The vision of the Trust is to help its beneficiary communities derive a long-term benefit from mining operations so that when the mines close, they are in a much stronger position than before and are more likely to be able to thrive and sustain themselves. In accordance with the Trust Deed, the Trust has an obligation to spend or distribute 70% of Trust Income (mostly comprising of dividends received from SIOC-CDT) in Public Benefit Activities and operational/administrative expenditures. This spending policy was approved as such by the South African Revenue Services in approving the Trust’s status as a Public Benefit Organisation.

The Trustees believe that to achieve this vision, the Trust itself needs to be sustainable beyond the Life of the Mine. It requires a sustainable pattern of spending, whereby the current needs of the community are not sacrificed in the interests of future generations, nor are future needs sacrificed to those of the present. To achieve the desired level of spending while preserving and enhancing the Trust’s purchasing power over time, the Trust would need to invest its excess resources to generate a return that is greater than its spending rate.

For this purpose, the Trust can invest up to 30% of Trust Income on a long-term basis through InvestCo. The returns of this investment(s) would be contributed back to the Trust to continue its mission to improve the conditions of its beneficiary communities beyond the Life of the Mine.

InvestCo’s new long-term return target is to achieve above inflation returns over a rolling 10-year period. The company positions itself as an institutional investor looking to invest in active fund managers using modern portfolio theory of a strategic asset allocation methodology. These are private equity, bonds, listed equity and global equities. We ensure that all managers appointed adhere to sound environmental, social and governance (ESG) principles integrated into their investment process.

InvestCo seeks new investments with the main principles of risk diversification as the main driver. The company is cognisant that the capital markets are volatile and will therefore aim to have a diversified portfolio of investments. By allocating InvestCo Assets to asset classes whose returns are not highly correlated over time, InvestCo aims to mitigate some of the volatility inherent in equities and thereby provide greater stability in spending distributions than might be possible with a more concentrated portfolio. To achieve a prudent level of portfolio diversification, InvestCo employs a strategic asset allocation between private equity, bonds, listed equity and global equities.

In line with the new investment approach, InvestCo has commenced partnerships with some well-known fund managers in the country, including Futuregrowth Asset Management (2019) and Prudential Investment Managers (2019).

InvestCo has historically invested in various direct investments in the following entities over the years:

These investments were invested prior to the adoption of the new investment strategy. The company continues to monitor and extract value from these assets on a continuous basis.