PGGM, the e50bn Dutch fund for healthcare and social workers and the UK’s BT pension scheme are contributing to a e300m activist fund being launched by a subsidiary of the fund management group Hermes.
Hermes Focus Asset Management Europe is launching its European Focus fund which will invest in underperforming companies. The move to Europe builds on Hermes’ specialisation in the UK market where it buys into underperforming companies and seeks to improve long term performance by engaging with the management.
Hermes has in addition signed up the e24bn Consignia pension scheme for postal workers and four UK local government pension schemes to the fund which will hold large shareholdings in relatively few companies.
Says Stephan Howaldt, chief executive of Hermes Focus AM: “we involve ourselves in constructive yet persistent discussions with companies that own good businesses but whose share prices have been underperforming their respective sectors.”
France, Italy and Germany are countries the fund will target and it has already singled out eight companies, predominantly in Germany. Hermes expects more investors to join the scheme which it hopes may in time exceed e1bn.
Hermes is the principal investment manager for both the BT and Consignia funds and manages a total of £44bn (e71bn).