The rise of Sweden’s super rich

Sweden has a world fame for championing excessive taxes and social equality, nevertheless it has turn out to be a European hotspot for the super rich.

On Lidingö island there are enormous pink and yellow picket villas on rocky cliff tops, and white minimalist mansions with flooring to ceiling home windows.

Less than half an hour’s drive from Stockholm metropolis centre, that is one of Sweden’s wealthiest neighbourhoods.

Serial entrepreneur Konrad Bergström flicks the sunshine swap in his wine cellar, to disclose the 3,000 bottles he is bought saved there. “French Bordeaux, that’s what I love,” he says, flashing a shiny white smile.

Elsewhere, there’s an out of doors pool, a fitness center upholstered in reindeer leather-based, and a workshop-come-nightclub, full with a big metallic urinal.

“I have a lot of musical friends, so we play a lot of music,” explains Bergström. He made his cash co-founding companies together with a headphones and speaker firm, and this house is one of 4 properties he owns in Sweden and Spain.

It’s not a stunning life-style for a profitable entrepreneur, however what may shock international observers is how many individuals have turn out to be as rich as Mr Bergström – and even richer – in Sweden – a rustic with a world fame for its leftist politics.

Although a right-wing coalition is at the moment in energy, the nation has been run by Social Democrat-led governments for almost all of the final century, elected on guarantees to develop the financial system in an equitable manner, with taxes funding a powerful welfare state.

But Sweden has skilled a growth within the super rich during the last three a long time.

In 1996, there have been simply 28 individuals with a web value of a billion kronor or extra (round $91m or £73m at at present’s alternate price), in response to a rich checklist printed by former Swedish enterprise journal Veckans Affärer. Most of them got here from households that had been rich for generations.

By 2021, there have been 542 “kronor billionaires”, in response to an analogous evaluation by daily newspaper Aftonbladet, and between them they owned a wealth equal to 70% of the nation’s GDP, a measure of the entire worth of items and providers within the financial system.

Sweden – with a inhabitants of simply 10 million – additionally has one of the world’s highest proportions of “dollar billionaires” per capita. Forbes listed 43 Swedes value $1bn or extra in its 2024 rich list.

That equates to round 4 per million individuals, in comparison with about two per million within the US (which has 813 billionaires – essentially the most of any nation – however is residence to greater than 342 million individuals).

“This has come about in a sort of a stealthy way – that you haven’t really noticed it until after it happened,” says Andreas Cervenka, a journalist at Aftonbladet, and writer of the guide Greedy Sweden, wherein he explores the regular rise of Sweden’s super rich.

“But in Stockholm, you can see the wealth with your own eyes, and the contrast between super rich people in some areas of Stockholm and quite poor people in other parts.”

One purpose for the rise of the brand new super rich is Sweden’s thriving tech scene. The nation has a fame because the Silicon Valley of Europe, having produced greater than 40 so-called unicorn start-ups – firms value greater than $1bn – previously 20 years.

Skype and Spotify have been based right here, in addition to gaming companies King and Mojang. More latest international success tales embrace the monetary tech start-up Tink, which Visa acquired for round $2bn in the course of the pandemic, healthcare firm Kry, and the e-scooter firm Voi.

At Epicenter – a shared workplace and neighborhood area with a large glass atrium – veteran entrepreneur Ola Ahlvarsson traces this success again to the 1990s. He says a tax rebate on residence computer systems in Sweden “wired or connected all of us much faster than other countries”.

A serial co-founder himself, he additionally factors to a powerful “culture of collaboration” within the start-up scene, with achieved entrepreneurs usually turning into function fashions for – and traders in – the subsequent era of tech firms.

Sweden’s measurement makes it a preferred take a look at market, too. “If you want to see if it works on a larger market, you can – at limited cost and without too much risk for your brand or for your stock price – try things here,” says Mr Ahlvarsson.

But Mr Cervenka argues there’s one other narrative that deserves extra consideration – financial insurance policies which he says have helped remodel the nation right into a paradise for the super rich.

Sweden had very low rates of interest from the early 2010s till a pair of years in the past. This made it low-cost to borrow cash, so Swedes with money to spare usually selected to put money into property, or excessive danger investments like tech start-ups, many of which shot up in worth in consequence.

“One of the big factors that’s driven this huge increase in billionaires is that we’ve had, for a number of years, quite a strong inflation in the value of assets,” says Mr Cervenka.

Although prime earners in Sweden are taxed greater than 50% of their private incomes – one of the best charges in Europe – he argues that successive governments – on the best and left – have adjusted some taxes in a manner that favours the rich.

The nation scrapped wealth and inheritance taxes within the 2000s, and tax charges on cash created from shares and pay outs to firm shareholders are a lot decrease than taxes on salaries. The company tax price has additionally dropped from round 30% within the 1990s to round 20% – barely decrease than the European common.

“You don’t have to move out of Sweden if you’re a billionaire today. And actually, some billionaires are moving here,” says Mr Cervenka.

Back on Lidingö island, Konrad Bergström agrees that Sweden has “a very favourable tax system if you are building companies”. However he says his wealth has a optimistic impression as a result of his companies – and houses – present employment for others.

“We have a nanny and we have a gardener and cleaners… and that also gives more jobs. So we shouldn’t forget about how we’re building the society.”

Mr Bergström factors out that rich Swedish entrepreneurs and enterprise capitalists are additionally more and more reinvesting their cash in so-called “impact” start-ups, which have a give attention to bettering society or the setting.

In 2023, 74% of all enterprise capital funding to Swedish start-ups went to impression firms. This the best proportion within the EU, and much above the European common of 35%, in response to figures from Dealroom, which maps knowledge on start-ups.

Perhaps the nation’s most excessive profile impression investor is Niklas Adelberth, who co-founded the unicorn funds platform Klarna. In 2017, he used $130m of his fortune to launch the Norrsken Foundation, an organisation that helps and invests in impression firms.

“I don’t have the habits of a billionaire in terms of having a yacht or a private jet or anything like that,” says Mr Adelberth. “This is my recipe for happiness.”

But others argue that Sweden is lacking a nuanced public debate about billionaire wealth, past a good-bad dichotomy of how entrepreneurs are spending their fortunes.

Recent analysis from Örebro University concluded that the media picture of Swedish billionaires is predominantly optimistic, and steered that their fortunes are not often defined within the context of the nation’s shifting financial insurance policies.

“As long as the super-rich are seen to embody the ideals of the neoliberal era, such as hard work, taking risks, and an entrepreneurial attitude, the inequality behind this is not questioned,” says media researcher Axel Vikström.

Mr Cervenka provides that debates about taxing the super rich aren’t as pronounced in Sweden as they’re in lots of different western nations, such because the US.

“That’s sort of a paradox. One would think that with our background – being perceived as a socialist country – this would be top of mind,” says the writer. “I believe it has to do with [the fact] that we have now turn out to be extra of a mentality of ‘winner takes all of it’.

“That, for those who simply play your playing cards proper, you too can turn out to be a billionaire… And that is fairly a major shift, I believe, in Swedish mentality.”

Sweden’s rich checklist additionally reveals that the nation’s wealth stays largely concentrated within the palms of white males, regardless of the nation’s massive immigrant inhabitants and a long time of insurance policies championing gender equality.

“Yes, it is the place individuals can create new cash, create new wealth, nevertheless it’s nonetheless very closed and the double requirements are fairly excessive in phrases of who will get their concepts funded,” says Lola Akinmade, a Nigerian-Swedish novelist and entrepreneur. “Sweden is an unbelievable nation that is a frontrunner in some ways, however there’s nonetheless so much of individuals excluded from the system.”