UK - The £27bn BT Pension Scheme will invest £15m into a new small company stocks fund to be launched by investment manager Hermes.
The fund will invest in approximately 30 fully-listed UK companies outside the FTSE350 which are considered to be underperforming. The fund aims to raise between £75-100m.
The asset management arm of Hermes – Hermes Focus Asset Management, which is owned by the BT Pension Scheme – will start investing in the fund early next year.
Priority will be given to Hermes’ current institutional clients and initial investments will be limited to a maximum of £15m each, with a minimum investment of £5m.
HFAM currently has a conventional small companies portfolio managed by Hamish Galpin, which has £300m under management.
All 20 clients in the existing fund are pension funds and managing director of investments Steve Brown said: “Our assumption would be that pension funds are the natural buyers of this type of investment process.”
The investment team for the fund is already in place and will use relational shareholder engagement techniques to improve long-term value.
Paul Harrison will head the UK Small Companies Focus Fund. He previously worked with Arthur Anderson for 10 years and was most recently chief executive of sporting goods company Hi-Tec Sports.
Philip Harris will soon join HFAM as head of investment for the new fund. He is currently head of small companies at Credit Suisse Asset Management and has 11 years of small companies fund management experience.
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