RWC Partners buys Hermes activist equity manager unit
By Drew Carter | September 18, 2012 12:48 pm
RWC Partners acquired Hermes Focus Asset Management, the activist equity management boutique within Hermes Fund Managers.
Terms were not disclosed.
A team of 11 investment staff running three funds with a combined $800 million will move to RWC from Hermes by Oct. 1, according to company executives.
“We came to the conclusion that the focus teams … don't quite fit with (our overall) platform,” said Saker Nusseibeh, CEO and head of investment at Hermes Fund Managers, in an interview. “At present, we believe responsible investing is something we should be doing as part of all of our businesses. The time when we will invest responsibly only through focused teams has passed.”
Mr. Nusseibeh added that the activist Focus Funds strategy was a better fit for wealth and private banking clients, while Hermes' focus is on institutional investors.
However, Peter Harrison, CEO of RWC Partners, said in an interview that because the Focus Funds strategies provide only quarterly liquidity, “the structure is not appropriate for wealth managers at this stage,” and he plans to market the strategies to institutional investors.
Paul Harrison, former principal and CEO at Hermes Focus, and Nigel Davies, former principal and managing director, will continue to run the Specialist U.K. Focus Fund, previously called the Hermes Specialist U.K. Focus Fund, at RWC. Maarten Wildschut and Petteri Soininen, both principals and managing directors at Hermes Focus, will continue to run the European Focus Fund, previously called the Hermes European Focus Fund, and Corinna Arnold, who was managing director, will continue to run the Nissay Japan Stewardship Fund, previously called the Hermes Nissay Japan Stewardship Fund.
Ms. Arnold will become a portfolio manager at RWC, while the other four will become partners and portfolio managers.
“They have generated a huge amount of alpha over a sustained period of time,” RWC's Mr. Harrison said. “Alpha is increasingly difficult to find, but they go out and make their own” by improving the health of portfolio companies.