ICAEW loses £1m in stock market

Chartered accountants pride themselves on their careful stewardship of other people’s money. So it has come as something of an embarrassment that the UK professional institute ICAEW managed to lose £1 million on the stock market last year.

The latest accounts from the Institute of Chartered Accountants in England and Wales also reveal that the organisation’s pension fund deficit more than doubled last year, from £10.2 million to £22.2 million. Compounding a bleak picture, the value of the institute’s venerable Moorgate Place headquarters declined by nearly £3 million, reflecting the soft property market in Central London.

One of the few winners was John Collier, who resigned as secretary-general in March last year. He received a £240,000 payoff. Peter Wyman, the institute’s workaholic president, did less well: the one-year term is unpaid, although he continues to share in the profits from his firm, PricewaterhouseCoopers.

The institute managed to lose a quarter of its equity portfolio. Realised losses came to just over £1 million, on top of a £900,000 equity loss the previous year. The portfolio’s market value fell from £4.3 million to £3.3 million in the course of last year. The body’s equity portfolio is managed by JP Morgan.

The institute said that “unbudgeted” losses on its equity portfolio were coupled with lower than expected investment income. With some deft financial manoeuvring, the bean counters realised a one-off net gain of £16 million by selling their commercial publishing arm, including Accountancy magazine, to Wolters Kluwer, the Dutch publishing house. The money has been invested in interest-bearing securities, reflecting a shift away from capital growth in favour of investment income.

A spokesman for the institute said it had decided to “take a hit” on equities in line with the change in investment strategy. Central and administration costs were £2 million lower last year, helped by centralised procurement and a hiring slowdown.

Refreshingly, the institute’s silver and antiques collection held its value at £3 million. The collection includes solid silver ash trays and rare books on double-entry bookkeeping.

If things get really dire, they could always sell the family silver.

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