Federated Hermes raises USD 486m for fifth co-investment fund

Min Ho
12 July 2023

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UK-headquartered asset manager Federated Hermes has held a final close for its fifth flagship private equity co-investment fund after raising USD 486m, according to a statement.

Private Equity Co-Investment Fund V (PEC V), which adopts a thematic strategy targeting growth companies, held its first close in December 2021, and has since surpassed its initial fundraising target of USD 400m.

Its 2018-vintage predecessor fund, PEC IV, raised just over USD 600m against an initial target of USD 350m.

Investors
Commitments came from existing PEC series investors, including Local Pensions Partnership Investments (LPPI) and Hostplus, as well as new investors from Europe and Korea, such as Samsung Life Insurance, the statement said.

The investor base of the GP's previous co-investment vehicle includes Ardian, BT Pension Scheme (BTPS) and Canada Pension Plan Investment Board (CPPIB), according to Unquote data.

Investments
PEC V has already committed to 23 investments with a further seven approved from the investment committee.

Among the megatrends that the GP invests in are demographical and societal change, net-zero economy, accelerating technological innovation, and global centre of gravity shift with a focus on investments in Asia, according to its website.

The majority of companies that it backs – around 70% – have an enterprise value of less than USD 500m across growth buyout, small-mid-cap niche buyout and turnarounds, according to its website.

People
Federated Hermes – Peter Gale (CIO and head of private equity).