The investment process is built upon a structured method of continuous analysis of existing and alternative investments with focus on the respective investments’ longterm return potential. Within the investment process, transaction plans are continuously updated with the aim to optimize long- and short-term timing and the forms of prospective stock purchases and sales. Corresponding plans are drawn up for new investments or complete divestments. The return potential for existing investments is to be compared with the return potential for possible alternative 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 provide for board representation.
Investments are to be made in established businesses 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 natural consequence of Industrivärden’s strategy is that the main focus is on long-term value creation in the portfolio companies. The return potential for investments in the portfolio companies is evaluated on a continuous basis with a three- to five- year time horizon. Major emphasis is put on comparisons against an estimated return potential for other investment alternatives, taking into account continuity and a long-term objective.
A long-term investment perspective means that considerable work is dedicated to analyzing important changes in the business environment. These can concern everything from macroeconomic development and innovations to megatrends such as digitalization, new material technologies, and long-term sustainable development. Having a keen understanding of these trends is of major importance for the ability to assess the portfolio companies’ long-term value potential and the opportunities and challenges that the portfolio companies are facing.
Equities market function
Industrivärden’s equities market function executes investment decisions and provides information on the market and macro-environment. To generate added returns and build knowledge, smaller investments are also made to a limited extent in listed Nordic equities. The function has one employee, who is also active in the analysis and investment organization.