Sustainability Focus, Extraordinary Performance

In 2014, The McKnight Foundation committed to investing 10% of its $2 billion endowments in strategies that align with its mission. In this analysis three years later, Elizabeth McGeveran discusses how one of those investments is now the best-performing equity fund in their entire endowment. 

 

On October 2, an early market-rate mission-related investment—Generation’s Global Equity Fund—“graduated” from the experimental impact portfolio to the main $2.2 billion endowments. Since the initial investment three years ago, Generation Global Equity has been the best-performing equity fund in the entire McKnight endowment. McKnight’s investment has returned 17.3% against the MSCI World benchmark’s 6.6% (as of June 2017). 

 

Generation Investment Management uses a longer-term investment horizon than typical active managers. Its staff intentionally explores the economic opportunities arising from a planet under pressure—and the resulting investments capitalize on trends such as the growth of cities, increasing water scarcity, and global efforts to reduce greenhouse gases. They see sustainability as an organizing imperative of the new global economy—a point of view that harmonizes with McKnight’s grantmaking goals.