Sustainable investing at generation investment management

Reichelstein, Stefan ; Bebb, Donna

Document Type: Report
Year of publication: 2016
The title of a journal, publication series: Case studies
Volume: SM257
Place of publication: Stanford, CA
Publishing house: Stanford Graduate School of Business
Publication language: English
Institution: Business School > Stiftungsprofessur für ABWL (Reichelstein 2018-)
Subject: 330 Economics
Abstract: In 2015, Generation Investment Management celebrated the successful 10-year track record of its flagship Global Equity Fund, which outperformed its benchmark index by over 500 basis points per year. A mainstream investment firm whose founders included former United States Vice President Al Gore and former head of Goldman Sachs Asset Management David Blood, Generation integrated qualitative sustainability factors such as environmental, social, and governance issues with traditional financial equity analysis. Along the way, Generation proved to skeptics that it was capable of building a mission-driven investment firm that prioritized returns and delivered superior results. Generation faced a significant challenge to its long-term investment focus during the global financial crisis in 2008. One of its largest holdings, the Irish industrial panel manufacturer Kingspan Group, saw its equity price drop almost 65 percent in one year. Confronted with this precipitous drop, the Global Equity Fund team decided that it needed to revisit its analytical process and question what, if anything, it had missed. This case provides an overview of Generation’s philosophy, culture, and organizational structure. It includes an in-depth look at the Global Equity Fund’s qualitative and quantitative investment process that utilizes the Kingspan Group investment as an example. Optional Excel spreadsheets are available to enable students to analyze Generation’s valuation methodology in greater detail. Learning Objective Students will explore how investment firms can achieve superior performance by considering sustainability and other qualitative factors as an integral part of the investment process. Students will also examine the concept of sustainable capitalism as a potential competitive advantage and how organizational structure and culture contribute to long-term investment success.

Dieser Datensatz wurde nicht während einer Tätigkeit an der Universität Mannheim veröffentlicht, dies ist eine Externe Publikation.

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