Charities 'chasing income' with riskier investment strategies

Previously cautious organisations forced to raise stakes, say investment managers

Many charities are adopting riskier investment strategies in an attempt to gain higher income from their portfolios, investment managers have told Third Sector.

John Kelly, head of client investment at CCLA, said he had spoken to a number of organisations that had previously invested conservatively to preserve capital, but were being forced to take more risks to raise income.

"Trustees are saying they have to generate more income from investments, or else sell off a building or shut down a programme," he said. "A lot of organisations can't cut their costs fast enough.

"They're seeing the water coming in and they can't fix the roof - so they're looking for a bucket."

John Gordon, director of charities at Cazenove Capital Management, said: "Many people who've been sensible and kept cash on deposit are now looking for other sources of income. But we're advising people not to move into assets that will dent their long-term capital."

Kate Rogers, client director at investment house Schroders, said her company was receiving more enquiries from charities about high-income investments, including corporate bonds and high-yielding equities.

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