Church Commissioners to invest in US timber, renewables

Shift in strategy at €5.9bn investor

The £5.2bn (€5.9bn) Church Commissioners, the body which manages the historic assets of the Church of England, says its plans to invest in US timberlands and is looking at other renewable investment opportunities on its property.

“We intend to open up a new asset class by making an investment in US timberlands,” the body said, arguing that timberland has provided attractive returns over many years.

It said staff have met with a wide range of possible managers in the US and that members of its Assets Committee went to the US to meet the preferred managers.

And it said it is “looking at opportunities for renewable energy schemes on our rural land estates, including land-based photovoltaic arrays (solar farms), wind turbines and anaerobic digestion”.

Andreas Whittam Smith, the First Church Estates Commissioner, said the Assets Committee is revising its investment strategy: He said: “Our habit of maintaining a very high weighting in equities and real estate regardless of market conditions, while it had served us well, is no longer appropriate.“The Commissioners, which revised its policy on investing in the defence industry in 2010, will potential expand its ethical investment criteria. It said: “Work in the pipeline for 2011 will take in the alcoholic drinks ethical investment policy, high interest rate lending, and excessive executive pay.”

And the organisation is also planning to extend its use of hedge funds that meet its ethical guidelines – citing “excellent” results from an existing manager. But the Commissioners’ new 2010 report also makes clear their views on commodity speculation and engagement with companies.
“Our ethical guidelines mean that we take care neither to be party to pushing movements in commodity prices further than they would otherwise go nor to engage in similar movements in currencies,” they say. They added that they want to avoid putting “undue pressure” on companies in difficulty.

The return on the Commissioners’’ global equities portfolio was 17.2% in 2010 – though ethical exclusions meant they missed out on the strong performance of gambling and defence related stocks.