Ex-Generation Executives Launch Urgent $1 Billion Climate Fund

BREAKING NEWS: Resolution Investors LLP, led by former executives from Al Gore’s Generation Investment Management, has just launched a global equity fund aiming for $1 billion in assets. This urgent initiative focuses on climate strategies designed to outperform the MSCI World Index by 2-to-3 percentage points after fees, marking a significant move in the investment landscape.

The fund, which currently holds $25 million in startup capital, is projected to grow to approximately $200 million within its first year. David Lowish, portfolio manager at Resolution and a former partner at Generation, emphasized the critical timing of this launch, highlighting an anticipated acceleration in the green transition due to the escalating impacts of climate change.

“The transition to net zero is a major event,” Lowish stated. “At first, things take longer to change than you think, and then they change much faster than you think.” He warned that investors who fail to adapt may face “very big losses.”

Demand for green stocks has surged this year, despite challenges from political resistance. Since December, the S&P Global Clean Energy Transition Index has skyrocketed nearly 40%, significantly outpacing the S&P 500 Index, which has gained around 15%.

Resolution’s fund will invest in approximately 30 publicly traded companies, focusing on those leading decarbonization efforts or providing products that aid emissions reductions. Notable holdings will include industry giants like Taiwan Semiconductor Manufacturing Co., Microsoft Corp., Alphabet Inc., and Aon Plc.

Lowish noted that climate investing has evolved considerably since its inception. The initial focus on green small-cap stocks has been challenged by rising interest rates post-pandemic, leading to a shift toward large-cap companies making substantial climate commitments. This evolution has paved the way for what he describes as “climate investing 3.0,” where investors are now more discerning about portfolio content.

Resolution’s Global Equity strategy will be classified as an Article 9 product, the strictest green investment category in the European Union. The firm plans to launch a similar strategy in the United States within the next year.

As the world grapples with climate challenges, this fund represents a pivotal moment for investors looking to align financial goals with sustainable practices. The urgency to act is clear, and Resolution Investors is at the forefront of this critical transition. Stay tuned for further developments as this story continues to unfold.