Hermes GPE / Insights / Hermes GPE raises $1.6bn for private equity investing

Hermes GPE raises $1.6bn for private equity investing

  • PEC IV co-investment fundraise closes above $600m
  • BT Pension Scheme commits $1 billion for new private equity mandate, including PEC IV
  • Additional $100m raised for sidecar mandate
  • Thematic, growth-oriented investment strategy

Hermes GPE, a leading specialist investor in global private equity, announces that it has successfully closed the latest iteration of its co-investment Club series, PEC IV. 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 extensive global network of GP relationships.

The Fund was launched just over a year ago with an initial target of $350m and an original hard cap of $450m.  With investor support, Hermes GPE was able to substantially exceed these amounts, raising $603.5m from global pension funds, professional investors and asset managers including the BT Pension Scheme (‘BTPS’), State Teachers Retirement System of Ohio, the Local Pensions Partnership, CPP Investment Board, Hostplus, Ardian, Korea Teachers Credit Union, SeAH Group of Korea and Decalia Asset Management. Hermes GPE also raised a further $100m for a co-investment sidecar mandate from an existing client at the same time.

Hermes GPE has a 19-year track record in private equity co-investments, investing over $3bn in more than 200 global co-investments. PEC IV has already committed c$220m to 24 investments in growth-oriented companies and structural investment themes which the firm believe will demonstrate strong through-the-cycle performance, and continues to have a pipeline of similarly attractive deals.

The Hermes GPE team have also started investing the new private equity mandate from BTPS, continuing a long-standing investment partnership. This latest allocation from BTPS totalling $1 billion will be invested over three years and split equally between co-investments and funds.

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

“We are delighted that alongside commitments from new investors, our existing investors have recommitted to partnering with Hermes GPE during 2019.  In particular, the continued support of BTPS is a significant endorsement of our track record and investment strategy.  Raising the latest iteration of our co-investment Club concept well above target, as well as expanding its geographical reach via the addition of new Korean investors, significantly strengthens our co-investment capabilities.

Our investment strategy is guided by a thematic overlay, with a particular  focus on ‘people, planet, productivity’ isolating structural growth themes which are uncorrelated with the economic cycle.  This enables the creation of consistent and sustainable ‘alpha’ independent of market cycles.  We seek to partner with exciting, ambitious, entrepreneurial companies that are disrupting existing business models, and promoting sustainability. Our pioneering track record in co-investments bears out the quality of our team and the many benefits of using co-investments in a private equity allocation – more control over the timing of investments, more control over fees, and faster allocation of capital, all of which combined can generate superior rates of return.”