OPINION | You cannot call yourself successful in a society that fails
added 02.08.2020 18:25
In South Africa, given the regulatory requirement to consider more sustainable investing and development prerogatives we as investors face, we urgently need to develop our impact investing capabilities and fund offerings to help convert many of our challenges into opportunities for investment.
Given the challenging environment investors face, we are well-versed in factors such as a constrained economic outlook, sluggish stock market performance, political uncertainty and lack of business confidence that put a lid on our investment expectations.
This means that pension and other funds that only access the listed bond market for credit exposure are limiting diversification benefits to just 20% of SA Inc's debt needs.
Despite Regulation 28 enabling at least 35% of allocations toward private markets (such as private debt and equity), our research shows that South African investors allocate only about 2% of their assets to alternatives.
Current pension fund laws make it a requirement to incorporate sustainable investing and explicitly require consideration of environmental, social and governance factors.