MORE THAN JUST WEALTH MANAGEMENT
Transformation and giving back are key focus areas for Citadel. This encompasses large initiatives that include driving transformational change within the financial services industry, to the smaller things that touch people’s lives in the most meaningful way.
TRANSFORMATION THROUGH BAYHILL CAPITAL
Citadel has always been committed to the creation of an inclusive, sustainable South African economy. Our aim is to expand the notion of wealth management to a broader spectrum of society, while boosting emerging wealth creation. This philosophy, explains Citadel Chief Executive Officer Andrew Möller, is why Citadel initiated the development of BayHill Capital, a specialist private client share portfolio company, in 2016.
“It is imperative that every individual, regardless of income, has access to wealth management services. This is essential if we want to create a vibrant domestic economy. We believe that BayHill Capital is significantly contributing to the advancement of South Africa by broadening the scope of financial services solutions available in the market, including transformational investments,” Andrew says.
As a transformational wealth manager, BayHill Capital creates economic change by investing savings in targeted BEE investments that offer competitive returns.
In 2017, Citadel Holdings concluded a Broad-Based Black Economic Empowerment (B-BBEE) transaction. This saw the company funding the acquisition of a 51% controlling stake in BayHill Capital to African Financial Group Wealth (AFG). The deal leveraged AFG’s mutual interest in transformation, and the need for the creation of emerging wealth to ensure BayHill Capital’s continued success. Citadel retained a 49% stake in the business.
Andrew also adds that to establish a fully functioning wealth management firm of the calibre of BayHill Capital needs more than financial support: “We knew that establishing a wealth management company can be a costly and lengthy exercise. We short-circuited this by opening up the operational backbone of Citadel’s business – the back office structure and support – to BayHill Capital as a mechanism to ensure the sustainability of this entity. Back office support forms the bedrock on which Citadel itself rests, and we saw this as crucial to the success of BayHill Capital.”
To complement its work with BayHill Capital, Marina Knox, Citadel Human Capital Director, explains that Citadel has embarked on an internship or article clerk programme. She explains: “It is very challenging to become a fully-fledged investment specialist, or an advisor in our context. It takes time. So we have started a programme called Advisory Associates. This allows individuals who are on an internship or doing their articles to be exposed and work within an existing practice with some of our senior advisors. Once they have completed their articles, they can become fully-fledged advisors, having built up relationships and a competency in dealing with clients.”
This approach to transforming, empowering and uplifting people taps into Citadel’s mandate to ensure that everything the company does is sustainable and has successful long-term outcomes. Marina says that helping to open the door for these young people to enjoy sustainable long-term careers is extremely important to Citadel.
For more information on BayHill Capital’s investment offering please follow this link.
BLACK OWNERSHIP THROUGH NALA
In addition to driving transformation within the financial services industry, Citadel, together with its parent company Peregrine Holdings, is involved in a black ownership initiative called Nala, which highlights the company’s commitment to B-BBEE through high-impact Socio Economic Development (SED) projects. Nala has a 20% stake in Peregrine Holdings, which includes Citadel, and it contributes to Peregrine Holdings being 25.26% black owned, of which 8% is black-female owned.
Ownership of Nala is made up of 70% being owned by the Peregrine Educational Trust (35%), the Peregrine Community Development Trust (15%) and the Employee Investment Trust (20%), and then the final 30% is owned by Peregrine Holdings Limited. Marina explains Peregrine’s, and hence Citadel’s, interest in Nala: “We would like to make a sustainable impact and difference, and therefore there are three specific trusts, and instead of us making a once off contribution to these organisations, they have a more continuous benefit.”
Nala was set up to benefit Peregrine’s black employees. In June 2017, Nala declared its first dividend to its shareholders and these funds were distributed to the beneficiaries of the Employee Portfolios Investment Trust.
For more information on Nala and its work please follow this link.
Citadel Philanthropy’s work is an important element of giving back. Not only is the Citadel Philanthropy Foundation (CPF) the first donor-advised fund of its kind in South Africa, it is also involved in using its influence to ensure that worthy causes are promoted.
Part of the work being undertaken by Citadel Philanthropy involves the creation of a database of charities. These organisations undergo a series of due-diligence assessments in order to be approved as organisations that will work well within the Citadel philosophy of giving back. It is these organisations that Citadel will support through the giving of time, skills and funding.
CFP acts as a conduit that makes it easier for other individuals and companies to be able to give. So even though the final grants to the beneficiaries are made from CFP, the initial funding comes from other entities.
Jean de Villiers, Head of Citadel Philanthropy, works tirelessly with these organisations to ensure they receive the necessary backing and exposure. Jean explains: “At Citadel Philanthropy our mandate is very broad; sometimes it involves me speaking, or us making people aware of the approved beneficiaries and charities listed on our database. And sometimes it is about letting money flow to one of those beneficiaries. We believe philanthropy is just as much about connecting the dots and placing people together to help find a solution as it is about giving money.”
For more information on Citadel Philanthropy follow this link.
GOING THE EXTRA MILE
In addition to our transformation and SED initiatives, Citadel and its employees are also generous in their time, money and skills when it comes to smaller projects. These include:
THE DIGNITY KITTY
The Dignity Kitty is a special allocation that has been set up specifically to benefit designated Citadel employees. Marina explains that before annual bonuses are paid out, a lump-sum is taken from the pool and funnelled to the Dignity Kitty for the benefit of “Magic Makers”, who are traditionally the beverage makers and drivers. Marina explains: “The Dignity Kitty was created for our own people to help them where they have a need, be it with the education of their kids including school uniforms, stationery and books, or medical costs, funeral expenses, transport, or any other areas. One of the Magic Makers this year was in tears; she had been saving for school uniforms, but she only had enough money for one set. With our support she could buy an extra set so she did not have to wash uniforms each night.”
Another favourite story of Marina’s is how funds from the Dignity Kitty helped one of the company’s Magic Makers get her driver’s licence at the age of 60.
In addition, employees who have served at Citadel for more than 10 years are eligible for larger contributions focused on home ownership. Marina explains that since the launch of the Dignity Kitty, 12 employees have been helped to buy or renovate their homes. Some employees have even been helped to fix their homes in times of floods or other disasters. Marina relates one story that made a profound impact on her: “One of our ladies had sewerage running through her home. So we bought her a multi-roomed wooden house that we had lifted off the ground.”
REACH-OUT DAYS AND MANDELA DAYS
Reach-out Days and Mandela Day initiatives are driven by employees who have identified a need in the community and then work with their colleagues to deliver on meaningful projects that can make a huge difference in the lives of people.
Marina gives a few examples of some of the projects the Citadel employees have embarked on to help those in need:
- Care packs for victims of trauma, including handmade dolls.
- Rape kits, which were delivered to local police stations.
- Bake sales and personal donations for projects such as a new kitchen for the Bona Lesedi Secondary School in Mamelodi, East of Pretoria.
- A Citadel Idols competition was held in the Pretoria office to raise funds for the Bona Lesedi kitchen.
- Book donations for old age homes and schools.
- Individual donations, for example where members of one of the Citadel offices threw a baby shower for a lady who only worked at Citadel for a month. But the office saw a need and clubbed together to help her.
THE HOLISTIC APPROACH TO GIVING BACK - A CASE STUDY
Citadel is committed to building sustainable, long-term relationships. In order to achieve this, the company and its employees put a lot of time and effort into supporting its beneficiaries.
Marina singles out one example of how Citadel covers all the bases and offers truly holistic support:
Citadel’s support of Partners for Possibility (P4P) started a few years ago when Marina participated in the programme as a business leader partnering the school principal of Bona Lesedi Secondary School. The P4P model sees partners paring up with school principals in a mentorship and coaching programme. As part of the programme, the business partner and school principal identify focus areas or projects. Three main areas were identified: scholar motivation; parental activation/participation and educator recognition. Through the partnership and as part of Reach Out, Citadel has been instrumental in helping the school achieve many milestones, including setting up a loyalty card programme to encourage parents to get more involved with the school; an honour system for the top-performing student, which includes being awarded a laptop for outstanding academic achievements; and recognising the school’s teachers and the work they do.
Citadel’s involvement has not stopped there. The school, which is part of the National School Nutritional Programme, provides two meals a day for the children, and is in desperate need of a new kitchen. Marina explains: “Their kitchen is in a terrible state so, as part of our engagement with the school, our dream, is to build them a new kitchen. So from our Reach-out Days’ budget, and from the money we have raised from our baking sales and personal donations, we have raised enough to do that. We now just need the Department of Education to approve the project.”
Should you want to get involved in any of our initiatives, contact us.