The DealMarket Digest keeps a watch out for smart money moves in the LP universe. This week we spotted signs of success at The Wellcome Trust. The world’s second-biggest medical charity achieved returns of 18 percent this year, about GBP 2.6 billion. The trust provided some insight into its portfolio management strategy in its Annual Report, attributing it to steady investments in public and private equity since 2008.
The Annual Report said that at Wellcome Trust, “market timing is an important tool”. It reduced exposure to public and private equity from 80% of the portfolio in 2005 to 58% in 2008, and then used the period between 2008 and 2011, “when most investors were highly risk averse”, to restore it to 69%. It is now 74% of the portfolio.
The trust says it has been “rewarded for this initially counter -cyclical action as returns have exceeded £7 billion (57%) since the beginning of the Global Financial Crisis in September 2008, with five consecutive years of positive performance.”
Its Annual Report is here. Among medical research charities, the trust’s endowment is exceeded only by that of the Bill & Melinda Gates Foundation in Seattle, reports Bloomberg. (Image source: Wellcome Trust Annual Report)