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Generation Investment Management Review

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Generation Investment Management

Generation Investment Management is a financial advisor firm headquartered in London that has its United States office in San Francisco. The firm exclusively advises pooled investment vehicles and institutional clients, including investment companies, profit-sharing or pension plans, charitable organizations and state or municipal government entities. The only way that individuals can invest with the firm is through one of its pooled investment vehicles. 

The firm has more than $18 billion in assets under management worldwide, with more than $8 billion attributable to the U.S. business, according to SEC filings. Sustainability is a major focus for the firm, which makes sense when you consider the firm’s chairman: former vice president and environmental activist Al Gore.

Generation Investment Management Background

Generation Investment Management U.S. is wholly owned by Generation Investment Management LLP. The two are collectively known as Generation. The firm was founded in 2004. Its U.S. business has 20 employees, including four who work in an advisory capacity.

What Types of Clients Does Generation Investment Management Accept?

Generation Investment Management serves investment companies, pooled investment vehicles, pension and profit-sharing plans, charitable organizations and state or municipal government entities. Unlike some other firms, Generation’s client base is fairly small. Its Form ADV (SEC-filed paperwork) indicates that the firm’s U.S. business serves fewer than 25 clients.

The minimum initial investment required for an individual to invest in the firm’s Global Equity fund is $3 million, with a minimum additional investment of $1 million. The minimum initial investment for the firm’s Asia fund is $1 million, with a minimum additional investment of $500,000.

Services Offered by Generation Investment Management

Generation Investment Management offers financial advisory services to institutional clients. It also provides sub-advisory services to the firm’s UK business. In addition to advisory services, the firm also provides investment research on the economy, industries, securities and market trends.

Generation Investment Management Investment Philosophy

Generation has three major investment strategies: Global Equity, Asia Equity and Growth Equity.

The Global Equity and Asia Equity strategies have some overlap. The Global Equity strategy uses a long time horizon, as it aims to remain patient and invest in companies with quality management teams and sustainable business strategies. The fund focuses on a select group of companies, allowing analysts to dig deep into how the companies work and what the best investment choices may be. The Asia Equity strategy uses similar strategies but focuses on equities in Asia. The organization of the investing teams allows both the Global and Asia Equity funds to cross-pollinate ideas and leverage the power of both. 

Meanwhile, the Growth Equity strategy focuses on investing globally in growth-stage businesses. It looks for companies with proven technology, as well as firms that are “at the leading edge of the transition to a sustainable economy.” The Growth Equity fund is a closed fund and is not marketed.

Fees Under Generation Investment Management

Clients who invest in the Global Equity Fund are charged a management fee of 1.00% of assets under management per annum. That fee may be reduced to 0.75% for clients who have invested continuously for five years or more. 

For the Asia fund, Generation is currently offering a reduced fee of 0.75% per year. The firm will continue to offer this reduced fee rate until it’s determined that it’s reached capacity, at which point it will charge 1.00% of assets under management. 

In addition to the above fees, clients may be charged an incentive fee of 20% of the amount by which capital appreciation outperforms a  specified benchmark within a certain period of time. The firm says that these fees may be subject to a “deferral mechanism,” which means that it will delay payment for up to three years depending on continued outperformance of benchmarks. 

Though the Growth Equity Funds are closed and not marketed, Generation does list its associated fees in its Form ADV. The firm charges 1.50% from the closing date until the end of the investment period, and will continue that rate until the tenth anniversary of the fund's final closing date. The fund also has a carried interest arrangement in which the carried interest partner will receive an incentive share of 20% above an 8% preferred return.

Disclosures

Generation Investment Management does not have any disclosures on its record from the past 10 years.

Where Is Generation Investment Management Located?

The firm’s U.S. office is located in San Francisco. The company’s main headquarters is in London.

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How Many Years $1 Million Lasts in Retirement

SmartAsset's interactive map highlights places where $1 million will last the longest in retirement. Zoom between states and the national map to see the top spots in each region. Also, scroll over any city to learn about cost of living in retirement there.

Least
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Rank City Housing Expenses Food Expenses Healthcare Expenses Utilities Expenses Transportation Expenses

Methodology SmartAsset calculated the average cost of living for retirees in the largest U.S. cities. Using that calculation, we determined how many years $1 million would last in retirement in each major city.

First, we looked at data from the Bureau of Labor Statistics (BLS) on the average annual expenditures of seniors throughout the country. We then applied cost of living data from the Council for Community and Economic Research to adjust those national average spending levels based on the costs of each expense category (housing, food, healthcare, utilities, transportation and other) in each city.

We assumed the $1 million would grow at a real return (interest minus inflation) of 2%, reflecting the typical return on a conservative investment portfolio. Finally, we divided $1 million by the sum of each of those annual numbers to determine how long $1 million would last in each of the cities in our study.

Sources: Bureau of Labor Statistics (BLS), Council for Community and Economic Research