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ASSET OWNERS

Church of England looks to grow several asset classes

Church of England
Church of England

Church of England’s investment fund grew 11% to a record £6.1 billion ($10.3 billion) for the year ended Dec. 31.

According to the Church Commissioners’ annual report, the London-based investment fund returned 15.9% over the year. The commissioners are now looking to further grow exposure to defensive equity assets – which the report explains as allocations to managers based on performance in weak markets — private equity, multiasset and infrastructure.

The fund, which is used to pay clergy pension benefits for service prior to 1998 among other expenses, is also “building up investments in credit strategies, where we participate in partnerships that supply new funding to companies that are recovering from financial distress,” wrote Andreas Whittam Smith, the first church estates commissioner, in the report.

The fund aims to grow its allocation to private credit “opportunistically,” the commissioners wrote in the report.

Last year represented a number of firsts for the fund, according to the report. It made its first co-investment in private equity, alongside money managers as part of a consortium bidding for a branch network of the Royal Bank of Scotland. “We see this as both an exciting investment opportunity and also the chance to create a ‘good’ bank,” the commissioners wrote.

The investment fund also completed its first infrastructure investment, with a $50 million allocation to a U.S. energy manager targeting predominantly credit market investments. The report does not name the manager.

The fund, which has a 2% allocation to timber, established its second timber manager last year, focusing on the U.S. Southeast, “where we believe attractive opportunities may be available during 2014.” The report does not name the manager.

According to the report, the fund expects to appoint two further managers to its defensive equity portfolio, to “expand the allocation to (private equity) significantly,” to improve diversification in its 10% multiasset allocation through additional managers and will continue to look at opportunities in infrastructure.

Spokesmen for the Church of England were not available to comment by press time.