Diocese of Sydney faces big losses

The Sydney Morning Herald reports that the Diocese of Sydney has suffered a massive financial loss.

The Glebe Fund lost about $160 million in investments placed in growth funds and real estate holdings. The chief executive of the board, Steve McKerihan, … conceded it was unusual to put 80 per cent of the ”growth assets” with one fund manager and agreed that many rival wealth managers chose to divide funds between several managers to spread the risk.

One of the problems turns out to have been borrowing money for investment purposes. Steve McKerihan, CEO of the Glebe Administration Board told Southern Cross:

There were two ways we sourced more funds to increase our investments. One of those was the Glebe Income Accounts, where we take deposits from various Diocesan organisations, parishes and individuals. Technically that is a form of gearing and it has been in place for a considerable amount of time.

More recently – between 2001 and 2007 – there was an amount of bank borrowing that effectively allowed us to make more investments….

We didn’t have all our funds in the stock market, we had investments in loans, listed securities, cash, and direct property – in that bundle of all those assets the losses were around 25 percent. There was nothing extraordinary or abnormal about our losses on our investments. That is a very important point.

The Endowment has declined by 60 percent and the reason is gearing. When the assets start to fall in value, you still have to repay 100 percent of the debt.

The Sydney Anglican has been hit hard by the loss and has cut staff and will only be available on-line by subscription.

Sydney Anglicans reports on their own reorganization:

Interstate and overseas readers will be encouraged to take paid subscriptions of the print edition. Southern Cross needs a boost in paid subscriptions in order to ensure its long-term viability.

The cutbacks to Sydneyanglicans.net will also impact the blog and podcast sections of the site.

“These changes are a recognition of the very trying times Anglican Media finds itself in,” says New Media Manager Mark Hadley. “But Sydneyanglicans.net has a loyal community who have helped us develop one of the best Christian website around.”

Anglican Media has lost the equivalent of 5 full-time staff this year. Mr Hadley will finish up with Anglican Media on September 30.

“Although I am leaving, Anglican Media is still committed to developing its web resources,” Mr Hadley said.

Allan Dowthwaite, CEO of Anglican Media and who has a TV production background, will be taking on the hands-on management of the site.

Anglican Media’s new web strategy is likely to see an increase in video-based resources.

Details of the changes to Anglican Media’s web service include:

• PDFs of Southern Cross will no longer be posted online. Major breaking news stories will be covered through the news stream on Sydneyanglicans.net

• Issues of Southern Cross prior to September 2009 will be available through an archive

• Advertising will be given more prominence on Sydneyanglicans.net

• The Classic Podcast stream (the best evangelical preachers from around the world) will be merged with the Latest Podcast stream (local Sydney Anglican preaching).

• After 6 months evaluating the blog strategy, there is to be a minor re-arrangement of the days some authors are posted. Some bloggers will be posted less frequently.

• There will be fewer film, TV and book reviews.

Read more here.

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