Federated Hermes Receives $1B PE Mandate from BT Pension Scheme

By David G. Barry

BT Pension Scheme, one of the UK’s largest occupational pension schemes, has awarded a $1 billion private equity mandate to Federated Hermes, Inc. Called Horizon III, the mandate will be managed by Hermes GPE LLP, a private equity firm which is a wholly owned subsidiary of Federated Hermes. It will be invested over three years through a 50/50 funds and direct co-investment model. BT Pension, which as of June 30, 2021, had 57 billion pounds in assets ($70 billion U.S.), made a $850 million mandate to the investment firm in 2015 (roughly $1 billion U.S. today) and a $750 million mandate in 2018 (roughly $927 million U.S. today), said Amy Mankelow, who is head of communications and external relations for BTPS. She said that BTPS has a “long-standing relationship with Federated Hermes across private markets.” Hermes GPE has invested more than $11 billion across nearly 300 funds and more than 260 co-investments. Its thematic investing strategy focuses on generating risk-adjusted returns by exploiting the opportunities created by four trends: the net zero economy; accelerating technological innovation; demographic and societal change; and the global center of gravity shift. In a statement, Morten Nilsson, CEO of BT Pension Scheme, said the mandates “have delivered consistent, sustainable returns for the Scheme throughout market cycles.” He said the new mandate demonstrates the scheme’s “continued commitment to this asset class with investments that meet our long-term sustainability goals.” J. Christopher Donahue, president and CEO of Federated Hermes, also in a statement said that that BT Pension’s investment demonstrates its “continued confidence in Federated Homes to deliver its investment objectives in a very competitive global private equity market.” Federated Hermes has $631.1 billion in assets under management and in addition to alternative/private markets also invests in equity, fixed income, multi-asset and liquidity management strategies for more than 11,000 institutions and intermediaries globally.