Hermes sells its activist governance Focus Funds

Business bought by London-based boutique RWC

Hermes, the UK fund manager, has sold its well known Focus Funds business, which runs $800m for institutional clients via one of the UK’s pioneer activist corporate governance strategies, to RWC the $4.1bn London-based boutique asset manager. Saker Nusseibeh, Chief Executive Officer and Head of Investment, Hermes Fund Managers, said the Focus Funds business had been sold because it no longer fitted with the fund manager’s core investment product offering. It was known to be a small contributor to Hermes’ profits, although performance of the funds is understood to have been relatively good in recent years. He said the fund manager’s corporate governance offering would continue through Hermes Equity Ownership Service (EOS), the governance advisory service. The Focus Funds were launched back in 1998 by Steve Brown and Peter Butler who founded the umbrella entity Hermes Focus Asset Management under then Hermes Chief Executive Alistair Ross Goobey. Both Brown and Butler subsequently left Hermes to start Governance for Owners, the London-based governance firm where Brown is still Chairman of the Investment Committee. The three investment teams comprising 12 investment professionals presently responsible for managing the Hermes
Focus Funds will join RWC on October 1.The four principals of the Focus Funds, Nigel Davies, Paul Harrison, Petteri Soininen and Maarten Wildschut all become Partners at RWC. The Focus Funds, which will be re-named the RWC Focus Funds, consist of a European Focus Fund managed by Maarten Wildschut and Petteri Soininen, a Specialist UK Focus Fund, managed by Paul Harrison, Nigel Davies and Phil Harris, and a Japan Stewardship Fund managed in collaboration with Nissay Asset Management advised by Corinna Arnold and Michael Connors. Mike Bishop, Chairman of the Investment Committee will continue in his current non-executive role. David Pitt-Watson, Chair of Hermes Focus Asset Management and Senior Advisor to Hermes Fund Managers remains with Hermes.Peter Harrison, Chief Executive Officer at RWC, which is 49% owned by Schroders, the UK fund manager, said the recent Kay Review in the UK had shown that asset manager engagement and long-term investing were important current and future investment themes: “These funds and teams epitomize a great deal of what Professor Kay is seeking to achieve and we are delighted to have secured their expertise in these areas.”
Harrison, who joined RWC in 2006, was a former Chief Investment Officer at Deutsche Asset Management and JPMorgan Asset Management.