Spotlight on Oxford
SPOTLIGHT
GROWING OXFORD'S ENDOWMENT
GROWING OXFORD'S ENDOWMENT
Have you ever wondered how the University’s academic programmes and other needs are funded? In the face of cuts in government funding for higher education, philanthropic giving has increased in importance, along with the University’s endowment – money and financial assets that are invested for the long-term. Oxford’ endowment has been built up over many years and includes gifts and donations given to the collegiate University for a range of purposes. The income generated from the capital investment supports the aims of the broad collegiate University, namely to secure the future of teaching, learning and research.
Endowment comes in two forms: permanent endowment, where the capital may not be spent, and expendable endowment, where the capital may be spent if it is considered to be in the best interests of the trust. Almost all permanent endowments and the majority of expendable endowments are invested in the Oxford Endowment Fund. The Fund is managed by Oxford University Endowment Management (OUem).
Oxford University Endowment Management & The Oxford Funds
A wholly-owned subsidiary of the University, OUem was formed in 2007 as part of a move towards creating a more sophisticated approach to managing the endowment of the University, colleges and other charitable trusts associated with Oxford. OUem manages The Oxford Funds, which allow the collegiate University to pool endowment assets and manage them as one. The Oxford Funds consist of two vehicles – The Oxford Endowment Fund for permanent endowments, and the Oxford Capital Fund for expendable capital. Since 2007, the funds under management within The Oxford Funds has increased from approximately £600 million (central university endowment only) to £1.9 billion, which includes the endowment of 22 colleges and 5 other investors, such as trusts and foundations associated with the University.
Endowment comes in two forms: permanent endowment, where the capital may not be spent, and expendable endowment, where the capital may be spent if it is considered to be in the best interests of the trust. Almost all permanent endowments and the majority of expendable endowments are invested in the Oxford Endowment Fund. The Fund is managed by Oxford University Endowment Management (OUem).
Oxford University Endowment Management & The Oxford Funds
A wholly-owned subsidiary of the University, OUem was formed in 2007 as part of a move towards creating a more sophisticated approach to managing the endowment of the University, colleges and other charitable trusts associated with Oxford. OUem manages The Oxford Funds, which allow the collegiate University to pool endowment assets and manage them as one. The Oxford Funds consist of two vehicles – The Oxford Endowment Fund for permanent endowments, and the Oxford Capital Fund for expendable capital. Since 2007, the funds under management within The Oxford Funds has increased from approximately £600 million (central university endowment only) to £1.9 billion, which includes the endowment of 22 colleges and 5 other investors, such as trusts and foundations associated with the University.
Sandra Robertson
OUem is now a 20 strong team of experienced professionals under the leadership of Sandra Robertson, who was appointed as OUem’s first Chief Investment Officer and Chief Executive Officer in 2007. Previously Co-Head of Portfolio Management at Wellcome Trust, one of the world’s largest medical charities and one of the UK’s largest institutional investors.
Investment strategy
The Oxford Endowment Fund exists to preserve and grow the value of the perpetuity capital of the collegiate University of Oxford. Its specific investment objective is to appreciate at an average of 5% per annum in real terms, and to achieve this at a lower volatility than would be experienced by investing solely in the public equity markets. This investment objective is long term, and not a year by year measure. The Fund seeks to achieve its objectives by investing across a range of asset groups that give a diversified stream of returns and which can function in a variety of environments. At its heart is the aim of providing sustainable growth and a regular distribution to the collegiate University.
The Oxford Endowment Fund exists to preserve and grow the value of the perpetuity capital of the collegiate University of Oxford. Its specific investment objective is to appreciate at an average of 5% per annum in real terms, and to achieve this at a lower volatility than would be experienced by investing solely in the public equity markets. This investment objective is long term, and not a year by year measure. The Fund seeks to achieve its objectives by investing across a range of asset groups that give a diversified stream of returns and which can function in a variety of environments. At its heart is the aim of providing sustainable growth and a regular distribution to the collegiate University.
Sandra and Paul Hayday, OUem's Performance and Risk Analyst
In accordance with producing long term, sustainable growth, the Oxford Endowment Fund invests in a range of different strategies designed to produce returns in a variety of investment climates. Equity investments are used as a principle driver of returns: investments in productive, growing companies with high returns on capital employed are likely to give the highest probability of achieving our real return targets. Strategies uncorrelated to equity are also used to give payoffs in periods of equity weakness, and to lower the overall volatility of the Fund compared to a simple investment in listed equity.
In global endowment terms, the Fund is young and has a short history. It has been open to investors and operating in its current form since 1 January 2009 and, in the five years since then, returned an annualised (or average) of 9.7% at a volatility of 6.1%. The volatility of the MSCI World, a proxy for global equity markets, has been 14.4% over the same period.
Sandra Robertson is the Chief Investment Officer and CEO of Oxford University Endowment Management. Previously Co-Head of Portfolio Management at the Wellcome Trust. She has also been an independent non-executive director of RIT Capital Partners Plc and serves as a Director of the Investment Fund for Foundations. She is also a member of the advisory board at Osmosis Investment Management LLP. She sits on the investment committee of University College Oxford and is a fellow of Oriel College. She holds a BA (Hons) from Napier University, Edinburgh.
The Oxford China Office will host an evening with Sandra Robertson, Chief Investment Officer and CEO of Oxford University Endowment in Hong Kong on 11 November, where she will share her investment philosophy with Oxford alumni and friends. For more information click here.
Written in October 2014
Sandra Robertson is the Chief Investment Officer and CEO of Oxford University Endowment Management. Previously Co-Head of Portfolio Management at the Wellcome Trust. She has also been an independent non-executive director of RIT Capital Partners Plc and serves as a Director of the Investment Fund for Foundations. She is also a member of the advisory board at Osmosis Investment Management LLP. She sits on the investment committee of University College Oxford and is a fellow of Oriel College. She holds a BA (Hons) from Napier University, Edinburgh.
The Oxford China Office will host an evening with Sandra Robertson, Chief Investment Officer and CEO of Oxford University Endowment in Hong Kong on 11 November, where she will share her investment philosophy with Oxford alumni and friends. For more information click here.
Written in October 2014