Assets and capital of the Foundation

The Foundation’s capital of DEM 10.1 billion (EUR 5.2 billion) was provided by the German government and German industry. By the end of 2006, a total of EUR 4.37 billion was disbursed to more than 1.66 million former forced labourers and other victims of National Socialism in 98 countries. The Foundation completed its payments programmes in 2007.

Portfolio strategy

At the beginning of 2008, the management of the Foundation’s financial portfolio was completely reorganised. Thereby, the income objectives were defined on the basis of the planned funding volume, the corresponding administrative costs and the inflation adjustment required to preserve the value of capital. The outcome was a target yield equal to the rate of inflation plus 3%. The intention is to spread risk as widely as possible by investing in diverse asset classes: shares, bonds, property, commodities and absolute return funds. This is designed to ensure that the target income is achieved with the minimum of volatility.

The basic principle is to "steer with a steady hand", and this should make it possible to generate target incomes above the long-term average. Short-term negative price swings will not immediately lead to adjustments.

The assets of the Foundation, which amounted to EUR 396 million at 31 December 2008, are invested as follows:

Sustainability

Nearly all investments have been screened using an ethical investment filter. The concept is based on the definitions of the International Labour Organisation (ILO), which is part of the United Nations. Mindful of the Foundation’s purpose and the reasons for its creation, this filter focuses on human violations in the work environment (for example child labour, forced labour, exploitation).

In line with its statutory purpose, the Foundation is especially concerned about violations involving modern forms of forced labour and human rights infringements in the work environment. In the case of private sector issuers, the focus is on labour law infringements in the fields of freedom of association, child labour, forced labour, discrimination, and health and safety at work. Wherever expedient and feasible, supply chains are also put under scrutiny. In the case of government issuers, the focus is on general human rights violations, labour law infringements and child labour.