"Sufina Ahmad of the John Ellerman Foundation discusses the importance of cultivating influence over a prolonged period in regard to long-term investments"
The John Ellerman Foundation: A Balance Between Financial Returns and Social Impact
The John Ellerman Foundation, a British philanthropic organisation with a rich history tied to the British empire, has announced its current investment strategy. With a portfolio of £142m, the Foundation's approach is heavily focused on long-term growth, with a strong tilt towards global equities, which comprise 85% of its overall portfolio.
John Ellerman, one of the wealthiest men in Britain in the early 20th century, made his fortune in shipping, owning the equivalent of the French fleet and supplying ships to the British navy during the Boer War. When he passed away, he left close to £36m, some of which was used by his son to establish the John Ellerman Foundation.
The Foundation's current strategy is not just about financial returns. It is also focused on positive impact and alignment with its charitable aims. The Foundation's core aims are to tackle the planetary crisis, social divisions, promote a more sustainable economic system, and advance marginalized communities.
Sufina Ahmad, Director of the Foundation for the past five years, has been instrumental in shaping this strategy. Ahmad, who previously worked at the City of London Corporation, the City Bridge Foundation, and the National Lottery Community Fund, has led the Foundation in adjusting its lineup of managers over the past five years to align with its investment policy.
The Foundation's investment policy is unique. It emphasises engagement over exclusion in responsible investing, maintaining a clear net-zero policy that excludes investments in tobacco, thermal coal, tar sands, and new fossil fuel infrastructure. Rather than focusing on the underlying holdings of pooled funds, it prioritises influencing fund managers to promote ethical and environmentally responsible investment practices.
The Foundation's strategic allocation is tilted heavily towards global equities, which account for 85% of its overall portfolio, with 15% allocated to other assets for diversification. The Foundation manages all its investments externally but is developing a social investment policy that could allocate up to 10% (around £15m) to social investments managed internally, including social impact funds and direct investments into charities, social enterprises, and related entities.
Political headwinds, such as managers leaving climate alliances, have made finding the right managers more challenging for the Foundation. However, the Foundation is realistic about its investment size and acknowledges that pooled investments make exclusions more difficult. Some of the funds the Foundation is invested in already have exclusions in place.
The Foundation is cautious about an overly active approach to changing managers, as it could lead to losing the ability to build influence. Instead, it tries to strike a balance between compliance with its investment policy and avoiding creating issues for itself.
The Foundation formalised its decision to become an in-perpetuity investor earlier this year. With this decision, the Foundation is committed to using its wealth to create a more sustainable and equitable world, balancing financial returns with positive impact and alignment with its charitable aims.
[1] Source: John Ellerman Foundation's 2021 Responsible Investment Policy.
- The John Ellerman Foundation, with a £142m portfolio, invests in global equities that comprise 85% of its overall portfolio, focusing on long-term growth and social impact.
- Sufina Ahmad, Director of the Foundation for the past five years, has led the Foundation in adjusting its lineup of managers to align with its investment policy, prioritizing engagement over exclusion.
- The Foundation has a net-zero policy that excludes investments in tobacco, thermal coal, tar sands, and new fossil fuel infrastructure, and it prioritizes influencing fund managers to promote ethical and environmentally responsible investment practices.
- The Foundation might soon allocate up to 10% (around £15m) of its investments to social investments managed internally, including social impact funds and direct investments into charities, social enterprises, and related entities.
- Finding the right managers has become more challenging due to political headwinds, but the Foundation is realistic about its investment size and acknowledges that pooled investments make exclusions more difficult.
- The Foundation's strategy encompasses addressing the planetary crisis, social divisions, promoting a more sustainable economic system, and advancing marginalized communities.
- With a history tied to the British empire, the Foundation has evolved from a legacy of wealth creation to a focus on balancing financial returns with positive impact and alignment with its charitable aims.
- Whether it's through environmental-science, climate-change, personal-finance, home-and-garden, technology, sports-betting, travel, food-and-drink, fashion-and-beauty, business, or data-and-cloud-computing, the Foundation strives to make a difference, using its wealth to create a more equitable, sustainable world.
