The BFCT's investment objective is to generate a capital return closely in line with the total return of the broader equity market over the long term whilst providing liquidity to the charity.
Where possible and financially attractive, the BFCT will also invest a proportion of the Trusts' assets into profit seeking companies that have a social charter that is fully consistent with the purposes of the charity. On occasion this may include early stage higher risk companies where the financial returns are not yet proven but their purpose is strongly aligned with BFCT's purpose of protecting and restoring our planet's biodiversity. In these cases, the Trustees recognize that losses could materialize but that the benefits of purpose outweigh the risks and these investments will not be of a size that would put the overall BFCT investment objective at risk
The Trustees believe this overall approach should allow the Charity to maintain the real value of the assets, whilst funding its annual expenditure. The Trustees have agreed an asset allocation strategy with investment managers, which is aimed at achieving this objective.
One of the key risks to the sustainability of the Charity is inflation and the assets will be invested to mitigate this risk over the long term. The trustees understand that this is likely to mean that investment will be concentrated in real assets and that the capital value will fluctuate. The trustees are able to tolerate volatility of the capital value of the Charity, as long as the Charity is able to meet its short-term grant making commitments through either income or liquid capital assets. To this end the Charity's assets are invested widely and diversified by asset class, by manager and by security. Asset classes can include cash, bonds, equities, property, hedge funds, structured products, private equity, commodities and any other asset that is deemed suitable for the Charity.