- Alexandra Andresen, born in 1996, is the world’s youngest billionaire at age 21.
- She and her sister Katharina, one year her senior, each inherited 42% of the family-owned investment company Ferd.
- Andresen’s father Johan still runs the company and controls 70% of the votes via a dual-class share structure.
- Ferd runs hedge funds, is an active investor on the Nordic stock exchange, and has private equity investments.
Just 19 years young, Alexandra Andresen is the world’s youngest billionaire. Heir to a family fortune built on tobacco, she debuts among the 2016 World’s Billionaires thanks to her stake in investment company Ferd that FORBES values at $1.2 billion.
View the full list of the 2016 billionaire rankings here.
Fresh out of high school, Alexandra seems to have no rush to be an active owner, and is instead one of the most promising horseback riders in Norway, collecting trophies from competitions across Europe.
Equally wealthy is her sister Katharina, one year Alexandra’s senior. After a spell in a Ferd led project targeting youth unemployment in 2014, Katharina enrolled at Amsterdam University College where she is a freshman studying social science.
The sisters each own 42.2 percent of the private company and have for a while. Despite their paper wealth, they have been able to live in relative normalness in Norway until recently. For individuals above the age 17, Norwegian tax authorities annually publish tax return numbers, so since hitting legal age, the sisters have gotten attention for their stakes. Katharina in an interview on Norwegian television said that she got 500 new friend requests on Facebook FB -0.54% when details on her wealth first were published in 2014.
The company Ferd, which means “journey” in Norwegian, has roots dating back to 1849, when Alexandra and Katharina’s great-great-great grandfather Johan Henrik Andresen bought J.L. Tiedemanns tobacco factory, starting what was to be the market leading cigarette maker in Norway for over 150 years. The family remained in the tobacco industry until 2005, when it sold its share to Skandinavisk Tobakskompagni for almost $500 million. Today Ferd is a holding company with diverse interests spanning private equity holdings, real estate, security investments and a hedge fund. Today Johan H. Andersen , the sisters’ father and chairman of the board, member of the fifth generation, owns 15.2% but still has 70 percent of the votes and the T twitter TWTR +0.33% handle @FerdOwner through which he spreads his thoughts to some 55,000 followers.
Despite being a private company, with no outside investors, Ferd semi-annually publishes details on their investment on their website including its equity value of more than $3 billion.
A similar set-up (the division of transfer and votes between generation, not the Twitter part) has produced yet another young billionaire from Norway this year. Gustav Magnar Witzoe owns 47 percent of SalMar ASA, one of the world’s biggest farmed salmon producers, founded by his father who still runs the company. The stake in SalMar makes this 22-year-old the third youngest billionaire on the planet.
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Why are Norwegian billionaires passing the wealth to their children at such a young age? You probably have already guessed it:
“There will probably be a number of reasons for how ownership to a family owned business is structured – and tax is almost always an important one”, says Espen Nordbo, partner at Oslo-based law firm Haavind with special interest in tax laws and regulations.
Norway is one of few countries that still have a net wealth tax, which require rich individuals to pay almost 1 percent of their net worth annually. Since the basis for this tax is each separate individual’s net wealth position, starting from the year the individual turns 17, a wealthy family can reduce their overall net wealth tax by distributing their assets between the family members, Nordbo explains speaking in general about ownership planning.
This might be less of a factor than it used to be, as the tax rates have been lowered recently, but there are also other regulations that play a part.
In January 2014 Norway’s new center-right government abolished the inheritance tax, which had been a big burden for family businesses in generational shifts. Some owners of family businesses fear that the tax might be reintroduced after the next election, potentially hastening ownership transfers.
Yet another factor is the limitations Norwegian inheritance laws has on the power of wills and testaments, protecting spouse and all children from being written out of the will. If you as a rich Norwegian want to make sure the “right” person inherits the fortune or company, gifting the assets prior to your death, is the only way you can freely decide who gets what.
Oyvind Bohren, professor of finance at the Norwegian Business School in Oslo with special interest in family businesses, adds that beside regulations, there is also a unique attitude aspect to Norwegian culture that might help explain the influx of Norse youngsters to the FORBES Billionaires list.
“One speculation … is that the earlier transfer of wealth to the children reflects the modern version of the Scandinavian model. In particular, the family is increasingly considered a team of equal partners where seniority and gender do not count anymore. The parents more often consider their children their peers, and they find it more natural that their children participate more seriously at the top.”
Peers or not, Alexandra and Katharina do give their dad a run for the money for the title as the social media king of the family, sharing their father’s love for an active online presence. Their social media of choice being Instagram. Katharina’s feed portrays her fashioned-filled student life in Amsterdam, and Alexandra’s is a mix of horses, medals, veganism encouragement and calls for a stop to animal cruelty. It doesn’t have to be so serious just yet.