Al Gore’s Generation Investment Management LLP, which buys shares of companies it deems socially responsible, aims to start a $500 million fund to invest in Asia, said two people briefed on the plan.
The fund may start by July, said the people, who asked not to be identified because the information is private. It will buy shares of Asian companies that adhere to Generation’s investment guidelines of focusing on “economic, social and environmental” sustainability, while eschewing “short-term” profit goals.
Generation is looking to invest in countries including China and India as Asia’s growth, and the region’s demands for natural resources, increasingly affect the world economy. The firm, which targets pension funds and wealthy clients, closed its main global equity fund in 2008 to new money after assets rose to about $5 billion. Gore, the former U.S. vice president, founded London-based Generation in 2004 with David Blood, who previously headed asset management at Goldman Sachs Group Inc.
“I’d be shocked if socially responsible firms weren’t expanding their investing into Asia,” said Douglas Elliott, an economics fellow at the Washington-based Brookings Institution and a former banker at JPMorgan Chase & Co. “What makes it possible is that Asian firms are moving increasingly towards more traditional western corporate forms with a lot more transparency and access to the capital markets.”
Gore, 62, wasn’t available to comment, said Kalee Kreider, his spokeswoman. A spokesman for Generation declined to comment.
Generation’s Asian fund, like the global equity fund, will only make bets that stocks will rise, according to the people. The fund will be separate from Generation’s venture-capital business, which provides funding for renewable-energy firms and companies that create markets for trading carbon emissions.
Generation’s earnings almost quadrupled in 2009 to 31.5 million pounds ($50.8 million) from 8.3 million pounds in 2008, according to a Sept. 9 filing with the U.K.’s Companies House.
Generation was eligible to distribute most of the profits to its 10 partners, including Gore, Blood, 51, and Peter Knight, a campaign manager to former U.S. President Bill Clinton. Five percent of the firm’s earnings go to the Generation Foundation, a U.K.-registered charity that researches sustainable development.
While investment returns aren’t publicly disclosed, the performance of Generation’s global equities fund was “outstanding” for the 12 months ended in March 2010, according to the most recent annual report filed by the U.K. Environment Agency’s pension fund.
The global equities fund beat its benchmark, the MSCI World Index, by 10 percentage points, said the pension fund, which invests in Generation. The MSCI index rose 47 percent over the same period, according to data compiled by Bloomberg.
Generation’s investments include 3.5 million shares of online auction company EBay Inc., 5.8 million shares of payroll processing company Paychex Inc. and 7 million shares of Quanta Services Inc., a contracting firm for electric utilities. Generation disclosed the holdings in a November filing with the U.S. Securities and Exchange Commission.
Gore, who served as vice president for eight years under Clinton, lost the presidency in 2000 to George W. Bush in a disputed election. After losing to Bush, Gore tried to raise public awareness about climate change, and he shared in the 2007 Nobel Prize for his efforts.