Turning our vision into reality – the first steps

Endowment Blog #8

You may have seen our announcement a couple of weeks ago that we are partnering with Rathbones who will manage our endowment – the culmination of months of thinking about how we invest using a “total impact approach”, how we engage with the investment community and how we determine which asset manager is best able to work with us to achieve our vision. Namely, how to invest to maximise social impact and at the same time, meet our financial goals.

When last I wrote about our endowment, I mentioned that a short list of three asset managers were coming in to present to the Endowment Working Group (EWG) at the end of February. We had a stimulating and thought-provoking day considering the different approaches taken by each manager and were impressed by the thought and work that each had taken leading up to the presentation. We considered each presentation against a variety of criteria – these included the experience in impact investing, the ability to deliver the desired products within the portfolio, the plausibility of the suggested investments, how engaged the manager would be as a partner to work with, how market changing the approach would be and finally the costs involved.

Ultimately, after much discussion and deliberation, Access selected Rathbones. The proposal presented was a credible and realistic portfolio that promises to meet our particular liquidity needs, is acceptable from a financial return and risk perspective, but importantly will have a positive social impact, in line with our bull’s eye approach. The aim is to invest initially 20 – 25% directly in the centre of the bull’s eye, with a view to increase this percentage over time as new products become available to invest in, such as the issuance of suitable charity bonds.

Culturally, it feels like a great fit. Importantly, Rathbones’ commitment to this space, including their Ethical Bond Fund and their partnership with Big Society Capital to support new charity bond issuances, also highlighted their engagement and willingness to grow and develop this market.

We transferred the funds to Rathbones in early July after spending a few months completing the necessary paperwork and other legalities, hence the reason for the delay in updating you via the blog. Having completed the formalities, the funds have been fully invested for nearly two months now. Since then, Rathbones have been working to invest as much as possible in the bull’s eye and we will be looking to publish our progress against this framework periodically over time. Really, our relationship with Rathbones is only just beginning – we will continue to work closely together looking at how we can continue to pursue maximum social impact from our portfolio, while balancing the financial risk and return aspects.

While the portfolio investment decision has now been made, the EWG will also continue to discuss what more can be done by Access to help build this market and how other “impact-orientated” pools of capital can be encouraged to similarly invest to ensure positive social impact. We will be speaking about our approach, together with Rathbones, at the upcoming Good Deals conference in November and hope to be publishing a case study detailing our approach from start to finish in December.

I will update you soon on how we are progressing against the bull’s eye framework and hopefully we will be able to demonstrate the proportion invested in the centre growing over time. We are optimistic!