Risk management: Swiss Investment Fund for Emerging Markets

Swiss Investment Fund for Emerging Markets

Key facts

Since 2011, the Swiss Investment Fund for Emerging Markets AG (SIFEM AG) has been Switzerland’s development finance institution. The Confederation owns 100% of SIFEM AG’s equity. SIFEM AG is part of Switzerland’s economic development effort, and invests in around 70 funds and financial institutions. In turn, these intermediaries finance small, medium-sized and rapidly growing private enterprises in developing and emerging economies. As at 31 December 2023, its total assets amounted to just under CHF 684 million. It had active liabilities (investment promises and ongoing commitments) of around CHF 1 billion at end-2023.

The Federal Council manages SIFEM AG according to strategic objectives. These stipulate, among other things, that SIFEM AG must have a corporate risk management system based on ISO 31000.

The Swiss Federal Audit Office examined the quality of risk management at SIFEM AG. Its core activity, i.e. managing financial risk in the investment portfolio, is effective. By contrast, risk management for the company as a whole is patchy, is performed on an ad hoc or reactive basis and shows considerable room for procedural and substantive improvement.