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Oxbridge colleges invested millions of pounds offshore, the Paradise Papers reveal

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Oxford and Cambridge universities have been revealed to have invested millions in offshore funds, following the leak of the Paradise Papers.

The Guardian reported that the elite universities have both invested significant funds to a private equity firms based in the Cayman Islands.

 According to the leaked documents, in 2006 Oxford invested £2.6 million in Coller International, a Guernsey-based private equity firm. Cambridge joined the same scheme, investing and estimated of £1.3 million.

The arrangement allowed the universities to avoid a US tax on hedge-funds and receive dividends tax-free, by routing money through what is known as a “blocker” corporation usually executed through a partnership with a US-based fund.

It has also been revealed that 29 Oxford colleges have invested in oil-and-gas linked fund, managed by Coller as well as other offshore partnerships.

Trinity, the richest college in Cambridge, has invested nearly £10 million in different A and B funds.

Other Cambridge colleges involved include Clare, Downing, Gonville and Caius, Jesus, Murray Edwards Newnham, Pembroke, St Catharine's, St John's and Trinity Hall.

The list is extended by the Oxford colleges All Souls, Nuffield, Somerville, St Antony's, St Catherine's, Queen's, Trinity, University, Wolfson and Worcester.

Previously, there have been student and staff protests in both institutions over investments in the fossil fuel industry.

Prem Sikka, an accounting professor at the University of Essex, emphasised the importance of open-door policy when it comes to university investments. He told The Guardian: "All the Caymans offer is secrecy and tax avoidance. There is nothing else there.

"It's not as if this is a place actively engaged in advancing science, research or human knowledge. We need to know what they are doing with the cash."

A spokesman for Cambridge University said: "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.”

A spokesman for Oxford University 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.

"That is £80m for UK education and research which the taxpayer does not have to fund."

The Paradise Papers is a special investigation by the Guardian and 95 media partners worldwide into a leak of 13.4m files from two offshore service providers and 19 tax havens' company registries. The files reveal the offshore financial affairs of some of the world’s biggest multinational companies and richest individuals.

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