The German Sovereign Wealth Fund plans to increase the allocation of private markets from 25% to 30%

On 16 July, the German sovereign wealth fund, Kenfo, increased its allocation to the private market from 25 to 30 per cent over the next two years, while reducing private equity exposure. According to its annual report, Kenfo expects to expand its real estate and infrastructure portfolio to achieve its distribution. “We can still see the attractive returns from these markets,” Vélena Kenpe, head of Kenfo's Investment Management Department, said. At the same time, she cautioned that since private equity had not performed as expected in recent years, a more prudent approach was needed in the future. Some investors have reduced their investments in private equity markets because of rising interest rates and the challenges posed by artificial intelligence to investment in software. Kenfo also adjusted its position on United States Treasury debt. The Fund reduced United States Treasury debt holdings from 600 million euros a year ago to about 200 million euros by the end of 2025, and subsequently increased its holdings by over 500 million euros by the end of June. “We did not plan to stop investing in the national debt, which remains a very important part of the government bond market,” says Kenya’s CEO, Anja Micus. The current yield of up to 2.8 per cent exceeds that of many other sovereign bonds. We're taking a flexible approach."