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Sesfikile Capital (Delisted)

PRI reporting framework 2020

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You are in Strategy and Governance » Investment policy

Investment policy

SG 01. RI policy and coverage

New selection options have been added to this indicator. Please review your prefilled responses carefully.

01.1. Indicate if you have an investment policy that covers your responsible investment approach.

01.2. Indicate the components/types and coverage of your policy.

Select all that apply

Policy components/types

Coverage by AUM

01.3. Indicate if the investment policy covers any of the following

01.4. Describe your organisation’s investment principles and overall investment strategy, interpretation of fiduciary (or equivalent) duties,and how they consider ESG factors and real economy impact.

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 

01.5. Provide a brief description of the key elements, any variations or exceptions to your investment policy that covers your responsible investment approach. [Optional]

Key elements of our RI approach include: 

• Black Economic Empowerment - this refer so the level of employment equity at investee company level in line with South African legislatin and objectives of equility and diversity 
•Green buildings - this refers to the number or % of green buildings n a portfolio where we have seen 'green buildings' show 1. higher attractiveness to multinational or blue chip tenants, 2. lower average vacancies 3. lower operational cost and disruption to the environment, thereby lowering overall portfolio risk
•Community development - particularly in the retail / mall sector we examine community involvment and development (direct jobs, anciliary services) that shopping centres provide 
•Exec compensation - we examine this to maximise alignement with clients / shareholders 
•Board diversity - in terms of race, background and skillset. 
•Board independence - we watch for weak boards that are dominated by executive teams 
•Capital structure - the capital structure often determines the risk profile and alignment of incentives 
•Shareholder rights
•Financial statements & auditors - rotation and qaulity of auditors is key 

01.6. Additional information [Optional].

SG 01 CC. Climate risk (Private)

SG 02. Publicly available RI policy or guidance documents

 

02.1. Indicate which of your investment policy documents (if any) are publicly available. Provide a URL and an attachment of the document.

URL/Attachment

Attachment

Sesfikile-Capital_ESG-Policy_July-2019.pdf

02.2. Indicate if any of your investment policy components are publicly available. Provide URL and an attachment of the document.

URL/Attachment

URL http://sesfikilecapital.com/wp-content/uploads/2019/07/Sesfikile-Capital_ESG-Policy_July-2019.pdf

02.3. Additional information [Optional].

We have attached our ESG policy that provides our approach to responsible investment 

SG 03. Conflicts of interest

03.1. Indicate if your organisation has a policy on managing potential conflicts of interest in the investment process.

03.2. Describe your policy on managing potential conflicts of interest in the investment process.

Yes. All members of Sesfikile Capital are subject to rules governing the personal account (PA) dealing policy. Members of the investment team are prohited:

- sitting on boards of listed property companies that form the investment universe 

- sitting on any company boards, advisory or investment committees that could conflict with the comany or investee companies 

- trading any shares for thier personal account that are currently being traded by the company for client portfolios. Members of the investment committee apply for clearance to trade a share with at least two members of the three-person portfolio management team approving / disallowing the trade 

- every six months board members (including the three portfolio managers) are required to disclose any directorships, advisory boards and any current or potential conflicts of interest. 

03.3. Additional information. [Optional]

SG 04. Identifying incidents occurring within portfolios (Private)

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