Unlocking potential

Ferd is a family-owned Norwegian investment company which owns companies mostly with majority stakes, but also with a minority, in partnership with other families and entrepreneurs, businesses from various sectors, including those involved in social entrepreneurship. Its vision is “to create lasting values and leave clear footprints” which bodes well for businesses, stakeholders and the planet.

One of Ferd's core businesses back in 1998 was in the tobacco sector, with 90% of its sales produced on license. But when the license provider threatened to withdraw granting rights, Johan knew change was in the air.

He also realized Ferd needed robust procedures for assessing and choosing suitable businesses to invest in. But Ferd's structure presented a challenge because it comprises different businesses, each with their own strategies. "We are, in a sense, a strange and unique animal in terms of the way we're set up," said Johan. How would Johan and his team align the organization behind the same sustainable goals?

To show the operating businesses that becoming sustainable was a risk and an opportunity worth taking, Johan decided that taking responsibility that Ferd did not have, like scaling social entrepreneurs, partnering with the government to reach the extreme poor with financing, and selecting certain SDGs for an impact investment strategy, could be a way to go. But who would be best to implement and manage them? An expert third-party? Or Ferd itself? "We didn't even know how much money we were going to allocate to this new area," confirmed Johan.

The license provider's demands compelled Johan to sell the tobacco business – which he believes was a good move for his company: “Sometimes it's necessary to sell the core business if it holds you back. Some core businesses can be turned around and changed, but in some cases, this is impossible."

Now, before committing to invest in a business, Ferd needs to know it meets certain criteria: "We go through a strict due diligence process, looking into the values of the company and background of its people. But everyone in the business of buying companies does that. We take it further, making sure the business can achieve its environmental and social goals, or at least get very near to them."

Today, Ferd invests in companies that share its goal to create sustainable change – and can deliver growth and attractive returns over time. In the pitching stages, companies must explain where they expect to have an impact, and how they will achieve their goals.

"First and foremost, we want to attract great people who can make a difference. I'm not Plato's philosopher king, Warren Buffett or Elon Musk. I don't know where we're going. But I attract people with great values and potential. And basically, I let them loose."

When it comes to aligning Ferd's businesses behind the same values, Johan recognises there isn't a one-size-fits-all approach: "While our businesses share the same overall ambitions, they don't necessarily share the same frameworks. What works for an engineering company probably won't work for a sporting goods company, for example."

Ferd decided it would launch and manage its own impact investment solutions, rather than rely on third-party providers: "It's a big decision whether you do it yourself or you let somebody else do it. We said, ok, let's do it ourselves and build on something we're already good at because that will show everyone in Ferd that they can do it too”.