The House of Wallenberg
Sweden’s leading business dynasty prepares for succession
The sixth generation of Wallenbergs is stepping up
The three cousins who lead the fifth generation of Wallenbergs: Jacob, Marcus and Peter / Photograph: Jeppe Wikstrom/Investor AGYou COULD easily miss the brass plate on the door of Arsenalsgatan 8C in central Stockholm.
It reads “Investor AB”—the name of the holding company that is controlled, through various foundations, by Sweden’s Wallenberg family.
The discreet sign fits the family motto: Esse, non videri (to be, not to be seen).
When you control 35% of the value of the national stock exchange, as the Wallenbergs do, invisibility is hard to achieve.
Few other families, at least in the West, hold comparable sway in their home countries.
Although the Wallenberg foundations own just 23% of Investor AB, which is publicly listed, they control a little over half its voting rights.
The holding company in turn owns sizeable stakes in many of Sweden’s largest businesses, including Atlas Copco (manufacturing), Saab (defence), Electrolux (home appliances) and Ericsson (telecoms).
The family also controls SEB, Sweden’s biggest bank, which was established by André Oscar Wallenberg, the dynasty’s founder, in 1856.
Moreover, the Wallenberg’s foundations are among Europe’s most beneficent.
Last year they gave away $300m for research and education, making them the biggest donor to the continent’s universities after Britain’s Wellcome Trust.
The Wallenberg family is currently led by three members of its fifth generation: Jacob, the chairman of Investor AB; Peter, his brother; and Marcus, his cousin, who chairs SEB.
With all three in their mid-to-late 60s, the transition to a new generation is now under way.
It is being closely watched across Europe.
“A lot in our early history happened by circumstance rather than design,” says Jacob.
The Wallenbergs’ position at the apex of Swedish business came about largely because of an economic crisis in 1877.
Several big Swedish companies had borrowed from SEB, which took equity rather than see them go under.
In 1916 Investor AB was founded in response to a new law that made it difficult for banks to hold shares in other companies.
The Knut and Alice Wallenberg Foundation (KAW), the first and largest of the 16 foundations established by the family, was set up in 1917 by Knut, a son of André Oscar, and his wife Alice, who had no children.
Over the generations these foundations helped shield the family’s wealth from inheritance duties.
“The establishment of KAW was a masterstroke,” argues Gunnar Wetterberg, the author of a book about the family.
Although Sweden scrapped its inheritance duties in the early 2000s, the foundations continue to enjoy tax benefits.
The family may have had plenty of good fortune, but past successions have not always gone to plan.
Marcus, the grandfather of the trio now in charge, wanted his son Marc to be the next leader.
Alas, Marc took his own life; it is said that he succumbed to the pressure of being the anointed heir.
“This tragedy has given the cousins insights in managing succession,” says Mr Wetterberg.
Whereas past generations did what they were told, the sixth has been encouraged to choose for itself.
It helps that there are 30 of them (all children or stepchildren of the trio and their sisters).
Their ascension began in earnest this spring when six joined the Wallenbergsfaren, or “Wallenberg sphere”, as Swedes call the network of foundations and companies controlled by the family.
“We were surprised by how positive the reaction was to this first step,” says Jacob, who had expected grumbles.
Institutional investors seemed to welcome the chance to get to know the next generation.
The six include Jacob junior, Jacob’s son (who joined the board of EQT, a private-equity fund co-founded by Investor AB), and Marcus’s son Fred (on the board of Investor AB). For the first time, women are also part of the succession process.
Among them is Stéphanie Gandet, who has joined the board of KAW.
More are expected to join the first sextet in the upper ranks.
Seven years ago the family introduced a charter laying out its values and goals.
They stay in close touch, meeting once a year in May at a villa on one of Stockholm’s many islands.
Every six weeks the trio (pictured) meets three of the 30 members of the sixth generation, in rotation.
He thinks that big European family enterprises are generally well prepared for handovers.
But the continent’s many midsized family firms find it more difficult (particularly those in provincial backwaters that wealthy heirs would rather leave).
A survey by the Ifo Institute for Economic Research, based in Munich, found that 42% of firms in Germany’s Mittelstand do not have a family member lined up to take the reins.
With 30 potential contenders, the Wallenbergs may find themselves faced with the opposite problem.
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