Public HTML RI reports - PRI reporting framework 2020

Select the services and funds you offer	% of asset under management (AUM) in ranges
Fund management	0% <10% 10-50% >50%
Fund of funds, manager of managers, sub-advised products	0% <10% 10-50% >50%
Other	0% <10% 10-50% >50%
Total 100%

Further options (may be selected in addition to the above)

Hedge funds

Fund of hedge funds

01.2. Additional information. [Optional]

Futuregrowth is a specialist investment company, which manages the full range of interest bearing and developmental investments in an ethical and sustainable way.

Our team of investment experts manages approximately R194 billion of assets across the full scope of debt products, from core funds through to yield enhanced funds, as well as a range of developmental impact funds (across a variety of asset classes).

We strive to keep our promises to clients through fundamental analysis that supports strong investment views. Our investment process uses a combination of value adding tools, including interest rate management and fundamental credit & ESG analysis, to add yield to clients' funds.

Futuregrowth provides debt and equity finance facilities to organisations looking to raise funds in the capital markets.

With a track-record of more than 25 years in the market we have the requisite skills set and the investment team is well positioned to:

structure transactions that add value to both its clients and investee companies, and
construct diverse portfolios that enhance returns, reduce risk volatility and produce relatively stable outperformance over time.

Futuregrowth is dedicated to the development and empowerment of South Africa and its people, with many of our investment offerings geared towards making a meaningful difference to our world. With this in mind the company continually strives to identify opportunities that will enrich the lives of our people through delivering economic and social returns that really matter.

OO 02. Headquarters and operational countries

02.1. Select the location of your organisation’s headquarters.

South Africa

02.2. Indicate the number of countries in which you have offices (including your headquarters).

2-5

6-10

>10

02.3. Indicate the approximate number of staff in your organisation in full-time equivalents (FTE).

85 FTE

02.4. Additional information. [Optional]

Futuregrowth is a specialist asset management company, which manages a full range of interest bearing and developmental investment funds.

| Our team of investment experts manages assets across the full scope of fixed income products, from core funds through to yield enhanced funds, as well as a range of developmental impact funds.

| Our investment process uses a combination of value adding tools, including interest rate management and credit analysis, to add performance to clients' funds.

| Futuregrowth provides debt and equity finance facilities to organisations looking to raise funds in the capital markets.

With over 25 years track-record in the market and the development of the requisite skills set, the investment team is well positioned to structure transactions that add value to both its clients and investee companies, and
Construct diverse portfolios that enhance returns, reduce risk volatility and produce relatively stable outperformance over time.

| Futuregrowth is dedicated to the development and empowerment of South Africa and its people, with many of our investment offerings geared towards making a meaningful difference to our world. With this in mind, the company continually strives to identify opportunities that will enrich the lives of our people through delivering economic and social returns that really matter. The suite of developmental impact funds consists of the following products:

Futuregrowth Infrastructure & Development Bond Fund
Futuregrowth Development Equity Fund
Futuregrowth Community Property Fund
Futuregrowth Agri-Fund
Futuregrowth Power Debt Fund
Futuregrowth Inflation-linked Power Debt
Futuregrowth Infrastructure & Development ILB
Futuregrowth Development Balanced Fund

| The Agri Fund is managed by Futuregrowth Asset Management and UFF as a specialist agricultural fund advisor.

l The property asset management component of the Community Property Fund is managed by Capital Land Property Asset Management.

OO 03. Subsidiaries that are separate PRI signatories

03.1. Indicate whether you have subsidiaries within your organisation that are also PRI signatories in their own right.

Yes

03.3. Additional information. [Optional]

We do not have any subsidiaries, but UFF is specialist fund advisor with a dedicated focus on the agricultural sector in Africa, they act as a fund advisor on behalf of the Agri fund. They are a PRI signatory and signed up to the Farmland principles during 2012.

OO 04. Reporting year and AUM

04.1. Indicate the year end date for your reporting year.

31/12/2019

04.2. Indicate your total AUM at the end of your reporting year.

Include the AUM of subsidiaries, but exclude advisory/execution only assets, and exclude the assets of your PRI signatory subsidiaries that you have chosen not to report on in OO 03.2

Total AUM
Total AUM	trillions	billions	millions	thousands	hundreds
Currency
Assets in USD
Assets in USD	trillions	billions	millions	thousands	hundreds

Not applicable as we are in the fund-raising process

04.4. Indicate the assets which are subject to an execution and/or advisory approach. Provide this figure based on the end of your reporting year

Not applicable as we do not have any assets under execution and/or advisory approach

04.5. Additional information. [Optional]

OO 06. How would you like to disclose your asset class mix

06.1. Select how you would like to disclose your asset class mix.

as percentage breakdown

as broad ranges

	Internally managed (%)	Externally managed (%)
Listed equity	<10% 0.04	0 0
Fixed income	>50% 83.26	0 0
Private equity	<10% 0.93	0 0
Property	0 0	<10% 2.08
Infrastructure	0 0	0 0
Commodities	0 0	0 0
Hedge funds	0 0	0 0
Fund of hedge funds	0 0	0 0
Forestry	0 0	0 0
Farmland	0 0	<10% 1.11
Inclusive finance	<10% 5.35	0 0
Cash	<10% 7.23	0 0
Money market instruments	0 0	0 0
Other (1), specify	0 0	0 0
Other (2), specify	0 0	0 0

06.2. Publish asset class mix as per attached image [Optional].

06.3. Indicate whether your organisation has any off-balance sheet assets [Optional].

Yes

06.5. Indicate whether your organisation uses fiduciary managers.

Yes, we use a fiduciary manager and our response to OO 5.1 is reflective of their management of our assets.

No, we do not use fiduciary managers.

06.6. Provide contextual information on your AUM asset class split. [Optional]

OO 07. Fixed income AUM breakdown

07.1. Provide to the nearest 5% the percentage breakdown of your Fixed Income AUM at the end of your reporting year, using the following categories.

Internally managed

48.6 SSA

37.7 Corporate (financial)

13.1 Corporate (non-financial)

0.6 Securitised

Total 100%

OO 08. Segregated mandates or pooled funds

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

Provide a breakdown of your organisation’s externally managed assets between segregated mandates and pooled funds or investments.

Asset class breakdown	Segregated mandate(s)	Pooled fund(s) or pooled investment(s)	Total of the asset class (each row adds up to 100%)
[g] Property	0% <10% 10-50% >50 %	0% <10% 10-50% >50 %	100%
[l] Farmland	0% <10% 10-50% >50 %	0% <10% 10-50% >50 %	100%

08.2. Additional information. [Optional]

The two externally managed funds are listed below.

The Futuregrowth Community Property Composite is a portfolio specialising in the acquisition of new and existing shopping centres, which cater to the needs of underserviced communities throughout South Africa and forms part of Futuregrowth’s suite of developmental investments. The benchmark is CPI + 4%.

The fund aims to outperform the CPI by 4% per annum before the deduction of taxes and fees and with income reinvested over a rolling 3-year period. The Composite seeks to provide investors with a low cost, high value property investment that focuses on emerging market retail property growth in underserviced rural communities and high density urban centres.

The Composite has purchased and developed 32 shopping centres located in rural and township areas countrywide over the past 20 years. These centres are located in seven of the nine provinces, providing retail services and products to a primary target market of approximately 10 million people.

Futuregrowth Agri-Funds, portfolios specialising in the investment of agricultural land, biological assets, agricultural infrastructure and other related farming implements, form part of Futuregrowth’s suite of developmental investments. There are currently three funds in our suite of agricultural funds. Fund 1 is closed, Fund 2 is in drawdown phase and Fund 3 is open for investment. The benchmark is CPI + 10%.

The fund aims to outperform the CPI by 10% per annum before the deduction of taxes and fees and with income reinvested over a rolling 3-year period.

The funds' investments are in the actual farmland and infrastructure, which is leased to an approved operator to manage and run the farm. The farmland will be developed and managed in partnership with these large-scale agricultural operators to further enhance its value. All farms acquired have further development potential. According to a planned expansion programme, the Funds invest capital into farms to develop additional arable land. This may include the acquisition of adjacent farmland.

OO 09. Breakdown of AUM by market

09.1. Indicate the breakdown of your organisation’s AUM by market.

0 Developed Markets

100 Emerging Markets

0 Frontier Markets

0 Other Markets

Total 100% 100%

09.2. Additional information. [Optional]

Our business

Futuregrowth Asset Management is a specialist investment company that manages around R194 billion of assets on behalf of our investors. Our large team of investment experts manages the full scope of interest bearing products, from money market funds to yield enhanced bonds, as well as a range of development funds. / Investment strategy As asset managers we aim to maximise long-term investment performance for our clients, which we do by identifying, sourcing and managing all potential sources of outperformance in our funds. Key tools are our interest rate strategy and asset selection process.

Interest rate strategy

Our approach to interest rate management is driven by fundamental economic factors, although we also consider many other market influences, including the potential impact of non-fundamental drivers. We use a top-down approach to formulate our macroeconomic view in conjunction with a bottom-up approach to price instruments. Together this forms our best investment view, which guides our investment strategy.

Implementation of the strategy includes optimising the mix of interest-bearing assets (cash, variable rate, fixed rate and inflation linked bonds), duration size and yield curve position, that once combined, will drill down to stock selection.

Asset selection

Our asset selection process is designed to add yield to client funds by analysing and taking advantage of the opportunities provided in the lending markets. Using mainly a bottom up approach to analysis of borrowers, potential deals in both the listed and unlisted sectors are independently assessed. Key elements in the process are pricing for risk, and terms and covenants negotiated to protect clients’ investments.

When seeking assets in the development equity space, we use our existing knowledge of companies and markets to identify long-term opportunities in unlisted equity.

Ongoing analysis of the relevant debt and equity instruments, including both economic and environment, social and governance (ESG) factors, is conducted.

The above sources of outperformance are blended with the aim of reaching the best possible outcome depending on the mandate and the needs of our clients. We are constantly seeking better ways to generate sustainable returns for our clients.

A word on sustainable investing

We consider that investors play a key role in the capital allocation mechanism of the economy, and our fund investors are part and parcel of South Africa’s long-term development. We manage our business in a long-term, sustainable manner, we seek to assess each investee company in terms of their own sustainable practices - including consideration of the counterparty’s character, products and practices. We believe a responsible investor channels capital suitably to sustainable enterprises.

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