Press release

Wellcome Trust announces annual results

2008/09 was another challenging year for economies and financial markets. Governments and central banks around the world were forced to resort to unprecedented measures in response to deep-seated and self-imposed problems in the banking system.

In these circumstances, we were pleased that the Wellcome Trust’s investment portfolio recorded gains of £580 million (5 per cent). Over three years, we have returned £1.25 billion (9 per cent) and, over five years, we have returned £5.5 billion (52 per cent). Since the inception of the investment portfolio in 1985, it has provided a total return averaging 14.5 per cent a year.

Our investment asset base at the end of the year was £13.0 billion, enabling us to spend £720 million in support of our mission.

Our liquidity position remains strong and we have enjoyed positive returns over five years in all asset classes and positive returns over three years in all asset classes except Property, where losses have been less than 3 per cent over the period.

Between September 2008 and April 2009, we invested over £1.2 billion into a directly-owned basket of 32 global mega-cap stocks. In September 2009, this basket of stocks was valued at £1.6 billion. The market crisis also facilitated the acquisition, at favourable prices, of 3 per cent of the shares of Marks & Spencer plc, which was announced in October 2008. Through the year, we continued to increase our direct holdings in private companies.

Sir William Castell, Chairman of Wellcome Trust, said: “The objective of our investment portfolio strategy is to protect ourselves in difficult markets and to grow our real spending power in more conducive conditions. Broad global diversification, our timely use of economic hedges, our careful selection of external managers and our direct acquisition of distressed assets in troubled markets have enabled us to achieve these aims.”

Commenting on the investment outlook, Danny Truell, Chief Investment Officer of the Wellcome Trust, said: “Both deflation and inflation remain higher than normal threats for different economies. In these circumstances, we deliberately do not use pre-determined strategic asset allocation or have a domestic UK bias to our investments.

Sufficient liquidity must be maintained to avoid the forced sale of assets at distressed prices. However, real assets offer the best long-term growth prospects and provide protection against inflationary pressures. The best returns will be driven by combining aligned partnership with the strongest external managers and building in-house resource to own selected assets directly.