Funding for Socially Responsible Asian Businesses

As concerns over China's economy grow, Generation Investment Management LLP is looking to start a $500 million fund in Asia. The investment firm, founded by former Vice President Al Gore, buys shares in companies that are socially responsible.

People familiar with the work of Generation Investment Management say that fund may start in July of this year. The fund will buy shares in Asian companies that focus on "economic, social and environmental" sustainability. China and India will be on the list of nations that Generation Investment will target.

Generation Investment Management also runs a venture-capital business that provides funding for renewable energy projects. The proposed Asian fund will separate itself from the larger venture-capital business.

In 2009, Generation Investment's earnings quardrupled to 31.5 million pounds. Most of the company's profits are eligible for distribution to its 10 partners, including Gore, however, five percent of the earnings are funneled to Generation Foundation, a U.K.-based non-profit that research sustainable development.

Critics of the proposed Asian fund worry about the longevity of some of the Asian markets, including China. At the end of 2010, Chinese GDP growth was at 10.3% and inflation jumped to 4.6%. Both of those results were well ahead of even the Chinese government´s own predictions. Some economists are asking if the government can calm rising economic indicators without intimidating long-term growth patterns.

Photo credit: Jeff McNeill