In past recessions the holdings of Sweden's Wallenberg industrial family have taken a pounding. But this year, Investor (INVEa.ST), the publicly traded firm that has large or controlling stakes in a range of companies including telecom equipment giant Ericsson (ERIC), appliance maker Electrolux (ELUXa.ST), and drugmaker AstraZeneca (AZN), looks better positioned.

After taking over as Investor's chief executive in 2005, Börje Ekholm was cautious about what he saw as credit conditions that were too easy. So he kept the brakes on new investments while building up financial firepower through the sales of Investor's stakes in truckmaker Scania (SCVa.ST) and OMX Group (NDAQ)—the latter to the Nasdaq stock exchange—for a combined $2.4 billion. The OMX sale was particularly satisfying because a bidding war between Dubai and Qatar drove the price sky-high, allowing Investor to exit before the market values of stock exchanges collapsed.

Now, with more than $1 billion in cash and with Investor's debt put on a long-term basis, Ekholm finds himself in position to hunt rather than be hunted as the downturn worsens. He says the future course of economic events is so uncertain that it is difficult to make decisions. He suspects that the global recession will be long. Although he thinks the stimulus packages will work in the sense of propping up economies at a low level, he worries that the flood of cash into the world economy will keep otherwise doomed banks and companies alive, prolonging the doldrums.

Fresh Opportunities

Still, the 45-year-old Ekholm seems to relish the moment. He says that someone in his position who is running a portfolio of investments in companies should be "opportunistic and flexible." He is sure that the credit crunch and market declines will present opportunities. It would be a mistake, he says, to sit on one's hands and do nothing.

Investor is likely to confine its major acquisitions to the Nordic countries, whose corporate landscape the firm and its network of executives know well. Ekholm also thinks that Investor may slightly expand its private equity and venture capital portfolio, which have grown on his watch. Unlisted investments now amount to a sizable 30% of the portfolio. Before taking his current job, Ekholm ran Investor's U.S. venture capital business. He still owns a house in Connecticut.

Of course, recent months have been no picnic. Investor's portfolio, now worth $13.2 billion, delivered a -23% return including dividends last year. But that was better than the 39% hit for the overall Swedish market. In an echo of crises past, Investor also recently ponied up $400 million for its share of a $1.7 billion capital raising by SEB (SEBa.ST), the Stockholm bank that was the original cornerstone of the Wallenberg empire and remains a key portfolio holding. The idea is to bolster the bank's capital before the inevitable losses on loans start coming through.

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