Sector investments to take three years to get back losses

Charities could have to wait three years to recoup the capital growth that has been lost on their investments in the stock market downturn, David Bailey, vice-president of charities with Deutsche Asset Management, has claimed.

Bailey told Third Sector: "Charities have probably lost five years of capital growth. They could have to wait three years to get it back."

Bailey said that fund managers "faced a challenge to come up with aggressive enough styles and strategies to achieve that".

Bailey called for charity fund managers to produce a mixed-asset common investment fund for third-sector groups, including property, bonds and hedge funds, but questioned whether the Charity Commission would permit it.

"We need to put forward new ideas and not just be the Cinderella of the pension fund industry,

said Bailey. "We have always lagged behind in the past."

He warned that investment house fees would rise for charities when the market begins to recover from the major losses incurred since the end of May.

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