Wellcome releases 2020/21 annual results
Wellcome Trust and Wellcome Trust Finance plc (a wholly owned subsidiary of The Wellcome Trust Limited as trustee of the Wellcome Trust) announce that they have each published their Annual Report and Financial Statements for the year to 30 September 2021 today.
We are pleased to report that our charitable expenditure on Wellcome’s mission to support science to solve the urgent health challenges facing everyone was £1.2 billion. Our investment base rose to approximately £38.2 billion, a total return of 34.5 per cent, or 33.0 per cent after inflation, for the year to 30 September 2021.
These are the strongest annual investment returns in over two decades. We have returned 312 per cent cumulative (15.2 per cent annualised) in the decade since September 2011, recording positive returns in each of these years. Returns have been 635 per cent cumulative (10.5 per cent annualised) over 20 years. Since the inception of our investment portfolio in 1985, it has provided a total return averaging 14.2 per cent a year.
On the back of this performance, we aim to maintain the real level of charitable spending for our core charitable activities, at current record levels for at least the next year. Over the next ten years, we are planning on spending in the region of £16 billion. This compares to around £5 billion over the last five years. In addition, we have committed an extra £750 million to funding of large-scale, high-impact activities that have a time-limited duration, to be drawn down over five years. This funding will increase our commitments to combat the three key worldwide health challenges of mental health, infectious disease and climate and health. Barring any major financial shocks, we expect to be able to increase this by at least another £250m next year.
We saw positive returns in each of the asset classes in which we invest (public equity, private equity, venture capital, hedge funds and property). All have maintained their strong long-term track records. Sterling strength was a meaningful headwind to returns this year. The Board removed the requirement to hold a minimum 15 per cent in Sterling during the year. At the end of the financial year, Sterling exposure stood at 12.5 per cent.
Our strategy to achieve a net zero portfolio by 2050 at the latest was published in July 2021. The annual report includes the first update on our net zero tracking data. The target and strategy are and will continue to be an integral part of our investment decision-making and engagement.
Julia Gillard, Chair of the Wellcome Trust, said: "The exceptional long-term performance of the investment portfolio has provided us with the means to increase spending commitments significantly at a time when the mission has never been more important.
Our investment team deserve immense credit not only for their efforts this year but for their careful stewardship and long-term thinking over many years, which has put us in such a strong position today. The direct result of their hard work is that more money is being dedicated to science to help solve the world’s urgent health challenges."
Nick Moakes, Chief Investment Officer and Managing Partner of the Investment Division at Wellcome, added: "The portfolio has had an exceptional year, the best since 1995, the year in which Wellcome PLC was sold to Glaxo. In part this has been thanks to strong global fiscal and monetary support for asset markets. However, our returns have been strongly boosted by the performance of our private assets, the seeds for which had been planted over the past decade and more. We continue to prepare for a more difficult environment as global fiscal and monetary policy becomes less favourable to financial assets. Our focus now is therefore to find more investments in assets with structural tailwinds that can underpin future long-term returns."