Anders Elgemyr: “We are living in an era of debt, and I do not see an end to it yet”

Carlsquare’s Anders Elgemyr is interviewed in the Swedish publication Realtid. Click here to read the article (SE):

Below you will find a English translation of the article:

The sale of Telia Carrier to Polhem was one of the highlights of the first half of the year. The most worrying thing is the enormous debt that has been created related to the pandemic. These words come from Anders Elgemyr, managing partner at Carlsquare, in the continuation of Realtid’s summer series.

What has impacted you the most in your professional role during the first half of the year?

– We participated in the creation of a completely new large Swedish company when Telia sold Telia Carrier to Polhem, owned by the first, third and fourth AP funds. Telia Carrier is a global leader in internet traffic, so it was great that this business could continue to be Swedish owned.

Something that has surprised, person or event – and how?

– There have been very few surprises in general in the markets over the past year, apart from Covid-19 of course. It is sad to see how poorly prepared the Swedish society is nowadays for external, unexpected events. Had this happened in the 1990s, we would probably have handled everything much better.

How do you see the current market situation? What were the biggest joys and the biggest worries during the first half of the year?

– The central banks have taken control of the markets. If you do not want to get involved politically against this, you just have to adapt. It is a completely new market that has developed since the financial crisis of 2008, and I do not see an end to this era yet. Stock markets are going up, which of course is nice, but unfortunately it is not only because of the underlying economy but because of all the financial stimulus. This is creating higher growth and demand than we otherwise would have had. But it also creates enormous amounts of debt on the other side of the balance sheet, so the big worry is of course how this will be handled. I do not believe in an immediate settlement but rather it is about encapsulating and managing than stepping down on loans. We are living in an era of debt which was initiated in 2008 and I do not see an end to it yet.

“We are living in an era of debt which was initiated in 2008 and I do not see an end to it yet.”

What will be the biggest joys and biggest worries in the second half of the year?

– Like previous question. However, I am a technology optimist, so it is great to see all the new innovations that is broadly created in all business areas. There is tons of positive energy around start-ups, and it is always fun to be part of that kind of process. In terms of transactions, it continues to be a super hot market for both private and public companies. We are one of the few independent actors active in both the public and private market on an international basis, so the current market is particularly beneficial to us.

What is the most important thing you learned during the pandemic?

– That our readiness was even worse than I feared and that there is a lack of interest among our politicians to improve this, despite the attention that the pandemic put on these kinds of issues.

What do you think will remain after the pandemic (changed working methods, tools, mindset)?

– I am certain that the willingness to work from home will increase in the future. But the importance of social interactions taking place in a workplace has also been evident. Most of us want to go to the office if we are not directly hindered. It is hard to create new ideas in vacuum but rather a critical mass of people is needed to brainstorm ideas among each other.

With a year and a half to go until the next parliamentary elections, which political issue will have the greatest impact on the financial services industry and on your business?

– ISK may already have become a hot topic. The Swedish stock market is almost unique in an international perspective and much of its success is based on innovative tax rules for saving in stocks, so it is very short-sighted to want to change this type of saving. But in general, the market is not interested in Swedish domestic politics, which is simply because Sweden chose to become a member of the European Union. The decisions that are important for the market are no longer made in the Swedish parliament and the Swedish central bank is also a loyal follower of the guidelines from ECB.

”ISK may already have become a hot topic. The Swedish stock market is almost unique in an international perspective and much of its success is based on innovative tax rules for saving in stocks, so it is very short-sighted to want to change this type of saving.”

How do you relax this summer?

– Vacation on Gotland and sailing.

What is your best reading tip for summer reading?

– I have to go with a classic: Shakespeare’s King Lear. It shows the total vulnerability of a leader who chooses the wrong confidants.

What is the best book/non-fiction book you have read in the first six months of the year that has helped you in your profession or leadership?

– None at all really. The last year has been all about developing conversations, which is a journey in itself.

What is the best book/non-fiction book of all time that has helped you in your profession or leadership?

– A very personal question. Sören Kierkegaard’s “Fear and Trembling”. The title says it all, doesn’t it?

How are you preparing for the fall 2021? What will be the most important issues in your role in the fall? For your business?

– It looks like the market will remain strong. Carlsquare is a relatively unknown brand, despite our size. We are number one in M&A in Germany in the segment for small and medium-sized transactions, and that is something we will also benefit from in Sweden. We have our own equity research that lifts the brand. However, the best way to become known is through transactions and we have many interesting M&A projects and several companies in the pipeline for IPO. First up is the Swedish company, Candles Scandinavia. It is a strong entrepreneurial company that is the Nordic leader in scented candles. They also have their own recipes for making environmentally friendly candles instead of using paraffin (which is derived from petrol), which makes it extra fun to work with them.