Once a year, SAGST’s Funding and Financial Report provides insight into the use of funds by one of Germany’s largest charitable foundations and discloses facts and figures relating to its assets. The latter were reorganised and distributed evenly across various asset classes in 2023 following the sale of shares in the Software AG company. In this interview for the publication of SAGST explizit, Chief Financial Officer Markus Ziener takes stock of the past financial year and looks at the key challenges and prospects for green investments.

High inflation rates, massive decreases in purchasing power and low growth dynamics: 2023 was a turbulent year for the economy. How did the Software AG Foundation fare with its investments?
Markus Ziener: As a foundation, we are active in various segments, which have now reached a healthy balance in 2023 thanks to the sale of our shares in the Software AG company. Thanks to this balance of investments in the capital and real estate markets, direct investments in companies and new activities in the money market, we can look back on the past financial year with satisfaction – despite the challenging conditions – having also achieved a reasonable result on the stock market in line with our capabilities. I would like to take this opportunity to point out that even though our SAGST special fund underperformed the DAX 40 and MSCI World with returns of 4.9% and 4.6% respectively, it is not comparable to these indices due to our strict investment criteria, which categorically exclude investments in certain sectors such as pharmaceuticals, defence and tobacco. 

Do you sometimes find those criteria restrictive? 
Markus Ziener: SAGST’s investments must not conflict with the foundation’s purpose as stated in our articles of association. Our investment guidelines, which include positive investment conditions in addition to these negative criteria, deliberately go even further. This is a matter of conviction, but it also means that our sustainability fund can only acquire shares in a limited number of listed companies that we define as making a valuable contribution to social development, which undoubtedly limits our investment horizon. Therefore, we have restructured the fund to some extent over the past year and moved from initially 100% equity-based investments to a two-thirds/one-third rule – two-thirds companies, one-third bonds. These are ultimately bonds from companies that are not exclusively listed on the stock exchange. We expect this to positively impact the fund’s future performance and have already seen corresponding effects this year.

How will SAGST’s investments develop in 2024 as a whole?
Markus Ziener: We made a strategic decision back in 2022 to support the renewable energy sector and have been pursuing this development more intensively in two ways since 2023: on the one hand, through direct and indirect equity investments in energy suppliers, and on the other hand, through direct investments in solar, hydro and wind power plants as well as storage technologies in order to participate even more directly in the depth of value creation in this sector, so to speak. To date, we have realised a total of three investments totalling around 52 million euros, including in EWZ Deutschland GmbH, a subsidiary of Züricher Stadtwerke, which aims to cover all of its customers’ energy needs from its own renewable sources by 2050. We have also invested in the Swiss company Aventron AG, which also generates green electricity and is majority-owned by three energy industry partners: Energie Wasser Bern, Stadtwerke Winterthur and Primeo Energie from Münchenstein.