Hermes ups the pace with new fund

17 November 2003

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Hermes Private Equity (HPE) is moving ahead with plans to increase its exposure to the asset class following the first close of its new buyout fund on Â£200m in February and the recent appointment of four new staff. Hermes Private Equity Partners I was cornerstoned by the British Telecom Pension Fund; the opportunity still exists for a small number of other institutions to enter the partnership. Historically, HPE was limited primarily to investing in third parties' private equity funds, which it continues to do as well as managing the Hermes UOB Fund-of-Funds, which is now fully committed. The new fund will target mid-market buyouts and development capital deals in the UK including secondary buyouts and recapitalisations. It will also invest in transactions in Continental Europe where it has a number of relationships with established local partners. The management team expects to make 10 deals from the new vehicle with equity investments of Â£15-20m; together with its institutional partners it has the capability to underwrite up to Â£50m in equity. The financial, retail and business services sectors are expected to be of particular interest according to Rod Selkirk, who heads up the six-strong investment team.HPE has recruited four new investment staff to manage the fund in the past six months. Justin Ward joined in September 2003 from CVC Capital Partners where he spent over seven years, most recently as an investment director, and worked on a wide range of mid-market and large UK and European buyouts. Shane Feeney joined in June 2003 from Morgan Grenfell Private Equity (MGPE) where he spent five years as an associate director. Simon Pitcher joined in June 2003 from MetLife (the largest US life insurer) where he spent over two years as an associate director. Belinda White joined in July 2003 from KPMG Corporate Finance where she spent three years in the private equity team advising institutions and management teams on buyout transactions. The final member of the team is Chris Clark. who has been at Hermes for three years