Generation pays out £10.7m to Blood as profits jump

Firm pays back some of co-founder’s investment.

London-based, Generation Investment Management, the sustainability themed house co-founded in 2004 by David Blood and former US vice-president, Al Gore, paid out £10.7m (€12.3m) in 2010 to Blood, its president and chief executive, a rise of 39% on the £7.7m he was paid in 2009. The remuneration hike came on the back of increased profits in the year to December 2010 of £49.1m, up 55.8% on 2009’s £31.5m, according to a UK accounts filing. Blood, a former Chief Executive of Goldman Sachs Asset Management, is understood to have been the sole capital partner in Generation, a limited partnership, when it started and a spokesman for the company said the remuneration level reflected an agreement by the board to start paying back Blood’s investment. The profits rise meant that Generation’s 20 partners, including Gore, were paid a combined £49.4m in 2010. The firm added 11 new partners in January 2010. In 2009, the nine partners at the time split £31.6m for the year.Clients of Generation, which runs about $7bn in assets, say performance has been good in recent years. The firm is paid long-term performance fees based on 3-5 years of returns. Generation runs a global equities mandate for the UK’s Environment Agency Pension Fund, which publishes its manager performance numbers. For the pension fund’s year 2009/2010, Generation was among the fund’s top three performing managers, returning 54.1% against a benchmark of the MSCI Developed World index, which returned 44%. Generation is given a target of 3% outperformance, which meant it was 7.1% up for the year.
Performance has slipped in the last year. For the pension fund’s year 2010/2011, Generation returned 6.9% against the benchmark of 7.4%, meaning it was 3.5% below target. Generation pays 5% of its profits to the Generation Foundation, which makes grants to sustainability-themed charitable organisations.