Han är Sveriges mest kände investerare. Tidningen Fortune beskrev honom som Europas ledande ”ägaraktivist”. Så hur tänker man om man heter Christer Gardell? Hur scannar han marknaden efter företag? Hur förbereder han sina ”tillslag”? Och hur bygger han ägarvärden?

The magazine Fortune has described him as Europe's leading owner-activist.

When he makes his offers, the stock markets are the ones to blame.

And what does he think of the 2017 Stock Exchange?

I'm going to talk to Christy Gardell about that.

You've been hanging behind the scenes for a while.

I've been listening to the previous ones, they've been very interesting.

I've been invited a few times before, but unfortunately it hasn't worked out.

I thought we would start by looking at some terms.

You and your sponsors are often described as owner-activists.

It's risk capitalists, business angels, hedge funds, and then there are stock activists.

We mix together with these risk capitalists.

These risk capitalists are those who invest in larger, unnoticed companies.

Business owners in smaller, unnoticed companies.

We invest in the stock market, and what we do is we buy large shares of property in larger, unnoticed companies, where we assess that there is a great potential for improvement.

We are actively working to achieve this potential, and we often go to the board of directors.

I think you summarized it well, because we have had both risk capitalists, business angels and now also owner activists.

So it will be a good summary for tonight.

You seem to be investing in a relatively small number of companies, 10-15, but as you said, you want to be the biggest owner.

What is behind the will to be a big owner in the companies you invest in?

If we have 130 billion, we don't want more than 10-12 companies in our portfolio.

That means we have to invest a lot of capital in each company.

So it's partly to get a better capital exposure in the fund against the companies we invest in, because it's worth investing a lot of time in them.

But also, as the largest owner, you become a bit of a centre for management, management and the rest of the shareholders.

We go in and invest in companies where we have made a decision that there is a possibility to change the company and that it will be better and more valuable to the shareholders.

And that's the way it is, change can often be a bit conflicted, because it challenges old decisions that have been made by the board and the board.

And there are often certain conflicts that you have to take care of to get 1 of the values that you think is good for the owner.

ABB and many other companies that we invest in are of a so-called conglomerate structure.

There are many different businesses that don't have much in common.

The problem with conglomerates is that they are very heavy-handed.

They are slow in making decisions and they build up a lot of overhead costs.

There is a built-in efficiency in conglomerates.

If you can free the underlying divisions or businesses, and they perform better and get a higher rating.

We don't believe in the conglomerate model.

We think it's impromptu and never worked.

And in a more fast-moving, globalised world, it works even worse.

Snabb rörlig värld globaliserad värld som funkar ännu sämre så svaret är att

får se Vad man kan ju räkna på väldigt mycket Framför allt när man går in I nya bolag, men var hur viktig magkänslan för dig när du tittar på bolag?

Magkänslan är viktigare än vad man kanske tror det är självklart så räknar vi But how important

is the gut feeling for you when you look at companies?

The gut feeling is more important than what

Of course, we count, and my employees count, so that they get blue faces when making a judgment on how the company is worth what it is worth, and what are the opportunities for improvement.

But where the gut feeling comes in, it is when you are going to make a judgment of how realistic it is to implement these improvements or changes.

It is possible to implement which people are involved and how long it takes.

there is gut feeling and experience that plays in.

And that part of the whole assessment is extremely important.

Because it's often there, when we invest in a company, the problem is not the repayments.

But there is a big difference in value if you carry out these investments or the measures after 2 years or if it takes 9 years.

You enter quite traditional sectors, such as finance and the workshop.

Is it because you have a gut feeling that you're more aware of them?

You avoid industries like technology and biotechnology.

We invest in 12 companies, and they have no idea how to make a loss.

So we spend a lot of time understanding downside investments.

I started with this 20 years ago, and we have only lost money in 1 case.

We are very careful in choosing the right companies and making sure they are stable and low-value.

The problem with companies in biotechnology, pharmaceuticals and technology is that they are not low risk.

In biotechnology, if you find a product that works or not, you lose all your money.

Pharmaceutical companies are worth in the research portfolio and it is impossible to make a better assessment of the products that will come out of it.

Even the tech companies have a very high risk profile.

We only invest in places where we feel that the probability of losing money

Technic bologna har väldigt hög risk profil vi vi går bara in I sig I investeringar där vi känner att Sandvik I samlikhet och förlorar pengar

Du har ju också tidigare varit stor ägare I en hel del stora svenska Företag publika sådana så som lindex interim justitia skandia sweat bank

telia I've been a big owner of a lot of big Swedish companies, public ones like Lindex,

Intrum Justitia, Scandia, Swedbank, Telia.

Now it's just truck manufacturing, Volvo, left in Sweden.

Volvo is our biggest investment, so it's a fairly large exposition in the portfolio.

No, We love Sweden as a country to invest in.

It's good regulatory for the shareholders.

We monitor all the big Swedish companies.

Our funds have become so big that we look at companies with a market value of

Vi har ju så att fonden blir så pass stor så att vi tittar på bolag som har ett marknadsvärde på 30 35 miljarder

Det gör att antal bolag I Sverige som passar där har blivit lite färre.

Men men vi har vi har nu ett par stycken och som vi följer att noggrant just nu.

Vad är strategin du som du nämner Volvo

But we have a couple of them that we follow very closely.

As you mentioned, Volvo is the biggest company.

Volvo is an example where it has taken a little longer than we might have hoped for.

But simply, we made a judgment that Volvo, as a company, should be able to be made more effective and earn a revenue margin of over 10%.

To be able to reach that, you have to focus on the business.

It was too much when we entered the business 10 years ago.

And, as we often do when we invest in companies, the reason there is a potential is perhaps because the management and board have not done their job properly.

So We saw the need to change the board and change the management.

Now we are in a situation where Volvo has got a good board, a very good management under Martin Lundstedt's leadership.

The re-engineering has been going on for several years.

There may be more re-enactment, but now we are in a position where we think Volvo will be able to earn more than 10% and get more stability and predictability in the sales, which should lead to the multiples being a bit higher.

A few years ago, you were talking about Ericsson.

Is Ericsson so downright now that it can be attractive for the CVN to go in?

We like the profit warnings when we don't own the company.

And when there is a profit warning, we always look at the company that is in our category.

So of course, when Ericsson has had the problems they have had, that it is clear that we look at companies.

We look at Telia, when everything went downhill in Kazakhstan and all possible places in the east.

The mood came, so of course all companies that end up in some kind of problem that scares away the short-term investors and pushes down the stock market.

Last year you created a drop of about 20% for your investors.

Our comparison index, the European index, was

What I'm most satisfied with is that we have been successful in this 20-year period.

And what I'm most satisfied with is that we have only done 1 roll.

It It's been a lot above the index, on average.

I don't know the figure, but I know it's a lot above the index every year.

What does it take to become an owner of a CVN fund?

We don't turn to the real estate market, because it gets so complicated and a lot of administration and stuff, but We turn to larger institutional investors.

We have around 350 investors in the fund, and I think the lower level is around 15 million euros.

Indirectly, you can get in through the pension system and so on.

But we don't have that many Swedish investors.

Most of our capital comes from North America.

So, 15 million euros via the pension system?

I was going to talk a little bit about that.

When you read about yourself, there's a lot to read about you, of course, but you get a reputation as a company builder or the Swedish Gordon Gekko, which I know you like.

What is it about you that arouses so many feelings, Krister?

We don't invest in something that doesn't need to change.

Sometimes you have to take a lot of conflict.

Svenska förhärskande då konsensus modellen och det gör ju att den investering stil som vi har kan upplevas lite lite annorlunda och då gillar media att hitta de här lite roliga beteckningar som pirat och styckare.

Det är något som alla kanske inte känner till om dig.

Du har en tvillingbror som också arbetar inom riskkapital branschen fast inte

A little funny nicknames, like pirate and butcher.

Something that everyone may not know about you is that you have a twin brother who also works in the risk capital industry, but

He is in so-called private equity, so he invests in unnoticed companies in Australia.

He goes out to meet people, to the city, to the pub sometimes.

I'm terrified of him when he comes home this week.

He was down in Båstad, I know everyone down there.

He came down there and he didn't know anyone.

And then he walked around and didn't say hi to anyone.

I thought, what the hell, has Christy Gardell become arrogant?

So if we meet in town and you don't say hi, then you can blame it on...

Speaking of which, your brother also plays tennis.

If you were to choose between tennis and stocks, what would you choose?

Since you have many investors in the fund, you might have to say stocks.

Yes, you might have to say stocks in this context.

at a picture of what it can look like when you're not doing stocks.

It seems like it's easiest to find you here at the tennis hall.

At lunchtime, you always find me here in Stockholm.

About 10-15 years ago, I made a strategic decision to quit business lunches and just play tennis at lunch.


Speaker 0: The magazine Fortune has described him as Europe's leading owner-activist. When he makes his offers, the stock markets are the ones to blame. So what does a man in his clothes think? And what does he think of the 2017 Stock Exchange? I'm going to talk to Christy Gardell about that.

Please welcome her to the stage. Welcome. Thank you. Welcome!

Speaker 1: Thank you.

Speaker 0: Great to have you here. How does it feel?

Speaker 1: It's great to be here.

Speaker 0: You've been hanging behind the scenes for a while.

Speaker 1: I've been listening to the previous ones, they've been very interesting. I've been invited a few times before, but unfortunately it hasn't worked out. But this year it worked out.

Speaker 0: We're incredibly happy to have you here. I thought we would start by looking at some terms. You and your sponsors are often described as owner-activists. What does that mean?

Speaker 1: Owner-activists are... There are different terms that around. It's risk capitalists, business angels, hedge funds, and then there are stock activists. We mix together with these risk capitalists. These risk capitalists are those who invest in larger, unnoticed companies.

Business owners in smaller, unnoticed companies. We invest in the stock market, and what we do is we buy large shares of property in larger, unnoticed companies, where we assess that there is a great potential for improvement. We are actively working to achieve this potential, and we often go to the board of directors.

Speaker 0: We will get to that in a moment. I think you summarized it well, because we have had both risk capitalists, business angels and now also owner activists. So it will be a good summary for tonight. CWN manages over 130 billion today. You seem to be investing in a relatively small number of companies, 10-15, but as you said, you want to be the biggest owner.

What is behind the will to be a big owner in the companies you invest in?

Speaker 1: Partly, it's a question of capital. We want to invest in a few companies. If we have 130 billion, we don't want more than 10-12 companies in our portfolio. That means we have to invest a lot of capital in each company. So it's partly to get a better capital exposure in the fund against the companies we invest in, because it's worth investing a lot of time in them.

But also, as the largest owner, you become a bit of a centre for management, management and the rest of the shareholders.

Speaker 0: What will happen?

Speaker 1: We go in and invest in companies where we have made a decision that there is a possibility to change the company and that it will be better and more valuable to the shareholders. And that's the way it is, change can often be a bit conflicted, because it challenges old decisions that have been made by the board and the board. And there are often certain conflicts that you have to take care of to get 1 of the values that you think is good for the owner.

Speaker 0: And how will it be in ABB?

Speaker 1: ABB and many other companies that we invest in are of a so-called conglomerate structure. There are many different businesses that don't have much in common. The problem with conglomerates is that they are very heavy-handed. They are slow in making decisions and they build up a lot of overhead costs. There is a built-in efficiency in conglomerates.

If you can free the underlying divisions or businesses, and they perform better and get a higher rating. We don't believe in the conglomerate model. We think it's impromptu and never worked. And in a more fast-moving, globalised world, it works even worse.

Speaker 0: So the answer is that it will go up?

Speaker 2: We'll see. Snabb rörlig värld globaliserad värld som funkar ännu sämre så svaret är att

Speaker 1: det kommer stickas upp Vi får

Speaker 2: se vi

Speaker 0: får se Vad man kan ju räkna på väldigt mycket Framför allt när man går in I nya bolag, men var hur viktig magkänslan för dig när du tittar på bolag?

Speaker 1: Magkänslan är viktigare än vad man kanske tror det är självklart så räknar vi But how important

Speaker 2: is the gut feeling for you when you look at companies? The gut feeling is more important than what

Speaker 1: you might think. Of course, we count, and my employees count, so that they get blue faces when making a judgment on how the company is worth what it is worth, and what are the opportunities for improvement. But where the gut feeling comes in, it is when you are going to make a judgment of how realistic it is to implement these improvements or changes. It is possible to implement which people are involved and how long it takes.

Speaker 2: And

Speaker 1: there is gut feeling and experience that plays in. And that part of the whole assessment is extremely important. Because it's often there, when we invest in a company, the problem is not the repayments. They are usually carried out in the end. But there is a big difference in value if you carry out these investments or the measures after 2 years or if it takes 9 years.

It affects the investment quite a bit.

Speaker 0: You enter quite traditional sectors, such as finance and the workshop. Is it because you have a gut feeling that you're more aware of them? You avoid industries like technology and biotechnology. What's the reason for that?

Speaker 1: We invest in 12 companies, and they have no idea how to make a loss. How to make bad investments. So we spend a lot of time understanding downside investments. We don't want any downside investments. We don't want to lose money.

I started with this 20 years ago, and we have only lost money in 1 case. I think it was in

Speaker 0: 1998.

Speaker 1: We are very careful in choosing the right companies and making sure they are stable and low-value. The problem with companies in biotechnology, pharmaceuticals and technology is that they are not low risk. In biotechnology, if you find a product that works or not, you lose all your money. Pharmaceutical companies are worth in the research portfolio and it is impossible to make a better assessment of the products that will come out of it. Even the tech companies have a very high risk profile.

We only invest in places where we feel that the probability of losing money

Speaker 2: is very low. Technic bologna har väldigt hög risk profil vi vi går bara in I sig I investeringar där vi känner att Sandvik I samlikhet och förlorar pengar

Speaker 1: är väldigt låg

Speaker 0: Du har ju också tidigare varit stor ägare I en hel del stora svenska Företag publika sådana så som lindex interim justitia skandia sweat bank

Speaker 2: telia I've been a big owner of a lot of big Swedish companies, public ones like Lindex,

Speaker 0: Intrum Justitia, Scandia, Swedbank, Telia. Now it's just truck manufacturing, Volvo, left in Sweden. Have you moved the Swedish stock market?

Speaker 1: Volvo is our biggest investment, so it's a fairly large exposition in the portfolio. No, We love Sweden as a country to invest in. It's good regulatory for the shareholders. We monitor all the big Swedish companies. Our funds have become so big that we look at companies with a market value of

Speaker 0: 30-35

Speaker 1: billion euros and up.

Speaker 2: Stora svenska bolag. Vi har ju så att fonden blir så pass stor så att vi tittar på bolag som har ett marknadsvärde på 30 35 miljarder

Speaker 1: och uppåt. Det gör att antal bolag I Sverige som passar där har blivit lite färre. Men men vi har vi har nu ett par stycken och som vi följer att noggrant just nu.

Speaker 0: Vad är strategin du som du nämner Volvo

Speaker 2: är största innehavet. But we have a couple of them that we follow very closely. What is the strategy?

Speaker 0: As you mentioned, Volvo is the biggest company. What was the strategy when you joined?

Speaker 1: Volvo is an example where it has taken a little longer than we might have hoped for. But simply, we made a judgment that Volvo, as a company, should be able to be made more effective and earn a revenue margin of over 10%. To be able to reach that, you have to focus on the business. It was too much when we entered the business 10 years ago. And, as we often do when we invest in companies, the reason there is a potential is perhaps because the management and board have not done their job properly.

So We saw the need to change the board and change the management. Now we are in a situation where Volvo has got a good board, a very good management under Martin Lundstedt's leadership. The re-engineering has been going on for several years. There may be more re-enactment, but now we are in a position where we think Volvo will be able to earn more than 10% and get more stability and predictability in the sales, which should lead to the multiples being a bit higher.

Speaker 0: That sounds interesting. A few years ago, you were talking about Ericsson. Is Ericsson so downright now that it can be attractive for the CVN to go in?

Speaker 1: We like the profit warnings when we don't own the company.

Speaker 0: Yes, that's true.

Speaker 1: And when there is a profit warning, we always look at the company that is in our category. So of course, when Ericsson has had the problems they have had, that it is clear that we look at companies. We look at Telia, when everything went downhill in Kazakhstan and all possible places in the east. The mood came, so of course all companies that end up in some kind of problem that scares away the short-term investors and pushes down the stock market. Then we'll see.

Speaker 0: Last year you created a drop of about 20% for your investors. Are you happy with that?

Speaker 1: Last year it was a good drop of 20%. Our comparison index, the European index, was

Speaker 0: 0.

Speaker 1: We have been successful for many years. What I'm most satisfied with is that we have been successful in this 20-year period. And what I'm most satisfied with is that we have only done 1 roll.

Speaker 0: What has the average roll-off been like?

Speaker 1: It It's been a lot above the index, on average.

Speaker 0: That's a pretty low figure.

Speaker 1: I don't know the figure, but I know it's a lot above the index every year.

Speaker 0: That sounds like you're happy with it. I think this sounds very exciting. What does it take to become an owner of a CVN fund?

Speaker 1: We don't turn to the real estate market, because it gets so complicated and a lot of administration and stuff, but We turn to larger institutional investors. We have around 350 investors in the fund, and I think the lower level is around 15 million euros.

Speaker 0: But indirectly, you can still...

Speaker 1: Indirectly, you can get in through the pension system and so on. But we don't have that many Swedish investors. Most of our capital comes from North America.

Speaker 0: Interesting. So, 15 million euros via the pension system? Tips? I was going to talk a little bit about that. When you read about yourself, there's a lot to read about you, of course, but you get a reputation as a company builder or the Swedish Gordon Gekko, which I know you like.

What is it about you that arouses so many feelings, Krister?

Speaker 1: My business is change. We don't invest in something that doesn't need to change. And change is often scary. You challenge earlier decisions. And it's a little scary.

Sometimes you have to take a lot of conflict. Svenska förhärskande då konsensus modellen och det gör ju att den investering stil som vi har kan upplevas lite lite annorlunda och då gillar media att hitta de här lite roliga beteckningar som pirat och styckare.

Speaker 0: Det är något som alla kanske inte känner till om dig. Du har en tvillingbror som också arbetar inom riskkapital branschen fast inte

Speaker 2: på samma marknad. A little funny nicknames, like pirate and butcher. Something that everyone may not know about you is that you have a twin brother who also works in the risk capital industry, but

Speaker 0: not on the same market.

Speaker 1: He is a risk capitalist. He is in so-called private equity, so he invests in unnoticed companies in Australia. We have competed evenly. I

Speaker 0: can imagine. We

Speaker 1: still compete. He was home last week. He comes home a bit then and there. He goes out to meet people, to the city, to the pub sometimes. And everyone thinks it's me.

Speaker 0: You are incredibly similar.

Speaker 1: I'm terrified of him when he comes home this week.

Speaker 0: That's when you make sure he's not home

Speaker 2: in the country.

Speaker 1: I take months to clean up. He was down in Båstad, I know everyone down there. He came down there and he didn't know anyone. And then he walked around and didn't say hi to anyone. I thought, what the hell, has Christy Gardell become arrogant?

He doesn't say hi anymore.

Speaker 0: So if we meet in town and you don't say hi, then you can blame it on...

Speaker 1: I always blame him. You always

Speaker 0: blame him. But it must be quite practical. Speaking of which, your brother also plays tennis.

Speaker 2: Yes.

Speaker 0: Who's the best?

Speaker 1: I'm pretty good at it.

Speaker 0: Of course. If you were to choose between tennis and stocks, what would you choose? Tennis balls, to be more specific.

Speaker 1: It depends on which stock.

Speaker 0: Stocks, generally. To do with stocks or tennis balls. You have to choose.

Speaker 1: Since you have many investors in the fund, you might have to say stocks.

Speaker 0: Yes, you might have to say stocks in this context. But I thought we

Speaker 1: would look

Speaker 0: at a picture of what it can look like when you're not doing stocks. It seems like it's easiest to find you here at the tennis hall.

Speaker 1: At lunchtime, you always find me here in Stockholm. About 10-15 years ago, I made a strategic decision to quit business lunches and just play tennis at lunch.

Speaker 0: Is that right? Have you played tennis?

Speaker 1: I always book

Speaker 0: 11-30-1.

Speaker 1: I played tennis today.

Speaker 0: Great, did you win?

Speaker 2: Yes.

Speaker 0: Of course. How important is tennis in your life?

Speaker 1: It's very important. I've been competing a lot, I've played 7-8 international competitions.

Speaker 0: Is there a ranking?

Speaker 1: Yes, there are some pretty high rankings. I'm actually the second European champion in the Royal Club of Tennis.

Speaker 0: Wow, I think that's worth an applause.

Speaker 1: And I was smart. I became European champion in mixed doubles, maybe I should add. I chose my partner, and she, a Dutch, was worth it.

Speaker 0: Smart. You have to be a bit strategic and tactical. I've also read that the day you quit the financial market, you chose stocks, so that was the right answer, but that you're going to make a career as a tennis player.

Speaker 1: Yes, that is right. You can play tennis, but it is a bit boring to play veteran tennis. But it is a class all the way up to

Speaker 0: 85. That's satisfying, because you're not going to stop with the other stocks. So you have a bit left. Finally, the 2017 stock market. What do you think about it?

Speaker 1: I've been optimistic about the stock market in recent years and I still am. The reason is that there are no better alternatives and the money has to go somewhere. The obligation market is upturned, the real estate market is upturned, the stock market is still valued relatively as it has been historically. It is not valued in a low-income, low-inflation environment. So that speaks a lot for the fact that money will be sought more and more in the stock market, which is positive.

In addition, you know, those of you who have been there, I don't see how old you are, but those of you who have been there know how a real so-called

Speaker 2: bull market feels. Dessutom vet man ju, vi som varit med, nu ser jag inte hur gamla ni är, men ni som har varit med ett tag, vet ju

Speaker 1: hur en riktig så kallad bullmarknad känns. Jag bor ju ute I Salkobaden och har åkt taxiin då

Speaker 0: 2000

Speaker 1: och sen 2007. Och när jag åker då så pratar taxiförarna, pratar accenten med mig. Från Saltis till Ängelbäcksgatan. And the market has to go there. No 1 really loves the stock market yet.

The market should always take a real turn to the real bull market before the festival is over. We haven't even gotten close to the classic bull market.

Speaker 0: Fantastic! The last words from Krista Gardell. We believe in the bull market. A big round of applause. Thank you for coming to Nordnet Live.

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"Jag är Christer Gardell" - Nordnet Live 2017