Generation Investment Management, a sustainability-focused public and private equity firm co-founded by Al Gore, is upping its bet on growth-stage companies via a new $1.7 billion fund.
With $36 billion in total assets under management, Generation puts the majority of its money behind publicly traded companies. But the new investment vehicle — dubbed Sustainable Solutions Fund IV — is still nothing to sneeze at, representing a 70% jump from the size of the firm’s previous growth fund.
This time around, Generation aims to plow between $50 million and $150 million into 15 to 18 “high-growth” businesses that advance environmental and social goals, such as mitigating greenhouse gas emissions, tackling inequality in finance and making healthcare more accessible. Ideally, Generation’s investment targets are “driving the transition to the sustainable future” while pulling in somewhere between $30 million and $300 million in annual revenue, partner and growth equity head Lila Preston said in a call with TechCrunch.
“From the very beginning Generation put sustainability research at the core of its investment process, because we thought it helped us find the very best businesses and management teams that we could back over the long term,” said Preston. That research, which goes into topics like electrifying transportation, remote work and circular economies, offers some explanation as to why Generation’s portfolio includes both project management tool Asana as well as more obviously sustainability-minded companies. The latter camp includes the likes of Pivot Bio, which aims to tackle farming’s nitrogen pollution problem.
“You can’t have a healthy life on a sick planet,” and “you certainly can’t have a net-zero future without inclusion,” added Preston.
London and San Francisco-based Generation thoroughly reports its sustainability research each year, but the company is not as forthcoming about its investors. Declining to name specific limited partners, the firm said they are largely based in North America and Europe, and include pension funds, investment banks and rich people.