No exit horizon
In the early 2000s, there were well-founded concerns about peak oil. Forecasts indicated that the turning point would come in 2005, and that a company like Stena would be affected by this. The founding of the investment company Stena Adactum in 2002 was a successful differentiation strategy.
CEO Martin Svalstedt has been there from the start and values the long-term approach.
“We have no exit strategy. We invest in companies we believe in, so that we can build companies we will be able to own forever, not make a quick turnaround and then sell the company,” says Martin Svalstedt.
Only investing in companies with strong management
Stena Adactum has developed strongly. Since it was established in 2002, the value of investments has grown and currently amounts to SEK 6-7 billion. A success factor has been to choose the right kind of company to go into.
“We acquire and develop Swedish companies with international operations, and with management we believe in. We do not buy in order to replace management, but because we believe in their ability to develop the business,” says Martin Svalstedt.
Right price tag is crucial
Another success factor is that the investments are made on reasonable valuations of the company.
“Sooner or later, we come to a situation where we need to sharpen the required rate of return. If a company is highly valued to start with, management may have difficulties meeting the higher requirements. Tension then arises between us as owners and management, which shifts the focus away from the development of the company,” says Martin Svalstedt.
Stena Adactum wants to have a business that generates cash flow. Companies should not need to make a turnaround.
“If that’s needed, then we were on the wrong foot from the outset,” says Martin Svalstedt.
Stena Adactum is also characterised by strong and present ownership.
“We ensure that the Board has the right expertise for the particular situation the Company is in. We always have a majority of external members and evaluate them regularly. We make changes to the Board’s composition at virtually every annual general meeting, in order to be able to provide relevant support to management,” says Martin Svalstedt.
The figures speak volumes. Stena Adactum has multiplied the value of investments – and serves as a platform for new business.