WEDNESDAY 15 FEBRUARY 2017 THE BIG READ

Family Businesses The Wallenberg foundations

Knut and Alice Wallenberg Foundation (created 1917) Research in medicine, technology The Wallenbergs: where money and natural sciences Marianne and Marcus Wallenberg Foundation (1963) meets Swedish science Social science and clinical medicine Marcus and Amalia Wallenberg Foundation (1960) One of the most powerful families in Europe offers a model for avoiding disputes Humanities with a focus on learning and the younger RICHARD MILNE generation Jacob Wallenberg Foundation all it flower power for (1960) the 21st century. Inside To promote trade and industry a university in central and activities that are charitable, CSweden, Magnus artistic, athletic or beneficial to Berggren demonstrates how health he placed an electronic circuit inside a rose. Using only Foundation for Jurisprudential Research organic material, the professor (1995, based on earlier managed to make electronic organisation founded 1947) wires inside the flower’s stem and even added logic gates that Dr Tech Marcus Wallenberg could turn the current on and Foundation for Education off. in International Industrial Entrepreneurship (1982) Prof Berggren, head of the laboratory of organic Berit Wallenberg Foundation electronics at Linkoping (1955) university, says the Art history and archaeology development could lead to Marcus Wallenberg Foundation plants and trees being turned for International Scientific into solar energy producers Collaboration (1976) with batteries stored in the Peter Wallenberg Foundation stem. Another application (1996) could be to delay flowering Teaching or education related to so that roses and tulips reach economics and technology shops and homes fresh. Yet The Foundation for Economic the discovery almost didn’t History Research within Banking happen. Many experts were in research these days. “Most squabbles that have hampered can then take away the skin, and Enterprise (1994) sceptical, with one Swedish money is tied to something in other dynasties. “It would not fat or muscles to investigate Ruth and Richard Julin biologist describing it as “a terms of milestones. [So] you have been possible to get to the cause of death. Foundation (1969) stupid idea”, but Prof Berggren don’t always have the money the fifth generation without it Prof Ynnerman goes on to Non-profit private healthcare received funding to support to do the brave stuff,” says Prof being a foundation,” says Peter show other techniques he has institutions his organic bioelectronics Berggren. Wallenberg Jr, 57, the chairman developed for what he calls research from the Wallenberg As much as the foundation of KAW. “the immersive visualisation family. The family’s main has done for science in of big data”. He shows a out about SKr1.8bn last year, philanthropic vehicle, the Europe, and specifically in Peeling back the layers Siemens gas turbine that can equivalent to the entire Knut and Alice Wallenberg Sweden where it has made the On a crisp winter morning in be stripped away and twisted amount it distributed from its foundation (KAW), which Scandinavian country of 10m Norrkoping, 100 miles from so that maintenance engineers inception in 1917 to 1991. Alice celebrates its 100th people a research powerhouse, Stockholm, Mr Wallenberg is can see, and be trained on, and Knut, who at the time was anniversary this year, is the it is also the secret ingredient on his annual visit to see what individual components. also Sweden’s foreign minister, second-biggest backer of basic in what is arguably Europe’s the foundation’s money has Buildings can be dropped into had built up a fortune in scientific research in Europe, most powerful business family. bought. Inside a small meeting an interactive map to show stakes in Swedish companies having distributed SKr24bn or It is the foundation — and not room in the basement of the how traffic flows change due to but they had no children. So $2.7bn in its lifetime. the family — that owns stakes town’s visualisation centre, their positioning. And lifelike they put their investments — The foundation hands out in companies such as Ericsson, Anders Ynnerman is showing objects — such as drones or a relatively small endowment grants that allow scientists Electrolux and Nasdaq. It off a touchscreen table. Ikea furniture — can be placed of SKr20m that would now be to investigate whatever they is this that the Wallenbergs With quick swipes, the into pictures or films with valued at around SKr570m or want without the obligation credit with giving them such professor in scientificextremely realistic lighting. $64m — in a foundation with to produce results — a rarity longevity and avoiding the visualisation is able to take the Thirty-five of his students the aim of promoting scientific coffin of an Egyptian mummy are working in Hollywood on research and education that called Neswaiu and peel back effects. is landsgagneligt, a concept the layers to show successively “The foundation’s support meaning “beneficial to the inner coffin, cartonnage, has been instrumental in Sweden”. The endowment wrapping and finally the building things. They have has now grown to SKr90bn body. The technology even appreciation for the whole ($10bn). discovered the imprint of an process from basic research to The family, descended amulet on the body, which, bringing it to the people,” says through one of Knut’s using 3D scanning, was made Prof Ynnerman, who has also brothers, have largely run into an image and printed. It is attracted funding from Nasa. the foundation and many of on sale in the gift shop. Goran Sandberg, executive the companies since then, The technology, backed in director of the foundation, but without any ownership part by the foundation, is used says of the professor: “In stake. Most of the public both in the CSI television series order to keep a guy like that in focus has been on how they and real life to perform virtual Sweden you need to give him run the companies in which autopsies. Bodies are put in a resources.” they hold large stakes, which CT scanner and pathologists The KAW foundation gave include the multinational

© THE FINANCIAL TIMES LIMITED 2017 Family affairs: and allows a few members of Scandinavia leads the way each generation to play the in foundation-building crucial roles. Steen Thomsen, a professor Many of the biggest companies at Copenhagen Business in Scandinavia from Ikea, to AP School and expert on the MollerMaersk are controlled by foundation-owned group, says foundations. the Wallenbergs operate one Created by company founders Knut Wallenberg and his wife Alice of the biggest such empires, to ensure independence they who started the foundation in 1917. He measured by revenues, in are also used to avoid potential was the chairman of the Enskilda Bank, Stockholm © Wallenberg Foundation the world. He argues that in family disputes after their death. business no one ownership Ingvar Kamprad, 90, the founder model works best, saying “it of Ikea, for instance set up twin the foundation and the is good to have a multitude of foundations in the Netherlands companies is the family — arrangements from the long and Liechtenstein to control the largely represented in the term of foundations to others Jacob, Marcus and Peter Wallenberg flat-pack furniture empire in order like private equity or hedge fifth generation by the cousins how we have been brought companies, centred on to give it “eternal life”. His three Jacob, Marcus and Peter. They funds”. sons play roles in the empire up,” says Peter Wallenberg traditional industry, could be Prof Thomsen says that but not crucial ones and the sit on company boards trying Jr, who has begun preparing put out of business if they fail the Wallenbergs do many foundations’ purpose cannot be to generate more dividends the sixth generation for their to adapt to new technology. things right including having changed. from the businesses to fund responsibilities. A senior Swedish banker a range of companies and a the foundations. The foundation has been outside the Wallenberg sphere Adherents of foundations argue competence over how to run “Poker tells CEOs: ‘the involved in many big education says: “The foundation work of that they provide stability and businesses developed over a better you do, the more money projects from the building theirs is hard to criticise. But protection from acquisition. long period. “With them, it’s we give to science’,” says Mr of the Stockholm School there are always questions But critics say that, without the not just about the next five Sandberg. About four-fifths of of Economics and various about the competence of each sanction of a possible takeover, years; they’ve been owning the money is given to research museums and institutes to generation. You maybe gain foundation-run companies can these companies for so long with the remainder reinvested. cutting-edge equipment such experience by keeping it in the lack discipline. they feel all the repercussions A general adage on family as a synchrotron radiation family but do you gain more through time,” he adds. Throughout Scandinavia, businesses says that the first facility and supercomputers. competence? I doubt it.” foundations are having to Foundation ownership is generation builds it, the second It is commemorating The foundation, however, is adapt. For instance, the family common in Scandinavia but generation spends it and the its centenary by building also seeing opportunities. Mr shareholders behind Maersk it is far from universally third generation squanders five public theatres with Sandberg, who admits that in have played a larger role in accepted. Marcus Wallenberg it. Research by the Family suspended domes in Sweden. pure money terms it is hard recent months as part of the has said: “Frankly, some of Firm Institute suggests that Spectators in the one planned to compete with the likes of conglomerate’s break-up plans. the other family companies only three per cent of family for Norrkoping will be Stanford and Harvard, says cannot understand. [They “Being a foundation can insulate businesses make it to the transported, in real time and that after the UK vote to leave say] ‘Why are you doing this? you from a lot of stuff,” says one fourth generation. There are 3D, from the International the EU and the election of You have no stake in the company adviser. “But they’ve countless examples of where it Space Station through the Donald Trump as US president game?’” Fredrik Lundberg, a realised that being inactive has gone wrong. The Porsche galaxies and into the outer “people are coming to us”. leading Swedish industrialist, just isn’t a choice — business and Piëch families that control reaches of the universe. “It’s Back at the Linkoping prefers a structure in which he conditions are changing so fast carmaker Volkswagen have, better to look forward rather laboratory teams of scientists these days.” and his daughters own their for example, squabbled for than back when you turn 100,” are working on a variety stakes directly. “You get more At Lego, Jorgen Vig Knudstorp, decades among themselves, says Mr Wallenberg of the of projects. One presents flexibility in the future, and the former chief executive, credits something company insiders project. paper labels that incorporate you also work for the wealth of family and foundation ownership blame for the weak governance sensors that can be used, for your family,” he says. as critical to the toymaker’s behind the emissions scandal Need to adapt instance, to show Médecins The Wallenbergs, however, recent revival as the most and previous bribery problems. A similar spirit is behind the Sans Frontières if vaccines remain convinced. “We profitable group in its industry. But for the Wallenbergs, who foundation’s largest grant: have become unusable due to work our butts off in the He is now working to co-ordinate despite their power do not SKr1.3bn over a decade for high or low temperatures in financial part but we do it for better, relations between the feature in lists of the richest research into autonomous transit. Prof Berggren shows another reason and that is the family, foundation and company Swedes, having a foundation systems and software off small ion pumps that could development of Sweden. It is as well as improve governance in avoids disputes over ownership development. The project be implanted in the heads of the group. brings together not just epilepsy sufferers to deliver researchers and universities neurotransmitters to stop but also companies, both inside seizures within milliseconds. and outside the Wallenberg Another group demonstrates ABB, SEB bank, carmaker sphere. paper that can conduct and Saab. The listed companies The aim is to recruit 150 PhD store electricity. in which the foundation has students, making it Sweden’s For Sweden, trying to large stakes have combined largest graduate school, with support not just leading revenues of $130bn. But much research into areas ranging researchers but some of less attention has been placed from automated mining to Europe’s biggest industrial on the foundation, which has autonomous ships. groups, the Wallenberg money tended, even in Sweden, to “There was a lot of research is vital. Says Mr Sandberg: “If operate in the shadows. in universities, and a lot in you can get the best minds to Peter Wallenberg Jr, companies. This is bringing Sweden it will have the most nicknamed “Poker”, describes it together,” Mr Wallenberg tremendous effect on society.” says. Left unsaid is the idea the family setup as a “closed AP Moller-Maersk, Lego and Carlsberg are all controlled by foundations © FT circuit”. Controlling both montage that many of the Wallenberg

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