Mark Mills
Managing Partner - London
Generation Investment Management

Generation Investment Management's strategy focuses on a long-term investment approach. Long-term investment entails identifying companies that will create sustainable value and succeed in maintaining their competitive edge.

The Generation Investment Management managers combine so-called 'sustainability' research with traditional fundamental corporate analysis. This 'sustainability' research consists in analysing the effects of long-term economic, environmental, social and geopolitical trends on shareholders' investments.

There are a number of different research focuses, such as climate change, demographics, poverty or lobby groups, etc.

By looking at these themes, analysts can gain more of an insight into the long-term problems facing individual sectors. For instance, climate change will have a major impact on the development of the energy sector and on the redefinition of competitive advantages (carbon emissions and new regulations to reduce these emissions, etc.). Companies will have to adapt to the new regulations and to changes in behaviour, which will affect their financial structure (income, margins, operating costs, etc.).
As a result, by detecting and analysing these main themes, it is possible to identify companies that will succeed in managing the risks and exploiting the new opportunities arising from these changes, and determine whether or not they will generate value for their shareholders.

However, Mark Mills believes investors are still somewhat reticent when it comes to taking a long-term view of investment opportunities. Financial markets are still dominated by short-termism, with the emphasis on short-term performance, rapid asset growth and broker fees.
Likewise, myths about the creation of shareholder value still persist.
However, consultancy firms like Mercer have shown that taking account of factors such as social responsibility or ecological concerns will become increasingly important in the years to come.