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February 2019

Millennials Q&A with Laura Destribats

1. How important are evolving trends when thinking about investments?

 

The Millennial thematic is distinctive in that it is driven by the evolving spending behaviour of this demographic cohort. The two key elements of our investment approach are to:

  • Anticipate how this behaviour will change over time.
  • Identify companies that can benefit from it.

Globally, Millennials’ income now exceeds that of previous generations, making them the world’s most powerful consumer force. The Millennial generation, also known as Generation Y, has grown up in the midst of a technological revolution resulting in very different spending and lifestyle preferences compared to previous generations. This is creating unprecedented disruption to businesses across the world. As this disruption materialises, driven by the consumer preferences of Millennials, investors are likely to be presented with a wide range of investment opportunities.


2. The GS Global Millennials Equity Portfolio was created to invest in businesses that capture value from the trends created by Generation Y. Tell us about the types of companies you look for?

 

We aim to identify companies whose future growth is likely to have high exposure to the rising spending of the global Millennial. These may be relatively new companies that have developed products or services that meet or facilitate the preferences of this generation, or companies that have been able to adapt their legacy business to capture this opportunity.

We require companies to have a proven track record and a market positioning that gives us confidence in a sustainable earnings growth.

GSAM’s Fundamental Equity team, leveraging 60 investment professionals across 6 locations, has created a proprietary universe of 500+ companies that align their business models to service this global generation and have the potential to emerge as winners.

 

3. What do you see as the next big trend that will impact investing in this product?


We think investors need to “future proof” their portfolios to benefit from the disruptive trends driven by the Millennials generation. We invest in both the creators and adopters of innovation across what we view as the most transformational areas of industrial change.

At the moment, given the critical role technology plays in Millennials’ lives, the Portfolio has a heavy technology bias, but it may well change in the future. As the spending patterns of Generation Y evolve, we may be presented with new opportunities in different industries such as health care, renewables and fin-tech.

As active investors, our job is to think ahead in order to capture the full breadth of opportunities.

Related Content

Investing in the Millennial Effect

We believe Millennials are reshaping markets and have the potential to impact businesses across sectors and geographies. Millennials are driving a series of trends that will shape tomorrow’s investment opportunities.

Investment Ideas

Learn more about the key trends that we believe investors should consider when constructing their portfolios.

ABOUT THE AUTHOR

Laura  Destribats

Laura Destribats

Co-Portfolio Manager, GS Global Millennials Equity Portfolio