Asset management is conducted in two main processes – investment and active ownership.
The investment process aim to maximize Industrivärden’s long-term return and is based on internal analysis, external documentation, and business intelligence. Based on this analysis, decisions are made on a regular basis on margin transactions in existing investments, divestments of an entire holding, or new investments. The estimated return potential for existing investments is to be compared with the return potential for new investments under evaluation, taking into account continuity and a long-term view.
A significant part of the work is focused on valuecreating active ownership in existing investments – the so-called portfolio companies. Active ownership aims to gain depth of knowledge about the companies and their business environments, and where necessary to influence their strategic development.
The active ownership process is conducted mainly through involvement in nomination processes for board elections, through board representation, evaluations of boards, CEOs and company managements, and by monitoring and – where necessary – efforts to influence the portfolio companies’ overall development. A decisive success factor is that Industrivärden’s analysis leads to implementable changes and/or value-creating transactions. The two main processes are tightly interwoven.
Asset management is based on Industrivärden’s relative strengths, which include a long-term investment perspective, depth of knowledge and experience in active ownership, a strong position of influence, financial strength and an extensive network.
Board of Directors
The Board of Directors makes decisions on major investments, continuously monitors the portfolio companies’ performance and decides on matters related to the exercise of active ownership in the portfolio companies. Individual directors represent Industrivärden on portfolio companies’ boards and participate actively in portfolio companies’ board nomination processes.
The Executive Management handles the Company’s day-to-day administration, which includes strategic, organizational and finance matters as well as control and follow-up, among other things. Members of the Executive Management also serve on investment teams and can contribute specialist expertise. The members of the Executive Management, together with representatives from the investment and analysis organization and the equities market function, make up Industrivärden’s investment committee. The committee makes investment decisions and adopts Industrivärden’s action plans for value creation in the portfolio companies.
Investment and analysis organization
The investment and analysis organization performs investment analyses, continuously reviews Industrivärden’s fundamental analysis of existing and new investments, and regularly updates the Company’s action plans in support of its active ownership.
Operations are organized into teams, which monitor and follow up the portfolio companies. The teams continuously perform investment and company analyses that culminate in the so-called fundamental analysis. Each investment team has deep knowledge about its respective portfolio company and its business environment in general. Important external factors include the market, competitors, customers and megatrends.
Based on this fundamental analysis, an action plan is continuously updated and forms the foundation for the design, execution and evaluation of Industrivärden’s active ownership. The aim is primarily to identify and describe various opportunities for value growth as well as strategic measures for creating this value. The fundamental analysis is a key component in the overall assessment that forms the basis of Industrivärden’s day-to-day investment decisions. All action plans are set on a continous basis by Industrivärden’s investment committee, and the respective, adopted action plans are presented to Industrivärden’s board. In this way the board members are provided with a current and in-depth picture of identified opportunities and measures. When necessary, Industrivärden communicates its views primarily with the chairman of the respective portfolio company’s board. Discussions are also held on an ongoing basis with the company’s CEO.
Equities market function
The equities market function implements investment decisions, contributes market information and executes transactions.
Operations are distinctively trust-based and therefore require that Industrivärden works with a professional and transparent corporate governance model in collaboration with other major shareholders.