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Industrivärden: Sweden's 80-Year Active Ownership Machine
I. Introduction & Episode Roadmap
Picture Stockholm's Strandvägen in the winter of 1943, where bankers and industrialists huddled in heated conference rooms, wrestling with a peculiar problem. Svenska Handelsbanken had accumulated a motley collection of industrial shareholdings—rescued companies, crisis-era assets, and investments forced upon them by two decades of economic catastrophe. The question haunting them wasn't whether to keep these holdings, but how to transform what began as emergency triage into a coherent ownership strategy.
In the winter of 1943/1944, Handelsbanken formed a holding company for the companies owned by the bank after the financial problems of the 1920s and 1930s, as part of a plan to phase out the bank's ownership of these companies, which included L. M. Ericsson. The limited company Industrivärden was registered on February 21, 1944. The name, which means "industrial values," was chosen to signify the major value in the industrial companies that were transferred to this company that was newly formed by Handelsbanken.
Eight decades later, that crisis-born entity has become one of Europe's most influential ownership platforms. On December 31, 2024, the portfolio had a market value of SEK 166,504 million, corresponding to SEK 386 per Industrivärden share. What began as a bank cleaning house for distressed assets evolved into something far more ambitious: a living testament to the power of concentrated, patient capital in an age of index funds and algorithmic trading.
This is the story of how a subsidiary created to warehouse banking wreckage became the control tower for some of Sweden's most important industrial enterprises—Volvo, Sandvik, Handelsbanken, Ericsson, Essity, SCA, Skanska, and Alleima. It's a tale that illuminates the unique Swedish model of corporate governance, the tension between active and passive investing, and the question every long-term investor must eventually answer: Does engaged ownership actually create value?
Industrivärden has sizable ownership stakes in eight portfolio companies: Volvo, Sandvik, Handelsbanken, Essity, SCA, Ericsson, Skanska and Alleima. The portfolio companies are characterized by proven business models and long-term value potential.
The numbers tell a compelling story. During the period 2018 through 2024, aggregated weighted operating profit has increased by an average of 11.2% annually, compared with 9.2% annually for Large Cap companies on the Stockholm exchange. But the real magic lies not in returns alone but in the model itself—a flywheel of dividend collection, strategic reinvestment, and boardroom influence that has operated continuously since Winston Churchill was still leading Britain's war cabinet.
II. The Swedish Corporate Governance Context
To understand Industrivärden, one must first understand the peculiar landscape of Swedish capitalism—a system that combines egalitarian social democracy with some of the most concentrated corporate ownership structures in the developed world. It's a paradox that has puzzled observers for decades: How does a country famous for its welfare state simultaneously nurture industrial dynasties that would make American robber barons envious?
The answer lies in what Swedes call "ownership spheres"—overlapping networks of holding companies, foundations, and family offices that exercise effective control over vast swaths of the economy. The Wallenberg family is a prominent Swedish family of bankers, industrialists, politicians, bureaucrats and diplomats, present in most large Swedish industrial groups, including EQT AB, Ericsson, Electrolux, ABB, SAS Group, SKF, Atlas Copco, Saab AB, and more. In the 1970s, the Wallenberg family businesses employed 40% of Sweden's industrial workforce and represented 40% of the total worth of the Stockholm stock market.
Two great dynasties dominate this landscape: the Wallenberg sphere, centered on Investor AB and Skandinaviska Enskilda Banken (SEB), and the Handelsbanken sphere, anchored by Industrivärden. These aren't competitors in the conventional sense—they're more like rival philosophical schools, each offering a different answer to the question of how patient capital should engage with industrial enterprise.
In 1916, new legislation made it more difficult for banks to own shares in industrial companies on a long-term basis. Investor was formed as an investment part of Stockholms Enskilda Bank. This legislation—intended to separate banking and industrial ownership—paradoxically strengthened the sphere model. Instead of banks directly controlling companies, family-controlled holding companies now held the stakes, insulated from banking regulators yet still tightly connected to the founding financial institutions.
The dual-class share structure enables this entire system. It is common for Swedish companies to have two classes of shares that differ in their voting rights. The use of two different classes of shares usually results in very stable ownership structures where founding families may retain control of a company even with a small equity interest. Companies with such share structures represent more than 70% of the aggregate market capitalisation of the main market listed companies in Sweden.
Unlike American corporations where one share equals one vote, Swedish companies routinely issue A-shares with ten votes each and B or C-shares with one vote each. This means an investor holding 10% of the economic interest might control 40% of the voting power—enough to dominate board elections and strategic decisions without exposing their portfolio to full market volatility.
Critics call this entrenchment; supporters call it stability. The Swedish Corporate Governance Code—a "comply or explain" framework—attempts to balance these competing considerations by mandating shareholder-appointed nomination committees (rather than board-appointed ones) and requiring extensive disclosure of ownership structures.
The results speak for themselves: Swedish corporate governance consistently ranks among the world's best in international comparisons. The Swedish stock market is a fairly large market, and perhaps most importantly, one of the few Western markets that has a growing number of listed companies as well as market capitalisation. And with regards to corporate governance, Sweden seems to perform equally well in international comparisons. Though we are of course not claiming that it is a perfect system, agency costs seem to be low in international comparisons, owners are highly engaged, and minority shareholder protection is strong.
What does this mean for investors? It means that when analyzing Swedish holding companies like Industrivärden, one cannot simply apply American valuation frameworks. The control premium embedded in Swedish A-shares, the overlapping ownership networks, the long-term orientation enforced by family and foundation shareholders—these factors create a fundamentally different investing environment, one where patient capital has structural advantages that don't exist in more liquid, dispersed-ownership markets.
III. Origins: Birth from Banking Crisis (1920s-1944)
The Great Depression arrived in Sweden via the spectacular collapse of Ivar Kreuger, the "Match King" whose fraudulent financial empire rivaled anything Bernie Madoff would later construct. Before the decade was out, an ambitious Swede named Ivar Kreuger pulled Svenska Handelsbanken into what has been called the largest financial fraud in history.
Kreuger had built a global monopoly on matches—not through superior products but through elaborate financial engineering that made Enron look like amateur hour. When he shot himself in a Paris apartment in 1932, the reverberations nearly destroyed Swedish banking.
An audit undertaken after his death revealed the extent of the fraud he had perpetrated, and Svenska Handelsbanken could not help but be involved in the bankruptcies and restructurings that followed. Not only had Kreuger embezzled $5 million from L.M. Ericsson, but he had endangered its independence by borrowing against his controlling interest in the company. Svenska Handelsbanken, along with rival Stockholms Enskilda Bank, was closely involved in Ericsson's reconstruction.
The bank found itself holding substantial equity positions in companies it had never intended to own—stakes acquired through loan defaults, restructurings, and the general chaos of economic collapse. The bank also took control of what remained of Svenska Cellulosa Aktiebolaget (SCA), a Kreuger venture for which it was the major creditor. It formally bought out SCA in 1934 for SKr 3 million, and considered itself fortunate when it resold an 83 percent stake in the company to industrialist Axel Wenner-Gren later that year for SKr 10 million.
By the early 1940s, Handelsbanken's industrial portfolio had grown into an unwieldy collection of holdings that sat awkwardly on a commercial bank's balance sheet. Wartime regulations and the practical realities of managing diverse industrial companies from a bank's headquarters demanded a solution.
A statutory meeting was held on January 15, 1944, and the company was registered on February 21. Industrivärden was formed as a sound company with 2,500 preferred shares and 250,000 ordinary shares. Helmer Stén was Chairman and Sture Ödmark was CEO.
The founding portfolio tells the story of crisis-era Sweden: The fundamental assets were holdings in eight companies: forestry company Bergvik och Ala, hydropower company Hammarforsen (both of which were hived off from SCA when the parent company was reconstructed), steel company Fagersta, Telefonaktiebolaget L M Ericsson, textiles company Almedahl-Dalsjöfors, textiles company Kilsund and portfolio management companies AB Hindus and AB Regia.
In 1945, Industrivärden was listed on the Stockholm Stock Exchange. Handelsbanken's shareholders received the opportunity to acquire shares in the new holding company, effectively distributing the bank's industrial inheritance to its existing investor base.
The parallel to the Wallenberg sphere's creation is striking. In response to the new legislation, the Wallenbergs set up Investor AB in 1916, transferring its vast industrial shareholdings to the new holding company. From the start, therefore, Investor held majority positions in a number of Sweden's oldest and most prominent industrial companies, such as Scania, Atlas Copco, and others.
Both holding companies emerged from necessity rather than design—regulatory pressure in the Wallenbergs' case, crisis management in Handelsbanken's. Yet both would evolve into sophisticated ownership platforms that would shape Swedish industry for generations.
The key insight of these early years was that concentrated ownership, when combined with long time horizons and genuine industry expertise, could create value in ways that dispersed ownership could not. The bank executives who founded Industrivärden weren't seeking to flip assets; they were building institutions designed to outlast their founders.
IV. Post-War Expansion & Diversification (1945-1970s)
The Marshall Plan era transformed Europe, and with it, Industrivärden's opportunity set. Demand for industrial products and input components rises sharply in post war Europe. Against this background, Industrivärden strengthens its ownership positions in attractive portfolio companies and carries out new acquisitions in sectors such as forest products, gas and steel. SCA becomes a new portfolio company.
Sweden's neutrality during World War II had left its industrial base intact while competitors' factories smoldered. Swedish steel, timber, and engineering products flooded into rebuilding Europe. Industrivärden rode this wave, expanding its portfolio with methodical precision.
In 1957, Industrivärden acquired shareholdings in AGA AB and Svenska Metallverken. In 1958, the company acquired shares in Borås Väveri, expanding in the textile industry.
The 1960s brought perhaps the most aggressive diversification in Industrivärden's history. In the 1960s, Industrivärden continued to diversify its holdings portfolio, with companies that had already been included in the portfolio of its predecessor, AB Handion, in the 1920s. These companies now became regular holdings, such as A-betong, Boliden and Husqvarna. Industrivärden also bought stock in its founder company Handelsbanken.
The decision to acquire stakes in Handelsbanken itself represented an interesting evolution—the offspring buying back into its parent, creating a circular ownership structure that reinforced the sphere's influence. This wasn't nepotism; it was strategic positioning that ensured Industrivärden would have a voice in Handelsbanken's boardroom just as the bank had shaped Industrivärden's birth.
Continued strong growth and extensive residential construction lead to investments in engineering and construction companies. Even though the five largest holdings account for most of the portfolio value, the equities portfolio becomes differentiated to include holdings in more than 60 companies and a number of wholly owned subsidiaries.
By the peak of this diversification wave, Industrivärden had transformed from a crisis-era holding pen into something resembling a Swedish conglomerate—though one that exercised control primarily through shareholdings rather than full ownership.
The 1970s brought new additions that would prove consequential for decades. In the 1970s, new holdings were added to the company's portfolio, including mining giant Atlas Copco, automotive manufacturer Volvo, pharma company Astra, and Alfa Laval, which had been in Handion's portfolio back in 1924. In the late 1970s, Industrivärden sold its stock in Fagersta to Kinnevik. This was replaced by a shareholding in Sandvik.
The Volvo position would eventually become Industrivärden's largest holding—but in the 1970s, it was merely one acquisition among many. The company's strategy reflected the era's thinking: diversification as risk management, breadth over depth, portfolio exposure to Sweden's entire industrial economy.
Yet even as the portfolio swelled to over sixty companies, the seeds of a different philosophy were taking root. Was broader really better? Or was something lost when ownership stakes became too thin to exercise genuine influence?
V. The Strategic Pivot: From Conglomerate to Focused Ownership (1980s-1990s)
The 1980s forced a reckoning. Falling productivity and growing international competition put demands on structural measures and stronger competitiveness. Industrivärden formulates a clear investment strategy with the ambition to exercise its ownership in a more structured way.
Global competition was intensifying. Japanese manufacturers challenged Swedish engineering companies. Financial deregulation created liquid capital markets that made traditional Swedish relationship banking seem quaint. The cozy post-war order was ending, and companies—and their owners—needed to adapt or perish.
Industrivärden's response was counterintuitive: focus. Rather than spreading resources across sixty-plus companies, the new strategy concentrated capital and attention on a smaller portfolio of larger positions. The goal wasn't just financial returns; it was influence. With 2% stakes in dozens of companies, Industrivärden was a spectator. With 10-25% stakes in a dozen major companies, it could shape destinies.
Consolidation of the wholly owned businesses continues, culminating in the formation of the industrial company Inductus, the industrial trading company Indutrade, and the property company Fundament. The equities portfolio is changed with the divestment of the holdings in PLM and AGA, new purchases are made in Sandvik, and other, and the holding in Skanska is doubled.
The 1990s accelerated this transformation. In the 1990s, the steel companies Sandvik AB and SSAB were added as important holdings in the company's portfolio. In the late 1990s, Industrivärden acquired shares in the industrial group Sandvik from Skanska. The company soon doubled its holding in Skanska and became the largest shareholder of the construction company.
A globalized capital market and mounting competition drive towards specialization. Industrivärden focuses on its area of strength: active ownership in large, listed companies. The portfolio is refined, whereby the remaining subsidiaries are sold. Industrivärden's ownership strategy is further refined.
By the turn of the millennium, Industrivärden had completed its metamorphosis. The conglomerate of the 1960s—with its textiles, real estate, and industrial miscellany—had become something cleaner: a pure-play investment company focused exclusively on large-cap Swedish industrials.
The rationale was elegant: Industrivärden couldn't compete with global private equity on leveraged buyouts, couldn't match index funds on cost, couldn't offer hedge fund-style trading returns. But it could offer something rare—patient capital combined with genuine operating expertise and board-level influence. This was its competitive advantage, and the 1990s saw the company lean into it fully.
VI. 2000s: Sharpening the Model
The new millennium opened with a portfolio that would have been recognizable to any Swedish business observer—and largely remains so today. At the start of the 2000s, Industrivärden's equities portfolio consisted of large shareholdings in six listed companies (Ericsson, Sandvik, Skanska, Handelsbanken, SSAB, and SCA), a medium-term equities portfolio (including Skandia and Lundbeck), two remaining wholly-owned industrial companies (Besam and Isaberg Rapid) and the industrial trading company Indutrade. At the end of the 2000s, Industrivärden was Skandia's second-largest shareholder, but the holding was sold eventually. The holding in Danish pharmaceutical company Lundbeck and the two remaining industrial companies (Besam and Isaberg Rapid) were also sold.
The Indutrade IPO represented a particularly interesting evolution. The industrial trading company—itself a collection of niche technical sales businesses—was spun off to public shareholders, with Industrivärden retaining a significant stake. This wasn't asset-stripping; it was strategic positioning, giving Indutrade the independence to pursue its own acquisition strategy while freeing Industrivärden to focus on its core holdings.
The 2008 financial crisis tested the model severely. Industrial companies worldwide saw order books collapse; Volvo's truck sales plummeted; Ericsson faced telecom carrier retrenchment. Industrivärden's concentrated portfolio meant concentrated pain.
Yet this was also when the active ownership model showed its value. Rather than panic-selling into the downturn (as index funds mechanically do when redemptions flow), Industrivärden maintained positions and, in some cases, increased them. At the start of the decade, Industrivärden becomes the largest shareholder in Volvo. Many industrial companies continue to struggle with the aftereffects of the financial crisis of the 2000s, and focus is directed in particular on various measures in existing portfolio companies.
The crisis also brought governance battles. When industrial companies struggle, boards must make difficult decisions—layoffs, factory closures, strategic pivots. Having a committed long-term owner in the room changes those conversations. Management teams knew Industrivärden wouldn't desert them at the first sign of trouble; that credibility enabled harder decisions earlier.
The decade ended with Industrivärden's model more refined than ever: concentrated positions in leading Swedish industrials, active board representation, long time horizons, and a capital structure designed for patience rather than leverage.
VII. Key Inflection Point #1: Helena Stjernholm & the New Leadership Era (2015)
In August 2015, Industrivärden announced a leadership change that raised eyebrows across Swedish financial circles. Helena Stjernholm, M. Sc. Econ., has been named as the new President and CEO of Industrivärden. Stjernholm (b. 1970) is currently a partner in the private equity firm IK Investment Partners with responsibility for its Stockholm office. She is also a member of IK's Executive Committee. Stjernholm has served in various positions with IK (former Industri Kapital) since 1998, and prior to that worked as a consultant for Bain & Company.
The appointment marked several firsts: the first woman to lead one of Sweden's major investment companies, and the first CEO recruited directly from private equity. After working for Bain & Company as a consultant (1997–98), she joined the venture capital firm IK Investment where she worked for 17 years. In 2015, she was appointed CEO of Industrivärden after Anders Nyrén left following an expenses scandal.
Born in 1970, Helena Stjernholm was brought up in the central Swedish town of Kristinehamn where she attended Källgårdsskolan and Södermalmsskolan before opting for technical secondary school subjects at Brogårdsgymnasiet. She then spent a year in the United States as an exchange student before completing her secondary education in Karlstad. On matriculating, she took a year off, working as a replacement teacher and a healthcare assistant. She also spent four months in Austria, working in a hotel and enjoying the skiing.
This background—provincial Sweden, gap years, practical work experience—stood in stark contrast to the typical Swedish business elite trajectory of elite boarding schools and family connections. Stjernholm had built her career on merit at IK Investment Partners, rising from investment manager to partner while developing deep expertise in industrial investing.
"After seventeen years in the private equity industry I have great experience of investment activities and active ownership. In my new role, I will be working with larger and in many cases globally operating, listed companies which feels like an exciting challenge. Industrivärden is an esteemed and successful institution in the Swedish business sector and the capital market. I'm really looking forward to lead the continued development of the company."
The private equity experience proved transformative. At IK Partners, Stjernholm had learned a particular approach to ownership—hands-on, operationally focused, with clear value creation plans for each portfolio company. She brought this rigor to Industrivärden's more traditional model.
In March 2017, Veckans Affärer named Helena Stjernholm the most powerful Swedish businesswoman of the year. She said she was happy to have earned the title as it would inspire younger women to progress in business. She had succeeded in achieving better results not only for Industrivärden but for their holding companies Volvo, SSAB and Sandvik.
Under her leadership, Industrivärden sharpened its focus on portfolio company development. Helena Stjernholm (1970) President and CEO. Chairman of SCA. Director of Sandvik and Volvo. Former partner and Chief Investment Officer at IK Partners, strategic consultant at Bain & Company.
The board seats weren't ceremonial. Stjernholm brought private equity intensity to public company governance—detailed operational reviews, clear performance expectations, and a willingness to push for strategic change when necessary. The transformation at Ericsson, discussed later, would test this approach to its limits.
VIII. Key Inflection Point #2: The SCA/Essity Spin-Off (2017)
In August 2016, Svenska Cellulosa Aktiebolaget (SCA) announced a decision that would reshape Industrivärden's portfolio: the historic Swedish forest products company would split itself in two. One of the biggest and highest profile Spin-offs in Europe this year is clearly the separation of Swedish SCA into an "integrated forest product group" which keeps the SCA name and a consumer product entity named "Essity". SCA communicated this already more than two years ago and starting this week, June 12th the spin-off is actually executed, with every SCA shareholder receiving one Essity share per SCA share.
A year later, 24 August 2016, the company announced that it intended to split the SCA into two separately listed companies. In December 2016 SCA announced the acquisition of BSN Medical, a company specializing in the areas of Compression Therapy, Wound Care and Orthopaedics. The purchase price amounted to €2740 million and included brands such as Jobst, Leukoplast, Cutimed, Delta Cast and Actimove.
The strategic logic was compelling. SCA had evolved from its forestry origins into a hybrid: one-half resource-intensive forest products (timber, pulp, packaging), one-half consumer-facing hygiene products (TENA incontinence products, Tork professional hygiene, Libero baby diapers). These businesses demanded different capabilities, attracted different investors, and faced different competitive dynamics.
One of these will continue to operate as SCA, an efficient and well-invested forest products company that will include the forest products operations and all forest land currently owned by the Group. SCA's hygiene business, including the current business areas of Personal Care (including the recently acquired BSN medical) and Tissue will become a leading global hygiene and health company operating under the name Essity.
In 2017, SCA split off Essity as a separate company, and Essity listed on the Stock Exchange in Stockholm on June 15, 2017.
Essity AB (commonly known as Essity) is a Swedish multinational company specializing in hygiene and health products headquartered in Stockholm, Sweden. Established in 2017 through a spin-off from the forest products company Svenska Cellulosa Aktiebolaget (SCA), Essity operates in approximately 150 countries and serves more than one billion people worldwide.
For Industrivärden, the spin-off transformed one holding into two distinct value creation stories. The forest products SCA retained Europe's largest private forestland—2.6 million hectares, roughly 6% of Sweden's total land area. The newly independent Essity could pursue consumer health acquisitions and global expansion without competing for capital with cyclical forest products investments.
The BSN Medical acquisition, timed to coincide with the spin-off, signaled Essity's strategic direction: medical-grade health products with higher margins and stickier customer relationships than commodity tissue papers.
From an ownership perspective, the spin-off exemplified Industrivärden's approach to value creation. Rather than opposing corporate restructurings that might reduce near-term earnings, Industrivärden supported strategic moves that enhanced long-term competitive positioning. The patient capital model allows for exactly this kind of transition management—absorbing short-term turbulence in exchange for structural improvement.
Both companies have performed since separation, validating the strategic thesis that focus creates value. SCA's forest land has appreciated as carbon credits and sustainable timber gain importance. Essity has expanded its medical solutions portfolio and navigated pandemic-era demand surges.
IX. Key Inflection Point #3: The Ericsson Turnaround Challenge (2017-Present)
If the SCA/Essity spin-off showcased patient ownership at its best, Ericsson tested whether the model could survive sustained adversity. The telecommunications equipment giant—one of Industrivärden's original 1944 holdings—entered the mid-2010s in crisis.
Years of strategic drift, management turnover, and failed ventures into consumer devices had left Ericsson struggling against ascendant Chinese competitors Huawei and ZTE. Market share eroded. Profitability collapsed. The company that had helped define mobile communications seemed dangerously close to irrelevance.
Active ownership means active engagement during crises. Director of Ericsson, Sandvik and Volvo. Stjernholm's board seat put Industrivärden directly in the room as Ericsson's leadership team confronted painful choices.
We are on track to deliver an EBITA of at least break-even for the full year 2023. In Enterprise we saw continued strong growth in Enterprise Wireless Solutions, and we recorded positive EBITA in the Global Communications Platform business.
The 5G transition provided a lifeline—but one that required substantial investment during a period of constrained resources. Ericsson is shaping the industry landscape by leveraging the full value of 5G and creating the world's most powerful innovation platform. We remain focused on three priorities: i) bolstering our leadership in mobile networks; ii) growing our enterprise business; and iii) driving our cultural transformation. Leadership in mobile networks is the cornerstone of our success. Our competitive advantage is clear – we deliver leading performance, energy efficiency and cost optimization. Our radios carry about half of the world's 5G traffic outside China.
Yet challenges persist. Ericsson said it expects further decline in 5G gear demand from mobile operators this year including in its key growth market of India, despite beating fourth-quarter operating profit expectations – helped by software sales. Sales in for FY23 fell three percent to 263.3 billion kronor – lower than expected by analysts – amid a "very weak" mobile networks market.
The Ericsson situation illustrates both the power and limits of active ownership. Industrivärden couldn't single-handedly fix Ericsson's competitive position or accelerate telecom carrier capital spending. But it could ensure stable governance, support necessary restructuring, and maintain patient capital during a difficult transition.
For investors evaluating Industrivärden, Ericsson represents concentrated risk. The holding remains substantial, the turnaround incomplete, and the competitive dynamics—particularly regarding Chinese vendors and geopolitical restrictions—remain volatile. Active ownership isn't magic; it's a governance approach, not a guarantee.
X. Key Inflection Point #4: Alleima Spin-Off & Modern Portfolio Refinement (2022-Present)
History doesn't repeat, but it rhymes. In 2022, Sandvik—another of Industrivärden's major holdings—executed a spin-off eerily reminiscent of the SCA/Essity separation five years earlier.
On August 31, 2022, Alleima AB (publ) gone listed on Nasdaq Stockholm. Sandvik AB (publ) (OM:SAND) completed the spin-off of Alleima AB (publ) (OM:ALLEI) for SEK 11.04 billion on August 31, 2022. Alleima AB commenced trading on Nasdaq Stockholm on August 31, 2022. This marks the start of Alleima as a fully independent company after being part of Sandvik.
While not a household name, Alleima is a company deeply ingrained in Swedish industrial history, with origins dating back to the 1860s. The company was formerly called Sandvik Materials Technology up until it was spun off by the Swedish global engineering powerhouse Sandvik in 2022. This was a process that took several years, and when CEO Göran Björkman rang the opening bell at Nasdaq Stockholm on 31 August 2022, Alleima began trading at a SEK 10 billion valuation.
Its name is derived from the combination of "alloy" and "material," representing the core strengths of this innovator in the materials technology sector. The foundations of the Alleima story were laid 1862, when Göran Fredrik Göransson founded Sandvikens Jernverk (Ironworks in English) in Sandviken, a small Swedish town about 200 km north of Stockholm.
Alleima specializes in advanced stainless steels and specialty alloys—products used in everything from oil and gas drilling to medical devices to nuclear power plants. With over 5.5K employees, 27 production facilities worldwide, sales in over 90 countries, and 80% of revenues coming from direct sales, Alleima serves ten different customer segments. From Industrial, Chemical & Petrochemical, and Oil & Gas, to Industrial Heating, Consumer, and Power Generation, Alleima is a niche player with a premium offering based on leading metallurgy.
For Industrivärden, the spin-off added an eighth portfolio company while concentrating its Sandvik exposure on the higher-growth, higher-margin machining solutions business. As of December 31, 2024, the company holds significant stakes in eight portfolio companies, including Volvo (30%), Sandvik (24%), and Handelsbanken (17%), alongside its 2% ownership in Alleima.
Before being spun off and rebranded to Alleima, Sandvik Manufacturing Technology had a revenue of SEK 12 billion, and an EBIT of SEK 492 million in the full year of 2020. Since then, the company has as of Q3 2023 almost doubled its revenue, amounting to SEK 21 billion, and more than quadrupled its EBIT, amounting to little more than SEK 2 billion.
The pattern is clear: Industrivärden supports corporate restructurings that create focus. Whether forest products from consumer hygiene or specialty alloys from mining equipment, the logic remains consistent—concentrated companies execute better, attract specialized investors, and ultimately generate superior returns.
XI. The Active Ownership Model Deep Dive
The philosophical heart of Industrivärden lies in a deceptively simple question: What does it mean to be an owner?
For index funds, ownership is a side effect—an unavoidable consequence of tracking market weights. For hedge funds, ownership is often transitory—a trading position to be exited when thesis plays out. For private equity, ownership is total but temporary—transform a company over five to seven years, then sell.
Industrivärden offers something different: permanent partial ownership with genuine influence. Through active ownership, Industrivärden works long-term to develop and create value in its portfolio companies. Shareholder value generated in Industrivärden is based on the stock market's valuation of the portfolio companies' financial performance, dividend capacity, risk exposure and future prospects. Industrivärden's combined share of the portfolio companies' profit generation capacity can be illustrated as the capital-weighted share of the portfolio companies' operating profit.
The influence component matters. The long-term investment perspective entails a natural focus on sustainable development and long-term value-adding measures in the portfolio companies. In its ownership role, Industrivärden aims to contribute to the portfolio companies establishing and ultimately strengthening their leading positions in their respective industries. Considerable importance is attached to distinct management, focus, flexibility and financial strength. Active ownership is exercised primarily through involvement in nomination committees, representation on boards of directors and continuous evaluation of companies, boards of directors, CEOs and company management.
At a practical level, Industrivärden's staff sits on nomination committees that select directors, occupies board seats at every portfolio company, and maintains ongoing dialogue with management teams about strategic priorities. This isn't passive ownership that rubber-stamps management proposals; it's engaged governance that shapes corporate direction.
The capital allocation flywheel drives sustainable returns. SEK 8.6 billion from its portfolio companies. After a steadily increasing distributed dividend of SEK 3.3 billion to Industrivärden's shareholders, our dividend surplus was therefore SEK 5.2 billion. We invested SEK 4.6 billion of this surplus in our portfolio companies during 2024. Over the past five years we have reinvested a total of SEK 19 billion in the portfolio companies, which is a key component of our value creation model.
This flywheel—dividends received exceeding dividends paid, surplus reinvested in portfolio companies—compounds ownership stakes over time without requiring external capital raises or debt. It's a business model designed for permanence rather than exit.
Correspondingly, the capital-weighted dividend yield of Industrivärden's portfolio companies amounted to 5.7% on December 31, 2024, compared with 2.0% for Large Cap companies on the Stockholm exchange. Industrivärden's portfolio companies generally have a balanced range of gearing, which limits the associated risk. This can be illustrated in the form of the capital-weighted net debt as a percentage of operating profit before depreciation and amortization (EBITDA). The ratio amounts to 0.1x compared with 1.3x for Large Cap companies on the Stockholm exchange.
Industrivärden's dividend policy stipulates that the company is to generate a positive cash flow before portfolio changes and after payment of dividends. The aim of this is to build investment capacity over time and to be able to support portfolio companies when needed. As a rule, the debt/equity ratio is to range from 0-10%, but may periodically differ from this range.
The conservative leverage deserves emphasis. Many investment companies leverage their portfolios to amplify returns; Industrivärden maintains minimal debt precisely because leverage is incompatible with permanent ownership. A leveraged holding company must sell when markets crash—exactly when patient capital matters most.
XII. Lundberg Influence & Ownership Structure
Behind Industrivärden stands another ownership sphere: the Lundberg family, whose influence has grown steadily over recent decades.
Financier Fredrik Lundberg now controls more than 25 percent of the capital in the investment company Industrivärden, according to a flagging notification. As of November 20, his ownership stake amounts to 25.32 percent of the capital and 27.80 percent of the votes in Industrivärden. This figure includes both the shares held by the real estate and investment company Lundbergs, as well as Fredrik Lundberg's personal holdings in Industrivärden.
Fredrik Lundberg serves as Chairman of Industrivärden's board—a position that gives him direct oversight of strategic direction. Chair Fredrik Lundberg CEO Helena Stjernholm Board members associated with Lundbergs Katarina Martinson, Lars Pettersson
On August 20-21 Fredrik Lundberg increased his holding by 400,000 Class C shares in the investment company Industrivärden, where he is Chairman of the Board and major owner. The total purchase price amounts to approximately SEK 142.9 million with an average price of SEK 357.13 per share.
The Lundberg ownership creates a layered structure: Lundbergföretagen owns a controlling stake in Industrivärden, which in turn owns controlling stakes in eight industrial companies. This pyramidal arrangement multiplies voting control relative to economic interest—exactly the structure that dual-class shares enable.
Through our principal ownership of Industrivärden, we indirectly have large ownership interests in a further four companies, as well as those directly owned by Lundbergs. This means that, directly and indirectly, we are a major shareholder in twelve publicly traded companies, alongside our wholly owned real estate operations. We have focused on these companies for many years and have continued to increase our holdings through share acquisitions. Over the past ten years, we have invested a total of SEK 14.3 billion in shares.
In 2024, the Parent Company acquired publicly traded shares for SEK 2,282 million, of which SEK 1,240 million in Industrivärden, SEK 579 million in Sandvik, SEK 267 million in Alleima and SEK 197 million in Handelsbanken.
The continued insider buying speaks to conviction. When the chairman and largest shareholder consistently adds to their position—not through options grants but actual purchases at market prices—it signals genuine belief in the ownership model.
Our ownership of Industrivärden also indirectly increases our exposure to a number of companies, giving us sufficient breadth in our investment portfolio. There is no need to overcomplicate things, as our twelve portfolio companies are entirely sufficient. Further diversification would only create more risk. In terms of timing, obviously we aim to invest at the most favorable times possible, but this is difficult to judge and it is easy to fall out of step.
XIII. Current Portfolio Analysis & Value Proposition
Industrivärden's current portfolio reflects eight decades of refinement. Each holding was selected for specific reasons, maintained through cycles, and positioned for long-term value creation.
Volvo (30% stake by market value): The commercial vehicle giant has evolved from its automotive roots into a pure-play truck, bus, and construction equipment company. For the full year 2024, net sales amounted to SEK 526.8 billion (552.3) and the adjusted operating income to SEK 65.7 billion (78.2), with an adjusted operating margin of 12.5% (14.0). Return on capital employed in the Industrial Operations was strong at 35.8% (36.7). The company's electrification strategy—positioning for commercial EV adoption—represents a multi-decade transformation opportunity.
Sandvik (24% stake): Following the Alleima spin-off, Sandvik focuses on machining solutions and mining equipment—high-margin, technically demanding products with strong competitive moats.
Handelsbanken (17% stake): The bank that created Industrivärden remains a core holding. Historically, we have been able to offer solid financial stability with lower credit losses than our competitors, despite lending just as much or more. This has given us the possibility to show more understanding and patience to customers when they have run into difficulties with their finances, which has long been a contributing factor to how we build up trust, loyalty and long-term customer relationships.
Essity, SCA, Ericsson, Skanska, and Alleima: Each holding represents sector leadership in its respective domain—consumer hygiene, forest products, telecommunications infrastructure, construction, and specialty materials.
During the last ten-year period, as of December 31, 2024, the aggregate market value of Industrivärden's ownership stakes in the portfolio companies has increased by an average of 7% per year.
The total return during the period was 10% for the Class A shares, as well as for the Class C shares. During the last five- and ten-year period, the average annual total return for the Class C shares was 12% and 12%, respectively.
The portfolio construction emphasizes companies with: - Leading market positions (usually #1 or #2 globally) - Strong cash generation capability - Manageable financial leverage - Long-term secular tailwinds - Management teams receptive to active ownership
XIV. Bull and Bear Cases
The Bull Case
Hamilton Helmer's 7 Powers Framework: Industrivärden's portfolio companies demonstrate multiple sources of durable competitive advantage:
- Scale Economies: Volvo's global truck manufacturing, Sandvik's machining tools, and Essity's consumer products all benefit from scale that smaller competitors cannot match.
- Network Effects: Handelsbanken's branch-based relationship model creates local network effects that strengthen with community integration.
- Switching Costs: Industrial customers face substantial switching costs when changing from Sandvik tooling or Alleima specialty alloys—products are specified into manufacturing processes.
- Brand: TENA (incontinence products), Tork (professional hygiene), and Volvo (commercial vehicles) command brand premiums built over decades.
- Process Power: Swedish engineering excellence—the ability to manufacture complex products at demanding tolerances—represents genuine process advantages.
Porter's Five Forces: - Supplier Power: Portfolio companies generally have diversified supplier bases; vertical integration (SCA's forests, for example) further reduces exposure. - Buyer Power: Industrial customers need specialized products; switching creates operational risk. - Competitive Rivalry: Consolidated industries with rational competitors; Chinese competition remains the primary threat. - Threat of New Entrants: Capital-intensive businesses with long customer relationships create high barriers. - Substitute Threat: Most portfolio products lack direct substitutes; digitalization and electrification represent evolution rather than replacement.
The Ownership Premium Argument: Active ownership creates value that passive alternatives cannot capture. Board representation enables governance improvements; long-term orientation supports necessary transformations; concentrated ownership aligns incentives.
The Bear Case
Concentration Risk: Eight holdings means eight potential problems. Ericsson's ongoing challenges demonstrate that even the best governance cannot guarantee competitive success. A serious misstep at Volvo or Handelsbanken could materially impact portfolio value.
Discount to NAV: Holding companies typically trade at discounts to net asset value—investors can buy the underlying companies directly, avoiding the extra layer. Industrivärden's governance advantages must exceed this structural discount to justify the holding company route.
Swedish Exposure: While portfolio companies operate globally, headquarters concentration in Sweden creates regulatory, currency, and labor market exposures. European economic weakness particularly affects construction (Skanska), commercial vehicles (Volvo), and industrial equipment (Sandvik).
Cyclicality: Industrial companies amplify economic cycles. In recessions, Industrivärden's concentrated industrial portfolio will underperform more diversified alternatives.
Chinese Competition: Ericsson faces Huawei directly; Sandvik and Volvo confront increasingly capable Chinese competitors in their traditional markets. The competitive landscape has shifted permanently.
XV. Key Metrics for Investors
For long-term investors evaluating Industrivärden, three metrics matter most:
1. Discount/Premium to Net Asset Value (NAV) The gap between Industrivärden's market capitalization and the aggregate value of its portfolio holdings is the single most important valuation metric. When Industrivärden trades at a significant discount to NAV, investors effectively acquire the active ownership platform for free—or even get paid for it. When it trades at a premium, the market is assigning positive value to the governance overlay.
How to track: Industrivärden publishes weekly NAV estimates; compare to prevailing share price.
2. Dividend Surplus (Dividends Received minus Dividends Paid) This metric captures the flywheel's effectiveness. A consistently positive dividend surplus indicates Industrivärden is generating more cash from holdings than it returns to shareholders—capital available for reinvestment or opportunistic acquisitions.
How to track: Annual report disclosure; quarterly updates on dividend receipts.
3. Capital-Weighted Operating Profit Growth of Portfolio Companies The ultimate test of active ownership is whether portfolio companies grow earnings faster than comparable businesses. During the period 2018 through 2024, aggregated weighted operating profit has increased by an average of 11.2% annually, compared with 9.2% annually for Large Cap companies. Sustained outperformance validates the ownership model; convergence toward benchmarks questions its value-add.
How to track: Annual report comparative analysis; quarterly earnings reports from individual holdings.
XVI. Conclusion: The Patience Premium
Eighty years after Handelsbanken executives gathered to solve their crisis-era holding problem, Industrivärden stands as testimony to a particular philosophy of capitalism—one where ownership carries responsibility, time horizons extend across generations, and value creation means more than quarterly earnings beats.
To ensure a company's long-term perspective and stability, it is extremely important that it has a principal shareholder who takes a great responsibility over the long term. In Industrivärden, the portfolio companies have an owner that actively participates in their corporate governance and strategic development. We can also strengthen the companies' capital base, when needed, through rights issues.
The model isn't for every investor. Those seeking high-growth technology exposure, emerging market diversification, or rapid trading gains should look elsewhere. Industrivärden offers something more particular: Swedish industrial excellence, filtered through active ownership, compounded over decades.
S&P Global Ratings has assigned Industrivärden a credit rating of A+/Stable/A-1.
In an investing world increasingly dominated by passive indexing and algorithmic trading, Industrivärden represents an alternative path—one where humans make decisions, ownership carries meaning, and patience remains a competitive advantage. Whether that model can continue outperforming in a changing world remains the central question for every investor considering this Swedish ownership machine.
The answer, fittingly, will only become clear over time.
Key Regulatory & Accounting Considerations
Holding Company Structure: Industrivärden reports under IFRS as an investment entity. Portfolio valuations reflect mark-to-market prices rather than historical cost. Unrealized gains and losses flow through the income statement, creating earnings volatility that doesn't reflect underlying cash generation.
Currency Exposure: While Industrivärden reports in SEK, portfolio companies generate revenues globally. EUR, USD, and other currency movements affect both portfolio company earnings and Industrivärden's NAV calculations.
Dual-Class Voting: Industrivärden's A-shares carry ten votes each; C-shares carry one vote. Investors seeking influence should note that voting power concentrates in A-shares, which trade at modest premiums to C-shares.
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