The heirs of IKEA founder Ingvar Kamprad won’t inherit his fortune thanks to a unique series of trusts and holding companies.
Swede Ingvar Kamprad founded the multinational furniture and homeware store as long ago as 1943, before the end of the Second World War. In its earliest incarnation it was a mail order firm and its very first product was a replica of a kitchen table belonging to Ingvar’s uncle. The first of many stores to follow appeared in Älmhult, Sweden, a full 15 years later.
Thanks to the remarkable, global success of IKEA, the famously frugal businessman became a billionaire. At the time of his death aged 91 on January 27, Bloomberg ranked him as the world’s eighth richest man, with an estimated net worth of $58.7 billion, a little more, even, than the founders of global tech behemoth Google.
But Kamprad’s heirs will not inherit those billions thanks to those multiple trusts and holding companies, which he established to preserve the independence of the IKEA ethos. In 1982 Kamprad established the Stichting INGKA (INGKA Foundation) in the Netherlands, a charitable foundation which has overall control of the majority of the world’s IKEA stores, via a holding company, also based in Holland. Meanwhile, a third Netherlands-based holding company, Inter IKEA Systems B.V., owns the IKEA brand and overall franchise. This in turn is subsidiary of a foundation based in Liechtenstein.
This complex arrangement ensures that the IKEA entity will remain fully independent of the Kamprad family. Instead they will inherit the separate – and significantly smaller – Ikano Group, a collection of businesses with total assets of around $10 billion.
Stowe Family Law Senior Solicitor Jane Gray said:
“Trusts are a great facility to ringfence and preserve assets after you have died but the downside is any control element dies with you. You have to be careful that any trust set up is constituted with assets that you don’t later want to pass on to someone else.”
“Assets contained in a trust are operated by the trustees for the benefit of chosen beneficiaries. In this case it appears that Mr Kamprad was not interested in money and far more interested in the survival of the Ikea concept supporting innovation and design.”
Photo of Ingvar Kamprad by Haparanda Midnight Ministerial June 2010 via Flickr under a Creative Commons licence