Capital Allocation and Value Creation

An investor's perspective, built for management

Capital Compass Advisory works at the intersection of financial research and executive decision-making. Our work draws on empirical evidence from capital markets, peer group studies, and ongoing research - including an active project at Lund University on strategic capital allocation - to help corporate executives make better, more disciplined financial decisions.

Capital Allocation Frameworks

At the intersection of corporate strategy and financial markets lies capital allocation. Every business should have a robust Capital Allocation Framework or "Playbook". Understanding value creation is essential for the proper downstream implementation of financial decisions, including how to deploy cash flow and establish appropriate targets and incentives.

Workshops & Seminars

Our workshops are designed to be flexible and tailored to meet your specific needs. Conducted in a context unique to your company, these workshops provide an "outside-in" perspective applicable directly to your business.

Online Programme

Our e-learning program adopts a practical, market-oriented approach to capital allocation. The course features numerous case studies and engaging pedagogical exercises. The program, including case studies and exercises, takes approximately one day to complete.

Research project at Lund University

Strategic Capital Allocation

Capital allocation is strategy made real. While external capital markets channel resources toward high-performing firms, many companies lack equally disciplined internal processes to direct capital where it creates the most enduring value. This project develops a research-grounded, practice-ready capital allocation framework and toolkit that helps firms translate strategy into disciplined value-creative allocation decisions. An additional central deliverable is the capital allocation maturity index, a benchmarking instrument that enables peer learning and targeted capability development. In short, the project develops a framework for capital allocation as strategic execution.

Reference assignments

We are grateful for the opportunity to work with so many talented and experienced management teams and boards while exploring key topics such as:

Capital allocation frameworks
Dividend capacity & Share buyback strategies
Financial target setting
Capital Structure & liquidity management
Value creation seminars & workshops

A warm thank you to all the great teams at Duni, Gubra, Alleima, NIBE, ICA Gruppen, Midsona, Thule, Gränges, Nordic Investment Bank, Atviva, Atvexa, Beijer Alma, and many others for your trust and collaboration.

The Book:
Capital Allocation and Value Creation

In order to run a company efficiently, it is not sufficient to simply be a competent businessperson. One must also possess the skills of a knowledgeable investor. The management must determine where to invest capital given the diverse range of investment options available, such as mergers and acquisitions (M&A), dividends, share repurchase programs and organic growth opportunities.

By adopting a practical, market-oriented approach to capital allocation, we aim to shed light on the complex issue of cash flow deployment and the creation of shareholder value. The book provides a useful analytical framework for corporate executives to consider when allocating capital, along with empirical findings from peer group studies and company case studies.

Media:

Endorsements:

Johan Dufvenmark, CFO

"The best practitioners’ guide to capital allocation!"

Magnus Söderlind, CEO

"Capital Allocation and Value Creation" is an excellent read for corporate decision-makers."

Anders Borg, Chairman of the Board

"Torbjörn's book provides a great framework for thinking about Capital Allocation"

Göran Björkman, CEO

"The book provides a clear and pedagogically effective way to understand capital allocation."

Jörgen Elf, Group Treasurer

"Over the past few years, there have been several occasions when there has been a need for qualified analyses of capital structure and rating issues. Torbjörn has always been the one who provided the most qualified analyses and delivered well beyond expectations. A brilliant analyst with deep insights and expertise in financial matters."

Christian Sievert, Board Member

"Torbjörn's book presents a straightforward and effective framework for understanding capital allocation."

John Bäckman, Head of IR & Treasury, Matas A/S and formerly Pandora

"This book is an invaluable resource for Investor Relations professionals seeking to bridge the gap between a company's business strategy and the investors' perspective on value creation. It offers clear, concise insights and will greatly benefit any IR department looking to enhance its communication with the financial market."

Pär-Ola Wirenlind, Group Treasurer

"As a Group Treasurer, I truly appreciate Torbjörn's approach to financial strategy. He has a clear ability to link the company's business strategy to key decisions around capital structure and funding"

Eva Gotthardsson, Group Treasurer

"Capital allocation plays a critical role in driving success. This book offers an easy-to-understand market-based framework that demystifies complex financial concepts."

Magnus Jonasson, Head of Asset Allocation

"Having spent my entire career in asset management, I’ve come to recognize one of the most critical drivers of long-term returns: effective capital allocation—both at the portfolio level and within a business. This insightful book serves as an essential guide, where the author blends rigorous analysis with practical wisdom, offering invaluable insights for executives, investors, and anyone looking to understand how intelligent capital deployment fuels long-term value creation. A must-read on the art and science of capital allocation."

Dan Christiernsson, Senior Portfolio Manager

"Written by a highly experienced practitioner, this book provides an insightful guide to key topics in capital allocation and value creation within a company, blending both theoretical and practical perspectives. It is highly recommended for anyone looking to enhance their skills in this field, from corporate executives and investors to students."

Patrik Juhlin, Group Treasurer

"Torbjörn’s approach to capital allocation provides valuable insights into aligning financial strategies with business objectives. He emphasizes the importance of understanding the company’s business model and market dynamics to make informed decisions, enabling a treasurer to optimize funding structures and effectively manage risks"

Jörgen Rosengren, CEO

"Torbjörn has written an excellent and accessible book on the sometimes difficult-to-grasp subject of capital allocation."

Per Frennberg, Chairman of the Board at AP7 and former CIO at Alecta

"The book deals with the important topics of optimal capital allocation and creation of value, from both a theoretical and practical perspective. It is generously illustrated with relevant empirical examples. Highly recommended reading for corporate executives, board members as well as investors and investment analysts."

Jörgen Elf, Group Treasurer

"Over the past few years, there have been several occasions when there has been a need for qualified analyses of capital structure and rating issues. Torbjörn has always been the one who provided the most qualified analyses and delivered well beyond expectations. A brilliant analyst with deep insights and expertise in financial matters."

Elisabeth Mosséen, Group Treasurer

"Torbjörn explains in an educational way and through many practical examples how CEOs and CFOs can make long-term decisions that lead to value creation in companies. His book 'Capital Allocation and Value Creation' contains many valuable insights that I have been able to apply in my discussions with management."

Capital Compass Advisory

Capital Compass Advisory, founded by Torbjörn Arenbo, boasts a broad network of seasoned professionals, from whom we draw extensive knowledge and expertise.

Torbjörn Arenbo

Torbjörn Arenbo has over 25 years of experience working as a corporate finance advisor and portfolio manager. He held the position of Chief Analyst and Head of Corporate Advisory at Danske Bank for more than 10 years.

Before joining Danske Bank, he worked as a portfolio manager at Alecta Investment Management.

Peter Trigarszky

Peter Trigarszky spent 14 years as an equity research analyst before moving into corporate finance advisor alongside Torbjörn in 2014. His work over the past 25 years at Danske Bank, and Handelsbanken before that, has given Peter expertise in understanding companies from both the equity and credit perspective.

Ready to Improve Your Financial and Operational Performance?

info@capitalcompass.se

+46 70 167 85 08