Investment portfolio

The Corporation was established in 2012 with the purpose of enhancing the management efficiency and diversification of the international reserves of the Republic of Kazakhstan. The Corporation is focused on active investments in alternative asset classes: private equity, real estate, infrastructure and hedge funds.

 

The Corporation’s portfolio management is guided by the Investment Strategy, which is approved by the Executive Board of the National Investment Corporation of the National Bank of Kazakhstan. The Strategy determines the investment horizon, risk appetite, profitability target indicators and investment limitations. According to the Strategy, the Corporation’s target returns and risk appetite is determined by the Reference Portfolio, which is a low-cost and passively managed portfolio composed of global shares (80%) and global bonds (20%).

 

The Сorporation’s portfolio management aims to generate long-term returns that exceeds the Reference Portfolio returns, at an equal or lower risk level.

 

 

The Corporation’s target portfolio is diversified by three asset categories::

 
  • Highly profitable risky assets: 30-40%
  • Diversifiers: 25-40%
  • Risk mediators: 20-35%

 

 

The Corporation invests in alternative assets mainly through investing in funds using a «Core-Satellite» approach. Large investments in diversified funds serve as the Core. Smaller specialized funds aimed at increasing returns or reducing risk serve as Satellites.

 

CORE
SATELLITE
«CORE-SATELLITE» Approach
Portfolio basis

direct investment in large global funds that

Discretionary management

investments in specialized funds and strategies managed by the strategic partner

Alternative investments

PRIVATE EQUITY

Private equity investments aimed at creating a diversified portfolio in terms of strategy, industry and geography. Private equity investments are part of the dynamic assets category.

Growth equity
Strategy of acquiring minority positions in relatively mature companies
Aim: expansion, entry into new markets, organic growth and acquisition of companies
Venture capital
Strategy of investing in companies at an early stage of development with minimal/negative cash flow
Aim: increasing the company value and subsequent sale of the investor’s share through M&A or IPO
Mezzanine
A hybrid strategy combining debt and equity financing
Aim: opportunity to convert to an equity interest
Buyout
Strategy of acquiring the controlling stake of a company with the use of debt financing
Aim: company development with subsequent resale
Special Situations
“Rescue” financing of companies that are in certain financial or operational circumstances
Aim: gaining profit from a potential increase of the company value

REAL ESTATE

Investment in funds whose key activity is investing in real estate properties covering various real estate types, strategies and geographies. Investments in real estate funds fall under the category of assets that provide additional diversification to investment portfolios

Core
Investing in real estate with top characteristics in its class (location, quality)
Offices, retail, apartments in central locations of big cities
Core Plus
The strategy of investing in lower quality assets with smaller capital investments
Real estate properties located on the outskirts or outside city centers
Value Add
The strategy of investing in real estate that is in need of considerable capital investments
Goal: Investors see ways to improve various properties, and increase their values, while taking the moderate level of risk
Opportunistic
The strategy with large capital investments
Approach: The comprehensive plan of improvement with potential change of the intended use of the building

HEDGE FUNDS

Investment funds created for investment in accordance with a certain strategy and in various financial instruments. Investments in hedge funds fall under the category of risk mediators.

Global Macro
A strategy of investment with the aim of making profit based on change in interest rates, stock quotes, exchange rates and value of other financial instruments
Event driven
A strategy of investment based on identification of potential corporate events and their impact on the value of the financial instruments / arbitrage from potential mergers and acquisitions
Relative-value arbitrage
An investment strategy aimed at making profit on the basis of the price divergence between correlating financial instruments
Equity
A strategy of investment in a combination of long and short positions in publicly traded stocks and derivatives
Credit
A strategy of investment in a combination of long and short positions in debt markets
Multi-strategy
A combination strategy combining long/short positions, the use of trading systems for tracking trends and other strategies

INFRASTRUCTURE

Investment in funds whose main investment target is infrastructure assets. Investments in infrastructure fall under the category of assets that provide additional diversification to investment portfolios.

Utilities
Electricity
Gas
Water
Global communications
Telecommunications providers
Cellular towers
Wiring systems
Energy infrastructure
Wind and solar power stations
Oil and gas
Energy networks
Transport and logistics
Trains
Planes
Trucks
Marine transport
Support infrastructure
Goods and services ensuring the operation of the infrastructure projects

Risk management

Risk management system

The Corporation’s risk management is based on the experience, and continuous professional and technological development

Risk management focuses on prevention, reaction, effective communication, and risk reduction

Operational
Investment
Risk identification
Analysis and Evaluation
Action plan
Decision making
Control
57A Mangilik Yel avenue,Nur-Sultan,
Z05T8F6, Kazakhstan
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