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  • rmacculloch

Shouldn't Charities Hold Diversified Investments, so they don't risk being decimated, like the Tindall Foundation?

In 2022, the Tindall Foundation, which owns around 21% of the Warehouse, a publicly listed company, had nearly all its capital invested in that one company, amounting to a total value of around $344 million (see the Foundation's accounts below). Its total assets were listed at around $401 million. In other words, 86% of the entire portfolio was held in a single stock. The following year, in 2023, the Foundation valued its Warehouse shares at about $236 million (a lost in value of $108 million in one year). Over the past year Warehouse shares have fallen again, from around $1.80 to $1.00 today, a drop of 40%. That amounts to another fall in the value of the Foundation's shares, this time to around $142 million (a drop of $104 million). Taken together, they sum up to a fall of $212 million in just two years. It must be even worse than that, since back in 2000, Yahoo Finance records Warehouse shares as selling for between $8 and $9.

What I don't understand is that since Charities are run for the benefit of the "beneficiaries", investing primarily in one stock opens those beneficiaries up to a huge amount of risk. In the case of the Tindall Foundation, the risk is now materializing. How come the Foundation didn't diversify, via a fund manager like Jarden's or Milford Asset Management, which would likely have meant it now has over a billion dollars in funds invested for good causes, rather than a number fast approaching one-tenth of that number?



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