SROA Capital Meets or Exceeds NABTU’s RCP Special Servicing Standards
SROA Capital’s vertically integrated private equity real estate and technology platform has established itself as a reliable investment partner for pension fund managers interested in providing employees and pensioners with secure, risk-adjusted returns.
Traditionally, pension fund managers were only allowed to invest in highly-rated bonds and blue-chip stocks. Increasing liquidity and improved transparency in private markets have led to changes in investment rules which now permit pension funds’ strategic and tactical asset allocation strategies to include private equity, real estate, hedge funds, and infrastructure, among other asset classes.
Pension funds now enjoy greater flexibility in strategy and manager selection that can help balance risk and achieve long-term return targets while also satisfying certain non-economic criteria.
Organizations like North America’s Building Trades Unions (NABTU) recognize the need to ensure that real estate investment firms form healthy partnerships with unions when providing labor for real estate construction projects. NABTU is dedicated to supporting the economic stability and security of organized construction workers in North America. Each year, NABTU issues a Responsible Contractor Policy (RCP) Scorecard. The NABTU RCP Scorecard measures how well investment firms that fund both real estate and infrastructure construction provide RCP’s that comply with special servicing requirements.
Together, SROA Capital and NABTU provide pension fund managers with the detailed data and research they need to make smart investment decisions. By working with NABTU to achieve and maintain labor-friendly policies in their investment agreements, SROA Capital has established itself as a trustworthy investment partner. By publishing the results of its RCP Scorecard, NABTU provides pension fund managers with a reliable source of vital investment information.
The NABTU Scorecard utilizes metrics in the following 10 categories to measure the effectiveness of asset managers’ efforts to implement their RCP when hiring unions for real estate and infrastructure construction projects:
- Effectiveness: Assesses whether the RCP requires union labor;
- Coverage: Assesses whether the RCP provides broad coverage that includes all relevant on- and off-site activities;
- Application: Assesses the degree to which investment firms include the RCP across all their relevant real estate and infrastructure investment products;
- Neutrality Provisions: Assesses whether firms ensure that contractors’ and subcontractors’ efforts to affiliate with labor unions will be protected by federal and state regulations;
- Labor Disputes: Assesses the degree to which investment firms avoid and/or successfully resolve labor disputes with the contractors their funds finance;
- Advance Notification: Assesses the degree to which investment firms provide advance notification of upcoming construction projects to ensure union contractors have the opportunity to submit competitive bids;
- Reports Work Hours: Assesses the degree to which investment firms consistently report hours worked by the employees of the construction firms their funds finance;
- Designated Labor Liaisons: Assesses whether investment firms employ a designated labor liaison, and whether that liaison meets regularly with a NABTU representative;
- Policy Enforcement Provisions: Assesses the effectiveness of a firm’s ability to maintain a successful track record of third-party reporting; training and compliance; and complaint resolution;
- Project Labor Arrangements (PLA’s): Assesses whether the investment firm utilizes PLA’s to reduce the likelihood of labor disputes.
Investment fund managers submit responses to detailed questionnaires that examine the thoroughness and effectiveness of their policies in each of the categories listed above. Responses within each category are evaluated and receive a final score ranging from 0 to 5. The more closely an investment firm’s policies align with NABTU’s standards in each category, the higher their score in that category. The highest possible score for each category is 5, so the highest possible total score is 50. Total scores are multiplied by two to put them on a percentage scale of 0 to 100.
In the current reporting period, 24 real estate investment firms received a NABTU Scorecard questionnaire. Six firms did not respond. SROA Capital received a total score of 90%, the second highest of all scores issued among the 18 firms that submitted responses. More importantly, SROA Capital was the only firm to receive a perfect score of 5 in every category in which their policies were evaluated[1].
SROA Capital’s consistent performance across the range of NABTU’s performance standards testifies to our commitment to maintaining an effective RCP that ensures mutually beneficial relationships among investment managers, contractors, labor unions, and employees. In turn, these policies reinforce the best practices that make SROA Capital a market leader among real estate investment firms and a trusted partner of pension fund managers.
“I am pleased to see that the results of NABTU’s RCP Scorecard accurately reflect SROA Capital’s dedication both to sound investment strategies and to a healthy, robust relationship with organized labor and the communities they support. SROA Capital looks forward to serving as a reliable investment partner for pension fund managers, so that together we can lay the foundation for a prosperous and secure future.”
–Benjamin S. Macfarland III, CEO, SROA Capital–
[1] At this time, SROA Capital has not yet implemented a company-wide PLA implementation program, so there were no policies to review under this category.