STRATEGIC ORIENTATION AND FURTHER DIVERSIFICATION IN TURBULENT TIMES.

The successful development of the property and energy portfolio since the launch of the single family office in 2018 has created a solid basis with conservative investments and sustainable cash flows in the WIRTGEN INVEST Real Estate and WIRTGEN INVEST Energy divisions.

Due to this change in the overall corporate structure, we have now decided to reflect these changes in WIRTGEN INVEST Finance as well.

We can now counter the very conservative and regular income in the property and energy sectors with a much more progressive strategy in the finance sector in the form of a higher equity allocation. By reducing the liquid investment portion of government and corporate bonds, there is greater scope for expanding the equity portfolio without jeopardising the broad diversification of companies. This can significantly increase returns in the long term.

The recent changes on the global financial markets have also led to a new inflation and interest rate environment, which we are facing in WIRTGEN INVEST Finance. In an environment of higher inflation rates, we see real asset classes as being more favourable than nominal interest-bearing forms of investments, which underlines our strategy.

An even stronger and broader regional and sectoral equity allocation should further increase the diversification of the overall portfolio in future and optimise earnings opportunities. For example, we attach greater importance to growth factors such as the global healthcare sector in the overall portfolio context.

History has also shown that a balanced mix of different company sizes in the portfolio leads to a better relation between returns and risks in the overall view.  The current valuations of smaller companies appear particularly attractive to us. We are also convinced of the potential of these companies – as an example, the robust German segment of small- and medium-sized companies.

We are also very interested in more inefficient regional equity markets, where significantly higher potential returns can be realised. These equity markets are often less transparent or difficult to access for foreign investors.

With carefully selected partners and a strong entrepreneurial approach, we want to invest in regional trophy companies worldwide. Being close to the companies and understanding their business models is the success factor here.

In addition, continuous investments in company stakes in the WIRTGEN INVEST Venture division should help to stabilise the overall portfolio and generate additional value contributions. We remain true to our strategy and continue to invest steadily and long-term focused in the areas of venture, growth, buyout, infrastructure and private debt. We recognise the benefits of continuous investment across all phases of the economic cycle. We also continue to pay attention to appropriate regional and sectoral diversification.

In addition to the consistency of our investment approach, however, we always have the opportunity to act opportunistically. While many investors in the market had to reduce their allocations to alternatives, we were able to capitalise on opportunities in the secondary markets.    

With this increased diversification effect, we believe the portfolio is well equipped for the future and the developments that the financial markets have in store!