Quote of the Week: Good Stewards


May 28, 2014

…in private equity we made our first co-investment alongside managers as part of the successful consortium bidding for a branch network of RBS. We see this as both an exciting investment opportunity and also the chance to create a ‘good’ bank.”


Who said it: Andrew Brown, Secretary and Chief Executive the Church Commissioners of Church of England


In Context:
The Church of England is an institutional investor with about 4% of its GBP 6.1 billion (USD 10.7 bn) fund invested in private equity. It is responsible for pensions and church costs. The quote about building a good bank is referring to the consortium, led by Corsair Capital, a PE fund specialized exclusively in financial institution buyouts, and that now includes a Kuwait-based Sovereign Wealth fund that has been attempting to revive a languishing savings and loan bank brand from Royal Bank of Scotland in the UK. The new bank will serve consumers and SMEs based on strong compliance to ethical and governance guidelines. The Church’s Investment board is quite activist in the UK on ethical loans and investment activity, moreso than typical institutional investors in this respect, and it is apparently not interfering with its portfolio performance. In the report, the return for 2013 was an impressive 15.9%. It said, “Everything that could go right did go right. Risk assets such as equities and property performed strongly. Our investment managers including our in-house property team did better than their peers, and the market and the safe-haven assets where we have a low allocation, UK gilt-edged securities, index- linked bonds and US Treasuries, duly went down.” Interestingly, the Church’s portfolio is constructed on the basis that such favorable conditions will be relatively rare, and therefore it has a number of defensive investments, which it discloses in fair detail in the report. (See Graphic). For those interested in watching smart money, this may be one to add to the list, keeping in mind that outperformance over time is key. (Image source: CofE Commissioner’s Fund)


Where we found it: Annual Report 2013 Church Commissioner’s Fund via PIOnline

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