Generation Investment Management halts plans for a second credit fund

Generation Investment Management has halted plans for a second credit fund, saying it will “fully focus on equity strategies” in the future.

The sustainability specialist, set up by Al Gore and David Blood in 2004, launched its first fixed-income fund in 2013, backed by Sweden’s AP3 and the UK”s Environmental Agency Pension Fund, among others. The Global Credit Fund specialises in direct lending to sustainable, privately-owned, growth-stage SMEs.

On its website, Generation describes the fund as “Global Credit Fund I, the first fund of its Global Credit strategy”. But, having allocated all the capital from that fund, the firm says it will not pursue any more fixed-income vehicles.
“Following the successful deployment of its first credit fund and on consideration of the resources required to scale up the credit strategy, Generation decided to fully focus on its equity strategies,” the firm said.A spokesman for the company added that the resources referred to were “people, in particular”.

Generation added that the current portfolio managers, Mike Ramsay and Julian Curtis, “continue to manage the first fund as employees of Generation” and “we are exploring together how we can back and support the team outside of the firm, as they develop the second fund platform with new cornerstone capital.”

The spokesman told RI that it was too early to say what any new strategy would involve, or how Generation would be involved, “but it could mean financial backing, it could mean investing in the new fund… a range of things are currently being discussed.”

This is not an approach Generation has taken with any of its other asset classes. It runs strategies in global equities, growth equities and Asia equities.