Ratos

"The sons were named Ragnar and Torsten, and at the next generational shift, the two began building an investment company with a broad focus, where the wholesale business became one of the assets. They foresightedly bought shares in companies that were part of the growing Swedish basic industry, such as the mining company Gränges and the forestry company Holmen, but also refining businesses such as Bulten, which still produces bolts for the automotive industry today, the electrical engineering company Asea (ABB), and Sweden’s lithographic printing company, which later became Esselte. The new investment company was named Ratos, built from the first letters of Ragnar and Torsten’s names. In 1954, the company was listed on the stock exchange; this was a way to allow individual family members to sell shares without affecting the business. The family secured control by forming the Söderberg foundations, with 27.1 percent of the votes in the company. An additional 46.4 percent was still owned by the family in 2012."

"In practice, Ratos would function as a venture capital fund, managed by the Söderberg family. The person tasked with restructuring Ratos was Arne Karlsson from Tumba, a southern suburb of Stockholm. Like most senior executives in the finance industry, he attended the Stockholm School of Economics. But he almost didn’t get in; according to himself, he played too many cards during his high school years. P-O has also attended the School of Economics, the school his great-grandfather helped found. Olof A. Söderberg and the district judge Knut Agaton Wallenberg came up with the idea for higher education for businessmen over a fine dinner in Saltsjöbaden on March 3, 1900. They also supported the school financially when it finally got started nine years later, and today P-O sits on the board."

"The foundation of the old Ratos was laid by a merchant in Dalarna. Per-Olof Söderberg was a blacksmith master at Garpenberg works. Garpenberg had connections to Högbo works in Gävle, which early on worked to produce high-quality steel, so-called Bessemer steel. In Gävle, the seed was sown for what would become Sandvik, one of the most successful steel companies in the world."

"“My brother Ragnar, my cousins Jan and Lars (sons of P-O’s uncle Erik Söderberg), and I agreed that Ratos needed to develop. Our view was that we should move toward buying and selling unlisted companies,” says P-O Söderberg."

"In 1989, the family faced a crossroads. Ratos was a mixed bag, containing a bouquet of listed shares as well as wholly owned companies in four different industries: transport, hotels, real estate, and trade. It attracted few investors; something had to be done, or the falling share price would erode the family’s fortune. The CEO, Sven Söderberg, started by hiring his eldest son, the then 34-year-old Per-Olof, P-O, as head of strategy. P-O grew up in Djursholm but had a Småland entrepreneurial streak. Early on, he ran his own businesses, one of which was an ironmongery with an industrial focus. Later, he founded the insurance advisor Söderberg & Partners."

"The sons were named Ragnar and Torsten, and at the next generational shift, the two began building an investment company with a broad focus, where the wholesale business became one of the assets. They foresightedly bought shares in companies that were part of the growing Swedish basic industry, such as the mining company Gränges and the forestry company Holmen, but also refining businesses such as Bulten, which still produces bolts for the automotive industry today, the electrical engineering company Asea (ABB), and Sweden’s lithographic printing company, which later became Esselte. The new investment company was named Ratos, built from the first letters of Ragnar and Torsten’s names. In 1954, the company was listed on the stock exchange; this was a way to allow individual family members to sell shares without affecting the business. The family secured control by forming the Söderberg foundations, with 27.1 percent of the votes in the company. An additional 46.4 percent was still owned by the family in 2012."

"In practice, Ratos would function as a venture capital fund, managed by the Söderberg family. The person tasked with restructuring Ratos was Arne Karlsson from Tumba, a southern suburb of Stockholm. Like most senior executives in the finance industry, he attended the Stockholm School of Economics. But he almost didn’t get in; according to himself, he played too many cards during his high school years. P-O has also attended the School of Economics, the school his great-grandfather helped found. Olof A. Söderberg and the district judge Knut Agaton Wallenberg came up with the idea for higher education for businessmen over a fine dinner in Saltsjöbaden on March 3, 1900. They also supported the school financially when it finally got started nine years later, and today P-O sits on the board."

"Arne Karlsson is keen to emphasize that Ratos has its own model for dealing with unlisted companies. They retain the companies for a longer time, the oldest holding has been kept for seventeen years, and have never put any company into bankruptcy."

"The first step was to transform Ratos into a pure investment company in 1995. But that was just the beginning. Even investment companies were, and still are, distrusted on the stock market. Investors see a risk that the major owner uses the company as a power tool rather than having the best interests of all shareholders in mind."

"– We distance ourselves from pure private equity, they are too financially oriented. Ratos has had an average annual return of 25 percent since the transformation. If we had borrowed more, it could have been higher, but with increased leverage you also increase the risk, he says."

"Ratos does not use the same reward model as other venture capital companies, but they have salary, bonus, and buy options in the companies they invest in. Karlsson’s Ratos is definitely more aggressive than the old one, he has replaced virtually all staff, but he takes less risk than other venture capitalists."

"The new Ratos makes more purchases and sales than the old one, but fewer than its competitors. This is because they do not have funds that close and force the sale of companies after a certain time. High activity is also not necessarily a good thing, as all consultants and lawyers who must be hired cost money. Those costs eat into the profit."

"Ratos, the Söderbergs' "power company"