The BT Pension Scheme (BSPS) has awarded a $1bn (£777bn) private equity mandate to Hermes GPE, to invest globally.
Hermes GPE - a joint venture with Hermes Investment Management - today (19 November) announced that the money will be invested over three years and split equally between co-investments and funds.
A similar mandate with Hermes GPE was awarded in 2015 in which it announced £1bn from BTPS would be invested globally over three years, also split between funds and co-investments. The fund had also invested a similar amount in private equity with Hermes GPE in 2011, and by 2014 its private equity portfolio represented 3.2% of its assets.
As at June 2019, 22% of the scheme's investments were in equities and of this, 87% were in publically listed securities. The other 13% was in private equities, amounting to around £1.6bn.
BTPS Management portfolio management principal Davide Deagostino said: "Over the years we evolved our private equity investment approach from the classic 'buy and hold' to a more dynamic framework where we actively manage the portfolio and regularly take advantage of secondary market opportunities, primarily, but not only, as sellers.
"[We also] deploy capital into investment programmes which are increasingly more thematically oriented and offer significant downside protection through a combination of diversification at general partner and portfolio level as well as style."
The majority of the scheme's private equity allocation is managed by Hermes GPE, which said the mandate continues a "long-standing investment partnership".
Head of private equity Peter Gale said the continued support of BTPS is a "significant endorsement" for its investment strategy.
Some $100m of the BTPS mandate will be injected into Hermes GPE's latest iteration of its co-investment club series PEV IV, which was launched just over a year ago.
The fund brings together investors from across the globe who contribute deal flow from their own private equity relationships, alongside opportunities sources from Hermes GPE's global network.
Since its launch, the fund has raised $603.5m from global pension funds including BTPS and Local Pensions Partnership.
Hermes Investment Management was founded in 1983 as the in-house manager for the BTPS, but last year it announced its decision to sell two-thirds of its interest in Hermes Fund Manager to American asset manager Federated Investors for £246m.
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