nicnbk

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 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 purpose of managing a Corporation's portfolio is to ensure, over the long-term horizon, returns exceeding those of the Reference portfolio, with an equal or lower level of risk.

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, Astana,
Z05T8F6, Kazakhstan

© 2012-2024 NIC NBK.

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