UK Edition
The endowment fund behind the Guardian will pump more money into the booming private equity market after the value of its assets increased by nearly a fifth in the pandemic.
The Scott Trust, which owns the left-leaning news publisher and funds its persistent operating losses from its investment returns, said the overall value of its assets increased by 19pc - or £178m - to £1.1bn for the year to March.
The endowment said it will seek “larger returns” by allocating more of its funds to “illiquid assets”, including private equity.
“We will be increasing allocations to these illiquid strategies where we believe that attractive returns may be generated in return for longer-term investment commitments,” it said.
The move is being made amid fierce debate over the role of private equity in the UK economy as attractively priced listed companies are targeted for buyouts by international funds.
In a recent editorial, the Guardian opposed the planned buyout of Morrisons, accusing private equity firms of a focus on “getting costs down, whether that be cutting staff or taxes, extracting profits and then cashing out”.
Increasing support for private equity also threatens to reignite tensions within the Guardian over previous investments in partnership with the buyout giant Apax. The publisher was criticised for its involvement in offshore ownership vehicles despite campaigning against them.
The Scott Trust’s growth comes as it reviews the governance of the Guardian by a complicated dual-board structure. Its failings were recently exposed by a power struggle between the editor, Katharine Viner, who reports to the Scott Trust, and its chief executive, Annette Thomas.
Ms Thomas, who reported to the board of Guardian Media Group, a commercial holding company, quit last month after only a year in charge.
The Guardian said on Tuesday that she received a year’s pay in lieu of notice, or £630,000.