A listed family office? Industrial conglomerate? Or a serial acquirer?
Classifying Latour AB at first glance seems complicated.
Family office - Founded by Gustaf Douglas as an investment vehicle for Swedish industrial companies, Latour resembles a family office in that it remains controlled by the Douglas family, who own 76% of its shares. Since Gustaf’s passing in 2023, his sons Eric and Carl continue his legacy as board members.
Industrial conglomerate - On closer inspection, Latour is also an industrial conglomerate. It owns partial or full stakes in both private and listed companies, and is involved in these companies both financially and operationally. The largest investment across its 17 holdings is Assa Abloy (25% of Latour’s net assets), a Swedish but global market leader in door locks and security solutions. Latour’s founder was among the key individuals in forming the Assa Abloy merger in 1994, and Latour is the largest shareholder, holding a 9.5% stake.
Serial acquirer - However, like Assa Abloy, nearly all of Latour’s investment companies use acquisitions as a key source of business and strategy growth (serial acquirers). Assa Abloy, for example, acquired 26 companies in 2024. Capital allocation is in Latour’s DNA, making it as much a serial acquirer as a conglomerate.
This complexity is a partial reason why only five analysts cover its stock, despite its value creation through the years. For us at Jenga IP, complexity like this isn’t an issue and I view Latour’s key values from three areas:
Track record: Since its IPO in 1985, Latour’s shares have compounded at an annual rate of 22%, resulting in a nearly 3,000-fold return over 40 years. Importantly, it has delivered this with outstanding results across both public (Assa Abloy, Sweco, Securitas) and private holdings (Hultafors, Swegon, Nord-Lock). It has never posted an operating or net profit loss.
Consistency and discipline: All 17 current holdings are focused on the industrial sector. Latour doesn’t buy and flip companies; it partners with management to internationalise beyond the Nordic region and improve their overall business strategy and governance. This reputation makes Latour a great partner for sellers who care about longevity.
Long-termism and culture: Latour invests for the long term. Of its 17 holdings, seven have been owned for over 20 years (72% of NAV), and another 5 for over a decade. Its culture is well-established across the company and its portfolio companies, supporting its results over the years.
Latour investment case
Market cap: SEK 143 billion
Jenga IP 2029 est. market cap: SEK 195 billion
Potential IRR (incl. dividends): 9.35%
Jenga IP Quality rating: 74.2/100 (Moderate moat)
Historically, Latour has traded at a wide premium to its net asset value, but with shares down by 16% YTD while being flat over the past 5 years, this is a great time to visit its investment case. Here’s what we will cover:
Table of Contents
History: A background on its founder, Gustaf Douglas, the formation of Latour in the 1980s, key early investments, and the business timeline.
Listed Investment Vehicles: A broad perspective on listed investment vehicles, their track record, a review of major peers, Latour’s uniqueness and positioning relative to peers.
The Swedish serial acquirers model: Insights into the Swedish serial acquirer model, its influences, and the limits of the serial acquirer model.
Latour’s Culture: An overview of its culture, management guidelines, governance, capital allocation framework, key operational and investment staff, and case studies of Latour’s influence on investment companies.
Latour’s Private Investments: A breakdown of Latour’s seven private investments, group-level analysis of the financials, growth model and potential, return on operating capital, assessment of their key risks and valuations.
Private Investment Case Study: A detailed study of Swegon (a Swedish HVAC manufacturer), including its unit economics, industry and competitive landscape, growth potential and valuations.
Latour’s Public Investments: A breakdown of Latour’s public markets portfolio, an analysis of each holding, a general commentary on their performance for the future and their growth potential.
Risks and challenges: A broader analysis of key risks and potential challenges for the Latour model, including reinvestment opportunities and limits, global macroeconomic sensitivity, cultural and personnel shifts, its debt structure, and balance sheet.
Valuation: An analysis of Latour’s valuation by sum of parts, earnings projections of each business segment till 2029 and IRR assessment.
Conclusion: Overview of Jenga IP’s approach to investing in (and with) Latour and lessons learned from the Latour research.
Latour’s History
Latour’s formation (Pre 1985)
Latour, the brainchild of one of Europe’s greatest capital allocators, Gustaf Douglas, wasn’t a straightforward path, typical in many investing legends and capital allocators. Born in the late 1930s, Gustaf climbed up the ranks in the Swedish newspaper industry, becoming the CEO of Dagens Nyheter and Expressen in the 1970s. Despite his leadership performance, the boards became wary of his growing private real estate investments, which were taboo for the newspaper’s management, given the independence required for newspapers. As a result, they parted ways with Gustaf stepping down to focus on his real estate investments.
For perspective, the 1970s and early 1980s were the golden years for the new breed of Swedish real estate and stock investors, including Gustaf, Robert Weil of Proventus and Sven-Olof Johansson of Fastigheter AB. During these years, real estate prices soared, tax rates declined, and lending practices became irresponsible, leading to the Swedish 1990s economic bubble burst and its currency crisis.
Gustaf Douglas continued building his investments and became one of the largest shareholders of Skrinet Group. At Skrinet, Gustaf faced his next challenge, a power struggle with another budding investor, Robert Weil. Unlike many other Swedish listed investment vehicles, Skrinet Group lacked a controlling shareholder, despite its size.
Without one, these companies are likely to attract activist investors seeking to broaden their portfolios soon, now, or later. However, Gustaf and Robert Weil disagreed on the strategy and culture at Skrinet Group, leading to both parting ways, with Gustaf selling his shares in the group in exchange for one of its subsidiaries, AB Hevea, in 1985. AB Hevea became Gustaf’s primary investment vehicle.
AB Hevea to Latour (1985 - 1997)
In 1987, Hevea was renamed Latour, but before this, a few things occurred that are fundamental to Latour’s investment case today:
Trelleborg: 89% of Latour’s equity investments were concentrated in the Swedish leader in rubber products. Gustaf Douglas joined the board in 1985, while Latour became its second-largest shareholder with 25% of its share capital.
Securitas AB: Securitas AB, one of the global leaders in security solutions, had its ownership transferred from Skrinet to Latour. Securitas AB remains a key investment for Latour today.
Assa: Latour acquired a 40% stake in Assa, a Swedish door lock company, which later merged with Abloy to form Assa Abloy, the global leader in door locks and Latour’s largest investment today.
Almedahl-Fagerhult: Latour acquired a third of Almedahl shares, which in turn acquired Fagerhult, a Swedish group in residential and non-residential lighting. Fagerhult, although currently listed, remains a Latour company with a 48% stake.
These four investments (Trelleborg, Securitas, Assa and Almedahl-Fagerhult) formed the basis of Latour’s investment strategy:
Significant stakes held for the long term
Industrials, building parts and solutions
Potential for international expansion
Gustaf Douglas didn’t want to limit these companies to just Latour’s resources, so over the following years, Latour listed the high-potential private holdings, allowing them to pursue their own M&A expansion with a decentralised model.
1991: Securitas AB was listed with Latour maintaining an initial 43% stake.
1994: Assa merged with Finland’s Abloy to form Europe’s largest door lock group and was listed on the stock market.
1997: Fagerhult was separated from Almedahl and then listed in 1997.
During these twelve years (1985 - 1997), Latour focused its investments on these companies. In the 1997 Latour annual report, Gustaf Douglas explained why:
“Latour’s development during the twelve years that the company has had its current focus and main owner is a result of the successes achieved by Securitas and Assa Abloy. We currently do not see any alternatives that are better for Latour shareholders.” - Gustaf Douglas, Latour’s 1997 annual report.
Gustaf Douglas was right.
Between its IPO in 1994 and 2000, Assa Abloy shares returned 18x (79% CAGR) while Securitas returned 9x (56% CAGR). Both were roughly 85% of Latour’s assets.
1997 - 2005
With the success of its investments and listings in Securitas AB and Assa Abloy, Latour’s reputation significantly increased, leading to better access to new private investments. They took advantage of these and in the following years, they invested in Sweco (architecture consulting), real estate (Piren), several textile and automotive (BT Industrier and Dayco Automotive) sectors.
The performance of these further investments was mixed, and Latour would later exit all of its investments in the textile, real estate and automotive sectors. On the brighter side, one worked out quite well: Sweco, the listed architecture and landscape consulting company, has compounded its revenue, earnings, and share price by more than 15% each year since Latour’s initial investment in 1997.
While Latour wasn’t entirely immune from the tech bubble slump at the start of the century, Gustaf Douglas raised his concerns in the company’s 1999 annual report and began bolstering Latour’s balance sheet with cash for potential investments, including buying back some of its own shares.
2005 - 2023
“It takes a long time to form a certain culture in a company but unfortunately a very little to tear it down” - Gustaf Douglas, 2005 annual report.
2005 marked a significant point for Latour. After its diversification efforts across both listed and private companies, its combined stake in Securitas and Assa Abloy fell to half of its total assets, from 85% a few years ago. This made it a truly diversified group as known today. Its shares are no longer traded at wide discounts to their assets, as their value creation has become better understood.
Management reshuffled its divisions, separating listed and unlisted investments while also grouping its unlisted investments into eight segments. Finally, Gustaf Douglas stepped back from writing his annual letters, with the then CEO, Jan Svensson, taking full control of shareholder communication.
The restructure supported its efforts in its unlisted and wholly owned companies, preparing them for growth and a potential listing, just as it did with Assa Abloy. Among them, Swegon (air filtration productions) and Hultafors (hand tools) led the charge, growing their sales and operating profits by double digits for years. The holding company structure at Latour also provided the capital base for acquisitions for each segment, further propelling their growth.
In the table below, I highlight the revenue and EBIT growth over the past 20 years for Latour’s three biggest unlisted companies.
These three companies have grown their revenue and operating profits by 12% and 16%, respectively, over the past 20 years, exceeding the growth rate of their publicly listed companies. More impressively, some, like Hultafors, have grown faster in recent years, compounding its revenue and EBIT by a 20% CAGR over the last six years, exceeding previous years, which I believe reflects Latour’s increased commitments to being more than just its Assa Abloy and Securitas AB investments.
Today, Latour is best described as a long-term investment vehicle dedicated to investing in Swedish industrial champions. In the table below, I break down the 17 Latour companies by the number of years held. As you can see, the majority, 11 of 17 companies, have been held by Latour for over 10 years. The long-termism and decentralised culture is similar to Warren Buffett’s Berkshire Hathaway model, as we’ll discuss in the next segment.
The Latour investment case is focused on its ability to grow the earnings, cash flow and book value per share of these existing 17 companies and to a much smaller extent, its future investments. For the investment case, though, I focus on just its existing subsidiaries and view any new wholly or listed investments as future optionality.
The table below presents Latour’s 40-year history in chronological order. In the second column, I highlight its revenue over the years as it grew its revenues from SEK 1.8 billion in 1991 to SEK 25.9 billion in 2024, a 12.3% CAGR, while its balance sheet equity value grew by 15% during the same period.
2. Listed Investment Vehicles