The investment process is built upon a structured method of continuous analysis of existing and potential new holdings. Qualitative and quantitative goals as well as the investments’ long-term return potential are evaluated continuously. In the course of the investment process, transaction plans are continuously updated with the aim to optimize long- and short-term timing and the forms of potential stock purchases and sales. Corresponding plans are drawn up for new investments or complete divestments.
The return potential for existing investment is to be compared with the return potential for new investments, taking into account continuity and a long-term view.
Industrivärden invests in listed Nordic companies with clear return potential, where it can exercise active influence through a strong, ownership-based position of trust. Industrivärden’s share of ownership should therefore amount to at least 10% of the number of votes and enable board representation. For new investments, the portfolio company should have a minimum market cap of around SEK 3 billion, and for investments in companies with a market cap ranging from SEK 3–10 billion, an ownership stake of 20%–30% of the capital is preferable. This is to ensure that the investment’s potential return will make a significant contribution to the equities portfolio as a whole.
Industrivärden continuously evaluates listed companies on the major Nordic stock markets and monitors all relevant IPOs in the Nordic region.
Investments are to be made in established companies in which Industrivärden can identify long-term, attractive return potential. The overarching investment criteria are:
- Clear potential for profitable growth
- Proven business model
- Good balance between risk and return
- Attractive valuation
A long-term investment perspective means that major emphasis is put on assessing interesting investment alternatives based on Industrivärden’s view of important developments in the business environment. These can concern everything from macroeconomic development trends and innovations to megatrends such as digitalization, new material technologies, sustainability, and so on. Many of these trends also present significant challenges and opportunities within the context of active ownership.
Current investments – portfolio companies
The return potential for investments in the portfolio companies is evaluated on a continuous basis with a 3–5 year time horizon. Major emphasis is put on comparisons against an estimated return potential for other investment alternatives, taking into account continuity and long-term objectives.
Equities market function
To enable professional asset management, Industrivärden has an equities market function that implements investment decisions, provides market information and executes transactions. To capitalize on this resource and on Industrivärden’s long-term shareholdings, trading is conducted in equities and derivatives.