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Letter from Chair of the Cambridge University Endowment Trustee Body
CEO and Chief Investment Officer’s Annual Letter
The Cambridge University Endowment Fund
The Cambridge University Endowment Trustee Body ("CUETB") was formally constituted in June 2022 as a separate body within the University with a fiduciary responsibility to represent the interests of all CUEF unitholders equally. It was established to ensure that the CUEF and UCIM, as its fund manager, act in accordance with their mandate to provide a permanent source of capital with a long-term investment horizon. This includes the Fund’s Responsible Investment Principles, developed in consultation with unitholders, UCIM and the Investment Advisory Board, which are intended to support the long-term resilience of the portfolio, reduce unmanaged risks and capture sustainable value.
The CUETB meets each academic term, with an additional meeting for all unitholders in the Michaelmas Term which allows direct input from investors to the CUETB. At our 2024 meeting, the unitholders were briefed on and agreed to support UCIM’s revised approach to engagement and voting in public equities.
Our main discussion during the year concerned the activity of the Working Group on Investments into and Research funded by the Defence Industries (“IRDI Working Group”). The IRDI Working Group’s recommendations, which were endorsed by University Council at its October 2025 meeting, provide a framework for assessing the ethical and reputational dimensions of research funding and investment relationships linked to the defence sector.
The Trustee Body welcomes the recommendations, including the endorsement of the CUEF’s investment model, and will ensure that those within its remit are implemented on a timely basis. In particular, the CUETB will ensure that the CUEF’s Responsible Investment Principles are updated to codify formally the Fund’s existing practice of excluding active investment in any company which manufactures weapons which are illegal under English law.
The CUETB will henceforth monitor the Fund’s exposure both to illegal and conventional weapons, as well as its exposure to other investment areas deemed by unitholders to be of particular concern. In addition to fossil fuels, we will monitor the Fund's exposure to gambling, adult entertainment and tobacco.
I would like to take this opportunity to thank both Milly Bodfish, a member of the CUETB, and Elaine Clements, a Director of UCIM, for their contribution as members of the IRDI Working Group. Their involvement was greatly appreciated by all my colleagues on the CUETB.
Milly has recently stepped down as a member of the CUETB following her retirement as a member of Council. I would like to thank her, also on behalf of my colleagues, for her significant contribution to the success of the CUETB since its foundation.
We recognise the fiduciary responsibility we hold in respect of the CUEF – managing it for the benefit of current and future generations of beneficiaries. We remain committed to sound stewardship and prudent governance and look forward to reporting further progress in the year ahead.
In a year of significant geopolitical and market uncertainty, the Fund demonstrated its resilience, particularly through a period of heightened market volatility in April.
With the majority of UCIM team members now having worked together for more than five years, our investment and operations processes are increasingly seamless, the portfolio is increasingly mature and we are having a growing impact in the sustainability arena.
Engagement with the University community focused on UCIM’s support for the Working Group on Investments in and Research Funded by Companies belonging to the Defence Industry. The report recommended key clarifications, including endorsing the CUEF’s fund-of-funds model and confirming that the CUEF will not invest actively in any company that manufactures weapons illegal under UK law. I am hopeful that these welcome formalisations of UCIM’s existing approach will provide reassurance to investors in the CUEF as well as the wider University community.
The UCIM team now stands at 21 talented and dedicated investment and operations professionals, with a shared commitment to delivering strong and consistent returns to Unitholders.
Our culture of integrity, accountability, collaboration, sustainability, intellectual honesty and excellence is now well-embedded. The team has exhibited high levels of satisfaction in our regular surveys throughout what has been a particularly busy year. In the last twelve months, six team members have been promoted in recognition of their exceptional contributions.
Following a substantial reconfiguration over the past five years, the CUEF portfolio now consists of investments with 60 high-conviction fund management partners. A key feature of UCIM’s approach is to invest in building deep relationships with the Endowment’s fund manager partners; relationships which generate significant returns in terms of market insight and access to opportunities and networks.
During the spring of this year, these relationships were a source of significant insight, as UCIM was able to deploy capital with confidence at attractive prices as markets sold off, with investments that have contributed strongly to performance during the latter part of the Financial Year and beyond.
For the Financial Year ended 30th June 2025, the Cambridge University Endowment Fund delivered a +5.6% net return, a solid return in a year of increasingly volatile and fragile markets. As at the end of the Financial Year, the “Magnificent Seven” US large technology companies accounted for 20.1%1 of the value of all global equities. By contrast, the CUEF portfolio is significantly more broad-based, including a significant element that is uncorrelated, or even negatively correlated, with equity markets. Over the last ten years, the CUEF has returned +8.3% per year, in line with its challenging absolute target of consumer price inflation plus 5%.
1Source: Bloomberg
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The operational focus this year was a successful migration to a new IT infrastructure, managed by an ISO-accredited service provider. The new architecture has increased robustness and security across all platforms, tools, and devices, appropriate for an FCA-regulated investment management organisation. Following the migration, UCIM was awarded Cyber Essentials accreditation. Based on this enhanced foundation, in 2026, we plan to take our first, measured steps in the implementation of artificial intelligence tools.
Sustainable investment continues to be an integral part of UCIM’s approach, focused on engagement with fund managers to encourage decarbonisation of their portfolios.
UCIM works closely with its partners to develop and implement tailored emissions reduction plans, prioritising those firms with the ability to drive real-world change. Our efforts are enhanced by our strong relationship with the University; we continue to work with the Cambridge Institute of Sustainability Leadership to provide expert support to partners through a bespoke executive education programme.
During the Financial Year, UCIM made further new commitments to fund managers investing in renewable energy infrastructure, as increasing AI usage alongside energy security concerns drove continued demand for clean power. As of 30th June 2025, the CUEF’s fossil fuel exposure had fallen below 1.0% for the first time, a key milestone on the path to having no meaningful exposure by 2030.
Since the current team joined UCIM in 2020, the value of the CUEF has increased by over £1.5 billion in absolute terms. The total annual distribution for the Financial Year was £172.7 million, bringing cumulative ten-year distributions to over £1.25 billion, and underlining the Fund’s contribution to the financial health of the University, Colleges, and Trusts.
Based on the significant efforts of the team and our governing bodies, UCIM and the CUEF are well-placed to navigate market uncertainty in the short-term with confidence and to deliver strong returns for its investors over the long-term.
I would like to thank Chairs of our governing bodies - Mark Lewisohn of the Cambridge University Endowment Trustee Body, Alan Brown of the UCIM Board, Sarah Fromson of the Investment Advisory Board – and their board colleagues for their exceptional advice, support and stewardship.
