New beginnings and inspiring thoughts…

Kate Rogers

Kate Rogers

Head of Policy, Co-Manager of Charity Multi-Asset Fund


See all articles

This month, as well as the launch of the ‘new’ third sector, we have also been officially launching our new enlarged charity investment team.  To mark this, we hosted an inaugural Cazenove Charities lecture, gathering at the Tate Modern to hear Danny Truell’s thoughts on managing charity investments.  For those of you who don’t know Danny, he is the rather inspiring and scarily intelligent Chief Investment Officer of the Wellcome Trust, responsible for an eye watering £17bn of assets. But what relevance would his thoughts on investments have to us, mere mortals, looking after often much smaller charity investment pots?  Not much you might think, but you would be wrong.  These were my key ‘take aways’ from his words of investment wisdom.

Watch out for the risks…

No foundations have the right to exist forever, and many will not be fortunate enough to receive any more donations (Wellcome Trust was founded on a single donation).  Life threatening factors for charity investment portfolios include inflation, concentration and liquidity.  We need to avoid falling foul of these risks in order to have the opportunity to grow.

Diversify… but not too much…

Our investments shouldn’t be over concentrated in one or two or ten assets, but also not over diversified into hundreds or we end up back at the average. 

Don’t get caught out with your cash flow…

Cash flow risk is a significant threat and if we have only one spreadsheet, it should be the one analysing the cash in and cash out of our organisation.

Benefit from charity longevity …

We should seek to take advantage of our fortunate position as long term investors, where we are free to hold assets for a very long time, in order to get improved returns. 

Use all of the charity’s assets…

Think about our charity’s assets in the broadest sense, including our trustees and other stakeholders.  Be creative about our investment portfolios and how stakeholders might be able to help gain access to investment opportunities or offer advice to improve returns. 

Be responsible and engaged…

We can use our shareholdings and our charity’s reputation to engage with the companies in which we invest, to encourage long term improvement in corporate governance.

Practise what we preach…

Our own governance structures should be robust and effective.  Our charity committees should be made up of individuals with complementary skills and external members should be welcomed to fill any gaps.  We need to work hard to engage our committees, so that they feel involved in the day to day charity activities, not just informed by six monthly papers.

This article first appeared in Third Sector on 17 June 2014

For this and other articles by Kate Rogers visit the Third Sector website.

The opinions contained herein are those of the author and do not necessarily represent the house view. This document is intended to be for information purposes only. The material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. The material is not intended to provide, and should not be relied on for, accounting, legal or tax advice, or investment recommendations. Information herein is believed to be reliable but Cazenove Capital does not warrant its completeness or accuracy. No responsibility can be accepted for errors of fact or opinion. This does not exclude or restrict any duty or liability that Cazenove Capital has to its customers under the Financial Services and Markets Act 2000 (as amended from time to time) or any other regulatory system. Cazenove Capital is part of the Schroder Group and a trading name of Schroder & Co. Registered Office at 1 London Wall Place, London EC2Y 5AU. Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. For your security, communications may be taped and monitored. 

Contact Cazenove Charities

Achieving your charity's investment objectives takes time and thought. To find out how we can help you please contact:

James Brennan

James Brennan

Portfolio Director