The core of KENFO's investment activity is determining a strategic asset allocation (SAA), which defines the key strategic components of portfolio construction and therefore the drivers of returns and risks regarding investments. The SAA is based on a long-term assessment of the markets, taking into account the investment objectives, risk tolerance, regulatory framework and balance sheet requirements of KENFO.
With regard to the investment of assets, both long-term liabilities and assets are key considerations for determining the investment strategy (which is adjusted on an on-going basis). The key objective is for the fund to maintain sufficient capital even during critical market conditions in order to be able to cover the financing of the estimated future disposal costs over the next 80 years.
The strategic asset allocation comprises of the following of the following investment categories particularly differing with regard to risk and their tradability (liquidity):
• Liquid investments consisting of broadly diversified securities to be invested worldwide and traded on organized markets, it serves to generate an additional return under risk.
• Illiquid investments consisting of broadly diversified, worldwide investments that are not traded on organized markets, such as corporate investments and loans, real estate or infrastructure projects, these serve to generate an additional return under risk.
KENFO's globally invested portfolio includes numerous asset classes, investment styles, regions and industries.