Updated Monday night
The Church Commissioners have issued their annual report for 2015 this morning, and the following accompanying press release.
Church Commissioners announce total 2015 return on investments at 8.2%
The Church Commissioners for England have announced their latest financial results with the publication of their annual report.
The Church Commissioners’ total return on their investments in 2015 was 8.2 per cent, exceeding their long-term target rate by 2%. Over the past 30 years the fund has achieved an average return of 9.7% per annum. After taking account of expenditure, the fund has grown from £2.4bn at the start of 1995 to £7.0 billion at the end of 2015.
In 2015, the charitable expenditure of the Commissioners was £218.5 million, accounting for 15% of the Church’s overall mission and ministry costs. Commissioners-funded projects ranged from clubs and drop-ins to youth work and food bank hubs, all supported by local churches.
Andrew Brown, Secretary of the Church Commissioners, said: “I want to congratulate the investment team for the continued strong performance, delivering more than 8% in a challenging financial climate. Without this leadership and good stewardship it would not be possible to support the Church as we do. But we must not forget the generous support from parishes, dioceses and cathedrals which provide around three quarters of the Church’s annual spending on ministry and mission.”
First Church Estates Commissioner, Sir Andreas Whittam Smith also congratulated the long-term performance but warned of harder times ahead due to the nervousness of investors: “The Commissioners’ fund has grown by an annual average of 9.7% over the past thirty years compared with an annual inflation rate during the same period of 3.4%,” he said. “Unfortunately it may be harder in the future to achieve such a satisfactory performance. My message to the wider Church is – don’t count on it. The nervousness of investors is explained by the feeling that governments have lost the power to reverse any slowdown in economic activity. In earlier time they would reduce interest rates, but now that rates hover around zero, that remedy is unavailable.”
Examples of funding provided in the report include:
Growth and diversification
Notable performance was once again delivered in property, private equity and timber. The property markets in which the Commissioners are invested were strong across the board and their property portfolio totalled just less than £2bn at the end of 2015 with an average return of 14.4%, generated through active management of a high quality set of properties.
The private equity portfolio continued to grow in the year, bringing the total to £87.7million. These strategies generated a combined return of 20.2% in 2015.
The Church Commissioners continued to invest in forestry with two new holdings in Australia, bringing the total holdings to nearly 120,000 acres. The timberland and forestry portfolio delivered a total return of 13% in 2015.
Responsible investment
The Church Commissioners’ ambition is to be at the forefront of responsible investment practice. In 2015 the Commissioners adopted a new climate change policy, setting out a comprehensive approach to climate change including how we divest, how we seek low-carbon investments and how we engage with companies and public policy. The Church Commissioners are actively integrating environmental, social and governance (ESG) issues into investment analysis and decision-making.
Notable work in 2015 included the Commissioners’ role in the Aiming for A initiative and the success of the shareholder resolutions on climate change disclosure that the Commissioners co-filed with BP and Shell. These were overwhelmingly passed at both companies, with the support of their respective boards.
Notes
The annual report can be download here. The annual review can be downloaded here.
Andrew Brown, Secretary of the Church Commissioners has commented on 2015’s results. Audio is available here, and video here. (1 min).
Edward Mason, Head of Responsible Investment for the Church Commissioners, has commented on our responsible investment work in 2015. Audio is available here, and video here. (1:53 min)
Update
Press reports
Katie Allen The Guardian Church of England sells investments fearing market slowdown
John Bingham The Telegraph Church of England invests in Google despite criticism of its tax record
Congratulations to all concerned for achieving this encouraging result. I only wish my Savings Bank Account paid 8.2% in Interest as opposed to the measly 1/2%! The two videos begin with the motto “Investing in the Church’s Growth”. Would that the Church of England congregations had also grown nationally by 8.2% in the last year, that would have been yet more Good News.
This is a fantastic result. We’ve got Archbishops’ Council tomorrow, at which we will be looking at ways in which the money from the Commissioners can be used strategically for the mission and ministry development which is at the heart of Renewal and Reform. The encouraging thing about that is the rigour with which the Commissioners monitor and expect the Church to justify the spending of the money they have seen from the investments. It really does focus the mind.
“Would that the Church of England congregations had also grown nationally by 8.2% in the last year, that would have been yet more Good News.”
We tried to do our bit – but only achieved 9% growth (in a fairly ‘central’ parish). However, I can’t believe it’s all about numbers…
Whilst this is good news, I share the First Commissioner’s apprehension about the future and the relative improbability of this rate of return continuing. The Commissioners are one of the most successful funds, so much so that I sometimes think they would provide much better value for the wider community of investors than many hedge funds with their egregious 2-and-20 compensation arrangements. However, much of this positive performance is a function of QE goosing returns on equities (at least until early this year) and property inflation (which is pretty terrible news for tenants who have to pay higher rents or… Read more »
Of course it’s not “all about numbers” but any reading of the Acts of the Apostles (aka the Acts of the Holy Spirit) will shew that numbers are important. Acts tells us, with its ever increasing number of those converting to Christianity and being baptised that it’s all about Growth, Growth, Growth as opposed to Decline, Decline, Decline.
Gosh! is this the direct consequence of enrolling clergy as MBAs? Saint Francis had a name for money, rhyming with wit! Will this windfall buy us out of the entrenched problems of sexism and homohobia?
The Church has a need for sound finances, both as a good employer, and as a guardian of buildings, and to empower and support service and mission. So these figures are at least reassuring in that sense. Good stewardship is important, not least because of the ‘widows mites’ that get given by sometimes very poor church members in good faith. It’s also important as a witness to people in our communities, that we try to be ethical, environmentally friendly, and distanced from ‘Caesar’ and the whole imperial thing of pursuing profit as an end in itself. The few questions I… Read more »
I think, Susannah Clark, that “The Church” is a misleading phrase to use. The Church Commissioners for England is (like each parish church) an independent charity, and its finances, as Froghole pointed out, are but a fragment of the finances of “The Church”. It’s also the case that “The Church” has remarkably few employees — the parochial clergy are mostly not employees, and most employees are employees of parishes or dioceses, not of the central C of E. Likewise almost all the buildings are not in the ownership of any central body, but of incumbents or cathedral chapters. Oh for… Read more »
@American Piskie: I am afraid that you will probably struggle to find much material that gives a composite picture of the finances of the modern Church of England rather than the Commissioners per se. Information about the Church of Ireland and the Church in Wales is still more difficult to obtain; they were both comprehensively disendowed on disestablishment, and then re-endowed heroically by voluntary subscriptions and bequests. How much of those endowments remain is moot, but their respective representative bodies may have information they are willing to divulge (much the same applies to the Scottish Episcopal Church, though it was… Read more »
Andrw Chandler not Andrew Young froghole.
Thanks, Froghole. In an age of transparency, the current situation is somewhat, hmm, obscure; I trust not intentionally so. What I would really like to have is a feeling for the order of magnitude of the annual flows between (it’s a lengthy list, and no doubt incomplete): The Commissioners, the pensions body (?), the central bureaucratic bodies, the bishops, the dioceses, the diocesan trustee companies, the diocesan schools, the cathedral chapters, the cathedral clergy, the parishes, the parish clergy, the PCCs, other ecclesiastical charities, bodies like Church Army, Ch Urb Fund, missionary societies. For example, I’d like to understand in… Read more »
american piskie: let’s take a simple one — the relationship between your parish share (or whatever it’s called in your diocese) and the stipend paid by the Ch Comms. The Ch Comms act as a central body that legally pays the stipends of stipendiary clergy, and collects tax and national insurance on behalf of HMRC. Each diocese is responsible for telling the CCs what to pay each individual, and for transferring the appropriate sum to the CCs to cover the total diocesan bill that month. If a diocese does not transfer enough money then the stipends will still get paid,… Read more »
Thanks, Simon Kershaw.
You can see that what I really want is a gigantic directed graph with appropriately weighted edges, with the sinks and the sources clearly marked!
AP, London diocese provide some information of some of the distribution of money from parish giving here :
http://www.london.anglican.org/support/finance/common-fund/
But that’s far from a comprehensive explanation of how even a single diocese operates.
The C of E system as described by Simon Kershaw seems unusually centralized to me. Is that normal across the Communion? Certainly here in Canada, as far as I know it’s usually done at a diocesan level, and I worked in one diocese where clergy were on local payroll (i.e. paid by the parish treasurer).