Hermes GPE, a UK-based fund of funds, has closed its latest co-investment fund on $480 million.
Hermes GPE PEC II Co-investment Fund was raised in approximately six months, according to a statement. The firm attracted commitments form a wide range of pension funds including BT Pension Scheme, State Teachers Retirement System of Ohio and the London Pension Fund Authority.
So far, the vehicle has committed $230 million to 19 investments across the mid-market in Europe, North America, Asia and other emerging markets, Hermes said.
“Effective co-investing brings with it significant benefits to investors and we have pioneered a ‘LP-friendly’ fee model that offers low cost exposure to high quality private equity deals,” Peter Gale, head of private equity at Hermes GPE, said in the statement.
The firm's first co-investment fund was a single client programme for BT Pension Scheme, a Hermes spokesperson confirmed. Hermes declined to disclose the size of this mandate. It also declined to comment on when this vehicle was raised.
“Investing in a co-invest vehicle alongside commitments to primary funds can materially add value to a private equity programme, offering the potential for improved economics, faster deployment and a shorter J-curve in terms of a return of capital,” Susan Martin, LPFA’s chief executive officer said.
Hermes GPE, which also makes primary fund and secondaries investments, has invested more than $1.6 billion in 107 global co-investments which have delivered realised returns of 1.9x and a 35.3 percent IRR as of 30 June 2014. Hermes GPE has £3.4 billion in private equity assets under management as of 30 September 2014.