GLOBAL - Hermes Fund Managers is stepping up its position as an equities manager and at the same time strengthening pension fund links by buying a majority stake in asset management specialist Sourcecap.

The multi-boutique asset manager - created and 100% owned by the UK's £31bn (€34.7bn) BT Pension Scheme - will boost its core active European equity assets under management to US$1.1bn (€680m) by taking the majority stake in Sourcecap alongside CalPERS, the $200.9bn US public pension fund giant, which already has a holding in the firm through its CalPERS Manager Development Program II.

The CalPERS holding was set up through entrepreneurial investment firm Legato Management Ventures LLC and this strategy is now being replicated somewhat as the BT Pension Scheme is also set to invest £200m in Sourcecap via a segregated account and a new UCITS III vehicle which is being created along the same parameters as its long-only European alpha product.

James Rutherford, lead fund manager and CIO at Sourcecap and Andrew Parry, CEO and COO, will continue to head up the Sourcecap team but work with Hermes to build more unconstrained European equity portfolios for institutional clients as well as develop the new UCITS III vehicle.

Hermes now manages £25.7bn in assets under management and has £40bn under stewardship through its Equity Ownership Service.

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