King's College Hospital Charity - Annual Report & Accounts 2019-20 - Flipbook - Page 16
Support, governance, fundraising and investment
management costs increased marginally from
£1.0m to £1.1m. Further details are provided in Note 4.
The Trustees take a long-term view of investment
returns. In 2018 the Trustees appointed Rathbones
as the Charity’s investment advisers and managers,
which was followed by the implementation of a revised
investment strategy during the third quarter of 2018/19.
This continued throughout the 2019/20 financial year.
40 – 80% in UK and Overseas Equities, invested
either directly or through funds selected for the
portfolio by Rathbones
0 – 30% in Fixed Interest
0 – 20% in Diversifier investment funds (property,
infrastructure and absolute return funds)
These allocation ranges are for guidance, with any
movement outside these ranges triggering a review
in the context of investment performance over time.
Any proposal to invest in alternative asset classes or
switch fund will require Board approval, on receipt of
appropriate professional advice.
Our investment objective is to generate a consistent
and sustainable return from our investment portfolio
to finance spending on grants and running costs, whilst
maintaining the purchasing power of the underlying
investments over the long-term and subject to the
appropriate balance of risk.
In addition, the Charity holds funds required for
working capital and to fund grant commitments due
within the next twelve months in the L&G sterling
In delivering on this objective, we seek to strike a
our ethical stance, which is to not to take any
direct holdings in tobacco;
minimising risk by diversification and
maximising returns; and
ensuring the fees charged by Fund Managers
are competitive and provide value for money.
The Finance, Audit & Investment Committee
regularly reviews the allocation and composition
of the investment portfolio to ensure that it remains
appropriate for the commitments and future funding
expectations of the Charity and that there are no
concentrations of holdings in sectors, which for
ethical reasons, are in conflict with the Charity’s
The revised strategy continues to use targeted asset
allocation ranges in order to balance return and
volatility. Since December 2018 the targeted range
for each asset category, excluding cash, have been
K I N G’ S CO L L E G E H O S P I TA L C H A R I T Y A N N UA L R E P O R T A N D A CCO U N T S 2 01 9/ 2 0
During the year, the portfolio generated interest and
dividends of £0.8m (2018/19: £0.8m) and there was a
net overall revaluation loss of £2.2m (2018/19 surplus
£0.3m)). The net loss of £2.2m comprises a loss on
financial investments of £2.5m and a revaluation gain
of £318,000 on the Charity’s social investment property.
The Finance, Audit and Investment Committee monitors
investment performance at every meeting. In assessing
the investment performance the Trustees have set
a performance target to exceed a return equivalent
to 4% above Retail Price Inflation (RPI) over the long
term. In addition, at each meeting Trustees review
the performance of the fund compared to benchmark
indices for each major asset class and in total relative
to the weighted composite benchmark index. For the
first three quarters of the year, the performance of the