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.

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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."

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Former US Vice President and Climate Reality Project Chairman, Al Gore gives a speech during Abu Dhabi Ascent event, a ministerial meeting to prepare for a September 23 climate change summit in New York on May 4, 2014 in Abu Dhabi. Ban Ki-moon urged 'bold' actions by countries around the world to reduce greenhouse emissions and fight global warming. AFP PHOTO / MARWAN NAAMANI (Photo credit should read MARWAN NAAMANI/AFP/Getty Images)
ASPEN, CO - JUNE 30: Hillary Rodham Clinton, David Gergen and Al Gore speak during Afternoon of Conversation at the Aspen Institute on June 30, 2014 in Aspen, Colorado. (Photo by Riccardo S. Savi/Getty Images)
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Former U.S. Vice President Al Gore, left, speaks as professor David Gergen listens during the Aspen Ideas Festival in Aspen, Colorado, U.S., on Monday, June 30, 2014. The festival gathers some of the foremost thinkers in the world with civically-minded leaders in business, the arts, politics, philanthropy to share ideas and questions and drive thought to action. Photographer: Matthew Staver/Bloomberg via Getty Images
Former U.S. Vice President Al Gore arrives to speak during the Aspen Ideas Festival in Aspen, Colorado, U.S., on Monday, June 30, 2014. The festival gathers some of the foremost thinkers in the world with civically-minded leaders in business, the arts, politics, philanthropy to share ideas and questions and drive thought to action. Photographer: Matthew Staver/Bloomberg via Getty Images
ASPEN, CO - JUNE 30: Al Gore speaks at Afternoon of Conversation during the 2014 Aspen Ideas Festival at the Aspen Institute on June 30, 2014 in Aspen, Colorado. (Photo by Leigh Vogel/Getty Images)
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LOS ANGELES, CA - JUNE 07: (L-R) Honoree Jim Berk, former United States Vice President Al Gore and Honoree Jeff Skoll inside the 13th Annual Chrysalis Butterfly Ball sponsored by Audi, Kayne Anderson and Stella Artois in Los Angeles, California on June 7th, 2014. (Photo by Jason Merritt/Getty Images for Chrysalis)
NEW YORK, NY - JUNE 05: Al Gore and Karenna Gore Schiff attend the 12th Annual James Parks Morton Interfaith awards dinner at Hilton Hotel Midtown on June 5, 2014 in New York City. (Photo by Walter McBride/Getty Images)
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JOHANNESBURG, SOUTH AFRICA MARCH 13: (SOUTH AFRICA OUT) Former US Vice President Al Gore addresses Climate Reality Leadership trainees at the Sandton Convention Centre on March 13, 2014 in Johannesburg, South Africa. Al Gore urged South Africa to cut back on coal-generated electricity and urged a new dialogue about the use of renewable sources and greener technology. (Photo by Denzil Maregele/Foto24/Gallo Images/Getty Images)
JOHANNESBURG, SOUTH AFRICA MARCH 13: (SOUTH AFRICA OUT) Former US Vice President Al Gore addresses Climate Reality Leadership trainees at the Sandton Convention Centre on March 13, 2014 in Johannesburg, South Africa. Al Gore urged South Africa to cut back on coal-generated electricity and urged a new dialogue about the use of renewable sources and greener technology. (Photo by Denzil Maregele/Foto24/Gallo Images/Getty Images)
Former US Vice President Al Gore listens during a session in Davos on January 24, 2014. Some 40 world leaders gather in the Swiss ski resort Davos to discuss and debate a wide range of issues including the causes of conflicts plaguing the Middle East, and how to reinvigorate the global economy. AFP PHOTO ERIC PIERMONT (Photo credit should read ERIC PIERMONT/AFP/Getty Images)
Former US Vice President Al Gore speaks during the Center for American Progress(PAC) 10th Anniversary Conference in Washington, DC, October 24, 2013. AFP PHOTO / Jim WATSON (Photo credit should read JIM WATSON/AFP/Getty Images)
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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." 

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.  

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."

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