First Court Magdalene College Cambridge

College Endowment

Magdalene College’s Endowment is invested to secure long-term returns that support its charitable mission:

  • Providing world-class undergraduate education
  • Encouraging applications from talented students, regardless of background
  • Promoting academic research of the highest quality

As the College is built to last in perpetuity, the Endowment is managed to generate sustainable investment returns over the long term.

The Governing Body delegates oversight of the Endowment to the Investments Committee, which reports through the Finance & General Purposes Committee.

Investment Structure

The Endowment consists of two principal portfolios:

  • Financial Assets Portfolio – invested primarily in funds managed by Baillie Gifford
  • Land and Property Portfolio – including agricultural land and commercial property, such as the Quayside development

Long-Term Investment Objectives

  • Maintain the real capital value of the Endowment after distributions and inflation
  • Provide a steady, sustainable, and growing cash flow to support the College’s needs

Distribution and Income Policy

Financial Assets Portfolio

The College follows a spending rule based on the average value of the Amalgamated Fund over the previous three years. This fund, established in 1956, consists of permanent and expendable capital as well as restricted funds. The current spending rate is 3.25%.

The College’s financial investments are principally invested in funds managed by Baillie Gifford mainly the Baillie Gifford Responsible Global Equity Income Fund.

Land and Property Portfolio

A portion of annual income from property holdings is distributed, with funds set aside for future repairs and improvements.

The majority of the College’s property is located adjacent to the main College site and includes the Quayside development.

The portfolio also has non-financial objectives, given its proximity to the College and its long-term strategic value, as follows:

  • Provide a strategic resource to the College, to support its current and future activities
  • Preserve the architectural and historical legacy of the College
  • Maintain the quality of the estate
  • Contribute to the Cambridge community
  • Improve energy efficiency and environmental impact.

Managing Risk and Diversification

The greatest long-term risk to the Endowment is inflation. To protect against this, the majority of investments are in assets that are expected to offer inflation protection, even if this means exposure to market fluctuations.

Some property assets, particularly those close to the College, are held for strategic reasons rather than financial return. These assets contribute to the College’s long-term sustainability.

Responsible Investment

The College believes its investments should align with its purpose of developing human and intellectual capital. Environmental, social, and governance (ESG) considerations are central to its investment strategy.

The Investments Committee ensures that investment managers integrate responsible investment principles into their decision-making. Investment managers report annually on how ESG factors have influenced asset selection and performance.

The College supports the UN Global Compact Principles and works with investment managers to apply responsible investment policies across:

  • Environmental impact and climate change
  • Human rights and labour practices
  • Ethical corporate conduct and governance

The College’s Financial Assets Portfolio specifically excludes investment in industries such as:

  • Oil and gas production
  • Tar sands and thermal coal
  • Gambling and adult entertainment
  • Tobacco, alcohol, and armaments

The College holds an investment in the University of Cambridge’s Endowment Fund which plans to reach net-zero by 2038.

The College has a modest long-standing small investment in the Charities Property Fund. The Fund's responsible investment policy is ESG – Charities Property Fund (cpfund.co.uk).