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Business model

Areas of operations

Asset management is conducted in two areas of operation – the investment operations and active ownership – which are tightly interwoven. The investment operations aim to maximize Industrivärden’s long-term return through divestments and alternative investments in new and existing portfolio companies. The aim of active ownership is to contribute to long-term value creation in the portfolio companies through significant positions of influence and depth of knowledge about the companies and their business environments.

The chosen business model entails a long-term perspective with low portfolio turnover and a natural concentration in large ownership stakes in a limited number of portfolio companies with distinct value potential that can be realized through active ownership.

 

Analysis

Investment decisions as well as decisions to exercise active ownership are based on extensive industrial and financial analysis as well as on assessments by the Board of Directors and management. This analysis forms the foundation for both investment decisions and action plans to exercise active ownership. The action plans summarize the strategic value drivers in the portfolio companies that Industrivärden believes to be most important during the coming three to five years.

Organization

Structure

Industrivärden has a professional and cost-efficient organization that is characterized by high flexibility and short decision-making channels. The organization has a long record of cumulative experience and pertinent competence. Operations involve some 15 employees at the offices in Stockholm plus eight board members and an extensive network. Internal work is project-oriented and based on well-developed processes.

Board of Directors

Apart from its customary duties, 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 on Industrivärden’s board are represented on the portfolio companies’ boards and participate actively in the portfolio companies’ board nomination processes.

Executive Management

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 participate actively in the asset management activities and can provide specialist expertise. Certain members of the Executive Management also serve on portfolio companies’ nominating committees and boards.

Employees

Professional and successful asset management requires competent and committed employees as well as an attractive and dynamic workplace. Major emphasis is therefore put on the recruiting process, competence development and a good company culture. Industrivärden’s ethical values and ambitions as an employer are set out in the Company’s Code of Conduct, which addresses areas such as the work climate, diversity and business ethics. The employees’ total compensation shall be competitive and in line with the going rate in the market.

Investment Committee

The members of the Executive Management, together with representatives from the investment and analysis organization, form Industrivärden’s Investment Committee. The committee monitors activities on a continual basis, makes investment decisions and adopts Industrivärden’s action plans for the exercise of active ownership in the portfolio companies.

Investment and analysis organization

The investment and analysis organization is organized into company teams. Each team is led by a team manager, and employees are normally active on two to three teams.

The company teams are responsible for the continuous monitoring of their respective portfolio companies, updating Industrivärden’s action plans for exercising active ownership and for conducting specific investigative projects related to strategic issues in the portfolio companies. They also recommend margin transactions in the portfolio companies as well as alternative investments and entire divestments.

Industrivärden’s equity market function executes investment decisions and supports the organization with market and macro information. To generate excess returns, smaller investments are also made to a limited extent in listed Nordic companies where favorable return potential has been identified.

Last update: 09 Mar 2020