Monday, 27 June 2016
Last updated 2 days ago
Mar 10 2014 | 1:11pm ET
The Church of England is poised to ramp up its exposure to alternative investments like hedge funds and private equity.
A spokesman for the Church Commissioners who oversee the Church's £6 billion endowment told the Financial Times they are set to increase allocations to alternative investments (including residential property and farm land) when they meet next month.
Alternatives already account for almost a third of the fund and the proportion allocated to hedge funds has tripled since 2009 to 10%. The Church's most recent annual report shows its hedge fund bets paid 5.9% in 2012.
According to the data provider Prequin, the Church is already the 15th largest single investor in hedge funds in the UK and one of the top 50 in private equity.
According to the FT, the commissioners will consider investing even more in hedge funds if such investments are seen as consistent with Christian values.
The Church’s Ethical Investment Advisory Group, after admitting that “investment portfolios will never be pure . . . Ethical ambiguity is intrinsic to life,” suggested last month there was a chance to use its investment clout as a force for good.
“We will graze our knees but this is better than disengagement—we need to be involved on the field of play, not on the sidelines,” it said.
The endowment targets annual returns of 5% above inflation and has beaten this goal consistently—its total return since 1992 is 550%.