A quarter of Paul Hamlyn's real return target goes on fees
This foundation publishes its investment management costs in money, which almost no endowment does. They were £10.18 million in the year to March 2026, on a portfolio of £996 million, or about 1% of assets. The target is inflation plus 4%. So roughly a quarter of the real return it is trying to earn is spent before a penny reaches a grantee, and its own accounting policy says that figure excludes fees taken inside hedge funds and some private equity funds.
Key numbers, and what they mean
£10.2M
Investment management costs for the year to March 2026, a named line in the accounts sitting above charitable spending. It was £9.31 million a year earlier.
About 1.0%
Those costs as a share of the £996 million portfolio. Against a target of inflation plus 4%, that consumes roughly a quarter of the entire real return objective.
12.6%
Its return for the year to March 2026, against a benchmark of retail price inflation plus 4% at 6.9%. A strong year, and the cost line rose 9% along with it.
£36.1M
Grants awarded in the same year. That works out at about 28 pence of disclosed investment cost for every pound granted.
The inflation plus 4% target
Disclosed investment costabout 1.0 point
What is left toward the targetabout 3.0 points
Costs shown are those the Foundation pays directly. Its own accounting policy states that hedge fund and some private equity fees are deducted from fund assets and reflected in reported values, so they never appear in the £10.18 million and are not quantified anywhere.
The read-through
From the report
Takeaway: how to apply it to a portfolio
Investment management costs are a named line in the accounts at £10.18 million for the year to March 2026, against £36.1 million of grants awarded.
Costs stated in money are auditable and comparable to the thing the money is for. That is about 28 pence of investment cost for every pound granted. Ask for the figure in pounds rather than in percent. The percentage hides the scale.
The target is inflation plus 4%. The disclosed cost is about 1% of assets.
Judge fee drag against the real return objective, not a nominal one. One point of cost against a four-point real target is a quarter of the entire purpose of the portfolio. The same 1% against an 8% nominal assumption looks like an eighth, which is exactly why nominal framing flatters costs.
The Foundation notes that costs rose 9% in the year, driven by the higher returns of over 12% in the value of the associated investment assets.
Fees charged on assets rise with the asset base whether or not anyone added value, so a good year automatically raises next year's cost base. A schedule that scales with assets rather than with value added ratchets in one direction until you renegotiate the breakpoints.
The Argus lensThe Foundation's own accounts say the £10.18 million excludes fees taken inside hedge funds and private equity funds. That hidden layer is precisely what we read for: what a fund actually charges, on what base, and what it keeps above the hurdle.
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About the source
The Paul Hamlyn Foundation's trustees' report and financial statements for the year ended 31 March 2026, published in July 2026, give the £996 million portfolio, the £10.18 million investment management costs line, the 12.6% return against a benchmark of retail price inflation plus 4%, and the grants awarded. The statement about fees netted inside funds comes from the Foundation's own accounting policies.