A transformative approach to investment

Principal officer, Joe Letswalo, holds the overall winner’s trophy which the Transport Sector Retirement Fund received from IRFA earlier this year. (Photo: IRFA)

Principal officer, Joe Letswalo, holds the overall winner’s trophy which the Transport Sector Retirement Fund received from IRFA earlier this year. (Photo: IRFA)

The Transport Sector Retirement Fund (TRSF) is putting its capital to work through responsible investment initiatives. It is changing the transport landscape for the better and its members no longer have to wait for retirement before they start reaping the benefits of their contributions.

“The TSRF considers broad-based economic empowerment as a key driver to help transform our society and our members’ daily lives,” explains its principal officer, Joe Letswalo.

“Our board of trustees is committed to giving careful consideration to prevailing socio-economic issues and finding the right balance to our responsible investment approach in order to help move our country forward.

“To ensure our success, the board is committed to uphold best business practices and good governance principles, to be resourceful and innovative and to take carefully calculated risks.”

Upfront, the fund has placed the target that at least 70% of its assets should be managed by black-owned investment. Currently, 75% of the fund’s assets are invested with black-owned managers.

Social impact investment

Various initiatives were adopted by the board of trustees to ensure the sustainability of the fund’s transformation approach.

“For example, the playing fields for appointed asset managers were not necessarily conducive to maintaining success levels, especially with regards to competition with more well-resourced and established ‘traditional’ asset managers. It was important to us that asset managers understood that the fund’s success is also their success,” says Letswalo.

As much as the fund’s investment approach encapsulates all the usual listed asset classes, the board of trustees also focuses its attention on various alternatives and social impact investment options. The TSRF’s approach to investment is considered to be progressive and dynamic, consciously addressing environmental, social and governance (ESG) matters and actively pursuing them.

“Our socioeconomic objectives are clearly noticeable in our impact investment approach, where the fund‘s investments assist in infrastructure development to directly serve the occupational needs of the majority of our workforce members, such as the development of high-end truck stops along the country’s major transport networks.

“It is important to the fund that our asset managers are reputable and consistent in providing the probability of returns. The board expects its asset managers to at all times be conscious of the environment in which they operate, and to give their committed consideration to transformation, including diversity and inclusivity, ESG principles and good governance,” says the fund’s principal officer.

This investment strategy, which grows and protects the assets of its members throughout their life stages, provides the fund’s members not only with monetary benefits, but also affords them dignity.

As a case in point, the Truck Stop Fund and particularly the development of the Highway Junction Truck Stop at Harrismith, not only gave members good returns of more than 25% over the past 12 months, but also plays a key role in job creation.

Economic injection

The Highway Junction Truck Stop is the first operational and highly efficient truck stop of its kind in the Fund’s investment basket and is now one of the largest work providers in Harrismith, providing 200 local residents with full-time employment.

Besides this injection into the local economy, TSRF’s members also benefit daily by having access to a safe space where they can rest and recover. They can obtain quality meals and healthcare facilities, do banking and purchase basic necessities.

With this approach, the TSRF is proving the success of responsible investments and the positive impacts that flow from it. The TRSF is successfully unlocking different income revenue streams, while offering viable and competitive returns.

In the experience of the TSRF board, its impact investment strategy encompasses broader returns such as the revival of economies, job creation and improved gross domestic products (GDP), while also helping to address a variety of social ills by providing good service delivery, healthcare and education.

“Our social impact investments currently outperform investments on the JSE, therefore this asset class is certainly the right fit for the Transport Sector Retirement Fund,” concludes Letswalo.