UK charities launch £32m impact investment mandate in ‘ESG investing Olympics’ initiative

Three UK charities have launched the ‘ESG investing Olympics’ where investment managers will publicly compete to manage a £32m investment pot.

Friends Provident Foundation, Joffe Charitable Trust and the Blagrave Trust have invited investment managers to “impress” them on environmental and social impact. Short-listed managers will be asked to present their proposal to an auditorium of mission-led investors and be featured in a report looking at emerging best practice and asset owner expectations.

"We believe that charities should use all their endowment to achieve their mission, not just their income"

The request for proposals (RFP) says the charities are seeking a reasonable financial return, and intentional social and environmental impact, along with other elements such as ESG integration and a voting record. 

The Joffe Trust, which seeks to promote tax justice, is moving all of its endowment, worth £10m, into the investment pot, as is the £13m-endowed Blagrave Trust that supports young people. 

Jo Wells, Director of the Blagrave Trust, said: “We believe that charities should use all their endowment to achieve their mission, not just their income.”

Friends Provident Foundation, which supports developing a fair and sustainable economic system, is moving £10m of its £30m endowment. 

Along with mission-led investees, grant recipients from all three charities will also be invited to attend the upcoming event with asset managers and ask questions. 

Colin Baines, investment engagement manager at Friends Provident Foundation, said: “There is growing demand from asset owners to have a purpose beyond financial return with their investments. This is reflected by the growth in funds labelled as impact, sustainable, responsible, green or ESG. However, the quality of these funds varies greatly with marketing claims not always aligned with investment practice.

“We wish to send a market signal that asset owners are demanding higher standards of impact and ESG investment. Asset managers will recognise that the standards expected by mission-led investors like us today often become the market norms of tomorrow.”

Friends Provident Foundation has an existing commitment to allocate up to 10% of its endowment to investments that generate strong social and environmental returns. As part of this pledge, it plans to launch an impact investment-focused trust with charitable foundations Panahpur and the Golden Bottle Trust. 

The current asset manager for Friends Provident Foundation is BMO Asset Management according to recent financial filings. It is Sarasin & Partners for Joffe Charitable Trust and Coutts & Co. for the Blagrave Trust. 

RI understands they may be invited to apply to the tender. The deadline for proposals is February 7.