Federated acquires majority interest in Hermes

Ridhima Sharma
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US based investment manager Federated Investors has completed its acquisition of a 60% interest in London-based Integrated ESG Manager Hermes Investment Management.

Hermes manages £33.6bn across 16 differentiated strategies in high-active share equities, credit and private markets, including real estate, infrastructure, private debt and private equity, serving more than 550 clients through wholesale and institutional markets. Hermes also represents £330.5bn through its Hermes Equity Ownership Services (EOS) division.

Hermes’ headquarters—including investment and stewardship teams—remain in London. BT Pension Scheme (BTPS) has retained a 29.5% interest in Hermes, and a 10.5% rest in Hermes was placed into an employee benefit trust by BTPS for the benefit of certain members of Hermes’ management and other employees.

The cost of the acquisition was £246.0m, as previously announced. An additional £13.9m primarily for Federated’s 60% share of Hermes’ estimated excess regulatory capital was paid, for a total purchase price of £259.9m.

J. Christopher Donahue, president and chief executive officer of Federated said: “As environmental, social and governance considerations play a growing role in investment portfolios, we look forward to bringing Hermes’ well-performing ESG integrated investment strategies to US investors―through institutional separate accounts, mutual funds and ESG-related consultancy services.”

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