A little divine intervention

Judge’s comment: “An excellent entry highlighting excellence, innovation, diversification and commitment, while its excellent long-term record also deserves a mention.”

Formed by the merger in 1948 of Queen Anne’s Bounty and the Ecclesiastical Commissioners, the Church Commissioners inherited the assets and work of both institutions to become the Church of England’s support, investment and administrations body. The Church of England’s pensions first became the Commissioners’ responsibility in the 1950s when they established a non-contributory plan for members of the UK’s Clergy.

One of the key recent developments is a new climate change policy that covers not only their investments but the Commissioners’ rights and obligations as stakeholders in some of the world’s leading energy groups and influence with national government to not only mitigate their own carbon footprint and the climate change risk in their portfolios but to also support the UK’s transition to a low carbon economy in the longer term.

For the Commissioners, a reduction in greenhouse gas emissions is not just a matter of increasing investment in renewable energy, but also involves paying attention to wider issues around energy supply and demand. An inclusive and comprehensive new policy is based on the Church of England’s ethical group and its central principles. On the day the policy was announced, the Church Commissioners and the Pensions Board divested £12m (€16.7m) from companies where more than 10% of revenue comes from extracting thermal coal or the production of oil from tar sands. The desire and need to distance the fund from these types of firms is a central principle of the new policy.

The Commissioners’ investment policy is to hold a diversified portfolio of investments across a broad range of asset classes consistent with the ethical guidelines. In 2014, the fund continued to increase its exposure to timberland and private credit strategies to seek higher returns and to better diversify the portfolio. The fund also acquired timberland in the USA, Australia and the UK, making the Commissioners the largest private sector forestry owner in the UK, providing roughly 5% of the UK’s domestic wood supply.

In 2014, the Commissioners’ equity portfolio outperformed its benchmark, returning 7.8% versus 6.8%. Performance was helped by a bias towards global markets away from the UK. The defensive equity portfolio comprises low-volatility equity managers who are expected to generate good relative performance in weak markets and to capture enough upside in periods of positive equity market performance to provide attractive returns over the long run.

The Commissioners property portfolio had another strong year in 2014, with each part of the portfolio delivering double-digit performance and exceeding its return target comfortably. The rural segment enjoyed a busy and productive year focusing areas such as strategic investments into water resources and their associated infrastructure. This involved making investments in water abstraction licences, irrigation reservoirs and field drainage, and has provided a number of environmental benefits as well as a welcome uplift in value on the estates concerned.

The strategic land segment did well, the portfolio providing a return of nearly 23.4% during the year. The Commissioners continued to focus on the acquisition of strategic land sites to replenish the portfolio for the long term. Two UK purchases were completed in 2014, comprising land in South Tyneside and Hertfordshire. Key disposals through the year generated capital receipts of £13.0m.

On the residential side, the Commissioners’ Hyde Park Estate generated more than £27m and more than £14m was reinvested to buy flats and houses to let. On the commercial front, the fund sold its 64.2% interest in the Pollen Estate, Mayfair to Norges Bank Investment Management and The Crown Estate for £381m. This was the Commissioners’ largest ever single property transaction.

2014 Essentials

The Church Commissioners

United Kingdom

Founded in current form in 1948

Assets: €9.2bn


  • one year: 14.4%
  • three years: 13.3%
  • five years: 11.5%
  • one year: 9%

Quick facts:

  • Launch of extensive climate change policy featuring non-financial criteria
  • Diversified portfolio across asset classes consistent with ethical guidelines
  • Significant and high performing real estate portfolio


  • Environment Agency Pension Fund United Kingdom
  • Lancashire County Pension Fund United Kingdom
  • London Pensions Fund Authority United Kingdom


  • John Jones
  • Gerald Moore
  • Erik Valtonen
  • Anton van Nunen