We at Sesfikile Capital take our fiduciary duty to our client investors very seriously and act in the sole interest of our clients. We recognise that Environmental, Social and Governance (ESG) factors play an important role in assessing the long-term sustainability of investments. Accordingly, we believe that the integration of ESG factors into our investment process is a crucial step and will ultimately lead to increased value and lower risk for client portfolios. All investment team members are aware that ESG factors must be considered in the valuation process and are therefore responsible for ensuring that the ESG considerations relevant to a particular company are included in their long-term valuation of a company. As Sesfikile Capital rigorously applies our investment methodology of capitalising forward distributable earnings by a fair exit yield. ESG is incorporated into our exit yield and hence will be implicit in every investment decision that Sesfikile Capital makes. Aspects that impact the exit yield are:
1. Balance sheet strength and portfolio quality
2. Quality of management
3. ESG factors including BEE, amount of green buidlings, community development, executive compensation, board independece and diversity, shareholder rights
4. Stock liquidity and quality of earnings