ESG specialists NN IP and Hermes IM acquired

Goldman Sachs has acquired ESG investment heavyweight NN Investment Partners (NN IP) for $1.6bn, while BT Pension Scheme (BTPS) has sold out of engagement specialist Hermes Investment Management. 

NN IP, which runs some $355bn, will boost Goldman Sachs’ presence in Europe, as well as its ESG brand and capabilities. Around 75% of NN IP’s assets include ESG integration, and the Netherlands-based firm is well known for its sustainability efforts, partly through groups such as the Partnership for Biodiversity Accounting Financials and Platform Living Wage Financials. 

German asset manager DWS also put in an offer for NN IP, which was being sold by Dutch insurer NN. 

A person close to the deal at DWS told RI: “We saw potential for a long-term growth partnership beyond management of existing assets and were therefore competing on more than price alone. In the end, it became obvious the seller’s priority was to maximise the immediate price tag and it became clear the transaction no longer fitted our growth plans.”

Goldman Sachs has launched a Sustainable Finance Group and promised to invest $750bn in sustainable finance by 2030. CEO David Solomon said: “Across NN Investment Partners’ offerings they have been successful in integrating sustainability which mirrors our own level of ambition to put responsible investing and stewardship at the heart of our business.”

NN IP employees will join Goldman Sachs Asset Management (GSAM) following the closing of the transaction, with the Netherlands becoming a significant location in Goldman’s European business. As part of the deal, GSAM, which has $2.3trn under management, will enter into a long-term strategic partnership agreement with NN IP, through which it will manage approximately $190bn of assets. 

Elsewhere, Federated Hermes has today announced it will acquire BTPS’s remaining 29.5% stake in Hermes Investment Management for £116.5m. 

In 2018, US-based Federated Investors acquired a 60% stake in the responsible investment house from BTPS, in a deal worth £264m. In this latest deal, Federated reportedly argued that the firm was worth a third less than the £395m eventually ruled by an independent valuer.

Hermes was established in 1983 by BTPS, the UK’s largest corporate pension scheme. In 2006, they both became founding signatories to the Principles for Responsible Investment.

Morten Nilsson, CEO of BTPS Management, said: “We retain strong links with HFML [Hermes Investment Management] and look forward to working with them as we focus on managing £57.5bn in assets towards our 2035 Net Zero goal as a responsible and engaged investor on behalf of our members.”