Federated Hermes private equity subsidiary wins $1 billion mandate

The private equity arm of Federated Hermes has won a $1 billion (€949 million) mandate from the BT Pension Scheme (BTPS) to manage its private equity investments.

The mandate, Horizon III, will be managed by Hermes GPE and is the third awarded to Federated Hermes by BTPS.

It will invest half of the capital in funds and the other half in co-investments.

Hermes was founded in 1983 by BT to manage its pension scheme. The telecommunications group sold a majority stake in the company to Federated Investors and had retained a 29.5% stake in the company until last year.

Despite the decision to sell its remaining stake in Hermes Fund Managers to Federated Hermes, BT remained a client of the asset management group.

“BTPS is a significant client on our private markets platform and the Horizon III mandate demonstrates BTPS’ continued confidence in Federated Hermes’ ability to achieve its investment objectives in a highly competitive global private equity market,” said J Christopher Donahue, President and CEO. officer at Federated Hermes.

Hermes GPE has invested more than $11 billion in nearly 300 funds and more than 260 co-investments since its inception in 2010. It previously managed the Horizon I and Horizon II mandates for BTPS.

“We have been building private equity portfolios for BTPS since the 2000s, which showcases our pension plan roots.

“Our dynamic investment approach combines top-down macroeconomic considerations with detailed bottom-up research that clearly resonates with BTPS and we work closely with its investment team to ensure private equity plays an effective role in the strategy. program asset allocation,” said Peter Gale, CIO and Head of Hermes GPE.

BTPS, one of the largest company pension schemes in the UK, recently managed to reduce its deficit from £4bn to £1.1bn at the end of March 2022.

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