"John Ellerman Foundation's Sufina Ahmad discusses the gradual development of impact through long-term investment strategies"
The John Ellerman Foundation Embraces Sustainable Investing for a Better Future
The John Ellerman Foundation, a British charitable organisation with deep roots in the country's history, has embarked on a new journey in perpetuity investing. With a strategic focus on global equities and a commitment to social impact, the Foundation aims to strike a balance between financial returns and positive societal change.
With a portfolio of £142m in assets, the Foundation's core aims are to tackle the planetary crisis, social divisions, promote a more sustainable economic system, and advance marginalized communities. To achieve these goals, the Foundation has adjusted its investment strategy over the past five years, allocating 85% of its assets to global equities and the remaining 15% to defensive investments like property funds.
In line with its charitable objectives, the Foundation is now exploring the possibility of allocating up to 10% of its assets, approximately £15 million, to social investments. These investments will be made through a combination of internal management and external social impact funds. The Foundation plans to engage a specialist investment consultant to help build a structured portfolio, with about 75% of social investments going to social impact funds and the rest directly into charities, social enterprises, limited companies, and social funds.
The Foundation's approach to engagement prioritises influencing its external fund managers rather than direct ownership engagement. By ensuring that fund managers understand and implement ethical, environmentally responsible investing principles, the Foundation seeks to promote a net-zero, socially responsible investment philosophy that aligns with its charitable aims.
Sufina Ahmad, who previously worked at the City of London Corporation, the City Bridge Foundation, and the National Lottery Community Fund, joined the John Ellerman Foundation as director five years ago. Under her leadership, the Foundation has formalised its decision to become an in-perpetuity investor earlier this year.
The Foundation's commitment to sustainable, responsible investing is not new. John Ellerman, the wealthiest man in Britain in the early 20th century, made his fortune in shipping and owned the equivalent of the French fleet. His wealth was linked to the British empire through shipping routes to South Africa and the Indian subcontinent. Ellerman also held stakes in breweries, coal mines, and influential British newspapers like The Times, Financial Times, and Daily Mail.
Despite the challenges posed by political headwinds, such as managers leaving climate alliances, the Foundation remains committed to its investment philosophy. It acknowledges that pooled investments make exclusions more difficult, but it continues to ask specific questions about engagement, escalation tactics, and divestment of fund managers. The Foundation's influence over fund managers is primarily through sharing its point of view.
In summary, the John Ellerman Foundation's approach to investing reflects a commitment to sustainable, responsible investing integrated with achieving financial returns consistent with its charitable goals. With a long-term focus, a strategic portfolio, and a dedication to social impact, the Foundation is paving the way for a more sustainable and equitable future.
[1] John Ellerman Foundation, "Investment Strategy," accessed October 1, 2022, https://www.ellermanfoundation.org/our-work/investment-strategy/
- The John Ellerman Foundation is committed to striking a balance between financial returns and positive societal change through its strategic focus on global equities and its expansion into social investing, which could see up to 10% of its assets, approximately £15 million, invested in this area.
- As a perpetuity investor, the John Ellerman Foundation aims to promote a net-zero, socially responsible investment philosophy by influencing its external fund managers to adhere to ethical, environmentally responsible investing principles and by directly investing in charities, social enterprises, limited companies, and social funds.
