The Wallenberg family’s main philanthropic vehicle, the Knut and Alice Wallenberg foundation (KAW), which celebrated its 100th anniversary this year, is the second-biggest backer of basic scientific research in Europe, having distributed SKr24bn or $2.7bn in its lifetime.
As much as the foundation has done for science in Europe, and specifically in Sweden where it has made the Scandinavian country of 10m people a research powerhouse, it is also the secret ingredient in what is arguably Europe’s most powerful business family.
It is the foundation — and not the family — that owns stakes in companies such as Ericsson, Electrolux, AstraZeneca and Nasdaq. It is this that the Wallenbergs credit with giving them such longevity and avoiding the squabbles that have hampered other dynasties. “It would not have been possible to get to the fifth generation without it being a foundation,” says Peter Wallenberg Jr, 57, the chairman of KAW.
The KAW foundation gave out about SKr1.8bn last year, equivalent to the entire amount it distributed from its inception in 1917 to 1991. Alice and Knut, who at the time was also Sweden’s foreign minister, had built up a fortune in stakes in Swedish companies but they had no children. So they put their investments — a relatively small endowment of SKr20m that would now be valued at around SKr570m or $64m — in a foundation with the aim of promoting scientific research and education that is landsgagneligt, a concept meaning “beneficial to Sweden”. The endowment has now grown to SKr90bn ($10bn).
The family, descended through one of Knut’s brothers, have largely run the foundation and many of the companies since then, but without any ownership stake. Foundation ownership is common in Scandinavia but it is far from universally accepted. Marcus Wallenberg has said: “Frankly, some of the other family companies cannot understand. [They say] ‘Why are you doing this? You have no stake in the game?’”
The Wallenbergs, however, remain convinced. “We work our butts off in the financial part but we do it for another reason and that is the development of Sweden. It is how we have been brought up,” says Peter Wallenberg Jr, who has begun preparing the sixth generation for their responsibilities.
Source: Milne, Richard, Financial Times, February 15, 2017, https://www.ft.com/content/f9e5af4e-f1d9-11e6-8758-6876151821a6