Wellcome Trust, a £21 billion endowment that finances medical and scientific research, has decided to review the investment approaches of external managers who look after £4.2 billion of equities after they generated sub-par returns in 2016.

Investment chief Danny Truell said too many third-party managers had short-term outlooks and relied too heavily on smaller-cap stocks, where Wellcome already has exposure through private equity interests. “Warning bells are sounding,” he said.