One of the UK’s largest pension funds, the £57 billion ($71 billion) BT Pension Scheme (BTPS), tapped Federated Hermes for a $1 billion private equity mandate.
The mandate with Horizon III will be invested over three years and managed by Hermes GPE LLP, a specialize global private equity investor and wholly owned subsidiary of Federated Hermes. The fund will pursue global thematically diversified strategy through a proven 50/50 funds and direct co-investment model established following similarly sized investment allocations managed for BT – Horizon I in 2015 and Horizon II in 2018.
“The Horizon Mandates have delivered consistent, sustainable returns for the Scheme throughout market cycles,” said Morten Nilsson, chief executive officer for BT Pension Scheme Management, in a statement. “Horizon III demonstrates our continued commitment to this asset class with investments that meet our long-term sustainability goals.”
The private equity arm of Federated Hermes, Hermes GPE has been building private equity portfolios for the pension system since the 2000s.
“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, chief investment officer and head of Hermes GPE.
The firm has invested more than $11 billion across almost 300 funds and more than 260 co-investments. The firm’s thematic strategy is centered on generating risk-adjusted returns via opportunities created by our global economic megatrends largely independent underlying economic cycles: the net zero economy; accelerating technological innovation; demographic and societal change and the global center of gravity shift.
“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 in a statement.