Investments

Investing for impact

Our impact investment strategy is driven by a commitment to make more of our capital work for our mission.

Impact investments are defined by an intention to generate positive, measurable social and environmental impact alongside a financial return. For example, in 2018, we allocated 5% of our endowment assets, around £50 million, for our emerging impact investing portfolio. We want to demonstrate that investing in health is good business.

We are a permanent endowment, which means we keep the majority of our resources in investments. By testing whether we can deploy significant investments through an impact-lens, we are really asking ourselves whether we can deploy all of our investments in this way. 

Impact investing activities

We run our impact investing activities from our endowment, rather than from its regular proceeds. This is because our ambition is to scale this work.

Through our portfolio of impact investments, we are backing bold ideas to come to issues from different angles – whether pioneering medical technology or helping to address social determinants of health like housing.

Our impact investment principles

There are three guiding pillars for our impact investing work:

• Returns commensurate with risk: Firstly, our impact investments must generate market risk-adjusted returns, allowing us to grow and replenish our endowment so we can continue to invest in a healthier society. In practice, this has generated two broad types of investment. One we would describe as ‘impact managed’, where our input is supporting established funds to increase the depth of their impact. The other we would describe as ‘catalytic’, where our capital is helping newer funds or models get off the ground.
• Impact alignment: Secondly, our work focuses on the social realities of health. This means we are investing in sectors such as housing and employment as well as medical technologies and life sciences. Furthermore, we are also attentive to the inverse gradient in health – namely, that those who most need care are least likely to receive it – and set the centre of our target to be underserved urban communities.
• Learning opportunities: Finally, our pioneering approach to impact investments, alongside other leading UK philanthropic organisations, gives us an opportunity to learn and to enhance our own work, while sharing our knowledge and encouraging others to explore ‘more for mission’ approaches.

To support our investments, we also strive to deepen our understanding of the UK’s major health challenges and to identify promising solutions and the fund managers behind them. We forge strong, collaborative partnerships with fund managers. Also, to add value to these relationships and to help position our investments for success, we also invest non-financial resources, including taking on advisory positions and offering health expertise.