Financial Review
Free reserves represent the unrestricted funds excluding the value of fixed assets less associated funding arrangements . These increased by £ 54.7m to £ 27.6m ( 2022 : negative £ 27.1m ), principally as a result of recognising an additional £ 65m loan from the Foundation , as described in note 25 . The remainder of the movement relates to additions to fixed assets during the year . The level of free reserves is considered by the College to be adequate .
Investment policies and performance The College invests funds to support its activities for the long term , across a spread of different asset classes . The three main components are :
• Over 8,000 acres of rural property holdings with their ancillary residential , commercial , sporting and woodland interests ,
• 29 residential properties in Winchester which are let out on the open market , and
• a diversified portfolio of equities , fixed income and alternative investments .
These investments form the principal assets of the College ’ s expendable and permanent endowed funds . In addition , the College maintains significant cash holdings .
The College invests funds to support its activities for the long term , across a spread of different asset classes .
The College ’ s investment objectives are to :
1 . maintain ( at least ) the value of the investments in real terms ;
2 . produce a consistent and sustainable amount to support expenditure ; and
3 . deliver ( 1 ) and ( 2 ) within acceptable levels of risk .
The College uses returns from these investments to help pay for :
• scholarships and bursaries awarded to pupils ;
• the Quiristers , the College ’ s choral foundation ;
• the preservation and maintenance of the Ancient Buildings ; and
• other purposes specified by endowed and restricted funds .
This is intended to balance the needs of current and future beneficiaries of the College .
To meet these objectives , the College ’ s investments as a whole are managed on a total return basis , maintaining diversification across a range of asset classes in order to produce an appropriate balance between risk and return .
The Statutes of the College permit the College ’ s funds to be invested in assets of any nature and the College has long had a policy of holding different asset classes . In line with this approach , an Order has been obtained from the Charity Commission to allow the College to invest permanent endowments to maximise total return and to make available an appropriate proportion of the total return for expenditure each year .
Under this total return accounting basis , the Warden and Fellows extracted as income in the year 3.5 %, of the value of the relevant investments . Further information can be found in note 1.9 and 6 of the financial statements .
42 | Winchester College - Annual Report 2023