The Health Foundation has selected Redington for a multi-phase project focused on optimising the endowment’s risk, return and responsible investment (RI) profile.
The Foundation – a charity with around £1.2bn in assets – initially appointed Redington in January 2021 for phase one of the project. This saw the consultancy advise the chairty on optimising its endowment’s risk and return profile while better aligning its investment strategy and managers with its RI guiding principles and broader mission.
Now embarking upon phase two, Redington will support the Foundation as it looks to bolster its position as a long-term, responsible asset owner alongside meeting the financial return objective to fund the Foundation’s operations.
In partnership with Redington, the charity will work to align the endowment with organisations consistent with its mission and values and use engagement to influence corporate behaviour.
Key outcomes from phase one included:
- implementation of a revised strategic asset allocation (SAA), increasing expected returns by 0.3%, while considering asset classes more closely aligned with the Foundation’s broader RI objectives;
- carbon emissions and climate change stress test results are now significantly lower, supporting the endowment’s ambition to reach net zero by 2035 and increasing its impact against UN Sustainable Development Goals three (Good Health & Wellbeing) and 13 (Climate Action), respectively; and
- restructuring of the endowment’s public equity portfolio to include allocations to a climate impact strategy and sustainable equity strategies.
Joanna Wright, head of RI at the Health Foundation, said: “As an investment team, we look at everything through a twin lens, balancing the need for financial return against our desire to be a responsible investor and asset owner. We put a lot of thought into what this truly means to the Health Foundation, and Redington’s expert advice and support throughout the past year has been invaluable in helping us to ensure our commitment to be a responsible investor and how we put that into practice reflects our values.”
Pete Drewienkiewicz, chief investment officer, Global Assets at Redington, said: “Our experience shows that aligning financial and responsible investment objectives is more achievable when there is a clear framework against which to calibrate that alignment. For the Health Foundation, this has meant getting all stakeholders behind a clear set of objectives that balance the trade-off between traditional investment metrics with the focus on being a responsible asset owner.”
He added that particularly for non-profits, proactively aligning values and investments “not only makes sense from a return perspective, but is inherently relevant to their very existence”.
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