Swedish PM warns against Volvo financial buyers

Göran Persson, Swedish prime minister, has attacked Cevian Capital, a Swedish hedge fund using private equity techniques, and Parvus Asset Management, a UK hedge fund, which acquired five percent of the voting rights in truck maker Volvo earlier this week.
 
The two firms have not publicly commented on their plans for Volvo, but they aim to take a seat on Volvo’s board of directors and are expected to attempt to force through a restructuring of the company.
 
According to the Financial Times, Persson said “these venture capitalists will break the national capital structures into pieces”, although neither Cevian Capital nor Parvus Asset Management are venture capital businesses.
 
Persson also questioned the motives behind Cevian Capital and Parvus Asset Management’s acquisition as well as backers of the two firms: “Who is this Cevian? We see a person named Gardell [Swedish businessman Christopher Gardell] stepping forward, but all this capital that is behind, what interest do they have, and what long-term construction is there?”.
 
Persson, who is understood to favour a strong role for the state regarding listed companies and is against deregulation, made the comments ahead of upcoming elections on 17 September.
 
The comments follow German Social Democrat party chairman Franz Muntefering’s reference to financial investors as “locusts” in mid-2005, also ahead of national elections at the time. More recently, Dutch economy minister Joop Wijn, who faces a general election in November, claimed that foreign private equity firms can damage domestic businesses.