Friends Provident Foundation is increasing its allocation to impact investments to a third of its endowment. The charity is more than doubling its investment in London-based impact investor Snowball
FPF has pledged to more than double its investment in Snowball with immediate effect and will also invest a further £1m for every £10m Snowball raises. FPF has already invested around £2m in Snowball over the five years since it first invested in the fund and currently plans to increase this up to a cap of £5m, though this could change in future.
Snowball’s largest investor, the Golden Bottle Trust, has also said it will double its investment in the fund. Other investors in Snowball include Trust for London, The EIRIS Foundation, The Ian Taylor Family Foundation and City Bridge Trust.
Snowball is multi-asset class, impact fund focused on investing in funds that support social equity and environmental sustainability, as defined by the UN sustainable development goals (SDGs). A certified B Corp, it has been investing for five years in areas ranging from off-grid energy and ecosystem regeneration to support for UK social outcomes contracts and safe homes for women.
Investing in a ‘fund of funds’ such is regarded as an efficient way for foundations with relatively small endowments and limited resources to make worthwhile impact investments, while reducing the degree of hands-on management that would be required for a portfolio of direct impact investments.
“The added investment is really about enabling Snowball to move towards scale, so that it can be sustainable in the long term. We’ve structured our investment in the way we have, not only to encourage Snowball to carry on fundraising, but also to encourage other investors by showing we have confidence in the impact Snowball can provide,” Danielle Walker-Palmour, the founding director of Friends Provident Foundation, told Impact Investor.
She said the investment made sense for FPF because Snowball’s goals were very closely aligned with FPF’s new strategy under which the foundation is increasing its allocation to impact investments from 10% of its endowment to around 33%. The total endowment currently stands at around £32m.
FPF is also planning to increase its shareholder and asset manager engagement as part of the strategy.
FPF has calculated that boosting impact investments to 33% of the portfolio will result in estimated income foregone of only 0.46% compared to the existing portfolio, based on its forecasts for the next five years.
“For investors without a social mission this might be a concern, but because we believe Snowball is aligned and is delivering us impact and value, it’s worth doing,” Walker-Palmour said.
Friends Provident Foundation was established after the demutualisation of the Friends’ Provident life insurance company in 2001. The insurer’s roots were a financial institution serving the Quaker religious community in the 19thcentury. FPF was created in 2004 as an independent charity, with an ethos based on Quaker values. Its endowment was funded by unclaimed shares in the insurer following its flotation.