evaluations of boards, CEOs and company managements, and by monitoring and – where necessary – influencing the portfolio companies’ overall development. In this way Industrivärden contributes to the portfolio companies’ growth in value over time. In its role as active owner, Industrivärden provides:
- Long-term perspective with focus on competitive growth in value over time
- Knowledge and experience with bearing on the portfolio company, its competitors and its external operating environment
- Genuine involvement and the ability to evaluate, lend support and make clear demands
- Owner cooperation through discussions and consensusbuilding on key issues with other owners
- Resources in the form of financial strength and an extensive network
During the last ten-year period Industrivärden’s stock has delivered a total return in line with the Stockholm Stock Exchange, which has performed well from an international perspective. In early 2016 Industrivärden presented a refined strategy with the express goal of increasing value creation over time. In 2016 Industrivärden’s Class C shares generated a total return of 21%, which is 11 percentage points higher than the Stockholm Stock Exchange’s total return index.
Industrivärden share – total return