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Wellcome Trust expecting to see investment returns fall

Dundee University
Dundee University

The Wellcome Trust has boosted the value of its fund to almost £25.9 billion despite “choppier markets” and pledged around £900 million a year in charitable spending until at least 2022.

Britain’s biggest charity and medical research institute said it notched up a total return of 13.4% for the year to September 30, or 10.7% after inflation.

It made pre-tax net income of £2.2 billion, flat on the previous year.

The group – the main source of non-Governmental biomedical research in the UK – said it has now returned 11.7% on average on its investments in the 10 years since the financial crisis.

It said its performance means it can vow to spend around £900 million a year on average until 2022 from its primary fund, which covers most of its charitable activities.

Another £200m will also be made available for priority areas and other large-scale, high-impact activities such as drug resistant infections and mental health.

However, the Trust cautioned investment returns recorded since the 2008 financial crisis will not continue.

“As the global economic cycle matures, markets have become more volatile,” Nick Moakes, chief investment officer and managing partner of the investment division at Wellcome, said.

“Our global focus and long-term horizon have helped us navigate a choppier environment.

“The decade since the global financial crisis has seen very strong investment returns, which we do not expect to be repeated over the next 10 years.”

In its annual report, the group said its spending on charities over the year to September 30 fell sharply to £723m from £1.2 billion in 2016-17 but it said this was largely down to the timing of significant spending commitments.

The Trust has had a long association with Dundee University where its grants have underpinned various research programmes.

“The performance of our portfolio in more difficult global markets has provided the ability for us to increase our charitable commitment over the last 10 years,” Trust chairwoman Baroness Manningham-Buller said.

“Our sincere thanks go to the investment team for the part that they have played in making this possible.”

The organisation was launched in 1936 following the death of pharmaceutical entrepreneur Sir Henry

Wellcome, who left the entire share capital of his company to trustees charged with spending income to further human and animal health.

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