Federated Hermes ramps up growth of stewardship team

Federated Hermes has expanded its global stewardship business as demand among institutional investors in the U.S. ramps up.

The money manager's stewardship team, EOS, has made 13 appointments this year, with 10 in the U.S. and three in the U.K., to help deal with more and higher intensity engagement with companies, a spokeswoman said.

Roles vary in seniority, with six senior appointments and the remaining seven covering middle and junior-level roles, she added.

"The U.S. is the largest capital market in the world so having more people on the ground there will enhance our ability to drive corporate change through engagement," Hans-Christoph Hirt, head of EOS at Federated Hermes, said in an emailed comment. "Already we are seeing more active ownership by statewide pension (funds) and endowments."

Demand for stewardship services has grown in the U.S. over the last 18 months, as well as greater interest in investment strategies that feature systematic environmental, social and governance factor integration and engagement activity, the firm said.

Right now, key topics in focus for institutional investors include "strategy and operational adjustments due to the (coronavirus) pandemic," Mr. Hirt said. Other focuses include diversity and race, and the treatment of and relationship with employees, suppliers and the wider community during the health crisis.

Climate change also remains a consideration, as well as CEO remuneration, "particularly given rising unemployment due to COVID," Mr. Hirt added.

The expansion of the U.S. team will also support the investment teams in Pittsburgh in integrating stewardship and ESG into investment considerations. The U.S. team engages with more than 300 companies in the U.S. That team reports to Tim Youmans, engagement lead for North America, while the U.K. hires report to Christine Chow, lead for Asia and emerging markets.

The firm now has more than 60 staff working across the stewardship and responsibility teams. EOS has more than $1 trillion in assets under advisement.

Federated Investors and Hermes Investment Management merged in 2018, creating a $605.8 billion money management firm.