Blue Chip Issue 80

RETIREMENT FUNDS
Impact Investing
JUST LAUNCHED
For the dignity and care of the planet and its people
Fran Troskie, Investment Research Analyst, RisCura
RisCura introduces two exciting CIS portfolios
Investing with dignity and care — these are key themes that we thread through our members’ retirement journey. Retiring with dignity
means retiring with the means to support yourself, with the ability to care for your needs and to achieve a desired and sustainable
standard Significant of living. What if changes a sense in of dignity the South and African purpose retirement could be fund further funds, personified where in appropriate, how members allows fund for cost their management retirement? while not
environment are anticipated over the next few years. The restricting the ability to generate market-beating returns.
Impact investing Financial is one such Sector way. Conduct Globally, Authority impact (FSCA) investing has means expressed the impact investments High to Equity redress socio-economic and environmental Low Equity ills,
desire to reduce approximately 5 000 pension funds, currently
Asset Class Allocation
Asset Class Allocation
“to generate positive, measurable social and environmental impact” while simultaneously earning attractive returns. And recent surveys of
in South Africa, to less than 500. The increased fiduciary responsibilities
while still delivering competitive investment returns. Impact investing retirement fund members have shown they want “positive” investments
and accountability placed on pension funds by the FSCA over recent
has transformed from a mere concept a decade ago to a formalised that leave a lasting legacy (2020 poll by global consultancy firm Bfinance;
years has disproportionally increased the time commitment, cost and
investment strategy today with a current estimated market size of USD Willis Towers Watson, 2020 Board of Directors Survey: Alignment
risk on small employers offering retirement benefits to their staff.
715 billion.
RisCura, a global investment firm, with roots in the large
of ESG with Executive Incentives and Human Capital Governance;
pension fund advisory sector for over 20 years, recently launched Reptrak 2021).
At RisCura, investing in a world with a sustainable future has always
two collective investment scheme (CIS) portfolios. The offerings
been at the heart of what we do. Research has dispelled the myth
Cash 2%
ILB15 6%
Cash 10%
ILB15 22%
are specifically for small-to-medium sized companies or funds RisCura is helping to make this possible. Using its extensive
Normal bonds 9%
Property 5%
Normal bonds 30%
Property 4%
that we need to forfeit financial gain for the “greater good”. There are
with limited governance bandwidth, giving these entities access institutional
Equity 43%
knowledge,
African Equity
RisCura
5%
has
Equity
recently
16%
launched
African Equity 2%
numerous examples where impact investors have netted substantial
Foreign Property 3%
Foreign DM Equity 17.5%
Foreign Property 2%
Foreign DM Equity 9%
to the same innovative investment ideas that were previously only South Africa’s Foreign EM Equity first 6.5% fund-of-funds China Equity 3% series focused Foreign EM Equity specifically 3.5%
China Equity on 1.5%
long-run returns, at appropriate levels of risk. And, more importantly,
available to their large stand-alone pension fund clients.
these income RisCura streams has have been proven instrumental to be stable and in sustainable. using their In South impact investments.
investment While a good employee benefit scheme helps companies to
Africa, one expertise such example to shape is those the South investors African who pension were first fund movers industry into as we The RisCura attract the Impact best Fund skills Series to their focuses organisation, on unlisted the significant debt, unlisted resources
renewable know energy, it today. where Widely returns credited of around as CPI+3-4% the pioneer were of locked liability-driven in property needed and unlisted to run the equity. funds The often solution distracts offers from trustees the a company’s single point core
over time. investment, alpha transport strategies and one of the first adopters of entry business into a widely activities. diversified A move portfolio to an umbrella at a competitive fund might cost. very By well
of actively managed China-specific investments, RisCura has been be advantageous to both employers and their employees, with
Retirees around the world have been hard-hit by the COVID-19
mapping the objectives of the National Development Plan 2023 to the
a longstanding and trusted advisor to some of the largest pension the time-consuming oversight and fiduciary burdens passed on
pandemic. In South Africa, interest rates are at record lows, traditional
targets and objectives of the UN Sustainable Development Goals (SDGs),
funds in Africa. Currently, the company influences the investments to the umbrella fund trustees.
sources of stable almost income 15-million have South lost their Africans lustre, through and stock its markets pension are
RisCura has identified eight priority investment themes (see themes in
fund and The move now also allows funds access to the same pension
volatile at medical best. The scheme pandemic clients. has also highlighted the glaring socioeconomic
ills The prevalent CIS portfolios, in many developed the RisCura and High-Equity developing economies Prescient –
image below) to focus the funds’ investments, thereby allowing retirees’
fund investment expertise (previously only presented to standalone
funds) via the RisCura CIS portfolios that are currently
capital to have an impact across areas such as job creation, agriculture
Fund of
gender, racial Funds and and income RisCura inequality; Low-Equity widespread Prescient poverty; Fund and of economic Funds, employ
and green
available
energy,
on
while
the
offering
Robson
an attractive
Savage Acumen
targeted investment
Umbrella
return.
Fund, the
vulnerability. a combination Globally, economic of best-of-breed growth has specialist languished, boutique and in managers South that
An additional
Sanlam
benefit
Umbrella
to retirement
Fund and
funds,
the Fedgroup
with their
platforms.
cashflow and
This
assetliability
matching needs, is that the series of funds has been structured
provides
Africa, the ensure revival greater is likely responsiveness to be slow and and painful the thanks ability to to its trade unique in volatile members with the peace of mind that their retirement savings are
political and market economic conditions. challenges. A combination of active and passive underlying invested with care.
by RisCura to allow for some monthly liquidity, while also allowing for a
long-term sustainable level of return.
Mobilising capital to spur an economic recovery has become essential.
Yet, do we want to perpetuate a landscape where inequality, poverty Retirement fund trustees can now give their members access to the
and corruption are rife, where essential services are lacking and where impact investments they seek and experience enhanced returns while
the environment is needlessly exploited? The answer is a clear no. That restoring dignity and care for the planet and its people. It’s a win-win
is why South African investors should, and increasingly are, looking to for all.
RisCura Solutions (Pty) Ltd and RisCura Invest (Pty) Ltd are authorised financial services providers.
Quality education Quality healthcare Creation of quality jobs
Inclusive finance
05/21/RS/SA_RF/TT
riscura.com
Nikolaas Delport, Business
David Potgieter, co-head for
Development for iDFM Services, RisCura iDFM Services, RisCura
Infrastructure
Clean energy
Affordable housing
RisCura has been instrumental in using their
investment expertise to shape the South African
pension fund industry as we know it today.
Craig Abbott, co-head for
iDFM Services, RisCura
Sustainable agriculture