Fixed Income with a Long-Term Perspective

We achieve diversification by investing globally, with a focus on Europe and the United States. We diversify our portfolio across a broad range of issuers from various sectors — including governments, corporations, and supranational institutions — spanning a wide rating spectrum from AAA to B-.

We primarily invest directly for the balance sheet of the respective investor, taking into account their specific requirements — particularly with regard to return expectations, duration, maturity, structure, and regulatory burden under Solvency II and comparable frameworks. The investment horizon is generally long-term oriented and characterized by low turnover. Investments in special funds are made within the framework of strategic asset allocation requirements. The objective is to cover our chosen niche markets through collaboration with renowned external asset managers.

Our investments are guided by the strategic asset allocation and the group’s sustainability strategy. We pursue a core-satellite approach, with the main focus on liquid bonds issued by borrowers of good to excellent credit quality from the G7 countries. To optimize returns, a variety of other additional investments can be made, e.g. in less liquid products such as promissory note loans and private debt, emerging market bonds, structured credit products or issuers in the high-yield rating space.

Based on the strategic asset allocation and the specific framework conditions of each investor, investments are made on an individual basis. Asset classes such as global high yield and emerging markets are covered through our own special funds. The objective is to take on market risk while outsourcing portfolio management to renowned international asset managers. In asset classes such as government bonds, covered bonds, and investment-grade corporate bonds, investments are made primarily in individual securities that are purchased or sold in line with each investor’s specific needs. As part of our portfolio management, we draw on the expertise of our in-house credit analysts and ESG specialists.

We manage the portfolios within the limits specified by the strategic asset allocation and the investor-specific requirements. The portfolio is guided by benchmarks agreed upon each by the investor. The majority of portfolio management is thereby implemented directly by our team through trading with brokers and in collaboration with our in-house credit analysts and ESG specialists. A smaller portion of the portfolio management is outsourced to external asset managers in own dedicated funds, for which we act as investment advisors.