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Christer Gardell, a Swedish fund manager and activist investor, has added his voice to the concerns. He argues A-share holders risk having too little “skin in the game” when a business takes a turn south, as he says happened at Ericsson several years ago. “If you control a company with A-shares, you need to have the exposure so it hurts if things go badly,” he said in an interview.
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“We’ve been doing this since 1916 with these companies,” Poker says. “We’ve been there and built this, ensured long-termism, ensured that the companies have been able to develop in good times and bad.”
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He and the other fifth generation leaders, as well as former Investor AB Chief Executive Officer Johan Forssell, can also point to outsized performance. Investor AB has beaten the Swedish stock market for 15 consecutive years with average annual returns of 19%, compared with 11% for Sweden’s SIX Return Index. For the next set of leaders, it may be a tough act to follow.
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One hedge fund manager, who asked not to be named citing the sensitivity of the matter, said the family portrays the selection process as a performance-driven one, though ultimately the top positions went to well-placed insiders. Typical succession for the Wallenbergs has been a “meritocracy of the blood,” according to historian Gunnar Wetterberg, who says that while training and credentials matter, family name and lineage are the decisive factor.
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“They were nominated because they were individuals from the family with the relevant experience and background,” Poker says of recent elevations. “We’re not an employment agency.”
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The rise of Sweden’s tech sector and billionaire class is another potential challenge to the family’s power and prestige at home. Ten years ago, the hedge fund manager said, there were maybe half a dozen institutions you’d go to for capital. Now, there are 50 private individuals with billions who can fund startups in the country, the person said.
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It’s not a view that everyone shares. “Even with successful entrepreneurs like Daniel Ek or the Klarna founders, they’re still nowhere near the Wallenbergs’ level of influence,” said Sverre Linton, chief legal officer and spokesperson for the Swedish Shareholders’ Association, which represents small stock investors.
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Swedish Royalty
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Despite their huge influence and business empire, the family are conspicuously absent from international and even Swedish rich lists, eclipsed at home by the likes of H&M heir Stefan Persson, Spotify co-founder Martin Lorentzon and the heirs to the Tetra Pak fortune. That’s because their vast assets are held in foundations, started out by Knut and Alice Wallenberg, in 1917.
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“They had no children,” Poker explains under the steady gaze of forefather Knut’s portrait. “They wanted to find a system that would ensure this could continue after they themselves were gone. For us in the fifth generation, you look at it and say: ‘Wow, here were people who thought long term!’”
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The clan has at times invited comparisons with the royal family. The top echelons take salaries from the foundations and holding companies they work for and are often seen on state visits. Marcus Wallenberg, for example, was part of a delegation to Canada alongside King Carl XVI Gustaf and Queen Silvia and Deputy Prime Minister Ebba Busch in November.
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“The lives of the leading Wallenbergs resemble, in many ways, those of Europe’s royal families — and are therefore hardly always particularly enjoyable,” Finnish financier Bjorn Wahlroos wrote in his memoire. “It is about self-discipline and the duty to bear one’s responsibility,” he said.
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Poker, so named by a relative for his enigmatic expression as a young child, recalls wistfully the memories of his father constantly on the road when he was a boy.
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