The Wellcome Trust has a £20.9 billion investment portfolio (at 30 September 2016) which funds all the work we do. The portfolio is managed by our investment team.

Our objectives

Our overall investment objective is to generate 4.5% real return over the long term.

This is to provide for real increases in annual expenditure while preserving the Trust's capital base to balance the needs of current and future beneficiaries.

We use this absolute return strategy because it aligns asset allocation with funding requirements and provides a competitive framework in which to judge individual investments.

Total portfolio cumulative net returns since 1986 (%)

Our investments history

Between 1936 and 1986, the Trust was the sole owner of the Wellcome Foundation, Henry Wellcome's drug company.

In 1986, the Trust began floating shares in the Foundation and used the proceeds to diversify its assets.

Since this first flotation, the endowment has experienced an average 14% growth every year. This has allowed us to greatly increase the funds available to disburse in charitable grants.

Total portfolio net returns (£)
Period to 30 September 2016

Table showing Wellcome total portfolio net returns 30 September 2016


Henry Wellcome's will creates the Wellcome Group (now the Wellcome Trust). The Group owns the Wellcome Foundation Limited, the drug company.

Death duties are considerable and have to be partially funded by selling some of Henry's historical medical collection. The remainder after death duties is £3 million.


The Wellcome Foundation Limited begins developing breakthrough drugs, and sales grow from £10m a year in 1952 to £50m a year by the 1960s.

Blockbuster drugs such as Zyloric (1966) and Septrin (1967) increase sales to about £400m a year by 1977.


Zovirax is developed. It becomes the world's first billion-dollar drug in 1985.


Henry's will is legally amended to allow the flotation of 21% of the drug company. The Foundation becomes a public limited company, Wellcome plc.


A secondary share offering raises a further £2.3bn and allows the Trust to diversify its assets further.


The Foundation merges with Glaxo.

In the years up to 2001, the Trust sells out of the combined Glaxo Wellcome shares to diversify its holding.


The Trust becomes the only UK-domiciled non-public sector organisation with an Aaa/AAA credit rating and the first UK charity to issue a listed bond.

Grant giving

In the Trust's first 20 years, we disbursed a total of £1.17m of dividends. Until 1972, our trustees allowed the majority of profits to be reinvested to build up the strength of the drug company.

Between 1965 and 1991, we disbursed about £100m.

Disbursements grew from £20m in 1985 to £100m in 1992 and £200m in 1994.

Over the 2015–16 financial year, our charitable disbursements rose to £1,034m.

The Wellcome Trust endowment now stands at approximately £20.9bn.

Our approach

Our approach to investing is set out in our Investment policy [PDF 62KB]. This is reviewed at least every two years by our Board of Governors and Investment Committee.


We welcome the introduction of the FRC Stewardship Code [PDF 140KB], and support the industry's continued efforts to strengthen the role played by institutional investors in corporate governance.


Philosophy and competitive advantages

In the deliberate absence of any pre-determined strategic asset allocation, with the exception of very broad asset ranges, the following investment beliefs drive our asset allocation:

  1. Sufficient liquidity must be maintained to avoid the forced sale of assets at distressed prices. Real assets offer the best long-term growth prospects and provide protection against inflationary pressures.
  2. To maximise investment returns from global economic activity, the portfolio should be very broadly diversified with no innate geographical bias.
  3. We seek to use the advantages of our long-term investment horizon, ability to tolerate high levels of short-term volatility, AAA balance sheet and proactive governance structure in our investment portfolio.
  4. The best returns will be driven by combining aligned partnership with the strongest external managers and building in-house resource to own selected assets directly.
  5. We're generally flexible about the vehicles we invest in, whether public companies or private partnerships.

Asset allocation

The net value of our investment asset base was approximately £20.9bn at 30 September 2016.

We invest across all asset classes and, for reporting purposes, split them into four areas:

  • public equity
  • hedge funds
  • private equity
  • property and infrastructure

Investment asset allocation
As at 30 September

Table showing investment asset allocation at 30 September 2016

Wellcome Trust Bonds are stated at quoted offer price in the table above. The bonds are carried at amortised cost in the Consolidated Balance Sheet. Investment assets exclude programme-related investments.

The investment asset allocation presents net investment assets by investment strategy rather than the statutory asset and liabilities classification basis presented in the Financial Statements. For example, the market value of Long Only Equities Global is the net market value of the equities, cash, investment debtors and investment creditors held within portfolios with a Global Equities investment strategy.

Public equity

A significant portion of our portfolio is invested in shares listed on equity markets around the world. We do this both directly through a portfolio of shares managed by our Investment team and through third-party managers.

There's no innate geographical bias in our equity portfolio – we're focused on owning well-managed businesses that are best able to take advantage of economic opportunities around the world.

When we appoint external equity managers to manage money on our behalf, we prefer active managers who share our long-term time horizon and run concentrated portfolios.

Public equity net returns (%)
Period to 30 September 2016

Table showing public equity net returns to 30 September 2016

Public equity allocations by strategy (£)
As at 30 September

Table showing public equity allocations by strategy at 30 September 2016

Direct public equity holdings > US$150m
As at 30 September 2016

Table showing direct public equity holdings at 30 September 2016

Hedge funds

We are one of the largest institutional investors in hedge funds.

We're prepared to consider a variety of approaches but avoid funds that employ substantial leverage to achieve returns. In general, most of the funds we invest in are closed to new investors.

Hedge fund net returns (%)
Period to 30 September 2016

Table showing hedge fund net returns to 30 September 2016

Hedge fund investments by strategy (£)
As at 30 September

Table showing hedge fund returns by strategy at 30 September 2016

Private equity

We have major exposure to private equity. This is mainly through partnerships with well-established buyout and venture groups across a broad range of locations and sectors.

We also selectively co-invest in direct opportunities alongside external managers.

Private equity fund net returns (%)
Period to 30 September 2016

Table showing private equity fund net returns to 30 September 2016

Private equity investment by strategy (£)
As at 30 September

Table showing private equity investment by strategy at 30 September 2016

Multi-Asset Partnerships (MAPs)
Period to 30 September 2016

Table showing multi-asset partnerships at 30 September 2016

Property and infrastructure

We have a global portfolio of property. Our major asset is our freehold estate in South Kensington, London.

Investment in commercial property and infrastructure is driven by finding attractive value propositions at the appropriate risk profile.

Property net returns (%)
Period to 30 September 2016

Table showing property net returns to 30 September 2016

Property investments by strategy (£)
As at 30 September

Table showing property investments by strategy at 30 September 2016

Risk management

We are very focused on both the qualitative and quantitative risks we take in our investments.

Our Investments team focuses on qualitative risk by continually meeting managers and through ongoing due diligence.

Our internal risk and performance team analyses the overall portfolio risk as well as the quantitative risk attributable to each asset class and underlying investment.

Investment risk is monitored and managed through a policy of holistic measurement using the following parameters:

  • value-at-risk (one-year horizon)
  • currency risk (both £ and US$ exposure)
  • equity market beta (expectation of movement in the portfolio given a certain percentage change in global equity markets)
  • liquidity and forecast cash holdings.

Bondholder information

In July 2006, we became the only UK-domiciled non-public sector organisation with an AAA credit rating and the first UK charity to issue a listed bond.

The £550m proceeds from the issue are being used for investments that, over the long term, will enable us to fund a wide range of scientific and medical research to improve health worldwide.

We received the International Financing Review award for the 2006 Sterling Bond of the Year for 'demonstrating the relevance of the capital markets to the sector and capturing the imagination of the investor community'.

Following our inaugural issue, it has been our strategy to regularly review market conditions and, on occasion, access the bond markets again when circumstances are appropriate.

We did so in:

  • spring 2009 - benchmark gilts rallied and the Trust's credit spread showed signs of relative strength, given its continued AAA (stable)/Aaa (stable) ratings.

Our initial book was more than three and a half times oversubscribed given strong demand for high-quality fixed-income product. Reflecting this, we priced with the tightest credit spread over benchmark gilts in investment grade, primary, Sterling markets since December 2007.

  • 2014 - demand for very long duration, high-grade issuance was significant. We issued bonds with a 45-year tenor.

Our initial order book was more than three and a half times oversubscribed, which allowed us to price at what we believe was the tightest spread for a non government-related issuer in the Sterling markets since the financial crisis of September 2008. We also believe this was the lowest coupon for a non government-related issuer in the Sterling markets for a bond with a maturity in excess of 40 years.

  • January 2015 - we issued our first euro bond.

This was priced at a spread of 40bps over mid swaps, with the 1.125% coupon the lowest ever for an Aaa/AAA rated corporate in the euro bond market. It is the lowest ever coupon in the euro bond market for a corporate issuance with a tenor of longer than ten years. The initial order book was seven and a half times oversubscribed.

Details of bond issues
Date of issueJuly 2006May 2009May 2014January 2015
Size £550.00 MM  £275.00 MM  £400.00 MM€400.00 MM
Tenor30 years12 years45 years12 years
IssuerWellcome Trust Finance PLC  The Wellcome Trust Limited,
as trustee of the Wellcome Trust
The Wellcome Trust Limited,
as trustee of the Wellcome Trust
Issuer ratingAaa/AAAAaa/AAAAaa/AAAAaa/AAA
StructureSenior, Unsecured Bonds 
GuarantorThe Wellcome Trust Limited, as trustee of the Wellcome TrustN/AN/A
Parent ratingAaa/AAAAaa/AAAAaa/AAAAaa/AAA

Investment team

    Bondholder update (PDF 1MB)Read our latest annual report and financial statements