Federated Hermes’ private equity arm has won a $1bn (€949m) mandate from the BT Pension Scheme to manage its private equity investments.
The mandate, Horizon III, will be managed by Hermes GPE and is the third that has been awarded to Federated Hermes by BTPS.
It will invest half of the capital into funds and the other half through co-investments.
Hermes was originally founded in 1983 by BT to manage its pension scheme. The telecoms group sold a majority stake in the business to Federated Investors and had retained a 29.5% stake in the business until last year.
Despite the decision to sell its remaining stake in Hermes Fund Managers to Federated Hermes, BT has remained a client of the asset management group.
‘BTPS is an important customer across our private markets platform and the Horizon III mandate demonstrates BTPS’s continued confidence in the ability of Federated Hermes to deliver its investment objectives in a very competitive global private equity market,’ said J. Christopher Donahue, president and chief executive officer at Federated Hermes.
Hermes GPE has invested more than $11bn across nearly 300 funds and more than 260 co-investments since it was founded in 2010. It previously ran the Horizon I and Horizon II mandates for BTPS.
‘We have been constructing private equity portfolios for BTPS since the 2000s, which showcases our pension scheme roots.
‘Our dynamic investment approach combines top-down macroeconomic considerations with bottom-up detailed research that clearly resonates with BTPS and we work closely with its investment team to ensure private equity plays an effective role in the Scheme’s asset allocation strategy,’ said Peter Gale, CIO and head of Hermes GPE.
BTPS, one of the largest corporate pension schemes in the UK recently managed to cut its deficit by £4bn (€5.2bn) to £1.1bn (€1.3bn) at the end of March 2022.