Achievements and Performance
The positive investment returns produced by the portfolio of non-Wittington Group Investments since 2005 (which has enabled the Trustees to make use of surplus expendable capital) and the continued increase in Wittington dividends mean that, once again, the Trustees have been able to make grants which exceed the level of their income without unduly reducing their cash reserves in real terms.
Investment performance
The Trustees’ portfolio of non Wittington Group investments has continued to perform well and out performed both the agreed benchmark of RPI plus 3 percent over a rolling three year period and the WM Index for Charities Constrained by Income. The Trustees were conscious, however, that the Rensburg Sheppards portfolio has, over the period since initially invested, out performed that of Sarasin Chiswell. The Trustees therefore, towards the end of 2007, took a decision to alter the traditional ‘single manager approach’ in relation to the Sarasin Chiswell portfolio and to replace it with a portfolio based upon a multi-asset/multi-manager approach. The aim of this was to achieve a better level of return for the same level of risk by diversifying asset classes and selecting specialist underlying managers for each asset class. The main part of this diversification is provided by hedge funds and the Trustees have taken the view that the use of these funds is appropriate within the context of the overall level of the Foundation’s Wittington and non-Wittington assets (such funds representing only 17% in value of the non-Wittington investments and a de minimis proportion of the overall investment value). Having interviewed a number of prospective managers, the Trustees selected Unigestion to carry out this investment policy for them. In order to provide a suitable comparison, the Trustees withdrew capital from the Rensburg Sheppards portfolio in January 2008 (representing the expendable capital used partially to fund the Oxford University grant) so that the Rensburg Sheppards portfolio was reduced in value to £40m. £40m of the value previously invested with Sarasin Chiswell was then transferred to Unigestion.
The Rensburg Sheppards/Savills’ Charities Properties Fund continues to produce good returns amounting to plus 10.7 percent for the year to 5 April 2008.
Once again, the Foundation’s principal investment in the Wittington Group has maintained a steady upward performance and the dividends paid by Wittington have increased by around 10 per cent. The Trustees receive a report on an annual basis which includes a detailed consideration of the underlying activities of Associated British Foods, Fortnum & Mason and Heal’s. Further analysis of the investment assets can be found in Note 8 to the Financial Statements. A copy of Wittington Investments Limited’s accounts for the year to 16 September 2007 can be obtained from the Foundation’s principal office.