The Church Commissioners have released their annual report for 2017 this morning, along with this press release:
The full press release is copied below the fold, but it starts with these highlights:
Hattie Williams has written in detail about the report for Church Times: Church Commissioners remain bountiful despite large drop in investment returns
Church Commissioners for England announce return of 7.1% on investments for 2017 and forecast muted earnings in medium term
The Church Commissioners for England published today financial results for 2017 and the year’s Annual Report.
The Church Commissioners’ total return on its investments in 2017 was 7.1%, compared to its target of 9.1% (RPI +5%) and 2016’s return of 17.1%. Over the past 30 years the fund has achieved an average return of 9.4% per annum.
Active management in 2017 was an important contributor to gains in public equities and real assets while bond markets were relatively weak. Sterling strength had an impact on performance, as did being globally diversified across multiple asset classes, resulting in the fund doing less well than equities markets which were the strongest source of returns in 2017. Liquid reserves continue to be held by the fund to reinvest selectively when valuations recalibrate.
The Church Commissioners distribute returns from the fund into the Church of England, accounting for approximately 15% of the Church’s running costs. Funding is targeted towards mission opportunities and those areas which are most in need, as well as meeting ongoing responsibilities for bishops, cathedrals and clergy pensions.
In 2017 non-pension support for the Church by the Commissioners totalled £144 million, up from £108.5 million in 2016. Support for mission activities totalled £56 million, Diocese and Ministry Support £37million and Bishops and Cathedrals support totalled £44million. Overall expenditure was at £226.2 million – down from last year due to lower pensions obligations.
First Church Estates Commissioner Loretta Minghella commented:
“Mindful of our mandate to support the Church of today and the Church of tomorrow, consistency over the long term continues to be a guiding principle of the fund. While this year’s performance at 7.1% was short of our target of 9.1% (RPI + 5%), our historic performance over a 30-year period shows annual growth of 9.4% per annum (target 8.4%) and 12.4 over five years (target 7.4)
“The macro economic environment is changing and anticipating muted returns in the future we will continue to develop our focus on non-traditional asset classes. Our perpetual endowment and long-term horizon is well suited to maximising returns from less liquid markets including venture capital.
“We continue to be at the forefront of responsible investment practice. Taking account of environmental, social and governance (ESG) issues is an intrinsic part of being a good long-term investor, for both ethical and financial reasons, and forms an essential part of our investment analysis and decision-making process. The Church Commissioners have a unique opportunity and responsibility as leading faith investors to work with partners towards the common good”
Andrew Brown, Secretary of the Church Commissioners, said:
“The Church Commissioners continue to fund the Church’s ongoing running costs with a 15% contribution. Part of that included in 2017 the Church Commissioners’ Strategic Development Funding for 23 projects spread over 20 dioceses, totaling £44 million. We are pleased to continue to play our part in funding the long-term future of the Church as we remain forever mindful of our obligation to manage the fund in perpetuity”.
Responsible Investment and Engagement highlights: