"John Ellerman Foundation's Sufina Ahmad discusses long-term strategies for accumulating influence"
The John Ellerman Foundation, a British philanthropic organisation with deep roots in the country's history, has taken a unique approach to investing. Its wealth, linked to the British empire through shipping routes to South Africa and the Indian subcontinent, has been transformed into a portfolio that aligns closely with its charitable aims.
With a portfolio of £142m in assets, the Foundation manages its investments with a strategic allocation heavily tilted towards global equities, accounting for 85% of its overall portfolio. However, it supplements these traditional investments with a growing emphasis on social impact investments, which currently form up to 10% of its total investments (£15m). This social investment strategy includes direct investments in charities, social enterprises, and social impact funds, reflecting the Foundation’s commitment to transforming social good through capital deployment.
Unlike traditional investment methods that prioritize maximizing financial returns alone, the Foundation integrates ethical considerations and active engagement into its investment process. It enforces a clear net-zero policy, excluding investments in tobacco, thermal coal, tar sands, and new fossil fuel infrastructure. However, it prioritizes influencing fund managers to adopt responsible investment practices rather than relying on strict exclusions at the asset level, which can be challenging in pooled funds.
The Foundation's approach to manager selection has become more challenging due to political headwinds, particularly in the US. Despite these challenges, the Foundation has adjusted its lineup of managers over the past five years to better align with its investment policy aims and objectives. Sufina Ahmad, who joined the Foundation as director five years ago and was awarded an MBE for charitable services in 2020, plays a crucial role in this process.
The Foundation's influence comes from sharing its point of view with managers. It asks specific questions about engagement, escalation tactics, and divestment to ensure that its investment decisions reflect its core aims. These aims are to tackle the planetary crisis, social divisions, promote a more sustainable economic system, and advance marginalized communities.
The Foundation formalised its decision to become an in-perpetuity investor earlier this year. This commitment to long-term investing is a testament to its belief in the power of capital to drive positive change. The Foundation's journey from a shipping magnate's wealth to a pioneer in ethical and impact investing is a testament to its vision and commitment to making a difference.
In the early 20th century, John Ellerman, the wealthiest man in Britain, made his fortune in shipping and owned the equivalent of the French fleet. He supplied ships to the British navy during the Boer War and held stakes in breweries, coal mines, and influential British newspapers like The Times, the Financial Times and the Daily Mail. Today, the John Ellerman Foundation continues his legacy by using its wealth to create a more sustainable and equitable world.
Some of the funds the Foundation is invested in already have exclusions in place, but the Foundation's influence extends beyond mere exclusions. It seeks to foster a deeper understanding of ethical investing among managers, representing a more nuanced and long-term approach than typical ESG screening or exclusionary policies. The Foundation's approach to investing is a shining example of how wealth can be used for good, aligning financial returns with positive social and environmental impact.
- Despite its origins in traditional businesses like shipping, breweries, and newspapers, the John Ellerman Foundation has transformed its investment strategy to prioritize social impact, accounting for up to 10% of its £142m portfolio.
- Embracing technology, the John Ellerman Foundation engages with fund managers to foster a deeper understanding of ethical investing, moving beyond simple exclusionary policies to create a more sustainable and equitable world.
