Generation Investment Management is a financial advisor firm whose main branch is headquartered in London. However, the firm 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.
Sustainability is a major focus for the firm, which makes sense when you consider that former vice president and environmental activist Al Gore works with the firm.
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. While it's UK arm is larger, Generation has significant assets under management (AUM) in the US, managed by a small team of advisors.
Generation Investment Management Client Types and Minimum Account Sizes
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-term 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.
What to Watch Out For
Generation Investment Management has a clean legal and regulatory record in the eyes of the SEC.
Opening an Account With Generation Investment Management
The firm’s U.S. office is located in San Francisco. The company’s main headquarters is in London. For more information, you can visit either location in person. To get in touch virtually, you can reach over over the phone or through the firm's website.
All information is accurate as of the writing of this article.
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