Fund making inroads for its members.
An ‘alternative’ asset-allocation strategy is put to good use.
When rushing along the Johannesburg-Durban motorway, pause briefly outside Harrismith to take a look at the Highway Junction Truck Stop. It’s a fine example of “responsible investment” by a retirement fund – in this case the Transport Sector Retirement Fund – directly to serve the occupational needs of its workforce members.
The project is large and impressive. It’s also unique.
“Four years ago we determined that good-quality truck stops are sorely lacking along SA’s major routes,” says TSRF principal officer Joe Letswalo. “Recognising that the vast majority of our members are truck drivers, and that a major cause of accidents is driver fatigue, we launched a strategy to ensure that our members and the broader transport community would have facilities to park and sleep safely.
“At the same time we wanted them to have access for refuelling and auxiliary services such as restaurants, primary healthcare clinics, recreational and warehouse space.”
A multi-brand facility, it is probably one of the busiest truck stops in Africa. Three different petroleum brands – Engen, BP and Total – have their own forecourts. Trucks can park overnight on a reinforced concrete surface with no chance of being stuck in mud. It’s purported to be the preferred stopover for about 70% of truck drivers passing through the N3 corridor.
A joint venture with the Deysel family’s Highway Group (whose chief executive is Ben Deysel), three years ago the TSRF bought its 50% share of the Harrismith project for R55m. Since then, says Letswalo, a 26% internal rate of return has consistently been achieved. With introduction of the multi-brand expansion strategy, he expects that it will be revised to 30%.
Now the TSRF Truck Stop Fund is raising around R3bn for development of similar hubs on major routes throughout SA. Sites have already been earmarked near Cape Town, East London, Colesberg and Musina for project completion during 2020-21.
The fund wants a national brand strongly recognisable for safety and cleanliness standards that qualitatively support the transport and logistics industry. The TSRF, says Letswalo, is continually looking for ways to improve members’ livelihoods while they are still actively employed.
A non-aligned standalone umbrella fund, TSRF currently has around 3 000 employers which bring its total membership count to about 70 000 individuals. Assets under management are approximately R7,1bn.
The Truck Stop Fund forms part of the TSRF’s “alternatives” asset allocation in terms of the Pension Fund Act’s Regulation 28. The TSRF has allocated R250m, representing 2,5% of its assets under management, to the Truck Stop project.
- Formerly the Road Freight & Logistics Industry Provident Fund, in 2017 its name changed to the Transport Sector Retirement Fund when it was opened to the wider transport sector.