Army charities have come together to create a £100 million common investment fund.
Three founding charities - the Army Benevolent Fund, Army Central Fund and the Army Dependent Trusts - will be joined by another six army-related charities on the day the fund is launched, scheduled at the beginning of September.
The Charity Commission has approved the plan in principle and final legal details are currently being completed.
Unusually for a common investment fund, charity investors have initiated its set up rather than a fund management firm.
David Turnbull, finance director at the Army Benevolent Fund, said: "This is a group of generic charities starting up a fund from scratch that is unique. We appoint the fund manager and if we don't like his performance we can recommend to the Commission that he is replaced. We want to hold the fund manager to account much more than an individual unit holder could do."
The charities have appointed Merrill Lynch to manage the fund.
Turnbull said that smaller charities would see financial benefits from joining the fund since they are now paying disproportionately large management fees.
The fund is set up so that any money invested remains the property of each individual charity and under the control of its own trustees. It will invest predominantly in UK and overseas equities but will also encompass bonds as well as alternative asset classes including property, hedge funds and private equity.
The founding charities are contributing £100 million to the fund, but Turnbull said the fund's assets could rise to £150 million within two years as more charities join. "There is £200 million invested by a total of 130 army charities,
The fund's advisory board will be appointed by the Army Board, the committee of field marshals and generals which runs the army.
It will consist of "eminent City figures
and senior officers.
Shirley Scott, director of the Charity Finance Directors' Group, is backing the venture. "This kind of common investment fund allows smaller charities to pool funds and have a bigger say over the investment manager,