Degree Day, Sheldonian TheatreImage credit: Oxford University Images / Pawel Sytniewski
Through investing collectively in The Oxford Funds, the collegiate University benefits from accessing a global, diversified pool of assets
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‘Christ Church relies on its endowment to provide nearly half of its annual income. This dependency will almost certainly increase in future years as other sources of income are likely to grow slowly, if at all, in real terms. As a result, maintaining and increasing the purchasing power of the endowment whilst providing a significant annual cash income is a vital part of preserving Christ Church in perpetuity.
‘Some years ago, Christ Church realised that it did not have the budget to support an in-house investment capacity and sought to outsource this activity in cost efficient ways to third party managers, which shared our very long term investment horizon. The establishment of OUem provided a suitable vehicle for Christ Church to work in co-operation with the University and other colleges. About two-fifths of the endowment is now invested in the Oxford Endowment Fund.
‘Christ Church greatly values the ability to diversify into a range of alternative asset classes which the Oxford Endowment Fund offers, particularly into
private equity and non directional investments. Identifying, obtaining access to and monitoring such investments requires infrastructure which is very difficult for Christ Church to acquire or maintain.’Co
‘Corpus Christi College is, like many others, increasingly reliant upon its endowment to underwrite annual operating costs.
‘In 2012, circa 42% of annual operating costs were met by endowment revenues. By 2016 that proportion had increased to 46% of a much larger sum, despite constant cost control measures alongside strenuous efforts to exploit irreducible spare capacity and generate additional trading revenues. Looking ahead we judge that this dependency is set to increase as inflationary pressures build, and alternative revenue sources grow slowly in real terms. Against this backdrop, it is essential that our investment activity maintains, and ideally increases, the purchasing power of the endowment. Thankfully, we do enjoy the latitude of a very long time horizon, with perpetuity our declared goal.
‘In 2012, we began a review of our investments accepting that a world of double digit performance was a rarity rather than a norm, and many advisers’ layered cost structures were therefore unsustainable. We sought a far-sighted charity sector specialist adviser that was judged able to deliver multi asset class global investment management services, whilst also readily appreciating the particular risk and time profile of an institution such as ours. OU Endowment Management were judged best able to intuitively understand and deliver on our needs. Results across the intervening years coupled with a peerless approach to client service, accessible reporting, and the communication of ideas have seen us increase our holdings so that we now have c. £89m managed by the team.
‘We recognise, in the team, hard won and proven expertise that is second to none and deeply relevant and attuned to our aims. Results have been consistently outstanding and yet the team remains alert to change, making timely strategic adjustments that are communicated with clarity and candour. Having now weathered several very stressful periods of market volatility the team has amassed, and importantly retained, a depth of expertise and maturity that is the envy of many who would seek to match its service. For Corpus, OU Endowment Management undoubtedly forms the dependable bedrock of our investment activity. We value the informed long term and global perspective of the team, and indirectly the skills of its Investment Committee. Critically important in our achieving a coherent performance across our entire portfolio is a refreshingly open and supportive rapport that serves to strengthen our in-house decision making.
‘Identifying, obtaining access to, and meticulously evaluating the full panoply of global asset classes is a task that demands fixed infrastructure and intellectual capital well beyond the means of even the wealthiest colleges. By adopting the pooled approach that is inherent in the OU Endowment Management charter we are able to use resource wisely, invest coherently and, based upon the soundly reasoned distribution rates, reliably support this institution and its aims.’
Corpus Christi College
‘Founded in 2004 through the vision and generosity of Dr James Martin (1933-2013), the James Martin 21st Century Foundation provides long-term financial support to the Oxford Martin School at the University of Oxford. The majority of the Foundation’s assets are invested in the Oxford Endowment Fund, and the predictable nature of the annual distribution is vital in helping meet its funding commitments to the School.
‘No other university, anywhere in the world, hosts an interdisciplinary research organisation like the Oxford Martin School. Its community of over 200 researchers, drawn from multiple fields and of the highest academic calibre, work collaboratively with policy makers, practitioners and business leaders to address the most pressing global challenges and opportunities of the 21st century.
‘In recent times, the School has helped develop alternatives for tackling climate change beyond the Kyoto Protocol; provided advice to the World Health Organization on understanding and combating dangerous global pandemics; and contributed to new rules and insight for improving global financial stability. In the UK, academics from the School regularly provide expert testimony to parliamentary hearings and advise government on strategic science and technology policy issues.’
James Martin Foundation
‘Keble’s endowment is modest by Oxford standards, so we’re grateful for the opportunity to benefit from the economies of scale that OUem offers. Endowments differ from other funds in that the focus is on maximising total return over the long term. Given the strength of OUem’s investment team and its advisory board, we’re happy to leave them to look after our money whilst we concentrate on running the College.
‘Keble is determined to build its endowment, the income from which covers roughly 10% of expenditure: 41% of it funds ‘deep’ maintenance of the buildings, 37% funds academic posts, 17% is applied to scholarships and bursaries and 5% supports College parishes.
‘We have recently begun using the Oxford Capital Fund as an investment vehicle for gifts towards our major building project – the £50m redevelopment of the Acland site. Our aim is to complete this highly ambitious project in time for our 150th anniversary in 2020.’
‘At Somerville our endowment has been growing steadily over recent years, the combined result of the ongoing generosity of our alumni, our fundraising campaigns for the Margaret Thatcher Scholarship Trust and the Oxford India Centre for Sustainable Development, and underlying capital gains on our investment. For some years now we have been putting all our new money with OUem, with the ultimate aim that they will be responsible for managing a significant portion of our endowment fund.
‘We benefit greatly from our access to the high-quality people at OUem and we value and appreciate the transparency and honesty of their dealings with us. We value the long term view they are able to take and the emphasis on delivering a reliable income stream with low capital volatility. We use OUem’s investment approach, in particular Private Equity and Non Directional assets to give balance to our overall portfolio.
‘Endowment distribution accounts for 20% of our total unrestricted and restricted income so it is very important to us. We have come to trust OUem’s ability to deliver their portion of this income stream.’