DEFINED BENEFIT

Church Commissioners for England returns 14.4% in 2014

The investment portfolio of the Church Commissioners for England, London, returned 14.4% for the year ended Dec. 31, thanks to strong performance by a number of the endowment fund’s allocations, including a gain of 7.8% across its equities portfolio.

The endowment fund grew 10% to £6.7 billion ($10.1 billion) over the year.

The endowment fund’s 24% allocation to global equities returned 11.2%, vs. a gain of 0.7% for its 10.9% allocation to U.K. equities.

“Performance was helped by our bias towards global markets away from the U.K.,” the endowment fund’s annual report said.

“As for our policy during 2015 and onwards, caution is the watchword,” wrote Andreas Whittam Smith, the first church estates commissioner, in the report. “For we may be living in ‘historical’ times, when events seem to presage a new order.”

Mr. Smith said events including civil war in Ukraine, “intense strain” on the eurozone and deflation “are making and will make their influence felt on the commissioners’ portfolio, albeit indirectly and sometimes with quite lengthy time lags, in ways hard to discern.”

The endowment fund’s almost 4% allocation to timberland and forestry delivered a 22.3% total return in 2014.

The commissioners said they monitored the infrastructure market in 2014, and met “a number of top-tier managers. We have to date made one investment, a $50 million commitment to a U.S. energy manager who provides credit to energy companies to help finance energy projects,” the annual report said.

The fund, renowned for its ethical approach to investment, voted on 24,302 resolutions at 1,788 company meetings globally in 2014, and also held engagement meetings with 27 companies on environmental, social and governance issues.

About 4.5% of its investment portfolio qualified for inclusion in the Low Carbon Investment Registry, which is maintained by the Global Investor Coalition on Climate Change. It also highlighted in its report its £284 million allocation to Generation Investment Management, all of whose investments must meet sustainability criteria.

It announced its new policy on climate change this year, and is also launching a new system for rating managers on responsible investment, and driving forward good practice, added Edward Mason, head of responsible investment, in the report.