The universities of Oxford and Cambridge secretly invested millions in offshore funds, according to documents unearthed within the Paradise Papers.
The Guardian reports that both universities committed significant funds to multibillion-dollar private equity firms based in the Cayman Islands.
Leaked documents show the university bodies of Oxford invested £2.6 million and Cambridge £1.2 million in Coller International, a Guernsey-based private equity firm.
The money was reportedly routed through what is known as a “blocker” corporation, typically done in partnership with a fund based in the US, which allows them to receive tax-free dividends.
The papers show 29 Oxbridge colleges have invested in offshore partnerships, with most of these participating in an oil-and-gas linked fund managed by Coller.
Trinity College, the richest in Cambridge, led the list with nearly £10 million invested in two separate A and B funds.
Prem Sikka, a professor in accounting at the University of Essex, 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.”
Other Cambridge colleges on the list include Clare, Downing, Gonville and Caius, Jesus, Murray Edwards, Newnham, Pembroke, St Catharine’s, St John’s and Trinity Hall.
The Oxford colleges named are All Souls, Nuffield, Somerville, St Antony’s, St Catherine’s, Queen’s, Trinity, University, Wolfson and Worcester.
Both universities have faced protests from staff and students over their investments in the fossil fuel industry in recent years.
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 divestment working group was set up by University council in May 2016 to consider the question of divestment from businesses involved in fossil fuel industries.
“The university is currently seeking views from a wide range of organisations and individuals. In addition to written submissions we are holding Town Hall meetings open to staff and students from across the University.”
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.