What company analysis does Generation undertake?

David Blood: Generation takes great care to understand each company before considering it for inclusion in the fund. Each company is subject to rigorous analysis from both individual analysts and the entire investment team, based on the quality of the business and its management and across a number of financial measures.

Sustainability research plays an important role in the assessment of both business and management quality. Each company is assessed based on sustainability factors such as human resource practices, stakeholder management, corporate culture, licence to operate and corporate governance.

The output of this analysis is inclusion on what we call our ‘focus list’ - a list of approximately 100 companies we would like to invest in if the price meets Generation’s valuation targets.

Is Generation a high conviction manager?

David Blood: Yes. Generation will only invest in a company if we have high conviction that it has the potential to deliver superior investment returns over the long-term. The Generation Global Sustainability Fund’s strategy is to invest in only 25 to 60 companies from more than 20,000 companies listed on the sharemarkets around the world. We believe that a concentrated stock portfolio provides the potential to gain the most from our intensive research process.

How is Generation Investment Management structured?

David Blood: Generation is privately owned with 15 of the 26 employees having a stake in the company. Al is the Chairman of Generation Investment Management and I’m the Managing Partner. Employees also have a significant amount of their own personal wealth invested in the firm’s funds which aligns their interests with those of investors.