By Padraic Flanagan From iNews UK

Oxford and Cambridge universities have secretly invested tens of millions of pounds in offshore funds, leaked documents from the Paradise Papers reveal.

The files reveal that the universities invested in a joint venture to develop oil exploration and deep-sea drilling in a fund run by Royal Dutch Shell, the Anglo-Dutch oil and gas company.

Leaked documents also show that both universities have committed significant funds to multibillion-dollar private equity partnerships based in the Cayman Islands, a tax haven popular with American and British hedge funds. The money is routed through what are known as “blocker” corporations.

This arrangement means the universities can avoid or “block” a US tax on hedge fund investments to receive dividends tax-free. Pension One of the largest contributors to the fossil-fuel-linked partnership was the UK university sector’s main pension scheme, the Universities Superannuation Scheme, with $88m (£67m) invested.

The Paradise Papers revelations are likely to increase pressure on Cambridge and Oxford to divest fully from fossil fuels. Last month, academics led by Rowan Williams, the former archbishop of Canterbury, called for an end to carbon-based investments by the universities.

Responding to the revelations in the Guardian, an Oxford University spokesperson said: “As charitable trusts, Oxford University’s endowment is exempt from UK tax.

The taxpayer therefore does not lose a penny from our investments. “The investments generate some £80 million a year which is spent on key academic priorities in Oxford. These include the majority of our scholarships and bursaries for students, vital research across medicine, the sciences, social sciences and humanities and our globally outstanding teaching.

Research “That is £80m for UK education and research which the taxpayer does not have to fund.” Commenting on criticism of its fossil fuel investments, the spokesperson said that in 2015 the university council restricted investment in coal and tar sands.

“The Oxford Endowment Fund has low exposure to the energy sector and has actively sought to invest in groups targeting resource efficient companies,” the spokesperson added. The taxpayer does not lose a penny from our investments.

A Cambridge University spokesperson added: “The Colleges and the University are charities and therefore their holdings in investments are tax-exempt in the UK, US and many other countries. This means there is normally no tax to pay.

“The fund arrangement, through which the University and Colleges invest, is standard for collective investments of this type. The fund is managed by a highly reputable investment advisor and, as is normal, the adviser makes the decisions about specific investments to be made by the fund.”

IMAGE: Oxbridge colleges invested millions in offshore funds, say the Paradise Papers (Photo: Getty)

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