UK’s Guy’s & St Thomas’ Charity makes impact investment pledge

Up to 5% of endowment to be committed to new strategy

London-based health foundation Guy’s & St Thomas’ Charity has pledged up to 5% of its £800m endowment to impact investing.
Speaking to Responsible Investor, David Renton, Director of Finance and Investment at the charity – which dates back to the 12th century – said the foundation had been doing local impact investment activity for a number of years from its charitable budget, but after a strategic review decided to look at how it could use its endowment to extend its impact.
“We looked at what other foundations were doing and what there was to invest in, and decided we could safely make some investments in funds which would help health issues in the UK as well as meet our return targets for the foundation,” he said.
As part of the new strategy, the foundation has appointed Anita Bhatia, who previously developed impact investment products for Barclays Wealth Management, to lead on its health impact investing activities. The foundation has also developed a bespoke impact assessment criteria to direct capital to ‘best in class’ specialist funds.
Its first investment is a £6m commitment to the Apposite Healthcare Fund II, run by Apposite Capital, a healthcare specialist private equity house.
Renton said for the $800m endowment overall, it tried to exclude tobacco as much as it could and was starting to think about how it can use engagement as a tool to influence companies on health issues, particularly childhood obesity.There is no firm data on the scale of impact investing done by UK foundations, but it seems to be limited to a small pool. In 2015, the UK government introduced a statutory power allowing charities to make investments that generate both social and financial returns. 
Renton said that move was a helpful signal, and that it spent a bit of time with foundations Esmee Fairbairn and Trust for London, who have been leaders in the field, before making its commitment to impact investment.
“They did take a lead [on impact investing] and like us, people quite rightly take these things seriously. There are more people talking about it and we hope others come and join us.”
Renton also said its chief executive Kieron Boyle was a driver for its decision. Boyle previously headed up a unit in the UK Government on social investment and was also the UK representative to the G8 taskforce on social impact investing. “We had been looking at this area before but hadn’t managed to persuade ourselves to do it. His arrival was a catalyst for looking at it again.”
Renton said the foundation was at the start of its impact investing journey and going forward would look at how best to measure impact and share its learning with others.