UK - Hermes Pensions Management is to set up its first direct private equity fund which will invest in UK and European mid-market companies.
The firm – which already offers private equity fund-of-funds to external clients – has received £200m from the £28bn British Telecom Pension Scheme for the fund.
Each individual company the BT fund invests in will receive between £10m-£25m.
The fund will also invest in companies that Hermes part owns through its fund-of-funds.
Hermes is in the process of recruiting four private equity managers to work alongside its head of private equity, Rod Selkirk, and director, Chris Clark, to run the fund.
However, before Hermes seeks funds from external clients it will focus first upon building up a track record.
Deputy chief executive Charlie Metcalfe said: “We will become more proactive when we have a track record, but if people are interested in what we are doing and want to co–invest with the largest scheme in the UK we would be delighted.
“Most firms know we have capital and we are frequently approached to make direct investments – with Rod, we have that ability.”
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