Wellcome Trust announces 2011/12 annual results

2011/12 proved a better year for financial markets, though fears remain about the cohesion of the Euro, the pace of the US recovery and lower expectations for global growth. We were pleased that our investment portfolio recorded a total return of 12%, equating to £1.6 billion on a portfolio value of £13.6 billion at the start of the year. The mark-to-market value of our Bond liabilities currently stands at £972 million (nominal value £825 million), compared to an investment asset base of £14.5 billion at the end of the year.

We have returned a total of 27% (annualised 8%) over three years and 145% (annualised 9%) over ten years to September 2012. Since the inception of our investment portfolio in 1985, it has provided a total return averaging 14% a year.

These returns enabled us to spend £643 million this year in support of our mission and also supported our AAA rating. They also should enable us to spend a projected amount in excess of £3.5 billion on our charitable activities between 2012 and 2017, a 25% increase over the previous five-year period.

We have enjoyed positive returns from each major element of the portfolio: public equities, private equities, venture capital, hedge funds and property, over one, three, five and ten years.

Sir William Castell, Chairman of the Trust, said: "I am pleased to report the continued strong performance from our investment portfolio, which has enabled us to make charitable payments that are twice the level at the turn of the century and are 35% higher than in the year [2006/07] before the global financial crisis."

Danny Truell, CIO of the Trust, added: "Premium returns from illiquid assets, market timing in asset allocation, active currency management, partner selection and the direct acquisition of public assets at distressed prices have combined to enable the portfolio to outperform world equity markets by a total of 10% over the past decade. Long-term themes will continue to inform our choice of investments; we expect to generate substantial free cash-flows over the next five years. In such uncertain economic times, it is an advantage to work with only very broad asset allocation constraints and with a talented investment team and a robust long-term investment philosophy; we believe that we are well-positioned for the future."