Tuesday, 26 January 2010

Church of England counts cost of New York property deal

The Church of England has suffered a £40 million loss on a disastrous investment in a New York apartment complex that was acquired by a consortium in 2006 for $5.4 billion — the biggest single residential property deal in the United States.

A spokesman for the Church Commissioners said that it had written off the entire value of its investment and added that the commissioners were “looking carefully” at the lessons to be learnt. “The investment was made in June 2007, which, with hindsight, was at the top of the property market and immediately before the credit crunch,” the spokesman said. He added that the Church had undertaken detailed due diligence in conjunction with external professional advisers.

The loss amounts to nearly 1 per cent of the total £4.4 billion assets held by the Church Commissioners to sustain the nationwide ministry of the Church. It follows a 19.6 per cent fall in the value of the commissioners’ investments in 2008 and comes as the Church faces criticism for allowing the build up of a £352 million shortfall in its pension fund, which is invested entirely in equities. Read more
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