UK – Hermes Pensions Management, the£50bn (e80bn) independent manager of the UK’s BT and Post Office pension schemes, is to buy up to a 21% stake in Botts & Company, a private equity fund management and investment company, to facilitate increased deals in direct private equity.
Hermes has agreed terms to acquire the holding in parent company, Botts Holdings, and will also invest £35m in its latest venture fund BCP2.
“Hermes’s investment in Botts is a sensible way to significantly increase our capacity and access to deal flows in direct private equity,” says Tony Watson, chief investment officer of Hermes, who will also join the board of Botts.
The private equity manager is currently raising funds for Botts Capital Partners 2 (BCP2), the successor to a £155m partnership raised in December 1998.
The new fund is expected to have its first and second closing dates in June and November and its target size is £300m.
“Quite clearly Hermes’s support is a transforming event for our company. Their funding will enable us to take advantage of the rapidly increasing demand for buy-out and expansion capital in Europe, particularly in the middle market,” says John Botts, founder and chairman of Botts.
Botts & Company currently manages £250m of discretionary private equity funds for investment in Western Europe, mainly in the UK and Germany, with offices in London and Munich.
Hermes manages over £750m in private equity on behalf of its principal clients.