The Nordic paradox and its impact on women’s rights
In a region celebrated for its progressive social model, strong welfare systems, and dedication to equality, a troubling issue has surfaced : the “Nordic paradox.” This paradox reveals a disturbing reality where, despite public commitments to transparency and fairness, significant wealth is hidden away through complex financial structures. This clandestine behavior has especially severe repercussions for women, who often remain unaware and are denied fair treatment in divorce settlements. The Nordic paradox and its impact on women’s rights…
The use of private equity funds based in tax havens has become an effective strategy for concealing assets and avoiding tax responsibilities. These offshore structures not only facilitate tax evasion but also enable financial abuse, depriving spouses and ex-spouses of their rightful share in divorce settlements as assets are quietly hidden away.
A deepening crisis of transparency
A recent investigation brought to light the questionable practices of certain influential private equity firms, particularly “Altor Equity Partners AB.” Altor founded by Harold Mix reportedly transferred millions of euros into offshore accounts, designating these amounts as “performance compensation”- a standard practice in the industry but controversial when it sidesteps national tax systems. These practices not only affect tax revenues but also directly impact equitable distribution of wealth in family law cases.
Fund manipulation and legal ramifications
Such substantial capital transfers raise numerous legal and ethical questions. When the Swedish Tax Agency—responsible for enforcing tax compliance—identified irregularities in Altor’s fund management, it particularly scrutinized Managing Partner Bengt Maunsbach. The investigation, which included a detailed trial, showcased the intricate ways Altor’s offshore funds remained largely beyond Swedish oversight. These hidden assets complicate the work of judicial authorities when attempting to calculate marital assets and establish fair divorce settlements. In cases where funds are sheltered in tax havens, they frequently evade asset distribution, leaving spouses – often women – without recourse.
This lack of financial transparency places women at a disadvantage, particularly in divorce cases where they may not have direct access to or knowledge of family finances. Private equity firms can exploit these gaps to protect assets and minimize financial settlements during separations.
Altor’s concealed wealth and its legal tactics
A recent article from Dagens Industry The Financer’s ex-wife loses 125 million detailed how Bengt Maunsbach, a key figure at Altor, allegedly defrauded his wife, Leslie, during their divorce. Altor’s executives and employees reportedly hold shares in offshore companies based in Jersey through personal investments, a practice that allowed them to benefit from financial flows while shielding these assets from Swedish tax authorities and divorce courts. According to information verified by the auditing firm PWC, Bengt Maunsbach ‘s fortune in 2021 will amount to a minimum of 1.19 SEK.
Maunsbach, who joined Altor in 2004 and played a significant role in managing investments across diverse sectors, reportedly underreported his income in 2013 by not declaring “carried interest” as salary, leading to a 2014 reassessment of his taxable income that increased it by approximately 1.4 million euros. This concealed income was just the beginning; as a high-level partner, the stakes are far greater.
As an example, further revelations showed that, despite declaring a modest income in 2020, Maunsbach acquired substantial assets, including a Princess S66 Class yacht named Centurion, docked at Djurgården and valued at 20 million SEK, and secretly purchased and total renovated a luxury apartment on Strandvägen 63 from Wrede worth 80 million SEK. Such extravagant purchases, concealed from his wife until divorce proceedings began, point to a carefully orchestrated scheme which shows off-shore funds are sheltered.
The wider implications for justice
This investigation reveals how, behind what appears to be an ordinary divorce, there was an elaborate strategy designed to deny a spouse’s rightful share. During Maunsbach’s divorce, Altor insiders reportedly rallied around him to protect his assets. This support not only undermines the integrity of the judicial system but also raises significant concerns about the role of corporate power in family law matters.
Altor partners covered their interests by delaying the disclosure of share value to the wife, even though they had said they would do so through their law firm, Mannheimer Swartling. The stakes are high. Mannheimer Swartling has acted as legal counsel advising Altor in connection with the structuring and establishment of Altor Fund VI, which has closed at its hard cap of EUR 3 billionSince inception, Altor funds have raised more than EUR 11 billion in total commitments.
In this context, Altor’s low salaries relative to the significant interests held in various companies highlight a broader issue of hidden wealth. While Altor’s main offices are spread across Nordic capitals, including Stockholm, Helsinki, and Oslo, the firm’s organizational structure reveals a discrepancy between reported and actual holdings, a fact substantiated by PricewaterhouseCoopers’ 2020/21 audit. Altor has 95 named employees (https://altor.com), but only 16 are listed in PricewaterhouseCoopers’ (PWC) PWC allocates 4.03 million euros, or an average of 251,000 euros per employee.
Worse still, the ex-wife’s legal team reportedly faced pressure to instruct them not to submit tax and income-related documents into the court, on the grounds that a better settlement discussion might result from keeping the information private.
PWC does the fund evaluation of many of the Altor owned companies and prepared the List of Bengt Maunsbach assetswhich was uncomplete.
Impacts on divorce settlements and legal disclosures
In divorce proceedings, routing wealth through offshore jurisdictions like Jersey creates a unique challenge. Such arrangements mean that hidden assets do not appear in national declarations of wealth, artificially reducing the financial distribution owed to spouses. In Maunsbach’s case, the use of a “general partner reserve” – a form of legal “protection” in private equity agreements – further obscured his actual wealth, making it difficult to trace and realize his true financial status.
According to a recent report (linked to the Swedish Tax Authority document), Altor was able to leverage these mechanisms to conceal assets. Additionally, delays in disclosing share values to Maunsbach’s ex-wife suggest an intent to minimize her settlement. Her legal team even reportedly faced pressure to withhold tax and income-related documents, suggesting that critical financial information might be kept private to facilitate a “better” negotiation outcome.
Scheme to utilize Offshore funds to withhold Assets during divorce planning
2020 – Bengt Maunsbach 1.3 Million SEK Income declared He declares 88 Million SEK
2021 – He files for divorce PwC 7 september 2021 list of Assets
Consequences for gender equality and social justice
The use of offshore companies and complex equity structures to obscure wealth exacerbates gender inequality. Women, historically less involved in managing family finances, are often disadvantaged by these opaque practices. The issue underscores the limitations of even the most progressive legal and tax systems when it comes to ensuring fairness and transparency.
In the case of Maunsbach both fund lawyers and family lawyers were active on his behalf during the divorce. It resulted in his ex receiving 2%- while he remained 98%
The “Nordic paradox” poses a crucial question: how can Nordic social systems, globally lauded for promoting equality, allow such inequities? Given the realities of hidden wealth and systemic loopholes, it is imperative for governments to strengthen financial transparency laws and address abuses of private equity structures.
Toward essential reforms
To address these imbalances, structural reforms are needed. Stricter regulation of offshore funds, enhanced oversight of private equity firms, and improved procedures to protect spouses’ rights during divorces are all potential pathways forward. As key players in the economy, private equity firms must be held accountable for their practices and their societal impact, especially regarding the rights and well-being of women.
Achieving true social justice and gender equality requires that financial and legal systems adopt greater transparency and enforce stricter accountability on private sector entities. The “Nordic paradox” serves as a stark reminder that even in societies committed to egalitarian principles, hidden areas persist – areas that require decisive action to secure a more just and equitable future for all.
Team Altor
Harald Mix (Partner), Bengt Mausbach (Partner), Stefan Linder (Partner), the three main partners,followed by Andreas Källström Säfweräng (Partner), David Hess (Partner), Giovanna Maag (Partner), Hajo Krösche (Partner), Herman Korsgaard (Partner), Jens Browaldh (Partner), JohanReiersen (Partner), Jonatan Lund Kirkhoff (Partner), Klas Johansson (Partner), Lars Fromm(Partner), Mattias Holmström (Partner), Paal Weberg (Partner), Petter Samlin(Partner), RuneWichmann (Partner), Søren Johansen (Partner), Øistein Widding (Partner).