FINANCE: Diversification at the Vatican

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Under a reorganization brought about by Pope Paul, responsibility for the church's finances has been divided in three. Cardinal Vagnozzi, a onetime apostolic delegate in Washington, coordinates all investments and economic projects. Archbishop Giuseppe Caprio manages the administration of the Patrimony of the Holy See, which, among other things, oversees the Vatican's payroll and supervises an investment staff of 15 lay and clerical experts. Bishop Paul Marcinkus, who is from Cicero, Ill., directs the Institute for Religious Works, which provides a full range of hanking services.

The church's money managers might well be envied by their secular counterparts. They do not have to show an immediate profit, pay few taxes, and do not have to report to shareholders. In addition, they have access to some of the best investment information because leading bankers and brokers yearn for the prestige of landing a Vatican account and send in all sorts of advice. The church also solicits advice through a select group that includes Morgan Guaranty Trust and Hambros Bank.

The Vatican survived the long bear market better than most investors, largely because of its conservative, nonspeculative approach. "A withdrawal and conversion to cash positions have been evident," says a Rome broker. Today, however, the Vatican is interested in new ways to make its money grow in order to meet the rising costs of its responsibilities in an inflationary era. The church has 5,000,000 full-time employees, and cares for 1.3 million persons who are receiving charity in Roman Catholic institutions. "The church must be poor and should also be seen to be poor," said Pope Paul in a speech last June, but his managers concede no contradiction in the fact that the Holy See needs more money. As one Vatican financier told Journalist Home: "You can't run the church on Hail Marys."