Clare takes out unprecedented loan to invest in stock market

Cambridge Varsity Online – Clare College has borrowed £15 million to invest in the stock market. The unprecedented inflation-linked loan is due to be repaid in 2048 and the College expects to make a profit of around £36 million.

Clare has already invested £3.5 million and aims to have invested the full amount within two months. Clare’s Bursar Donald Hearn said he hoped the market would have bottomed out by then: “We think the market is going to go down a bit more, but may begin to recover once the FTSE drops below 3,250.

“We’re borrowing at an interest rate of 1%, and we’re reasonably confident of a useful profit. The money will only be invested in funds which track stock market indices, and will be globally diversified including emerging markets,” he said.

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