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Hermes sells majority stake to Federated Investors

Hermes has completed the sale of a majority stake in its business to US fund giant Federated Investors.

Federated has bought a 60 per cent interest in Hermes, which is best known for its envinromental, social and governance funds, for £246m.

A provision for excess regulatory capital brings the total cost of the deal up to £259.9m. Hermes’ headquarters will remain in London.

The deal was made possible after the BT Pension Scheme announced it would sell its majority stake in Hermes in April.  The BT Pension Scheme retains a 29.5 per cent interest following that deal, whilst Hermes management holds a 10.5 per cent interest.

Federated president and chief executive officer Christopher Donahue says: “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.”

Federated is one of the largest US fund houses, managing $392.2bn (£298.9bn) in assets across its 108 funds.

Hermes manages £33.6bn in assets and provides both active investment management and stewardship services.

Both firms have said the deal will contribute to global expansion of their ranges.

Hermes chief executive Saker Nusseibeh says: “Today, Hermes joins with Federated to form a truly global asset manager―dedicated to active management―with mutually beneficial distribution capabilities that leverage both Federated’s extensive network of financial intermediaries in the US and Hermes’ fast-growing client base in the U.K, continental Europe and Asia.”

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