BT Pension Scheme awards $1bn private equity mandate to Federated Hermes

BT Pension Scheme (BTPS) has awarded a $1bn private equity mandate to Federated Hermes that will be invested over three years.

The mandate, which is called Horizon III, will be managed by Federated Hermes’ wholly owned subsidiary, Hermes GPE LLP.

It will use the global thematically diversified strategy through 50/50 funds and direct co-investment model established following similarly sized investment allocations managed for BT Pension Scheme, Horizon I and Horizon II.

Hermes GPE’s thematic investment strategy focuses on generating risk-adjusted returns by taking advantage of the opportunities created by the net-zero economy, accelerating technological innovation, demographic and societal change, and the global centre of gravity shift.

So far, Hermes GPE has invested more than $11bn across 300 funds and more than 260 co-investments.

Commenting on the mandate announcement, Federated Hermes president and chief executive ofccier, J. Christopher Donahue, said: “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.

“As Federated Hermes continues to invest in its private markets business, which includes private equity, real estate, private debt and infrastructure, we recognize its importance to customers around the globe.”

BT Pension Scheme Management chief executive officer, Morten Nilsson, added: “The Horizon mandates have delivered consistent, sustainable returns for the scheme throughout market cycles. Horizon III demonstrates our continued commitment to this asset class with investments that meet our long-term sustainability goals.”

Hermes GPE chief investment officer and head, Peter Gale, concluded: “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.”

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