(PITTSBURGH, Pa., Aug. 18, 2021) — Federated Hermes, Inc., (NYSE: FHI) a global leader in
active, responsible investing, has today agreed to the acquisition of the remaining 29.5% interest
in Hermes Fund Managers Limited (HFML) held by BT Pension Scheme (BTPS).
Federated Hermes acquired a 60% majority interest in HFML from BTPS in 2018. The transaction
provided a call option for Federated Hermes to purchase the rest of HFML and gave BTPS a put
option to sell its residual shareholding in HFML, in both cases between three-to-six years after the
Both parties have now agreed to close a transaction for BTPS’s remaining 29.5% interest in HFML
on 31 August, 2021. BTPS and Federated Hermes have agreed to an independent fair valuation of
HFML of £394.9 million, (approximately $547.4 million). Consequently, Federated Hermes will pay
£116.5 million, (approximately $161.5 million) to BTPS for its remaining shares in HFML. Federated
Hermes will fund the transaction through a combination of cash and borrowings from its existing
credit line. An employee benefit trust continues to hold approximately 10% of HFML for the benefit
of certain members of HFML’s management and key employees.
J. Christopher Donahue, president and chief executive officer of Federated Hermes, said:
“Over the past three years, our shared values and mutually beneficial areas of expertise have given
us the opportunity to engage with BTPS and enjoy an open dialogue with them as a key client and
owner. Our combined investment management, stewardship and distribution experience make it
prudent for FHI to complete this deal in a timely fashion so that we can continue to focus on
expanding our investment and stewardship capabilities while growing our global distribution
Although BTPS will no longer have an ownership interest in HFML, it will remain a significant client,
with $12.0 billion in assets under management invested in several Federated Hermes sponsored or
managed investment products, including $10.1 billion in long-term private markets strategies as of
31 July, 2021.
Morten Nilsson, chief executive officer, BT Pension Scheme Management, said:
“Over the last decade, HFML has grown from being our in-house team into a strong, global asset
manager responsible for £43.9 billion. We are pleased to see the business flourish under new
ownership, making the sale of our residual shareholding a simple, logical next step.
“We retain strong links with HFML and look forward to working with them as we focus on managing
£57.5 billion in assets towards our 2035 Net Zero goal as a responsible and engaged investor on
behalf of our members.”
Upon closing of the transaction, Federated Hermes expects to continue to pursue a variety of
opportunities for growth as it offers world-class active investment management and stewardship
services that target financial outperformance across a wide range of asset classes for investors
around the world.
Saker Nusseibeh, chief executive officer of Hermes Fund Managers Limited said:
“We are thankful to BTPS, an owner who supported and championed our approach to responsible
investment and sustainable wealth creation long before many had understood its importance. We
look forward to continuing to work with the Scheme as a client in the future. Completing this
transaction represents an important milestone for our firms and is a consequence of the close
collaboration and cultural fit we have enjoyed since Federated Hermes acquired its majority share
in 2018. Since then, we have worked closely as a team and with Federated Hermes’ support we
have implemented growth plans and invested in the overall business, which has had assets
increase from £33.6 billion to £43.9 billion.”
Federated Hermes, Inc. is a leading global investment manager with $645.8 billion in assets
under management as of June 30, 2021. Guided by our conviction that responsible investing is the
best way to create wealth over the long term, our investment solutions span equity, fixed-income,
alternative/private markets, multi-asset and liquidity management strategies. Providing world-class
active investment management and engagement services to more than 11,000 institutions and
intermediaries, our clients include corporations, government entities, insurance companies,
foundations and endowments, banks and broker/dealers. Headquartered in Pittsburgh, Federated
Hermes’ nearly 2,000 employees include those in London, New York, Boston and offices worldwide.
For more information, visit FederatedHermes.com.
BT Pension Scheme is one of the UK’s largest corporate defined benefit pension schemes with
assets of over £57.5 billion (as of 30 June, 2020) and 280,004 scheme members. For more
information, visit btps.co.uk. This press release is issued and approved by BT Pension Scheme
Limited of 1 America Square, 17 Crosswall, London EC3N 2LB. This document is not an offer to sell
or an invitation to apply for any product or service of BTPSM Limited.