18.8% return for our investments
News / Published: 13 December 2016
We're pleased to report that Wellcome's investment portfolio recorded a total return of 18.8% for the year to 30 September 2016, equating to £3.5 billion on an investment portfolio value of £18.3 billion at the start of the year.
Cash payments in support of our mission were £749m and the investment base rose to £20.9bn.
- We have returned over £13.5bn (129% cumulative, 10.9% annualised) in the eight years since the start of the global financial crisis in September 2008, recording positive returns in each of these years.
- Returns have been 138% cumulative (9.1% annualised) over ten years and 446% cumulative (8.9% annualised) over 20 years.
- Since the inception of our investment portfolio in 1985, it has provided a total return averaging 13.8% a year.
- We maintain a AAA/aaa (stable) credit rating.
Depending on actual investment returns, we aim to be able to commit at least £5bn to our charitable mission over the next five years.
This year, we enjoyed double-digit returns from every asset class except property. Each major element of the portfolio – public equities, private equities, venture capital, hedge funds and property – has performed strongly over the longer term.
Returns in Sterling were boosted by the sharp depreciation seen after the Brexit vote as we maintained the vast majority of our overseas exposure unhedged.
Eliza Manningham-Buller, Wellcome's chair, said: "I am pleased to report that, once again, our investments have done well, building on past investment decisions, and despite a turbulent market. Our charitable expenditure is now over 50% more a year than it was five years ago in 2011 and more than double that of a decade ago."
Danny Truell, Managing Partner of our Investment team, added: "The portfolio has again performed well in a difficult environment for many investors. The decision to reduce home country bias and to diversify assets and geographical exposure has borne fruit. Although future investment returns are unlikely to match recent experience, we remain confident that the portfolio should generate sufficient cash flows to insulate the Trust from potentially more difficult conditions."
With the investment portfolio having grown in complexity over time and with more assets managed in-house, we have continued to strengthen our team, largely through internal promotions. We have recently moved away from having a sole Chief Investment Officer and have promoted Nick Moakes and Peter Pereira Gray to the roles of managing partners alongside Danny Truell, who remains a key part of the team.