Year-end reflections on our Bull’s Eye

The end of our financial year (31 December 2017) provides a great opportunity to reflect on the performance of our endowment to date and to share how we are doing against our Bull’s Eye goals.

February 14th, 2018 by Janie Oliver

Readers will recall that we invest our endowment using a “total impact approach” – this means using our endowment to achieve maximum social impact while meeting our financial requirements.

We established our “Bull’s Eye model” to prioritise how we choose to invest:

  • In the inner ring of the Bull’s Eye (Tier 1) we invest directly in charities and social enterprises in the UK
  • Tier 2 – we invest in charities and social enterprises delivering social impact elsewhere
  • Tier 3 – we invest in other organisations delivering social impact
  • Tier 4 – we invest in best in class ESG organisations

Our aim is to invest as much as possible in the Bull’s Eye with tiers 2 – 4 decreasing in priority. We’ve had funds invested with Rathbones for the last 18 months and at year end, our portfolio was invested as follows:

And these are the investments making up the Bull’s Eye (35.6% at December 2017):

The market value of assets under management at 31 December was £45.5 million – this means approximately £16.2m invested directly in charities and social enterprises delivering social impact in the UK. Rathbones and the team at Rathbones Greenbank are working hard to increase this percentage further and it is our ambition to continue to invest as much as possible in the Bull’s Eye, directly aligned with our mission. 

Our Bull’s Eye investments increased by 10% over 2017 – one investment that helped us to do this was the purchase of a Retail Charity Bond issued by Greensleeves Care, a not-for-profit care home provider. In April 2017, Greensleeves Care became the first care provider to launch a Retail Charity Bond – it raised £33million in less than one week and marked the largest amount ever raised on the Retail Charity Bond platform. The funds raised will be used to buy and develop new care homes, pay down existing debt and ultimately enable more residents to receive critically needed care. This is a great example of how it is possible to support charities via our investments, helping to enable social impact and generate financial return simultaneously.

So what about our financial return? When we started on this journey our hope was that we would be able to prove that you could generate social impact without sacrificing a good financial return. While it’s still too early to answer this question definitively, the early indicators are extremely positive. Since inception of the portfolio, our total weighted return (after fees) is 4.78%. We are delighted with the performance to date, especially given our portfolio is entirely invested in fixed income investments (and some cash). We of course know that the market can go up and down and acknowledge that this return will change over time, but as of year-end, this is the performance to date.

But most importantly, we are excited about 2018 and the possibility of placing an even greater percentage of our portfolio with charities and social enterprises, creating positive social impact. We will keep you posted!