Lambourn Almshouses: Investment Policy
1. Introduction
The Trustees of Lambourn Almshouses are responsible for ensuring that the charity’s assets are managed in a way that supports the charity’s objectives, in compliance with UK law and Charity Commission guidelines. The Trustees believe that a well-planned investment strategy is essential to generate a sustainable return, which will allow the charity to continue its work in providing social housing to those in need.
The Trustees have agreed that a minimum of £100,000 from general reserves (as outlined in the Reserves Policy) should be invested to generate income. Additionally, funds designated for the Cyclical Maintenance Fund (CMF) and Extraordinary Repair Fund (ERF) will be invested appropriately until they are required for their designated purposes.
2. Investment Objectives
2.1 The primary investment objective is to achieve the best possible financial return within an acceptable level of risk, in line with the charity’s duty to act in the best interests of its beneficiaries.
2.2 General Funds: The objective for general reserves is to generate a relatively high level of income, while safeguarding capital to minimise the risk of losses.
2.3 Cyclical Maintenance Fund (CMF): The objective is to ensure that these funds are readily available and preserved to meet the expected future costs of regular maintenance (e.g., kitchen and bathroom replacements). As such, investments will be risk-averse and focused on capital preservation.
2.4 Extraordinary Repair Fund (ERF): The aim for the ERF is to achieve long-term capital growth, with reinvestment of income to prepare for significant future expenditures, such as structural repairs or refurbishment projects.
2.5 General Reserve Fund (GRF): The objective is to maintain a low-risk, liquid reserve that can be accessed easily for general expenditure and special projects, ensuring ongoing operational stability.
2.6 Investments will primarily be for the long term, but Trustees will ensure that the charity retains the ability to meet its financial obligations for planned expenditure without jeopardising liquidity through over-investment.
2.7 All investments must comply with UK law, be ethical, and align with the moral values of Lambourn Almshouses. Trustees will avoid investments in industries or companies that conflict with the charity’s objectives or values.
3. Risk Management
3.1 The Trustees recognise the importance of balancing risk with returns and have identified the following risks and mitigation strategies:
- Inflation and Capital Value Erosion: This risk will be mitigated by investing in a diversified portfolio of appreciating assets or placing funds in fixed deposit accounts to maintain value.
- Investment Vehicle Failure: To mitigate this risk, the charity will diversify its investment portfolio across a range of asset classes and vehicles.
- Counterparty Risk: The charity will only deposit funds with institutions that have a minimum credit rating of ‘A’. No more than £200,000 will be deposited with any single institution to further reduce risk.
4. Liquidity
Lambourn Almshouses will maintain a minimum of £20,000 in easily accessible assets to meet short-term operational needs and any anticipated expenditure over the next six months. This will ensure that the charity can meet its immediate financial obligations without needing to liquidate longer-term investments.
5. Ethical Investment Policy
The Trustees are committed to ensuring that the charity’s investments reflect its core values and ethical stance. The charity will avoid investments in companies or sectors that:
- Contradict the charity’s aims (e.g., those involved in harmful or exploitative practices).
- Are associated with environmental harm or significant social injustice.
- Operate in industries such as tobacco, alcohol, gambling, or arms manufacturing.
The charity aims to invest in funds that promote positive social and environmental outcomes, wherever possible.
6. Management, Reporting, and Monitoring
6.1 All investment decisions will be made collectively by the Trustees in consultation with professional advisors as necessary. The Trustees will consider collective investment funds, such as the National Association of Almshouses Common Investment Fund managed by M&G or funds managed by CCLA, as suitable vehicles for managing the charity’s portfolio.
6.2 Investment performance will be regularly monitored and reported against agreed market benchmarks. Reports provided by the fund managers will be reviewed by the Trustees, and adjustments to the investment strategy will be made where necessary to meet the charity’s objectives.
6.3 The Trustees will review this policy and the charity’s investment performance annually to ensure the continued suitability of the investment strategy in line with the charity’s financial needs and objectives.
7. Approval
This policy has been approved by the Board of Trustees of The Lambourn Almshouses:
Signature:
Name: Christian Noll
Position: Chair of Trustees
Date: 1 November 2024