The purpose of Saastamoinen Foundation’s investment strategy is to ensure consistent and systematic management of the Foundation’s investment assets, so as to ensure that the portfolio generates revenue necessary for running the Foundation. The long-term objective is for investments to facilitate positive development of the Foundation’s operations, as laid down in its charter.
It is the Foundation’s policy to invest its assets responsibly because, in our estimation, responsible investment reduces the risk level of the portfolio. Responsible investment means that investment decisions take into account not only economic aspects but also environmental, social and governance (ESG) concerns. Together with its partners, the Foundation works to develop the processes for monitoring and reporting of responsible investment. The impacts of responsibility on portfolio returns and risk are measurable, given a sufficiently long time period.
The Foundation has set an absolute return target of 5.5% per annum on its portfolio, which takes into account the grants awarded by the Foundation, its operating expenses and inflation expectations. This goal cannot be achieved with a low-risk investment portfolio, as the return on such a portfolio is insufficient.
Investments are divided between several asset classes and sectors in order to diversify risks and meet investment objectives. Part of the portfolio consists of equity investments that aim at long-term growth, but it also includes fixed-income investments that generate more stable returns. Investments are implemented in both publicly traded securities and other investment instruments. Investment takes into account the Foundation’s cash-flow needs by investing annually in items that distribute dividends or other direct income.
Investments can also be made in diversified private equity, private debt, real estate, forestry and infrastructure funds, as well as in unlisted companies. The purpose of these other investment assets is to improve the risk-reward ratio of the portfolio. The Foundation pays particular attention to the reporting and monitoring of illiquid investments.
Photo: Pastinen and Wolkoff, Vyborg Timber Agents in Egypt
Photograher: South Karelia Museum