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Generation Investment Management company logo
Asset/Investment Management
FINANCE | Investment Firms & Funds
generationim.com

Investments

86

Portfolio Exits

16

Funds

5

Partners & Customers

2

About Generation Investment Management

Generation Investment Management's approach to active investment management is based on an investment process that fully integrates sustainability analysis into decision-making and is focused on long-term performance.

Headquarters Location

20 Air Street

London, England, W1B 5AN,

United Kingdom

+44 (0) 207 534 4700

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Latest Generation Investment Management News

‘This is bullying’: How much of your money are gas suppliers holding?

Feb 3, 2023

Revelations that suppliers have been stockpiling credit amid soaring bills have sparked fears customers are being taken advantage of Energy companies have raised direct debits while holding billions of pounds’ worth of customer cash. Photograph: Owen Humphreys/PA Energy companies have raised direct debits while holding billions of pounds’ worth of customer cash. Photograph: Owen Humphreys/PA Last modified on Fri 3 Feb 2023 08.56 EST Mark Wilson was furious on receiving a message asking him to bring his energy account “back on track”. Ovo, which had taken on his supply after acquiring SSE’s retail arm, was proposing to increase his monthly direct debit from £102 to £168. Wilson* had built up £500 in credit, and had even reduced his direct debits previously as his regular payments were overshooting consumption. “This is the most outrageous and terrifyingly abusive email,” he wrote to Ovo. “How can I need to get back on track when I am not off track, never have been, and am not likely to leave the rails? This is bullying.” Wilson was not the only one to receive a nasty shock this winter, as some companies sought to increase customer direct debit payments – even for those who had built up healthy credit balances. It emerged last week that while Britons were sat indoors in woolly hats with the heating off to save on bills, suppliers had hoarded an estimated £9bn of customer cash by November last year, more than four times previous calculations. In Wilson’s case, Ovo later said readings passed on by SSE were wrong, apologised, and offered to reduce his direct debit payments. Typically energy customers on direct debits will build up credit during summer, when usage is low, and suppliers will run that down over the pricey winter months. However, the surge in wholesale gas prices, which began in 2021, has tested existing norms and exposed some of the cascade of suppliers that went bust while using customer money to fund their business. An industry row over whether customer deposits should be ringfenced ensued. Ofgem accused suppliers of using customers “like an interest-free company credit card” but later stopped short of ordering full ringfencing. Now – with energy suppliers already in the crosshairs over their treatment of often-vulnerable prepayment customers – there are fears this situation could be repeated as energy rationing and high prices play havoc with billing. The Guardian asked Britain’s biggest energy suppliers how they were treating customer credit balances. A surge in wholesale gas prices has led Centrica, which owns British Gas, to upgrade profit expectations three times. Photograph: Toby Melville/Reuters Centrica (British Gas) Direct debit customers: About 3.75 million Centrica, which has been most vociferous in calling for ringfencing , said it has about £400m in customer deposits held in a separate account, holding about £130 per customer. The company’s division supplying household energy is expected to make a loss in the second half of its financial year, but a surge in wholesale gas prices has led the group to upgrade profit expectations three times as its finances are boosted by soaring wholesale gas prices after Russia’s invasion of Ukraine. “The real question is whether customers can be repaid [their credit balances] on demand. We can, as this money is not being used for working capital. It is only used to buy energy,” a spokesperson said. Chief executive Chris O’Shea has also expressed concerns that suppliers are being paid government money upfront to cut bills, risking going bust while holding taxpayer cash. O’Shea was under pressure this week after it was alleged that agents working on behalf of British Gas had broken into homes to fit prepayment meters when there were signs that young children and people with disabilities lived in the properties. Eon Direct debit customers: About 2 million Eon expressed dismay at Ofgem’s decision not to ringfence customer credit balances after the failure of about 30 energy suppliers, which ultimately cost customers billions. The supplier, which took overNpower’s retail arm in 2019, has called for a social tariff to prevent vulnerable customers from paying high energy bills. Eon declined to give an average customer credit balance or say how much in customer credit it held. Chief executive Michael Lewis told the Guardian: “Ofgem’s own report says companies were allowed to enter this market on a ‘free bet’, with the cost ultimately getting picked up by customers around the country. “Our view is that this ‘free bet’ has to end. It can’t be acceptable that new suppliers are allowed to gamble with customers’ money, which is why we’re disappointed Ofgem has changed its mind on ringfencing credit balances.” Eon has called for a social tariff to prevent vulnerable customers from paying high energy bills. Photograph: Rosemary Roberts/Alamy Ovo Energy Direct debit customers: Undisclosed At the start of the pandemic, Ovo received an £8.9m fine from Ofgem for communications and billing issues. The regulator found inaccurate annual statements were sent to more than 500,000 customers over a period of three years and Ovo underestimated consumption over one winter, meaning customers were under or overcharged. More recently, customers have reported issues with their Ovo bills, including one who was told she owed £44,800 for two months’ supply to her one-bedroom flat. The supplier is understood to have argued against ringfencing customer money. Ovo declined to give an average customer credit balance, say how much in customer credit it held or comment for this article. EDF Direct debit customers: About 2 million The energy supplier, which is owned by the French state and runs Britain’s nuclear power stations, said all of its customers are in credit and debit to it at different points in the year, depending on usage. It is understood EDF held typically held about £300m of residential customer credit during 2021, but was owed more than £1bn by customers through the year on average. EDF said it is “supportive” of Ofgem’s efforts to improve the financial resilience of energy suppliers. A spokesperson said: “We don’t use credit balances to fund our business growth. We support targeted, risk-based measures that ensure suppliers are financially responsible and protect customers.” EDF said it reviews each account twice a year to assess the risk of getting into debt or building up too much credit based on their usage and prices in the market. EDF declined to give an average customer credit balance. Octopus Energy Total customers: 3.4 million (“almost all” direct debit customers) Octopus vehemently opposed the proposition to ringfence customer deposits. It has argued it instead favours an insurance policy for credit balances, comparable with the kind provided by holidaymakers through the ATOL scheme, as this would provide the same level of protection but cost five to 10 times less than ringfencing credit balances. The supplier stated that it “does not use customer credit balances to fund its business operations” and said that, for nine months of the year, customers owe the firm more money than is owed to them. Octopus said “whilst our customer credit balances were £660m at the end of November, at the same time our customers owed us £510m for energy they had used and not yet paid for” – meaning it held £150m in the month at which credit balances are their highest, at the start of winter. On average, it held £44 per customer. Octopus Energy stated that it ‘does not use customer credit balances to fund its business operations’. Photograph: Neil Hall/EPA The company, which also owns Bulb, said it has used the £1bn of funding it has raised from investors, including Al Gore’s Generation Investment Management to invest and grow. ScottishPower Direct debit customers: About 3 million The Glasgow-based supplier, which is owned by Spain’s Iberdrola, reviews customer accounts every three months. It said its customers “see the benefit of spreading the cost of their energy over the year” to protect against high winter bills. The company’s chief executive, Keith Anderson, has been vocal during the energy crisis, with concerns over the number of Britons falling into fuel poverty . “As the UK’s only integrated electricity company, investing £10bn in the UK by 2025, ScottishPower does not rely on credit balances for working capital,” a spokesperson said. ScottishPower declined to give an average customer credit balance or say how much in customer credit it held. A ScottishPower spokesperson said the firm ‘does not rely on credit balances for working capital’. Photograph: PA Images/Alamy Christine Farnish, a former Ofgem board member, has said that “firms are collecting more than they absolutely need”. Darren Jones, chairman of the business, energy and industrial strategy select committee which studied ringfencing, says: “On first look, it makes sense to ringfence customer balances because it’s customers’ money and a few companies that went bust last year had such bad practice relying on spending other people’s money that they didn’t run their business well enough, and walked away with millions of customers money. “But, in reality, if you do ringfence it gives an advantage to larger listed players over privately owned and smaller companies because they can draw down capital more cheaply, which would result in higher prices for customers with smaller companies.” Ofgem suggests consumers who believe suppliers have amassed too much of their money contact the firm to ask for their money back. Last July, Ofgem accused five suppliers of “moderate or severe” weaknesses in the way they charge customers direct debits. It ordered suppliers that had increased direct debits by more than 100% to review them, affecting more than 500,000 customers. With consumers rationing their energy use, predicting and calculating bills has become difficult for suppliers. With bills expected to remain much higher than historical averages for some time, that situation is unlikely to let up. *Name has been changed

Generation Investment Management Investments

86 Investments

Generation Investment Management has made 86 investments. Their latest investment was in Weka as part of their Series D - II on November 11, 2022.

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Generation Investment Management Investments Activity

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Generation Investment Management Portfolio Exits

16 Portfolio Exits

Generation Investment Management has 16 portfolio exits. Their latest portfolio exit was Tigo Energy on December 06, 2022.

Date

Exit

Companies

Valuation
Valuations are submitted by companies, mined from state filings or news, provided by VentureSource, or based on a comparables valuation model.

Acquirer

Sources

12/6/2022

Acq - Pending

$99M

1

4/4/2022

Reverse Merger

$99M

7

9/23/2021

IPO

$99M

Public

16

9/22/2021

IPO

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$99M

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10

7/23/2021

IPO

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$99M

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10

Date

12/6/2022

4/4/2022

9/23/2021

9/22/2021

7/23/2021

Exit

Acq - Pending

Reverse Merger

IPO

IPO

IPO

Companies

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Valuation

$99M

$99M

$99M

$99M

$99M

Acquirer

Public

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Sources

1

7

16

10

10

Generation Investment Management Acquisitions

1 Acquisition

Generation Investment Management acquired 1 company. Their latest acquisition was FNZ on October 09, 2018.

Date

Investment Stage

Companies

Valuation
Valuations are submitted by companies, mined from state filings or news, provided by VentureSource, or based on a comparables valuation model.

Total Funding

Note

Sources

10/9/2018

Private Equity

$99M

$1,400M

Acq - Fin

2

Date

10/9/2018

Investment Stage

Private Equity

Companies

Valuation

$99M

Total Funding

$1,400M

Note

Acq - Fin

Sources

2

Generation Investment Management Fund History

5 Fund Histories

Generation Investment Management has 5 funds, including Generation IM Sustainable Solutions Fund III.

Closing Date

Fund

Fund Type

Status

Amount

Sources

5/21/2019

Generation IM Sustainable Solutions Fund III

Late-Stage Venture Capital

Closed

$1,000M

2

6/30/2014

Generation IM Climate Solutions Fund II LP

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$99M

10

4/29/2008

Generation IM Climate Solutions Fund LP

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$99M

10

Generation IM Just Climate Fund

10

Generation IM Sustainable Solutions Fund IV

10

Closing Date

5/21/2019

6/30/2014

4/29/2008

Fund

Generation IM Sustainable Solutions Fund III

Generation IM Climate Solutions Fund II LP

Generation IM Climate Solutions Fund LP

Generation IM Just Climate Fund

Generation IM Sustainable Solutions Fund IV

Fund Type

Late-Stage Venture Capital

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Status

Closed

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Amount

$1,000M

$99M

$99M

Sources

2

10

10

10

10

Generation Investment Management Partners & Customers

2 Partners and customers

Generation Investment Management has 2 strategic partners and customers. Generation Investment Management recently partnered with Octopus Renewables on March 3, 2022.

Date

Type

Business Partner

Country

News Snippet

Sources

3/30/2022

Partner

United Kingdom

With UK energy prices rising, green energy provider Octopus signs up to European wind power

Octopus Renewables , a fund management specialist within the Octopus , has signed four deals to ramp up wind power generation across Europe and to help deliver Net Zero .

1

10/9/2018

Partner

Canada

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10

Date

3/30/2022

10/9/2018

Type

Partner

Partner

Business Partner

Country

United Kingdom

Canada

News Snippet

With UK energy prices rising, green energy provider Octopus signs up to European wind power

Octopus Renewables , a fund management specialist within the Octopus , has signed four deals to ramp up wind power generation across Europe and to help deliver Net Zero .

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Sources

1

10

Generation Investment Management Team

8 Team Members

Generation Investment Management has 8 team members, including , .

Name

Work History

Title

Status

Peter Sage Knight

Founder

Current

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Name

Peter Sage Knight

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Work History

Title

Founder

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Status

Current

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