The US asset management giant that is reportedly in the running to acquire ESG-focused asset manager Hermes Investment Management has become a signatory to the Principles for Responsible Investment (PRI).
Pittsburgh-based Federated Investors was reported by Reuters and other financial media earlier this month as considering a bid for Hermes, the London-based firm known for its governance and stewardship stance.
Federated, which is listed on the New York Stock Exchange, has $366bn in assets under management for clients such as West Virginia, Chilean pension funds and the Commonwealth of Massachusetts.
It was founded in 1955 and offers domestic and international equity, fixed income, alternative, and money market strategies. Its top three shareholders are BlackRock, Fidelity and Vanguard.
It says of itself: “Federated has always taken the long view, believing that diligently doing business the right way over time will present the opportunity for growth. We continue to develop products with the goal of long-term consistent performance.Other potential buyers for BT Pension Scheme-owned Hermes – which has assets under management of £30.8bn – reportedly include Challenger, Old Mutual Asset Management and Eaton Vance.
Both Hermes and the BTPS were founding PRI signatories in April 2006 and BTPS Trustee Director Donald MacDonald was the inaugural chair of the PRI.
“We believe ESG factors can help identify business and operational risks”
Hermes CEO Saker Nusseibeh recently took on the role of non-executive chairman of the Carbon Tracker Initiative, the influential environmental data NGO.
Federated says, in a new ESG policy statement announcing its joining the PRI, that it views ESG factors as “qualitative information that is integral to its fundamental analysis process”.
“Specifically, we believe relevant and material ESG factors can help identify business and operational risks, and add a contextual dimension to the overall evaluation of a security.” The PRI wasn’t able to comment.