In 1992, founder Dr. h. c. Peter Schnell provided SAGST with assets when he transferred his shares in the Software AG company to the foundation. With assets amounting to around 1.5 billion euros, the foundation aims to be a healing force in the world, but also to participate responsibly in the financial market. According to CFO Markus Ziener, the primary goal of our asset management strategy is not to maximize profits, but to generate reasonable returns and make meaningful investments. In light of this, we only make financial investments that generate worth in the truest sense of the word. Instead of focusing on speculation and derivatives, our foundation purchases shares or bonds directly, or opts for direct participation in companies. As Ziener explains: “Just as we work very closely with people in our project work, we also want to do that with our investments.”
An ever-larger role is being played by mission investments and so-called sustainable investments, which not only generate returns but further the foundation’s purpose. Examples include the “Heidelberg Village” housing project as well as our foundation’s strategic focal areas and key locations. Here, capital investment and project support have long gone hand in hand. In the future, we aim to expand this area even further, as these types of projects allow us to better serve the general public good. According to Ziener, investments in the common good allow us to even better pursue our “intrinsic purpose” as a foundation.
Clear Investment Principles
It’s not just in the area of mission investments that we very carefully determine where to invest, and where not. The foundation invests financially in projects that it can also support ideologically and avoids investments in companies that do not create true worth. Thus, investments in – for example – the weapons industry or gene technology companies are excluded on principle; neither will you find investment banks or pharmaceutical companies included in the SAGST investment funds. These funds are managed by Prisma Investment GmbH, an asset management company that was created in 2011 as a spin-off of the foundation and in which we are still involved, both in terms of capital and advisory committee participation.
Inflation Compensation and Diversification
The balanced assets of the foundation amount to around 136 million euros, which, according to German foundation law, are to be maintained undiminished. That is why we annually allocate a portion of the invest rebalancing back to the assets in order to compensate for inflation-based capital devaluation. Based on the inflation rate of 1.8 percent, this amounted to 2.4 million euros in 2017. In addition, our asset management team seeks to limit fluctuations in assets during market cycles and therefore invests in four very different asset classes: direct investments in companies, securities, real estate investments, and mission investments.