Updated Monday night
Church Commissioners announce total 2015 return on investments at 8.2%
The Church Commissioners for England have announced their latest financial results with the publication of their annual report.
The Church Commissioners’ total return on their investments in 2015 was 8.2 per cent, exceeding their long-term target rate by 2%. Over the past 30 years the fund has achieved an average return of 9.7% per annum. After taking account of expenditure, the fund has grown from £2.4bn at the start of 1995 to £7.0 billion at the end of 2015.
In 2015, the charitable expenditure of the Commissioners was £218.5 million, accounting for 15% of the Church’s overall mission and ministry costs. Commissioners-funded projects ranged from clubs and drop-ins to youth work and food bank hubs, all supported by local churches.
Andrew Brown, Secretary of the Church Commissioners, said: “I want to congratulate the investment team for the continued strong performance, delivering more than 8% in a challenging financial climate. Without this leadership and good stewardship it would not be possible to support the Church as we do. But we must not forget the generous support from parishes, dioceses and cathedrals which provide around three quarters of the Church’s annual spending on ministry and mission.”
First Church Estates Commissioner, Sir Andreas Whittam Smith also congratulated the long-term performance but warned of harder times ahead due to the nervousness of investors: “The Commissioners’ fund has grown by an annual average of 9.7% over the past thirty years compared with an annual inflation rate during the same period of 3.4%,” he said. “Unfortunately it may be harder in the future to achieve such a satisfactory performance. My message to the wider Church is – don’t count on it. The nervousness of investors is explained by the feeling that governments have lost the power to reverse any slowdown in economic activity. In earlier time they would reduce interest rates, but now that rates hover around zero, that remedy is unavailable.”
Examples of funding provided in the report include:
Growth and diversification
Notable performance was once again delivered in property, private equity and timber. The property markets in which the Commissioners are invested were strong across the board and their property portfolio totalled just less than £2bn at the end of 2015 with an average return of 14.4%, generated through active management of a high quality set of properties.
The private equity portfolio continued to grow in the year, bringing the total to £87.7million. These strategies generated a combined return of 20.2% in 2015.
The Church Commissioners continued to invest in forestry with two new holdings in Australia, bringing the total holdings to nearly 120,000 acres. The timberland and forestry portfolio delivered a total return of 13% in 2015.
The Church Commissioners’ ambition is to be at the forefront of responsible investment practice. In 2015 the Commissioners adopted a new climate change policy, setting out a comprehensive approach to climate change including how we divest, how we seek low-carbon investments and how we engage with companies and public policy. The Church Commissioners are actively integrating environmental, social and governance (ESG) issues into investment analysis and decision-making.
Notable work in 2015 included the Commissioners’ role in the Aiming for A initiative and the success of the shareholder resolutions on climate change disclosure that the Commissioners co-filed with BP and Shell. These were overwhelmingly passed at both companies, with the support of their respective boards.
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