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Investing for the Long Term: Six Generations and Going Strong - Wallenbergs of Sweden
EXCERPTS
THE FIFTH GENERATION – RINGING IN MODERN TIMES
In the 1990s, Peter’s son Jacob and Marc’s son Marcus – both in their mid-30s – were given positions of responsibility in the family business. While their other cousins pursued careers outside the family business, Jacob and Marcus had evinced an early interest in joining the family business. Both cousins had studied in the US and were quite close to each other. Jacob had attended the University of Pennsylvania’s Wharton School, where he earned a Bachelor’s Degree in Economics in 1980 and an MBA in 1981. Marcus had received a Bachelor’s Degree in International Affairs from Georgetown University in 1980.... |
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THE WAY THE FAMILY BUSINESS WORKED
Though the Wallenbergs were wealthy, they were not counted among the richest Swedes, with none of them making it to the ‘Top 100 Swedes’ list compiled by Swedish business magazine ‘Veckans Affarer’. ..
ROLE OF OUTSIDERS AS INVESTORS AND MANAGEMENT
Industry observers pointed out that the market placed a large discount on the shares of Investor AB, which meant that Investor AB’s share price was lower than the combined net value of its assets. There were several reasons for the low share price of Investor AB...
WALLENBERGS’ INVESTMENTS FOR THE LONG TERM
The Wallenberg family stated that they were cautious in investing in companies as they believed in “buy to hold”, where holding could extend up to 100 years. The family invested in companies in those industries where it had a good understanding of how things worked and there was optimum utilization of its experience, network, and financial expertise. ..
BRINGING IN THE NEXT GENERATION
Over the decades, the Wallenbergs had been quite successful in managing their line of succession with capable and successful individuals at the helm. In Sweden’s free society, the Wallenbergs’ family business was regarded as a model for expansion of a family business through generations without any bickering. ..
LOOKING TOWARD THE FUTURE
As of 2016, the Wallenbergs controlled a business empire that was worth US$ 250 billion. On the contrary, the personal wealth of the family was estimated to be just around US$ 1 billion. The various family holdings employed about 600,000 people and had sales of US$ 154 billion annually. ..
EXHIBITS
Exhibit I: Concise Family Tree of the Wallenbergs Over Five Generations
Exhibit II: Positions Held by Jacob, Marcus and Peter Jr.
Exhibit III: The Key Wallenberg Holdings and Voting Rights, as of 2015
