The Coram Family has increased its investment in private equities to £750,000.
The charity's allocation to private equity has now risen from 5 per cent of its £14m portfolio to 8 per cent.
Biman Mittra, finance director at the charity, said the decision was made because of the "superior risk return characteristics" of the asset class.
"As Coram takes a long-term view of its investment policy, we are able to ride out short-term volatility in return for higher anticipated total returns," he said.
"We considered both our medium-term income requirements and the relative illiquidity of this asset class."
Mittra is a former investment banker with Goldman Sachs. The US firm has urged charities to invest more in alternative assets such as hedge funds and private equity. US universities such as Yale and Harvard have more than 50 per cent of their assets lodged in such alternative assets.
- See Focus Finance and Governance, page 21.