UK's biggest charity earns £580m from investments

Finance | Tania Mason | 22 Dec 2009

The Wellcome Trust’s investment portfolio gained 5 per cent during the year to September 2009, adding £580m to its asset base.

The interest returned brings the Trust’s five-year return to £5.5bn, or 52 per cent, and averages out at 14.5 per cent a year since the portfolio was started in 1985. Its total assets at the end of the financial year stood at £13bn, and it spent £720m in support of its mission.

During the year its equity portfolio rose 17.9 per cent and its hedge fund investments rose 15.9 per cent but its property portfolio lost 9.8 per cent and private equity returns were also “moderately negative”, according to Wellcome's chief invesment officer Danny Truell.

During 2008/9 it sold much of its commercial property portfolio and switched money from external equity fund managers to invest £1.2bn into a directly-owned basket of 32 global mega-cap stocks. By September 2009 the value of these stocks was £1.6bn.

Another of its most notable acquisitions during the year was the purchase of 3 per cent of all Marks and Spencer shares. But the Trust (pictured) deliberately exchews a domestic UK bias for its investments, preferring to avoid threats such as inflation and deflation where it can.

New EU rules 'could hurt income'

The charity is concerned that new draft rules on alternative investment managers would restrict its ability to invest in non-EU-based hedge funds and private equity funds, and that this could damage its future performance. Half of its portfolio is invested outside the EU.

“Professional investors do gain some benefits in terms of disclosure and regulation from the directive but these would be more than offset if they were prevented from choosing which funds they invest in,” said Truell.

Brussels is still considering the new rules.

Directory: Wellcome Trust

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