What is the purpose of an endowment?
An endowment is charitable money held on trust to be retained for the benefit of a charity or foundation. The collegiate University’s endowments promote one of the University’s founding objectives, to sustain academic freedom.
The money managed by OU Endowment Management (OUem) contributes to the development of academic excellence, research capabilities and student experience, all of which maintains the University’s global status. Successful endowment management is critical and is designed to ensure that academic activities can be funded for current beneficiaries and future generations. Providing best-in-class returns on its investments assists the University in meeting these objectives.
Many of the endowments across the collegiate University have defined beneficiaries, outlined in the trust deeds eg a teaching post, programme of scholarships, or upkeep of an antiquities collection or building; where the distribution of the Oxford Endowment Fund can often provide the entire annual income. General purpose endowments can be used more freely to benefit education and research across the University.
I would like to give money to the University, can I donate directly through OUem?
If you would like to give money to the collegiate University, we suggest that you speak directly to the department, college or club you wish to donate to. OUem is solely focused on investment management.
Is University working capital / pensions / student fees held in the Oxford Endowment Fund?
No, only charitable funds held on trust can be invested in the Oxford Endowment Fund.
Do all Universities have an investment office?
Endowment management is relatively rare in the UK although it is much more common in the United States. Oxford is one of a handful of institutions in the UK which is fortunate to have a large enough endowment to require an investment team.
The colleges have individual endowments and can choose to invest with other investment managers. OUem is structured to allow the collegiate University to collectively invest its endowments, no matter how large or small a college’s endowment is. Without OUem, the University would have to seek investment management services from other investment businesses, which are not necessarily so focused on the specific needs of the University.
How do I find out more about how the Funds are invested?
We publish a Report of the Oxford Endowment Fund annually. This can be found in the Oxford Endowment Fund section of the website which is designed for all interested parties. It contains details of our investment approach, returns, asset allocation, sector breakdown and geographic allocation.
What is OUem and how is it related to the University?
OUem Ltd is a subsidiary company of the University of Oxford. It is regulated and authorised by the UK Financial Conduct Authority. It is the discretionary investment manager of the Oxford Endowment Fund, a vehicle available only to Professional Investors.
What is the system of oversight for OUem?
OUem is FCA regulated and has significant reporting obligations and responsibilities with the University, its Investment Committee and collegiate investors. OUem recognises the importance of ensuring that its activities align with those of the collegiate University. It maintains robust governance and reporting structures, and it takes these responsibilities extremely seriously.
What is the University’s position on investments in fossil fuels?
In 2015, there was an in depth review across the University concerning energy investments. Council concluded that ‘OUem already has in place robust mechanisms for ensuring that environmental and social factors are fully and properly taken into account in OUem’s investment decisions’. Council requested that OUem avoid direct investments in oil sands and coal and this restriction is incorporated into OUem’s investment process.
Council’s full statement is found here.
Further information on OUem’s approach is found here.
How much exposure is there to fossil fuel extractors in the Oxford Endowment Fund?
The Fund has low exposure to the wider energy sector, particularly when compared to energy’s natural weighting in equity markets.
At 31 December 2016, there was just 1.1% exposure to energy exploration and extraction in the Fund. Additionally, there was 1.0% exposure to energy equipment and services, and 0.2% in storage and transportation. In total, there was 2.3% exposure to the energy sector. By way of example, had the Fund been passively invested over the same period in the FTSE 100 Index or MSCI World Index the exposure would have been 15.6% or 7.3% respectively. For further information, please go to our ESG risk management section.
Does the Oxford Endowment Fund pay tax?
Due to the charitable nature of its underlying investments, the Oxford Endowment Fund is viewed as a charity in the UK and has a similar status in the US. This means that it is not required to pay the majority of taxes. In the instance that any tax is due, these are paid in full.