The Foundation’s investments are designed to yield long-term, stable returns with moderate risk, such that the Foundation’s net capital is not jeopardised and the Foundation is able to meet its commitments in terms of awarding grants and of laying a capital base for its subsidiaries, including H. Lundbeck A/S.
To achieve this, the financial targets are:
to maintain or increase the purchasing power of the portfolio assets
to provide a relatively predictable and stable real return to be used for awarding grants
To achieve these targets the following investment guidelines are applied:
the portfolio must be diversified and encompass a variety of asset classes, e.g. equity, fixed income, credits, private equity, property and distressed debt
the portfolio must not include any unusual risks with respect to geography, sectors, companies or political stability
the portfolio must have a predominance of listed assets
The Lundbeck Foundation's Board of Trustees is responsible for the investment policy and has appointed an Investment Committee to implement it. The Board/Investment Committee share responsibility for the strategic and tactical allocation of assets and risk management with the executive management of the Foundation and with the Investment Department.
The portfolio is managed by the Investment Department. The majority of the Foundation's portfolio is managed by the investment department's team. Additionally there is collaboration with external asset managers and partnerships are also forged with other investors to build up the requisite scale of investment, as well as the competence to make certain types of investments. One such example is the property company Obel-LFI Ejendomme A/S, which is owned jointly with C.W. Obel Ejendomme A/S.
The structure adopted for each individual investment is designed to secure maximum insight and, where appropriate, influence in order to guarantee that the investment complies with the values and objectives of the Foundation.
Risk management is an integral part of investment management, and is described in detail in the investment policy adopted by the Supervisory Board. The market risk is managed by setting limits per asset class. Maximum limits are also set for the duration of the bond portfolio. Liquidity risk is managed by limits on the proportion of the portfolio invested in non-liquid assets, e.g. private equity. In addition to these limits, the portfolio’s Value-at-Risk (VAR) is monitored in order to control and manage current market risk.