Investor AB, a swedish Berkshire Hathaway?

Investor AB is an swedish owner of high-quality, international companies founded by the Wallenberg family a hundred years ago. Basicly its a business conglomerate with listed investments, wholly-owned subsidiaries, Privat-Equity and Financial Investments. Of course the comparison with Berkshire Hathaway is obvious, they even quoted Buffett in they reports. In contrast to BRK they pay a dividend.

investor_color

This is what they say about themselves:

We have a long-term investment perspective and support our companies in their efforts to create sustainable value. Through board participation, industrial experience, our network and financial strength, we strive to make our companies best-in-class.

Investor owns significant stakes in highquality companies. Through the Boards of Directors, we work for continuous improvement of the performance of the companies.

The Investor story begins with André Oscar Wallenberg who decided to leave his career as a naval officer to found Stockholms Enskilda Bank (SEB) in 1856. During the 1870’s, when Sweden was hit by a recession, the bank became the owner of several industrial companies, customers to the bank, by converting debt into equity, in order to protect its capital. Investor was established in October 1916 when new Swedish legislation restricted the banks’ ability to own shares in other companies. Atlas Copco (then Atlas Diesel) at this time already was one of their holdings – and still is up until today. They clearly proved their long-term investing horizon.

Stockholm, Approaching Blue Hour

photo: “Stockholm, Approaching Blue Hour” from Tobias Lindman under CC.

The Wallenberg family

The Wallenbergs have a very low-key public profile, avoiding noticeable displays of wealth – I find this appealing in a time were even a president candidate is flaunting his wealth. Wallenbergs business empire is often referred to as the Wallenberg sphere. In 1990 and subsequent years, the “Wallenberg sphere” controlled nearly one-third of the GDP of Sweden. Investor AB is a big part of this sphere (the other one is non-listed FAM), in this article for example they even call Investor AB “the Wallenberg family office”.

The Knut and Alice Wallenbergs Foundation holds  20.0% of the capital and  43.0% of the votes. The Marianne and Marcus Wallenbergs Foundation holds 1.9% of the capital and 4.1% of the votes.  The remuneration of the Board can be found on page 33 of the annual report. The eleven Board members are getting just SEK 9mn (about EUR 0,9mn) as payment. Munich Re at this time has a comparable market capitalisation. Their Board of Management received remuneration totalling €23.4mn. (I would not consider the Munich RE board as overpaid). It seems that their Corporate Governance is in line with shareholder interests.

I highly admire the attitude and the long term horizon of the Wallenbergs at Invetor AB. Their style of communication remindes me of Warren Buffett and they would play a big part in my investment case.

 

Investor AB holdings:

This are the holdings of the company according to their 1Q16 report. Investor organize them as Listed Core Investments, Privat Equity and wholly-owned subsidiaries.

 

Listed Core Investments:

Atlas Copco, ABB, SEB, AstraZeneca, Ericsson, Wärtsilä, Sobi, Nasdaq, Electrolux, Saab, Husqvarna

Privat Equity:

EQT throught which they own a diversiveid Portfolio of venture-like investments (link Current-Portfolio EQT)

Wholly-owned subsidiaries organized in Patricia Industries:

Mölnlycke Health Care, Permobil, Aleris, BraunAbility, Vectura, Grand Group

 

And other:

also they own 40% of telecommunications operator “3 Scandinavia” and some “financial-investments”

 

First conclusion

I find Investor AB is an interesting holding-company with an stable and sound anchor investor whose interests seem to be inline with external shareowners. I will take a closer look at them later.

 

 

Disclaimer: The content contained on this site represents only the opinions of its author(s). I may hold a position in securities mentioned on this site. In no way should anything on this website be considered investment advice and should never be relied on in making an investment decision. As always please do your own research!
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