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James Isola
Maitland

+44 (0) 20 7379 5151
hermesgpe-maitland@maitland.co.uk

06th October 2017

Hermes GPE raises c$620m for global co-investment platform

PEC III co-investment club fund closes above target at $389m. Additional $230m raised for sidecar and segregated mandates. Ten existing and new institutional investors spanning the UK, Continental Europe, North America and Asia Pacific. Co-investment program targeting thematic investments in global growth companies and mid-market buyouts.

London, 05 October: Hermes GPE, a leading specialist investor in global private equity, today announces that it has successfully raised c$620m for its co-investment platform.

 

The Hermes GPE PEC III Co-Investment Fund LP (‘PEC III’) has exceeded its $300m target fund size with total commitments of $389m raised from a club of global pension funds, professional investors and asset managers. This group includes the State Teachers Retirement System of Ohio, a leading US public sector retirement system, the Local Pensions Partnership, a collaboration between Lancashire County Pension Fund and London Pensions Fund Authority, Canada Pension Plan Investment Board, the global investment management organisation that invests the assets of the Canada Pension Plan, Hostplus, one of Australia’s largest superannuation funds, Ardian, Continental Europe’s leading private investment company, and a number of other UK and Continental European investors.

 

An additional $230m has been committed for sidecar and segregated co-investment mandates by longstanding Hermes GPE clients.  These mandates will either invest alongside PEC III, or in separate co-investment and alternative strategies.

 

The club concept brings together like-minded investors who contribute deal flow from their own private equity relationships alongside opportunities sourced from Hermes GPE’s own extensive global network of GP relationships.  PEC III has so far committed $200m to 30 sectorally diverse, mid-market and growth investments globally. The Fund follows a thematic investment strategy, seeking to identify companies in niche markets or geographies where the growth potential does not hinge on the wider macroeconomic cycle.

 

The Fund is managed by Hermes GPE which has a 16 year track record in private equity co-investment. The firm was one of the earliest adopters of using co-investments as an integral part of private equity portfolio construction, which it began implementing in 2001.  The team has deployed c$2.5bn in 168 co-investment opportunities worldwide, with PEC II, the predecessor club fund, generating net returns of c23% IRR and a TVPI of 1.6x, comfortably outperforming vintage top quartile benchmarks at 30 June 2017. 

 

Peter Gale, Head of Private Equity at Hermes GPE, said:

Our approach to allocating capital where we ‘should’ rather than where we ‘can’ hinges around identifying investment themes which we believe will generate the best growth investment opportunities for our funds and their investors. This is now a well-proven model, offering control over strategy and portfolio construction, with demonstrable ability to enhance investment returns through lower fees and a reduced J curve.  In this context, I am delighted to welcome back all of our existing club investors and also to welcome new partners from around the globe who have been drawn together by the material benefits that co-investing brings.”

 

Ends.

 

Further information:

James Isola, Maitland

+44 20 7379 5151

 

Notes to Editors

Hermes GPE

Hermes GPE is an active and long-time investor in global private markets with a 25 year investment history spanning private equity funds and co-investments, currently managing cUS$5bn of private equity assets1 for global institutional investors.  We invest on a globally unconstrained basis from offices in London. New York and Singapore.  Hermes GPE is part of Hermes Investment Management (Hermes) which manages assets on behalf of more than 400 clients across equities, fixed income, alternatives and real estate, with c$40 bn2 assets under management. Both Hermes and Hermes GPE are active proponents of responsible investing.  Hermes GPE is authorised and regulated by the Financial Conduct Authority and is a registered investment adviser with the United States Securities and Exchange Commission. Hermes GPE (Singapore) Pte Ltd is regulated by the Monetary Authority of Singapore.

1 AUM as at 30 March, including PEC III which closed on 28 September 2017

2 AUM as at 30 September 2017

 

Hermes Investment Management

 

We are an asset manager with a difference. We believe that, while our primary purpose is helping beneficiaries retire better by providing world class active investment management and stewardship services, our role goes further. We believe we have a duty to deliver holistic returns – outcomes for our clients that go far beyond the financial and consider the impact our decisions have on society, the environment and the wider world.


Our goal is to help people invest better, retire better and create a better society for all.

 

We offer clients access to a broad range of specialist, high conviction investment teams with $40 billion* assets under management. In Hermes EOS, we have the industry’s leading engagement resource, advising on $403.5 billion* of assets.

 

Hermes' investment solutions include:

·         Private markets – Infrastructure, private debt, private equity and real estate

·         High active share equities - Asia, global emerging markets, Europe, US, global, and small and mid cap

·         Credit - Absolute return, global high yield, multi strategy and global investment grade

·         Multi asset - Multi asset inflation

·         Stewardship – Active engagement, intelligent voting, sustainable development and advocacy

 

*Please note the total AUM figure includes £5.9bn of assets managed or under an advisory agreement by Hermes GPE LLP (“HGPE”), a joint venture between Hermes Fund Managers Limited ("HFM") and GPE Partner Limited. HGPE is an independent entity and not part of the Hermes group. £0.1bn of total group AUM figure represents HFM mandates under advice. Source: Hermes as at 30 September 2017 with the exception of one portfolio totalling £10.5m valued as at 31 May 2017.

 

 

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