Contact Institutional Clients
Antonis Maggoutas
Head of Business Development, Germany & Austria
Phone: +49 69 913339 51
Contact Wholesale Clients
Valentin Richter
Associate Director - Business Development, Germany and Austria
Phone: +49 69 913339 31
Company at a glance
At Hermes, we are committed to delivering superior risk-adjusted investment returns to our clients. In addition to our financial targets, we understand that the way we achieve our investment objectives will have wider societal impacts. As such, we seek to provide both for a better financial future for our ultimate stakeholders, as well as for a better, more sustainable, society. The pursuit of “outcomes beyond performance” drives the execution of all of our strategies.
We achieve this goal through a holistic approach to investing that incorporates environmental, social and governance considerations into all of our investment products. Our ability to mitigate ESG risks and capture investment opportunities arising from these considerations is essential to achieving consistent investment out-performance for our clients.
Our heritage has enabled us to put this into practice since 1983 – firstly to manage the assets of the BT Pension Scheme (BTPS), and subsequently to offer our skills to a broad and fast-growing range of customers globally, from institutions to advised private investors. Our specialist, high conviction investment teams manage assets across equities, credit, infrastructure, private equity, private debt and real estate.
Critically, Hermes has one of the world’s largest stewardship resources of any fund manager in the world . Launched over 14 years ago, Hermes EOS provides a platform for like-minded investors to pool resources, creating a powerful force for positive change.
Market position and target clients
Hermes Investment Management provides active investment strategies and stewardship. Our goal is to help people invest better, retire better, and create a better society for all. We have been doing this since 1983, first to manage the assets of our original owner, the BT Pension Scheme (BTPS), and more recently for a growing range of external customers, from institutions to advised private investors.
Our legacy of investing on behalf of one of the UK’s largest corporate pension schemes, along with our partnerships with some of the world’s leading institutions, provides us deep insight into the long-term needs of investors and enables us to offer solutions to their investment needs that may be hard to access elsewhere. Our strong heritage of acting in the interests of over 300,000 pension holders – not shareholders – means a culture of fiduciary responsibility is embedded at the heart of our organisation and gives us a track record of being very closely aligned to our clients. Today, we manage money for more than 500 clients in nearly 30 countries.
Investment philosophy in general
Hermes is an established investment management firm focused on Outcomes Beyond Performance: delivering excellent long-term investment performance and stewardship, while improving the lives of many. Our goal is to help people investment better, retire better, and create a better society for all.
We believe in independent and empowered investment teams, each with their own investment process, fully accountable for delivering sustainable long-term performance to our clients. We believe this structure provides focused, entrepreneurial asset management capabilities and supports our performance-oriented investment culture. Independent oversight is provided by our Investment Office, which pre-emptively and proactively ensures clients’ interests are always at the forefront of our portfolio managers’ considerations.
We believe that ESG considerations are a fundamental component of investment decisions and integrate them into our decision-making processes, in ways that are relevant to the specific strategy being managed. We have been doing so since our establishment in 1983. Hermes EOS, one of the world’s largest stewardship teams, actively engages in areas such as income equality, gender diversity, governance and environmental impact. We sit on many of the world’s leading ESG stewardship committees and advisory boards including:
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PRI
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CFA Future of Finance Advisory Council
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GRESB
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IIGCC
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UNEP FI investment commission
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UK Banking Standards Board
Investment Strategies
Equity Strategies
sub-category |
|
---|---|
Euroland / Europe | x |
USA |
|
Japan |
|
Global |
x |
Asien ex Japan |
x |
Latin America |
|
Afrika |
|
Emerging Markets (global) |
x |
Themes / Sectors |
x |
Market-Cap (Large-, Mid-, Small-Cap) |
|
Active |
x |
Passive |
|
ETF |
|
Other |
|
Short description of your competence and USPs in managing equities
As at 31st December 2018, Hermes managed EUR19,356 million across our equity capabilities.
A list of our equity products is shown below:
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Asia ex-Japan
-
European Alpha
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Europe ex-UK
-
Eurozone
-
Global
-
Global ESG
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Global Emerging Markets
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Global Emerging Markets SMID
-
Global Screened ESG
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Global Small Cap
-
Impact Opportunities
-
SDG Engagement
-
US SMID
Fixed Income Strategies
sub-category |
|
---|---|
Govies |
|
Covered Bonds |
|
Corporate Bonds IG |
x |
High Yield Corporate Bonds |
x |
Emerging Markets |
|
Subordinated Bonds |
|
ABS |
|
Inflationlinked Bonds |
|
Municipals |
|
Global Unconstrained |
x |
Active |
x |
Passive |
|
ETF |
|
Other |
|
Short describtion of your competence and USPs in managing fixed income
As at 31 December 2018, Hermes managed EUR3,179 million in the credit asset class. A list of our credit offerings is shown below:
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Absolute Return
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Global High Yield
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Global Investment Grade
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Multi-Strategy
-
Unconstrained Credit
Real Estate Strategies
sub-category |
|
---|---|
Residential |
|
Office |
|
Retail |
|
Industrial and Logistics |
|
Hotel |
|
Health Care (Hospitals etc.) |
|
Mixed |
x |
REITS |
|
Other |
|
Short describtion of your competence and USPs in managing real estate
Hermes Real Estate offers client-focused property investment solutions through segregated and pooled structures, seeking to maximise risk-adjusted returns. Hermes Real Estate is one of the largest real estate managers in the UK, with £7.9 billion* of assets under management (GAV) in
both UK and international portfolios.
We are organised along client-focused investment and asset management specialisms, supported by a central team providing robust risk management oversight, research and corporate finance support. We also work in partnership with our related companies, MEPC and Argent, combining our expertise in conjunction with these specialist platforms to deliver our client offering.The investment process adopts a top-down portfolio risk management and bottom-up property selection to target assets that are highly competitive within their local marketplaces and which have sustainable income streams.
We believe it is imperative to understand how occupiers assess property in order to fully assess risk. We believe that a responsible, sustainable approach to real estate investment management is the only strategy that both protects and enhances the value of our clients’ assets, now and into the future. Therefore our principles of Responsible Property Investment (RPI) are fully integrated within our investment process.
As at December 2018, Hermes managed EUR7,478 million in real estate assets.
Loans / Private Debt Strategies
sub-category |
|
---|---|
Senior Loans |
|
Leveraged Loans |
|
Secured |
|
Unsecured |
|
Infrastructure |
|
Commercial Real Estate |
|
Residential Real Estate |
|
Corporate Loans |
|
Direct Lending |
x |
Other |
|
Short describtion of your competence and USPs in managing loans
Unique origination capability:
With four exclusive legally binding documented co-lending agreements with major European partner banks (KBC (Benelux), Royal Bank of Scotland/NatWest (UK), Danske Bank (Nordics) and DZ Bank (Germany)), who are legally bound to invite Hermes to participate in all deals originated by them within specific parameters, the Private Debt Investment Team has exclusive access to high- quality loans to European mid-market businesses. This network is complemented by independent origination through the team’s contacts in Europe. This dual origination strategy is designed to offer a wide deal flow/maximise exposure to market opportunities while retaining full independence and absolute flexibility for the Private Debt Investment team to decide which transactions to invest in and which transactions it should not, based on their risk/reward profile.
An experienced team:
The investment team has the full spectrum of loan-investing skills and through-the-cycle experience, with an average of c.16 years’ credit experience.
ESG integration:
ESG risks can impact investments as heavily as financial risks. Good ESG practices reduce risk and improve long-term returns, supporting our aim of preserving capital and capturing yield.
Private Equity Strategies
sub-category |
|
---|---|
Venture Capital |
|
Mezzanine |
|
Buyout |
|
Special Situation |
|
Listed Private Equity |
x |
Other |
|
Short describtion of your competence and USPs in managing private equity
Hermes GPE, which incorporates Hermes Infrastructure and Hermes GPE Private Equity, is a leading independent investor in global private markets. The team's 28 year track record makes Hermes GPE one of the most experienced investors and portfolio advisors in international private equity and infrastructure.
Absolute Return Strategies
sub-category |
|
---|---|
Equities long/short |
|
Equities market neutral |
|
Fixed Income |
|
Credit |
x |
Convertibles |
|
Commodities |
|
Volatility |
|
Multi Strategy |
|
Multi Asset |
|
Other |
|
Emerging Market Strategies
sub-category |
|
---|---|
Equities |
x |
Fixed Income - Govies |
|
Fixed Income - Corporate Bonds |
|
Fixed Income - Hard Currency |
|
Fixed Income - Local Currency |
|
Fixed Income - unconstrained |
|
Convertibles |
|
Mixed - Equities + Bonds |
|
Other |
|
Please describe your compenetnce and your USPs in managing Emerging Market strategies
Hermes has been a pioneer in emerging markets investing, successfully managing portfolios in the asset class since 1993. Hermes launched the Hermes Global Emerging Markets Fund in December 2008. The team now manages €6.3bn) in global emerging markets equities.
Sustainability - ESG
ESG PHILOSOPHY
ESG considerations are at the heart of our business and incorporated across our range of public and private markets capabilities. We believe we have a responsibility that extends beyond the financial and that we must consider the impact of our decisions on the world that our clients live in. To ensure that this is the case and that we continue to develop our integration of ESG across the business, we established the role of Head of Responsibility in 2014 and created a dedicated Responsibility Office.
Our responsible investment approach has been expressed through a number of policy guidelines and principles, both at the Hermes corporate level and by our stewardship and investment teams. These include the Hermes Responsible Ownership Principles, which seek to create a common understanding between boards, managers and owners of the proper goals of a public company. Complementing these global principles, we have also developed specific corporate governance guidelines for 15 major countries. These guidelines take into account the regulatory and legal context of a country as well as corporate governance best practice.
Hermes Ownership Principles:
https://www.hermes-investment.com/wp-content/uploads/2018/10/final-responsible-ownership-
principles-2018.pdf
Hermes’ regional corporate governance guidelines:
https://www.hermes-investment.com/ukw/stewardship/eos-literature/
The Responsible Ownership Principles sets out our expectations for the companies we invest in on
our clients’ behalf and covers the below points:
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Transparency and communication
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Corporate culture
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Strategy
-
Financial disciplines, structure and risk management
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Stakeholders, environmental and social issues
-
Governance
By being explicit about appropriate expectations, we aim to create a better framework for
communication and dialogue between boards and management on the one hand, and shareholders
on the other hand. This can contribute to better management of companies and ultimately the
sustainable creation of wealth for their shareholders. The Principles were updated in 2010 to include
lessons from the financial crisis.
Responsibility is, of course, a far wider concept than shareholder engagement. We believe it is our
responsibility to lead discussion and debate about the fiduciary responsibilities of fund managers to
our clients, their stakeholders and, ultimately, society at large. We are active participants in public
policy discussions and support the 300 Club, founded and previously chaired by our CEO Saker
Nusseibeh, as an independent forum for discussion and debate about the responsibilities of the
industry.
We also believe that we should lead by example. We have a strong community engagement program in which many of our personnel participate. We have ISO 14001 accreditation for environmental responsibility and we adhere to the London living wage guidelines. Our internship and work experience programs actively seek out candidates from across the social spectrum.A broader description of our beliefs can be found at the following link:
ORGANISATION
Category |
|
---|---|
ESG-Officer | x |
UN PRI |
x |
ESG-Company Report |
x |
ESG (Company) Rating |
x |
Investmentstrategies
Asset Classes |
|
---|---|
Equities |
x |
Fixed Income |
x |
Convertible Bonds |
|
Real Estate |
x |
Multi Asset |
|
Others |
|
Short describtion of your ESG-competences
We believe that the seamless integration of ESG considerations into the investment process is critical to a portfolio manager’s ability to achieve sustainable long-term out-performance at an acceptable level of risk. Gaining an understanding of the regulatory, reputational and managerial risks facing individual companies, and the implication these have on investors’ portfolios, helps investors more effectively manage their exposures. Hermes feels that this relationship will only strengthen.
The Hermes Global Equities team has observed a longer-term trend towards investors favouring companies that are well managed with a greater level of transparency. In response to this, the team developed a number of tools, including the ESG Dashboard, the QESG Score (proprietary ESG rating) and the Portfolio ESG Monitor, that are available for use by portfolio managers across Hermes. These tools highlight potential high-risk behaviour from an ESG perspective within companies, at which point Hermes Equity Ownership Services (Hermes EOS) – our specialist and dedicated in-house ESG advisory team – can be consulted further as required.
ESG Dashboard
The ESG Dashboard integrates Hermes EOS’s proprietary ESG research with data from a range of
external providers, including Sustainalytics, Trucost, FactSet and Bloomberg. The Dashboard
allows all Hermes investment teams to access key ESG-related information on any stock in their
investment universe. The amalgamation of the different sources allows stocks to be assessed across
many metrics. The Dashboard also highlights industry-specific key performance indicators related
to social, ethical and environmental factors.
QESG Score
The QESG Score, which forms part of the ESG Dashboard, was built using the expertise of Hermes
EOS. The Score identifies stocks with positive ESG characteristics and/or stocks demonstrating
positive ESG change. Proprietary data generated internally is included, as well as best-of-breed
ESG data sources (detailed above). The QESG Score was built from a conceptual standpoint and is
tilted towards governance factors, which have been shown to add greater shareholder value and
capitalise on the belief that well-managed companies will outperform over the long term.
Portfolio ESG Monitor
The most recent development has been the Portfolio ESG Monitor, which reports on ESG characteristics of portfolio stocks (both in absolute and benchmark-relative terms) including voting and engagement data from Hermes EOS. The Monitor also highlights companies with potential controversies and ESG concerns. The tool acts to promote discussion on thematic ESG risks as well as identify the best and the worst companies according to various ESG metrics. By thoroughly rating companies on these extra-financial criteria, businesses (and investment managers) can be steered towards greater consideration of the ESG issues. This incentive is complemented by direct dialogue with businesses that is made possible through Hermes EOS.
All investment teams at Hermes have access to the tools described above and a dedicated point of
contact within Hermes EOS to help integrate ESG issues into their analysis.
ESG-Methods
Methods |
|
---|---|
ESG Intergration | x |
Best in Class |
|
Exclusion Criteria | x |
Positiv Screening |
x |
Impact Investing |
x |
Engagement / Active Ownership | x |
Minimum |
|
ESG Reporting |
x |