Have you ever wondered how the Company funds our patronage objectives through the generations? Or how we supplement our general income from our investment activities?
To find out more we caught up with Liveryman Sean Molony, Chair of the WCI Investment Committee.
Sean was first introduced to the Company by Chris Chaplin in 2011. As Sean recalls, “With my background in investment finance, portfolio management and asset allocation, I received a tap on the shoulder from the Clerk when I was about to receive my Freedom of the City and he suggested I might like to join the WCI Investment Committee”.
Since then Sean hasn’t looked back. As Committee Chair, he is assisted by seasoned investment professionals Edmund Brandt, David Guild, Simon Johnson and Ian Plenderleith. The Committee’s remit includes appointing an external Investment Manager, agreeing clear investment objectives and then monitoring portfolio management performance against these objectives.
There are two important categories of assets stewarded by the Committee and its Investment Manager. The first comprises the non-property Company assets, income from this portfolio helps to maintain the financial health of the Company, on a sustainable basis and in perpetuity.
The Innholders’ Charitable Foundation is the second asset category, this portfolio provides an income stream in the order of £335,000 on a rolling 12 month basis. Although this amount is dynamic and may be lower or higher each year, the income largely funds the annual charitable objectives of our Patronage Committee. The Committee expects this level of income to increase over the years to come.
The investment objectives are to maximise the returns with a prudent and careful investment philosophy. Whilst issues such Brexit dominate the short term, the Committee remains much more focused on longer term issues. The return from equity investments, such as shares, has proven in the longer term to be superior to bond investments, with a current inherent investment bias towards high-returning equity assets, including those associated with large global companies and technology organisations.
Mindful of the current economic and equity cycle, the portfolio includes a sensible proportion of defensive assets including value-oriented equity investments and some bonds, but fewer property-related assets partly due to our existing property portfolio exposure.
In 2017 the Committee appointed one of the UK’s largest charity Investment Managers to provide discretionary management services. This means that instead of advising the Committee on where to invest, the Investment Manager makes day-to-day decisions on our behalf.
The Committee meets quarterly in a governance capacity. These meetings include a reporting pack from the Investment Manager to demonstrate the performance of the portfolio against the investment objectives. The Investment Manager’s performance is also monitored on a quarterly basis, but a more formal review is expected to take place at any time after the initial three year appointment period.
Many charities have committee members or trustees with little or no investment speciality. WCI’s Committee is highly experienced and confident in their ability to scrutinise investment decisions, which is acknowledged by the Investment Manager as a positive aspect within the overall client / manager relationship.
An area of emerging interest to Sean and the Committee is Environmental Social Governance (ESG), as this is a trending topic within the investment industry. ESG includes measuring and reporting on a company’s diversity and equality, the welfare and ethical policies maintained in countries where the company operates, assessing a company’s global social standing and how it supports the local communities of its workforce. Although measuring and reporting ESG is in its infancy, Sean is interested in investigating with the Investment Manager the risks and rewards of a longer term investment strategy focusing on organisations with strong ESG credentials.
In between Committee meetings and his day job at Legal & General Investment Management, Sean likes to play competitive tennis, drink craft ale and is passionate about adventure travelling – 110 countries at the last count, with El Salvador next on his list. Sean stresses that although there is a personal time commitment involved with all committee work at WCI, this is more than offset by the gratitude of the Court and Company, Herbert’s hospitality and the opportunity to engage directly with the charities supported by the Patronage Committee. In Sean’s own words:
“When I am poring over the Committee minutes on a Sunday evening, I sometimes wonder why I am doing this in my leisure time. Then I remember the visits I have made over the year to the charities we support, to see first-hand what a fantastic job they do. It is a privilege and a great source of personal satisfaction to join up the dots – to understand how my Committee and our Investment Manager maximises our asset income – then seeing the work of the Patronage Committee distributing this cash – and then visiting the worthy causes we support to see the difference this money makes.”
Liveryman Jason Essenhigh