Investments
Investment Committee
Investment of the Community Foundation's assets is one of the main responsibilities of the Community Foundation Board. The Board delegates this responsibility to an Investment Committee, chaired by the Treasurer, who is supported by other board members with investment experience. The current membership of the Investment Committee is John Josephs (Treasurer), Guy Readman, John Sands, Trevor Shears and Colin Seccombe.
Investment Managers
The Board is required under the Articles and Memorandum of Association to receive professional advice on investment performance and appoints Investment Managers and monitors their performance. The appointment of Investment Managers is reviewed at least every three years and alternative managers are considered if necessary.
The current Investment Managers are Investec Asset Management and UBS Wealth Management. The Community Foundation also has facilities to hold funds at Gerrard. Investment Managers are given discretionary powers to select investments within an overall policy agreed with the Community Foundation.
Investment Policy
The Community Foundation operates a total returns policy which enables Investment Managers to invest funds for long term growth. The objective of the fund is to produce as much total return as possible whilst seeking to maximise the long term real value of the fund.
The Investment Committee sets a level of cash to be withdrawn from the fund each year which may be taken from capital or dividends. The withdrawal level is reviewed to ensure the long term sustainability of the fund in varying market conditions and to produce as much as possible for distribution. The Investment Committee has currently set 6% per annum for withdrawals. Since April 2006 withdrawals from the endowment fund have been based on the value of the fund at January 2006 plus inflation in order to provide a more consistent income stream. However, following recent market falls, income has been linked to the market value and the Investment Committee are reviewing the policy. Currently donors may choose to reinvest some or all of this amount rather than to award grants.
In January 2008 Innovest were appointed to provide information to the Investment Managers on the environmental rating of the UK equities in the portfolio. The Investment Managers report quarterly to the Investment Committee on share holdings that are below an agreed rating.
Asset Allocation
The Investment Committee agrees asset allocation with the Investment Managers. This is a typical allocation for charitable funds and it allows the fund to be measured against WM Unconstrained Charities Index.
The current long term asset allocation parameters agreed by the Committee:
| Asset Class | Range |
| Equities: | 65-80 |
| UK Equities | 45-65 |
| Overseas Equities | 15-35 |
| Bonds/Cash/Other Assets | 20-35 |
| UK gifts | 5-20 |
| Overseas Bonds | 0-5 |
| Cash | 0-10 |
| Hedge Funds | 0-5 |
| Property | 0-5 |
Performance
The Investment Committee monitors Investment Managers performance figures against WM Unconstrained Charities Index on a quarterly basis.
Donated shares and Ethical investment
- The Community Foundation would generally hold donated shares at the donors request unless it is clearly in the Community Foundation's interest to dispose of them.
- Gift of shares to the endowment fund of AIM shares or shares listed on other stock markets than London are credited to a separate donated account and proceeds of the shares are credited to the main endowment fund when sold. Donor funds are credited with units calculated at this point.
- There are no ethical restrictions on the main portfolio but donors may elect to invest their funds in a separate ethical fund.
Donations
Donations to the capital fund acquire a unit value in the month of the donation. The unit value is used to calculate income to each of the component funds within the portfolio and to ascertain the month end market value of each fund. The returns from both Investment Managers are aggregated for distribution purposes.
The Community Foundation is a limited company with power to spend capital but the Board's intention is to maintain the long term capital value of the fund and not to spend capital. Donations to the capital fund cannot therefore normally be withdrawn for distribution.
Further Information
If you have any questions about investment matters please contact Sonia Waugh, Finance Director.
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