Structures value creation
Industrivärden’s core business is to invest in listed Nordic companies with good potential for value appreciation, and through active ownership contribute to continuous growth in value of its portfolio companies.
The role as active owner requires that Industrivärden can exercise significant ownership influence and entails a long-term investment horizon. An active ownership perspective fosters a keen understanding of the portfolio companies’ businesses, operating environments and continuing development. Contributing to value creation in the portfolio companies increases asset values while reducing Industrivärden’s equities risk.
Successful business model
Industrivärden has many years of experience in value-creating active ownership and works according to a tried and tested business model. Ultimately Industrivärden’s success can be credited to it’s employees and established work processes.
Highly refined work process
Work is conducted in four processes, where most of Industrivärden’s resources are dedicated to value-creating active ownership. Every portfolio company is analyzed with respect to potential growth in value. Quantitative goals are evaluated on a continuous basis, as are various forms for a future exit. Major emphasis is put on continuous comparisons with longterm investments in other listed companies. Investments are evaluated continuously over time with a 5 to 8 years time horizon.
Clear investment criteria
Investments are made in companies with proven business models and considerable opportunities for future growth in value.
• Investments in mid-sized and large cap listed Nordic companies.
• Focus on business models that can be applied in several markets.
• Good ability to generate growth in cash flow.
• Major potential for value appreciation through active ownership.
• Ownership stakes that enable significant influence.
Analysis
Industrivärden has a lean organization that is distinguished by high flexibility and short decision-making channels. The Company has 20 employees, eight board members and an extensive contact network with specialist know-how. Operations are project-oriented and involve personnel from both the investment organization and staff functions.
Each portfolio company and potential new investment candidate is monitored by an investment team. The investment team performs a company analysis that culminates in a so-called fundamental analysis.
Based on this analysis, the team continuously updates an action plan, which serves as a platform for the design, implementation 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 achieving this value.
All analysis is based on external information material. Each investment team presents its action plan on a continuous basis to the director or directors with ties to Industrivärden serving on the board of the portfolio company. In this way, Industrivärden’s representatives are provided with a current picture of identified opportunities and measures. By working with sound, well-researched ideas, Industrivärden can exert influence on the respective portfolio companies’ boards. In this way, over time parts of the action plans can be put to concrete work in the portfolio company for future value creation.
Executive Management and Investment Committee
The CEO is responsible for Industrivärden’s day-to-day administration, which is handled by the Company’s Executive Management. This work involves strategic, organizational and financing matters as well as controls and follow-up, among other things. Industrivärden’s Executive Management also serves as the Investment Committee, which adopts action plans and makes investment decisions within set mandates.
Representatives of the Executive Management participate on the investment teams as investment heads.
Market operations and short-term trading
Industrivärden has a separate function that conducts various market operations in the aim of supporting the investment activities with market information and executing investment decisions. In addition, in an effort to generate excess returns, short-term trading is conducted in equities and equity-related instruments. Value is created primarily through derivative transactions in the shares of existing portfolio companies.