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The case of Bhutan Trust Fund for Environmental Conservation

The case of Bhutan Trust Fund for Environmental Conservation. Overview. Governing Body Fund at a Glance Type of Fund Capital, Investment & Performance Beneficiaries Lesson Learnt Challenges. Governing Body. Management Board Members- 6 members Secretariat 11 persons.

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The case of Bhutan Trust Fund for Environmental Conservation

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  1. The case of Bhutan Trust Fund for Environmental Conservation

  2. Overview • Governing Body • Fund at a Glance • Type of Fund • Capital, Investment & Performance • Beneficiaries • Lesson Learnt • Challenges

  3. Governing Body • Management Board Members- 6 members • Secretariat 11 persons. • Technical Advisory Committee- 7 members. • Investment Committee- 6 members

  4. Fund At a Glance • Fund Name: Endowment Fund • Country: Bhutan • Objective: Conservation of eco-system and biodiversity • Governing body: Six Member Management Board • Legal status: Royal Charter, 1996 • Capital: US$ 21 Million • Establishment: May 1992 • Beneficiaries: NGOs, RGOB, Individuals, Grass roots Community.

  5. Type of Fund • Endowment Fund • The Principal capital is kept in perpetuity and not expended. • Preserve the Real Value, Income Generated is Reinvested. • Income from investment is used for funding programs (3 year rolling portfolio market value)

  6. Capital • A donation of US$ 21 million was raised from: Global Environmental Facility, Denmark, Finland, the Netherlands, Norway and Switzerland. • Present Endowment is $44.181 million • Endowment capitalized through the investment interest after program expenses

  7. Investment Structure as of 29 June 2012 Total Portfolio Value $44,181,405

  8. Investment Structure as of 29 June 2012 Bhutan Portfolio Value $6,214,944

  9. Investment Structure as of 29 June 2012 Offshore Portfolio Value $37,968,461

  10. Portfolio Performance

  11. Fund Raising • Annual Fund raising strategy under development.

  12. Beneficiaries • Mostly Government Agencies- MOAF, MOE, MoWHS, MOEA • NGO- RSPN, YDF • Communities • Local Governance • Individuals

  13. Lessons learned • Good investment policy and guidelines and keeping close watch of the Success factors. • Established Procurement guidelines and Operational Manual (value for money) • Strong support from International Organizations (UNDP and WWF-US) • Asset Management Committee-Outside expertise • Special care from Investment Managers

  14. Challenges in Endowment Fund • High Volatility of Capital Market- mixed portfolio • Requires Constant Monitoring of External Market • Human resources- investment Managers • Thinly spreading the investments and generation of income is small • Fund lost as transactional costs

  15. Challenges • Lack of investment opportunities within the Country • High Investment Costs • No Economy of Scale • No Negotiation Power on Fees

  16. Kadrinche & Thank YOu

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