stats
globeinteractive.com: Making the Business of Life Easier

   Finance globeinvestor   Careers globecareers.workopolis Subscribe to The Globe
The Globe and Mail /globeandmail.com
Home | Business | National | Int'l | Sports | Columnists | The Arts | Tech | Travel | TV | Wheels
space


Search

space
  This site         Tips

  
space
  The Web Google
space
   space



space

  Where to Find It


Breaking News
  Home Page

  Report on Business

  Sports

  Technology

space
Subscribe to The Globe

Shop at our Globe Store


Print Edition
  Front Page

  Report on Business

  National

  International

  Sports

  Arts & Entertainment

  Editorials

  Columnists

   Headline Index

 Other Sections
  Appointments

  Births & Deaths

  Books

  Classifieds

  Comment

  Education

  Environment

  Facts & Arguments

  Focus

  Health

  Obituaries

  Real Estate

  Review

  Science

  Style

  Technology

  Travel

  Wheels

 Leisure
  Cartoon

  Crosswords

  Food & Dining

  Golf

  Horoscopes

  Movies

  Online Personals

  TV Listings/News

 Specials & Series
  All Reports...

space

Services
   Where to Find It
 A quick guide to what's available on the site

 Newspaper
  Advertise

  Corrections

  Customer Service

  Help & Contact Us

  Reprints

  Subscriptions

 Web Site
  Advertise

  E-Mail Newsletters

  Free Headlines

  Globe Store New

  Help & Contact Us

  Make Us Home

  Mobile New

  Press Room

  Privacy Policy

  Terms & Conditions


GiveLife.ca

    

PRINT EDITION
Caisse allies with Gore firm for long-term deals
space
Quebec pension manager's $3-billion partnership with company co-founded by former U.S. vice-president part of shift toward holding private investments for up to 15 years
space
By ANDREW WILLIS
  
  

Email this article Print this article
Wednesday, October 10, 2018 – Page B1

The Caisse de dépôt et placement du Québec struck a US$3-billion alliance with a money manager cofounded by former U.S. vice-president Al Gore, creating a partnership that aims to make investments that can be held as long as 15 years.

The Quebec pension manager's deal with Generation Investment Management LLP is part of a larger shift toward holding on to private investments for a longer period of time, said Caisse chief executive officer Michael Sabia. Many private equity funds have shorter time horizons and typically begin to cash out an investment between five and eight years after first putting money in.

In an interview, Mr. Sabia said the fund is frustrated with short-term thinking that prevails on many boards and management teams.

"We've run across CEOs and CFOs who reject growth projects because they won't benefit the bottom line within 18 to 24 months. That's just crazy," he said.

The partnership puts the Caisse, one of the world's largest fund managers with $308-billion in assets, into business with a London-based firm that is focused on investing in sustainable companies, which it defines as businesses that "provide goods and services consistent with a low-carbon, prosperous, equitable, healthy and safe society." Generation was founded in 2004, four years after Mr. Gore's narrow loss to George W. Bush in the 2000 U.S. presidential election led to his exit from active politics.

"We see this approach giving companies the time they need to build great, sustainable businesses," said Mr. Sabia, whose fund has $37billion invested in private equity.

Mr. Sabia predicted that over time, "markets will have to change, by moving to a longer-term perspective."

The two asset managers announced their first investment on Tuesday, acquiring a majority stake in a digital finance company, FNZ, which valued the company at $2.8billion and ranks as one of the largest fintech transactions done this year.

The Caisse and Generation are buying the two-thirds of FNZ currently owned by U.S. private-equity firms General Atlantic and HIG Capital.

FNZ provides back-office wealth management services to approximately five million customers at 60 financial institutions in Europe and Asia; it has 1,400 employees, 400 of whom are shareholders who will continue to own the other one-third of the company.

FNZ fits the concept of a sustainable business by dramatically lowering the cost of wealth management, which Mr. Sabia said provides significant social benefits, as it builds the retirement savings of working-class pension plan members and other middle-class investors, along with institutional investors.

FNZ founder Adrian Durham said his firm's technology, along with regulatory changes, have reduced consumer costs by 40 per cent over the past decade.

Generation was founded Mr.Gore and David Blood, former CEO of Goldman Sachs Asset Management, and currently manages US$20-billion, using environmental, social and governance (ESG) criteria as part of its investment process.

Since its launch, Generation's flagship fund generated 13.5 per cent annual returns, compared with a 7.3 per cent return for its benchmark, according to consulting firm Mercer. In an interview, Mr. Blood said: "Sustainability and ESG are tools that help us understand how a company operates, and how it can deliver superior results over the long term."

Mr. Gore is chairman of Generation and plays an active role as a rainmaker for the firm. Outside politics and business, he's known as the Oscar-winning campaigner against climate change from the documentary An Inconvenient Truth. Mr. Gore is expected to work with the Caisse's private-equity team to find investments for the new partnership.

"We see the sustainability revolution and the technology revolution opening up new opportunities across every sector, including food, finance, energy and manufacturing," Mr. Blood said.

Generation's past successes include an early stake in home automation company Nest Labs, acquired for US$3.2-billion in 2014 by Google parent Alphabet Inc. Generation has also invested in green energy companies, an online supermarket and Toast Inc., a restaurant software company.


Huh? How did I get here?
Return to Main Mathew_Ingram Page
Subscribe to
The Globe and Mail
 

Email this article Print this article

space  Advertisement
space

Need CPR for your RSP? Check your portfolio’s pulse and lower yours by improving the overall health of your investments. Click here.

Advertisement

7-Day Site Search
    

Breaking News



Today's Weather


Inside

Rick Salutin
Merrily marching
off to war
Roy MacGregor
Duct tape might hold
when panic strikes


Editorial
Where Manley is going with his first budget




space

Columnists



For a columnist's most recent stories, click on their name below.

 National


Roy MacGregor arrow
This Country
space
Jeffrey Simpson arrow
The Nation
space
Margaret Wente arrow
Counterpoint
space
Hugh Winsor  arrow
The Power Game
space
 Business


Rob Carrick arrow
Personal Finance
space
Drew Fagan arrow
The Big Picture
space
Mathew Ingram arrow
space
Brent Jang arrow
Business West
space
Brian Milner arrow
Taking Stock
space
Eric Reguly arrow
To The Point
space
Andrew Willis arrow
Streetwise
space
 Sports


Stephen Brunt arrow
The Game
space
Eric Duhatschek arrow
space
Allan Maki arrow
space
William Houston arrow
Truth & Rumours
space
Lorne Rubenstein arrow
Golf
space
 The Arts


John Doyle arrow
Television
space
John MacLachlan Gray arrow
Gray's Anatomy
space
David Macfarlane arrow
Cheap Seats
space
Johanna Schneller arrow
Moviegoer
space
 Comment


Murray Campbell arrow
Ontario Politics
space
Lysiane Gagnon arrow
Inside Quebec
space
Marcus Gee arrow
The World
space
William Johnson arrow
Pit Bill
space
Paul Knox arrow
Worldbeat
space
Heather Mallick arrow
As If
space
Leah McLaren arrow
Generation Why
space
Rex Murphy arrow
Japes of Wrath
space
Rick Salutin arrow
On The Other Hand
space
Paul Sullivan arrow
The West
space
William Thorsell arrow
space





Home | Business | National | Int'l | Sports | Columnists | The Arts | Tech | Travel | TV | Wheels
space

© 2003 Bell Globemedia Interactive Inc. All Rights Reserved.
Help & Contact Us | Back to the top of this page