Frequently Asked Questions

Oxford University Endowment Management (OUem) was set up by the University of Oxford in 2007 following a review led by Sir Alan Budd. The review recommended that the University’s investment assets be supervised by an Investment Committee drawn from a global pool of investors with recent and relevant investment experience. This Committee in turn looked to the world’s most successful endowments and foundations and their governance models and concluded that a dedicated full time investment team would provide the best outcome for the University, given the inherently short term nature of the investment industry.

At this time, several other pools of capital across the University requested to access the OUem team’s expertise. So, against the backdrop of the Global Financial Crisis, the founding team created a unique structure designed for long term capital, sought and achieved regulatory permission from the UK Financial Conduct Authority and put in place world class infrastructure to support the strategy.

Over the last two decades there has been a move away from a traditional mix of simply owning public equities and government bonds. Investors are looking for access to more sophisticated investment funds which require a different level of expertise and skill set. In the UK, few endowments and foundations have the scale and resources to employ in-house professional investment teams to invest in these strategies. The Oxford Endowment Fund (OEF) has been designed to enable our investors access to a wider range of investment assets, globally, through the simplicity of owning units in a fund.

From September 2007 to 31 December 2008, OUem solely managed monies for the University. Since 1 January 2009, OUem has been managing monies for other institutional clients.

Under the terms of its regulatory status, OUem can only take on investors who are considered institutional or “Professional Investors”. Professional Investors are generally understood to possess a higher level of experience, knowledge and expertise to assess investment opportunities, and subsequent reporting, appropriately. As Professional Investors, they have the knowledge and sophistication to make decisions about how they want their investments managed and to select between investment managers to ensure their investment needs are met.

There are over 40 such Professional Investors in the OEF, all UK endowments and foundations.

OUem is a professional investment manager regulated by the UK Financial Conduct Authority (FCA), established in 2007. It specialises in managing global, diversified portfolios for endowments and foundations. It is a commercial operating subsidiary of the University of Oxford.

Our investment strategy is to build a resilient portfolio, diversified across a wide range of investment classes, geographies and time horizons. We implement this by building, in the main, a fund of funds managed by talented third-party fund managers across a wide range of investment strategies. Further details of our investment approach can be found here: Generating returns | OUem

No, the OEF owns units or interests in vehicles which themselves may own shares in public companies.

www.ouem.co.uk is designed as a comprehensive resource for information on the Oxford Endowment Fund (OEF) and OUem. This includes information on:

– Investment philosophy, process, performance and asset allocation Generating returns | OUem

– Sustainability policy ESG risk management | OUem

– Ethical investment restrictions Restricted investment areas | OUem

The OEF Report OEF Report | OUem contains the most recently published information on:

– Purpose, investors, team

– Performance, asset allocation, geographic exposure, sector exposure

– Sustainability overview

TCFD & TNFD Report TCFD & TNFD | OUem contains policy and reporting on sustainability, climate and nature. This includes:

– Governance, strategy, risk management and metrics relating to climate and nature analysis

OUem has discretion on investment strategy and buying and selling investments, subject to the guidelines set out in the legal documents of the OEF.

While owned by the University, we have our own governance framework consistent with being an FCA regulated entity.

FCA – the Financial Conduct Authority is the regulatory body that oversees OUem in respect of the products it manages. The regulated activities that OUem undertakes are limited to those outlined in a Scope of Permissions. All employees and directors at OUem are required to comply with the FCA Conduct Rules.

Depositary – the Depositary is an independent service provider to the OEF. Under the rules for Alternative Investment Funds, its responsibilities include providing oversight to ensure OUem, as manager of the OEF, is carrying out its duties in compliance with the OEF governing documents.

OUem Ltd – the Board of Directors of OUem sets the strategy of the business, monitors the management of the company, as undertaken by the Executive Directors, and ensures that proper procedures for compliance with statutory and regulatory obligations are in place.

Investors in the OEF – our investors’ investment oversight is led by their Investment Committee or Finance Committee, which will include members with deep investment expertise as well as representatives of the institution’s governing body or equivalent trustees, ensuring alignment with their responsibilities.

A decision to invest in the OEF will involve detailed due diligence by these committees, often supported by independent investment consultants, to assess the suitability of the OEF compared with other managers. Investors scrutinise our investment philosophy, governance, performance and risk management, alongside our reporting framework. Investors also spend time understanding our approach to ESG and sustainability, including any investment restrictions, and this will be factored into their decision making as to whether to make an investment.

Our investors’ Investment Committees will continue to exercise oversight once an investment is made. OUem is subject to regular reviews by these bodies, again often supplemented by external consultants, to ensure that our performance, processes, and reporting remain robust and aligned with investor objectives.

There are three key reasons that we do not publish the investments owned by the OEF:

i. OUem is a commercial business

The competitive landscape for charitable investors is fierce, and most of our investors employ a combination of managers to help meet their investment objectives. As such, we compete for business against other commercial investment managers who provide a broad range of different investment approaches and strategies.

ii. Our competitive advantage

Our investment experience, judgement and unique investment process is what we think of as our ‘intellectual property’. This is what we use to review, select and monitor the third-party fund managers and is the basis upon which we market the OEF.

A key part of our strategy is to find and partner with exceptional investment talent. This differs in each asset class but in general, these are small, owner managed businesses who are focused on a single strategy and whose interests are aligned with their investors by focusing on increasing revenue through performance rather than by gathering assets. These fund managers are typically capacity constrained, meaning they actively limit their assets under management, and therefore have the luxury of choosing their investors. As such, we face significant competition from other investors for allocations, often having to persuade the managers of the merits of having the OEF as an investor. Our ability to find and access exceptional investment talent (i.e. fund managers) is a key competitive advantage for us as a business.

iii. Regulation

It is important to note that the FCA defines the specific regulated activities and services we are authorised to provide and OUem is restricted to dealing and managing investments exclusively for Professional Investors. Consequently, OUem is not permitted to market or promote the OEF to Retail Investors. This includes any communication that could be considered a ‘Financial Promotion’, which the FCA defines as ‘an invitation or inducement to engage in investment activity that is communicated in the course of business’.

To comply with these requirements, OUem limits the nature of reporting shared publicly, as visitors to our website are not assumed to be Professional Investors, and we aim to ensure that no publicly available material could be deemed a financial promotion to retail investors.

For public equity (‘shares’ in public companies) our preference is to invest with active fund managers who invest globally and own a concentrated portfolio of companies (between 8-30 companies) and who typically own these for a three to five year period. The managers rely on their skills as business and financial analysts to carry out deep research into these companies and determine at what price level they are willing to buy to get to their long term expected return.

Fund managers will usually share the research on their underlying investments verbally or in writing with the investment team at OUem, on the understanding that the information will be treated as confidential. This confidentiality is formalised through Non-Disclosure Agreements (NDAs), signed by OUem. OUem carefully tracks the underlying holdings of the funds of these active managers. Similarly, we will track the holdings of private equity fund managers under the same conditions.

OUem will also occasionally use passive funds, which we describe as Index, where we are simply trying to gain exposure to the market for a fixed period and so there is little additional value to our investment analysis in tracking the detailed holdings of these funds. Each one of the individual holdings of these funds will only represent a fraction of a percentage of the overall OEF.

Passive management has become an increasingly popular way to invest, and now approximately 50% of global assets are invested in this way.

Passive management or index tracking funds are simply tracking a chosen benchmark or index – for instance, the FTSE 100 (top 100 companies on the UK stock exchange) or the MSCI World (an index of 1,500 of the world’s largest companies, weighted by their market capitalisation). With passive funds investors are simply looking for exposure to a market, not individual companies.

We use this from time to time to gain exposure to global markets to maintain allocation and liquidity. The percentage of the OEF passively managed is reported in the OEF Report | OUem

In the UK, the investment assets of an educational institution generally fall into three categories:

a) Short-term working capital – comprising in the main fee and research income

b) Medium term capital – a mix of savings, grants and charitable gifts to fund a building or major capital project

c) Long term endowment – charitable gifts from individuals or other private entities provided to fund a specific activity or general charitable spend, over decades or even centuries. These gifts are generally held in trust by the institution.

Our sustainability policy is called our ESG Risk Management Principles and these are found here ESG risk management | OUem and in our sustainability reporting. These are signed off by the Board.

Where the OEF owns shares in publicly listed companies, OUem would actively vote on those shares and report our voting decisions to our investors. It does not currently own any publicly listed companies.

The OEF predominantly owns investments indirectly, hence engagement activities are carried out with investment groups, rather than through voting. Understanding a manager’s approach to engagement is a key area of due diligence and ongoing evaluation. OUem will enact any voting rights ascribed under the ownership structure. Further detail of our engagement is included in TCFD & TNFD | OUem

The UK Stewardship Code is a voluntary reporting framework originally established for investors who own UK listed shares. While we support the principle of good stewardship of companies, we do not invest in UK public equity directly and therefore have chosen not to report against the framework. We support the Investor Forum which is an organisation dedicated to promoting effective stewardship in UK equities.

Sustainability reporting is now a regulated activity and, from 2026, OUem will fall under scope of the FCA’s Sustainability Disclosure Requirements.

The OEF has investment restrictions, and these are outlined on our website, here: Restricted investment areas | OUem

Investment restrictions apply to direct investments. To enforce the restrictions on the third-party funds into which the OEF can invest would limit the investment universe and impact our ability to achieve our investment objective. Our approach is to select managers and strategies where they are unlikely to invest in any significant way in the restricted sectors and if they do, to engage to reduce that exposure, or to sell the fund, if the exposure becomes material.

Indirect exposure is reported here: Restricted investment areas | OUem

TCFD & TNFD | OUem reporting includes substantial climate and nature reporting, alongside other sustainability reporting. This includes carbon metrics of the portfolio, approach to net zero and a fossil fuels review.