Anja Mikus heads Kenfo, the first German state fund. She will soon be investing billions more to secure pensions. A huge responsibility – also because many Germans still dismiss shares as gambling.
How secure the pensions of the future will be is decided behind a mouse-grey facade. In the Lenz building on Kurfürstenstrasse, not far from the KaDeWe in western Berlin, around 50 employees manage assets worth billions that are used to store German nuclear waste. The structure is called Kenfo, “Fund for the Financing of Nuclear Waste Disposal”.
His employees are investment specialists who could easily be found in the gleaming skyscrapers of the banks in Frankfurt am Main. His boss, Anja Mikus, has worked in the investment industry for 35 years, including in leading positions at Allianz and Union Investment. When the opportunity to set up Germany's first sovereign wealth fund came up with Kenfo in 2017, she jumped at the chance – and was so convincing that she is now also entrusted with the generational capital (more on this here).
Previously known as the “share pension”, it supplements the previously purely pay-as-you-go statutory pension with a so-called capital cover. Mikus therefore receives several billion euros every year to invest in the capital market. The proceeds will then be used to co-finance pensions in the future – a small revolution.
t-online spoke to Anja Mikus and Verena Kempe, Head of Investment Management at Kenfo, about how they deal with the responsibility, how and when exactly the money could be invested and what bothers them most about the criticism that they are gambling away their pension.
t-online: Ms. Mikus, how do nuclear waste and the statutory pension fit together?
Anja Mikus: Very good, because both need sustainable financing. In the case of nuclear waste, disposal must be financed over the long term, and contributions to statutory pensions should not rise too much. And in both cases, the money for this should be generated – in whole or in part – on the capital markets.
This seems to work well with nuclear waste. Last year, despite wars and economic crises, the Kenfo achieved a record return of 11.1 percent. How does that work?
Mike: We owe this to our solid portfolio, i.e. the mix of riskier and less risky assets. Valuations naturally fall in difficult capital market phases, but the portfolio then has the strength to benefit from the upward trend again. We are proud of that.
And how is it doing this year?
Mike: As of August 31, our return was 7.1 percent, well above our target return of an average of 3.7 percent per year. Our equity portfolio even reached 12 percent.
You suggested early on that the federal government could use the Kenfo structures to manage generational capital, then known as equity pensions. Don't you have enough to do?
Mike: Good question (laughs). I think it's right that the state's money is managed centrally. This will create synergies and improve the quality of investments. With Kenfo, we've already built a successful and powerful platform, and there's a professional team that can get started right away. That's why it would be sensible and efficient to give us this task.
You would then have even more responsibility in the future – not only for financing nuclear waste disposal, but also for the statutory pension. How do you deal with the pressure?
Mike: Investing is always a responsible decision – whether you are managing the money of savers or institutions. The money has always been hard-earned and should be invested in such a way that it brings the greatest possible added value, taking into account the risk appetite. Being aware of this responsibility every day is important. But we can handle it well.
Anja Mikusborn in Kassel in 1956, has been CEO of Kenfo since its founding in June 2017. The business graduate looks back on more than three decades of experience in the investment industry. She rose from securities analyst to managing director of the investment company at Allianz, later heading portfolio management at Union Investment, where she managed around 250 billion euros.
The second pension package has not yet been passed by the Bundestag. When do you expect to be able to invest the first euro?
Mike: As long as there is no generation capital foundation, we cannot invest any money. First, the law must be passed and the foundation established. In order to get things started this year, we need the “go” in November if possible. Our initial investment requires a certain amount of lead time.
And you think it will work?
