Responsible investing is the integration of environment, social and governance (ESG)-related risks and opportunities into research, valuations, portfolio construction and ownership activities. At Electus we understand how such risks can impact on long-term sustainability and forecasting of cash flows when valuing companies. We therefore include these factors in our fundamental valuations process which informs our stock selection, sector allocation, portfolio construction and proxy voting (record).
However, it is our passion for good corporate governance that distinguishes us as a responsible investor. We regularly engage with the senior management and chairperson of the companies in which our clients are invested, or will potentially invest, discussing issues such as strategy and its execution, business model risk, balance sheet management, capital allocation, share issues, executive incentives and remuneration.
Electus Corporate Engagement Actions
- Letter to Texton Property Fund with Electus's views on Strategy and Capital Allocation.
- Letter to Novus Holdings re cash back to shareholders and their response.
- Letter to clients about our strong corporate engagement with Anglo American's Chairman
- Presentation to Anglo American's CEO and senior management.
As a responsible steward of the assets in which we invest for our Electus clients, we build strong relationships with senior management teams. This is a crucial aspect of our business, not only so that we can engage on issues where we see fit, but also because we believe that if a share that our clients own is undervalued, we can normally identify why this is the case. We then can engage and work with management to "unlock" the potential value.
We subscribe to responsible investment guidelines, which are based on the United Nations-backed Principles for Responsible Investment (UNPRI), the Code for Responsible Investing in South Africa (CRISA) and Regulation 28 of the Pension Funds Act, as well as client mandates.
Responsible investment downloads
Here are our policy and guideline documents as well as relevant industry codes and legislation.