Wednesday, March 14, 2007

More On Gore

In the previous post I took a look at Al Gore's preposterous claim that he is not profiting from the carbon offsets that he does not buy from his London investment firm, GIM, Generation Investment Management. He does make a profit (most likely a pretty healthy one) for two reasons: the investment cost him nothing because it is an offset donated by GIM, and GIM seems to have some pretty smart people running the show.

  • David Blood, the former CEO of Goldman Sachs Asset Management, is Managing Partner;
  • Mark Ferguson, previously co-Head of Pan-European Research at Goldman Sachs Asset Management and a Global Equities Portfolio Manager, is Chief Investment Officer;
  • Peter Harris, previously head of International Operations for Goldman Sachs Asset Management, is Chief Operating Officer;
  • Peter S. Knight, formerly Managing Director Met West Financial, lawyer, Chief of Staff for Senator Al Gore (D-TN) from 1977-1989, and Campaign Manager for President Clinton's successful re-election in 1996, is President of Generation U.S.;
  • Colin le Duc, previously Director of Research for SAM Sustainable Asset Management in Zurich and strategy consultant for Arthur D. Little in London, is Head of Research; and
  • Uncle Al, Chairman, manly inventor of the intertubes and manly ex-Vice President of the United States. Knowing full well that carbohydrate offsets would not be available until he invented them in the year 2011, Gore demonstrated manly love for his wife by inserting his tongue down her esophagus at the 2000 Democratic Convention and removing the sugar laden Moon Pie from her stomach that she had eaten off stage just moments prior.

The biographies of the Board members are here. We already touched on Peter Knight and his narrow avoidance of a federal investigation when Janet Reno was fortuitously distracted by a comely co-ed intern from George Mason.

But what else is going on here? The spokesman for GIM, Richard Campell, gave us a clue. The confusion, Campbell said, arose because GIM pays to offset the energy use of its operations and the personal emissions of its 23 employees, including Gore. And of course the bigger carbon footprint you leave, the bigger the offset and the more money that is donated to your account for investment.

We do not invest in any activity of carbon offset. That's nonsense. We are a fund management business that does sustainability research," he added.

But the offset is an investment in an eco-frienfly business? Who is receiving the dough if the investment pays off? Campell is silent on this. But their website isn't so silent. It gives a clearer picture of what they're about than their spokeman.

Long Term Focus: A majority of a company's value is determined by its long-run performance. Investment results for long-only equity strategies are maximized by taking a long-term investment horizon.

That doesn't sound like research to me, sounds more like a 401k.

We Buy High Quality Businesses:Dominant market positions, strong entry barriers, predictable future, pricing power, and secular growth trends.

Hmmmmmmm. No research here.

At the Right Price: Key to our success is our price discipline and the ability to buy companies at sufficiently attractive prices to deliver performance.

Nope, no research here either. Then there's this:

LONDON, February 26
-- Northern Trust has been appointed by Generation Investment Management ("Generation") to provide full investment operations outsourcing for its assets under management. Northern Trust now provides custody, trade services,fund accounting, transfer agency, performance measurement and clientreporting across Generation's fund range domiciled in Dublin and Delaware,and investment administration support services for Generation in connectionwith its global separate account business.

I'm not a financial wizkid and I sure don't know what this means. I thought GIM had all this experience?

As a new firm, we had the opportunity to partner with Northern Trust early on to position our business operations strategically for future growth," said Peter Harris, Chief Operating Officer of Generation. "One of the key advantages for us in partnering with Northern Trust is the benefits we receive from a well run, established global business with large resources and deep expertise. We want to focus on managing our clients' assets and delivering superior investment performance: outsourcing to Northern Trust enables us to do this whilst providing the outstanding operational support we require as we grow our business."

This still sounds like 401k stuff to me. Anyone out there lend a hand? Partnering to receive benefits from a "well run, established global business" and one with "deep pockets espertise"?

Northern Trust Corporation (Nasdaq: NTRS) is a leading provider of investment management, asset and fund administration, fiduciary and banking solutions for corporations, institutions and affluent individuals worldwide.

I hate to be redundant, but this does not sound like a research company. And notice the use of "affluent individuals worldwide." Sounds to me like rich people with guilty consiences seeking offsets.

Northern Trust, a multibank holding company based in Chicago, has a growing network of 84 offices in 18 U.S. states and has international offices in 13 locations in North America, Europe and the Asia-Pacific region. As of December 31, 2006, Northern Trust had assets under custody of US$3.5trillion, and assets under investment management of US$697 billion. NorthernTrust, founded in 1889, has earned distinction as an industry leader in combining high-touch service and expertise with innovative products and technology.

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