An $18 billion fund manager started by Al Gore and a Goldman Sachs exec is setting its sights on Silicon Valley
- Former vice president Al Gore teamed up with a former head of Goldman Sachs Asset Management to create Generation Investment Management, which invests in sustainable companies in both public and private markets.
- Generation's ethos is rare on Wall Street. The founders say they can be long-term greedy - and make lots of money - while making the world a better place.
- The London-based firm had an office in New York which is moving to San Francisco, as the firm focuses on deploying its money in Asia and in the tech industry.
- Since launching in 2004, Generation's performance numbers have been strong, beating the competition.
NEW YORK - Generation Investment Management, the sustainably focused boutique co-founded by former US vice president Al Gore and Goldman Sachs Asset Management head David Blood, has launched a new office in San Francisco.
The $18 billion firm, which will keep its London headquarters but shutter its New York unit, expanded to the west coast to better access companies and entrepreneurs that fit Generation's purview, particularly in Asia, said Colin le Duc, cofounder and partner at Generation.
Generation invests the bulk of its assets in the stocks of sustainable companies, but also plows money - $30 to $50 million at a time - via its two private equity funds, which manage about $1.2 billion and are overseen by le Duc.
While Generation is a relatively small player in asset management - the firm employs only about 100 people, and its competitors manage well into the trillions - its investment picks have performed well. The company's public equity vehicle returned about 17.5% after fees since September 2014, according to the McKnight Foundation. That's a hefty gain compared to the MSCI World index, which returned 6.6% over the same period.
Le Duc declined to specify how the private equity funds have performed, but hinted at strong performance: "We wouldn't be managing $18 billion [firmwide] today if our clients didn't trust us."
Generation invests in companies it thinks will be successful in the long-term; the companies must provide products or services that have a low-carbon footprint and, in Generation's words, lead to a "prosperous, equitable, healthy and safe society."
Generation's investments include bike share operator Motivate, which is behind New York's Citi Bike, electric bus start up Proterra, and Taiwanese electric scooter maker Gogoro. The firm also backed Toast, a digital platform for restaurants that Generation said would help reduce food waste and digitize paper processes.
The company has also invested in mainstream companies like Microsoft and Qualcomm, the leading chipmaker for mobile phones.
It's a different approach from most investors, particularly hedge funds, which are known for an obsession with earnings calls and short-term plays.
"It's the difference between big game hunting and farming," le Duc said. "Do you spend your time just trying to find that one big win, knock out blow, where you hit the big game, or is it better to have much longer term returns and yield that brings that level of financial reward over a longer period of time?"
"We believe that you can have your cake and eat it, in terms of doing great things for society in how you invest as well as making a lot of money. We see those things actually are a virtuous circle rather than in competition with each other."