Editor’s observe • This story is out there to Salt Lake Tribune subscribers solely. Thank you for supporting native journalism.Ensign Peak Advisors, The Church of Jesus Christ of Latter-day Saints’ multibillion-dollar investment fund, has gone from working practically incognito 19 months in the past to dealing with an uncomfortably sizzling highlight.Despite being amongst the world’s largest investment funds, the Salt Lake City agency functioned largely unseen till late 2019, when a former high manager-turned-whistleblower claimed it had amassed as much as $100 billion, allegedly with out its senior leaders telling a lot of anybody.That touched off waves of recent scrutiny for a worldwide church used to protecting the slimmest of economic profiles. Ensign Peak has since made what quantities to a shocking sequence of quarterly stories to federal authorities on the portion of the Utah-based religion’s general holdings it manages, not least for the portfolio’s sheer measurement.It totaled practically $50 billion as of June after gaining $3 billion in three months and including practically $12 billion since its first submitting in early 2020 — simply earlier than the U.S. onset of the coronavirus pandemic. Alongside that stream of recent monetary info, just a few different cracks in the partitions of secrecy round Ensign Peak are being widened in federal court docket.Though not named as events, Ensign Peak Advisors and the phrases and actions of its senior managers have been at the middle of a high-profile lawsuit filed final March in U.S. District Court in California. It accused church leaders of fraud over their dealing with of billions of {dollars} in members’ tithing.That case, introduced by distinguished former Utahn James Huntsman, sought at the least $5 million in donations, curiosity and penalties, alleging the religion’s high authorities fraudulently misled members about spending donations meant for non secular endeavors on industrial tasks as an alternative. A federal choose just lately tossed out the lawsuit, however Huntsman’s legal professionals plan to enchantment.The church contended no precise tithing was ever used and as an alternative got here from Ensign Peak’s earnings.“The monetary data destroy Huntsman’s fraud declare,” its legal professionals argued in Aug. 31 court docket filings.In a number of rounds of clashing court docket motions, the intently watched dispute led church attorneys to disclose innermost enterprise particulars to a federal choose on a few of Ensign Peak’s greatest transactions — together with how it helped fund the City Creek Center mall in downtown Salt Lake City.Here is a few of what all these paperwork have introduced into focus:Heavy on tech(Trent Nelson | The Salt Lake Tribune) The Church of Jesus Christ of Latter-day Saints’ Administration Building in Salt Lake City on Thursday, Aug. 26, 2021. Court paperwork and Security and Exchange Commission filings shed extra mild on how the church invests its cash.Ensign Peak is a large investor in iconic know-how shares.According to its first 2020 report back to the U.S. Securities and Exchange Commission, filed months after allegations by whistleblower David Nielsen and his twin brother, Lars, made headlines, Ensign Peak’s worth was reported at $37.8 billion in shares and mutual funds. About $3 billion of that got here from mixed shares of Apple and Microsoft, accounting for 7% of the fund’s whole worth.As of June, the fund’s shares in 5 Big Tech firms — Apple, Microsoft, Google, Amazon and Facebook — have been value practically $9 billion, or 18% of its whole worth.A more in-depth evaluation of Ensign Peak’s newest disclosures present that past massive title shares, know-how in quite a lot of types accounts for as much as 27% of all its shares — value practically $13.3 billion.As of mid-2021, it reported greater than $2 billion every in firms specializing in software program; web providers; semiconductors; different pc {hardware}; and biotechnologies behind new drug remedies.Broader bets(Christopher Cherrington | The Salt Lake Tribune)Reports reveal the massive stakes in tech are a part of an enormous hands-on market technique by Ensign Peak, with upward of 1,850 totally different shares at occasions, unfold throughout just about each a part of the U.S. financial system and overseas.There are few clues as to how straight concerned church leaders are in Ensign Peak’s strikes, though officers over the fund have stated they eschew debt in step with the religion’s tenets and avoid investments Latter-day Saints think about objectionable, similar to tobacco or playing shares.Beyond tech, Ensign Peak’s high holdings learn like a typical blue chip roster: J.P. Morgan, Merck, Berkshire Hathaway and Intel. The fund holds immense stakes of $400 million or extra in family shares like Home Depot, Disney and Johnson & Johnson whereas at occasions making profitable fast trades in “meme shares” similar to GameStop and Tesla.A Salt Lake Tribune evaluation exhibits the subsequent highest concentrations of its investments past tech are in shopper items, well being care and monetary sectors, every at stakes of between 12% to fifteen% of Ensign Peak’s whole worth, for shares value a complete of $8.6 billion, $6.9 billion and $6.6 billion, respectively.The portfolio has giant positions in banking, enterprise providers and several other hefty hedge funds. It has shifted since mid-2020 into shares in fundamental industries and capital items that may anticipate to take off in an financial restoration. Ensign Peak additionally has at the least $1.3 billion in shares of oil and fuel firms, even after dumping 44% of its inventory in Exxon Mobil early in 2020.The ups and downs of lesser-known shares in its portfolio present simply how intently managed Ensign Peak’s holdings are.It had a $1.5 million stake in sports activities attire maker Lululemon in early spring of 2019, however managers had drawn that all the way down to $2,000 by the begin of 2021. The stake bounced up once more to $102,000 in June.Ensign Peak held $349,000 in shares in Beyond Meat, maker of plant-based meat substitutes, at the finish of 2019, however that was all the way down to $5,000 in June, making it the smallest holding in the portfolio.[Get more content like this in the Mormon Land newsletter, a weekly highlight reel of developments in and about The Church of Jesus Christ of Latter-day Saints. To receive the free newsletter in your inbox, subscribe here. You also can support us with a donation at Patreon.com/mormonland, where you can access gifts and transcripts of our “Mormon Land” podcasts.]The fund depends on a wholesome share of so-called actual property investment trusts (REIT), which bundle landholdings into shares on the market. The fund held $885 million in REIT shares as of June, together with one other $750 million in index funds, whose beneficial properties and losses are wired to general market traits.It reported proudly owning $27.8 million in shares in an index fund centered on firms in South Korea in late 2019, a stake that rose to $30.4 million by the finish of final yr. Shortly afterward, Ensign Peak bought all of it, judging from its absence in current stories.In the similar late 2020 window, Ensign Peak purchased shares in index funds focusing on Saudi Arabia and India, to the tune of $3.3 million and $12.6 million, respectively. It has considerably upped these holdings since. Ensign Peak reported in June it held $18 million in the Saudi fund and $58 million in the India one.Beyond query, Ensign Peak Advisors has the potential to earn massive cash on the church’s behalf. Bouncing again since early 2020, Ensign Peak has posted quarterly beneficial properties of between $2.4 billion and $6.9 billion.Tithing or earnings?(Illustration by Christopher Cherrington | The Salt Lake Tribune)Court paperwork submitted in California by the church’s attorneys say the fund has been round since 1997, seeded initially by extra tithing funds to create a “wet day” account. Church officers have stated the reserves are supposed to assist pay for operations in poorer elements of the world and to see the 16.6 million-member religion by way of any financial downturns.Before that, the reserves have been managed by the church’s Investment Securities Department, a high church monetary official disclosed. By 2003, Ensign Peak’s belongings had grown, in response to court docket paperwork, although the church isn’t publicly saying by how a lot.David Nielsen, the former Ensign Peak fund supervisor, stated the tithing-fueled fund held at the least $100 billion throughout his nine-year tenure there ending in 2019. Court paperwork in the Huntsman lawsuit have known as it “a hedge fund which holds in extra of $128 billion.”According to a number of rounds of clashing court docket motions, the authorized dispute between Huntsman and the church hinges on whether or not as much as $2 billion transferred from Ensign Peak and in the end used for the City Creek Center mall and an ailing insurance coverage agency have been drawn from sacred donations — or, as church leaders preserve, investment earnings generated from that preliminary giving.The church doesn’t dispute that funds made to City Creek got here from Ensign Peak. But its legal professionals go to nice lengths in difficult Huntsman’s lawsuit — together with submitting uncommon monetary paperwork below seal and blocking info from public view on others — to point out that no precise tithing went into these transactions.In 2003, the legal professionals assert, the church earmarked cash for City Creek from Ensign Peak’s investment beneficial properties. That was in protecting, they stated, with then-church President Gordon B. Hinckley’s declaration that the religion had “a compelling accountability to guard the setting of the Salt Lake Temple” and that it was “crucial to do one thing to revitalize this space.”Firing again(The Salt Lake Tribune) President Gordon B. Hinckley assured Latter-day Saints throughout General Conference in 2003 that no tithing cash went towards the City Creek Center mall.Huntsman countered that tithing funds — and earnings from these member donations — have been commingled at Ensign Peak. To assist that, he supplied a freshly sworn assertion by David Nielsen by which the whistleblower says that for officers at Ensign Peak “each penny was known as the ‘widow’s mite’” — a biblical allusion to its sacred nature.Nielsen referred to a March 2013 assembly with the agency’s then-president, Roger Clarke, by which he heard Clarke define $1.4 billion in spending on City Creek over 5 years and a one-time fee of $600 million to Beneficial Life, a struggling church-owned insurance coverage firm.Based on Clarke’s statements, Nielsen stated, “it appeared the church’s public statements have been supposed to hide the reality about EPA’s use of tithing” for each industrial ventures.The church responded that Nielsen’s assertions amounted to rumour and provided its personal sworn assertion from Clarke, who was president and managing director over Ensign Peak from its 1997 founding till he retired in May 2020. In it, Clarke affirms the veracity of all enterprise data submitted on Ensign Peak’s function in the case, together with its funds to City Creek Reserve.Editor’s observe • James Huntsman is a brother of Paul Huntsman, chairman of the nonprofit Salt Lake Tribune’s board of administrators.
Here’s how the LDS Church’s investment arm, Ensign Peak Advisors, makes its billions
