Germany's sovereign wealth fund to waive restrictions on investments in arms manufacturers

The fund will have the freedom to purchase defense stocks and bonds, CEO Anja Mikus informed Bloomberg. The fund was earlier restricted from investing in firms that derived over 5% of their income from defense-related operations.

This choice aligns with an overall assessment of investor mood in Europe, as numerous investors are beginning to view investments in arms manufacturers as a component of their sustainable investment approach, the agency notes.

Kenfo says that these investments "are now essential due to the altered security landscape." Mikus remarked that it would be improper for the sovereign wealth fund to step back from Germany’s increasing defense expenditures.

Kenfo can now invest in weapons producers based in the European Union, the United Kingdom, Norway, and Switzerland, she noted. She clarified that geographical restrictions arise from the necessity to adhere to specific export control regulations. Investments in firms that manufacture controversial weaponry, including cluster munitions, continue to be banned.

Established in 2017, Kenfo oversees assets totaling €25.6 billion.

source: bloomberg.com