ESG

Al Gore's Generation looks to make an impact with $1B sustainable vehicle

May 21, 2019
Generation Investment Management has raised just over $1 billion for its latest vehicle, Sustainable Solutions Fund III. Co-founded by former US Vice President Al Gore and former Goldman Sachs Asset Management CEO David Blood, the fund will use the capital pool to back later-stage startups that focus on environmental solutions, healthcare and financial inclusion.

The fund will seek investments ranging between $50 million and $150 million, consistent with the typical size targeted by the London-based firm, which launched 15 years ago and has more than $22 billion of assets under management.

Generation has already put its third fund to work by leading Andela's $100 million Series D. Also backed by Mark Zuckerberg and Priscilla Chan's company, Chan Zuckerberg Initiative, Andela connects engineering teams with software developers in Africa and reached a $700 million valuation following the round. The sustainable investor has also funded Sophia Genetics, a provider of data-driven medicine applications, leading the biotech company's $77 million round in January.

Tapping into the zeitgeist

Generation's latest fund is a big step up, as its previous effort raised just $300 million. It comes at a time when the notion of environmental, social and governance (ESG) and sustainable investing is gaining traction, with industry heavyweights such as BlackRock CEO Larry Fink asserting that investors must make positive contributions to society.

There also appears to have been a tidal shift against the previous belief that doing good with investments will almost always result in lower-than-market-rate returns. Ronald Cohen, who co-founded global investment giant Apax Partners and now heads the Global Steering Group for Impact Investment, believes that investing under impact guidelines can beat average returns and, importantly, if impact principles were applied across all asset classes, the market could be worth as much as $30 trillion by 2030.

Featured image via Boonyachoat/iStock/Getty Images Plus
 

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