Hermes Investment Management

Hermes Investment Management
Name	Hermes Investment Management
Type	Subsidiary
Industry	Asset management
Founded	1983
Headquarters	London, United Kingdom
Area served	Global
Products	Asset management, stewardship, private markets, listed equities, fixed income
Parent	Federated Hermes (formerly)

Hermes Investment Management Hermes Investment Management is an asset management firm headquartered in London, providing investment, stewardship, and advisory services across public and private markets. The firm has been involved with pension funds, sovereign wealth funds, insurance companies, and charitable foundations, and has played a role in debates over corporate governance, fiduciary duty, and sustainable investing. Hermes works with multi-national clients and interacts with regulatory bodies and industry associations across Europe, North America, and Asia.

History

Hermes was established in 1983 in London during a period of expansion in the financial services sector, initially serving pension schemes and corporate clients. In the 1990s the firm grew alongside developments at institutions such as the Bank of England, City of London Corporation, and UK pension trustees, participating in dialogues influenced by reports like the Cadbury Report and the Greenbury Report. Through the 2000s Hermes expanded its product range amid consolidation in the asset management industry involving players such as Barclays, Prudential plc, and Aberdeen Asset Management. The firm’s evolution intersected with regulatory initiatives such as the Financial Services Authority reforms and the implementation of Markets in Financial Instruments Directive provisions. In the 2010s corporate restructuring and acquisitions in the sector—featuring firms like Aviva, Standard Life, Schroders, and BlackRock—shaped Hermes’s strategic options. Hermes has engaged with international institutional investors including Norwegian Ministry of Finance (Norges Bank) counterparts and Government Pension Investment Fund (Japan) delegates. Leadership changes and transactions involved executives with ties to institutions such as Goldman Sachs, Morgan Stanley, and J.P. Morgan Chase.

Business operations and services

Hermes offers services across listed equity, fixed income, private equity, real estate, infrastructure, and stewardship. Its client base includes pension funds, insurance companies, sovereign wealth funds, and endowments—often managed in collaboration with trustees and fiduciaries. Operations encompass portfolio management, risk analytics, engagement, proxy voting, and client reporting, interfacing with custodians such as State Street, BNP Paribas Securities Services, and Northern Trust. Hermes’s stewardship work liaises with standard-setters including the International Corporate Governance Network, Financial Reporting Council, and Task Force on Climate-related Financial Disclosures. The firm’s global offices and regional hubs interact with exchanges like the London Stock Exchange, New York Stock Exchange, Tokyo Stock Exchange, and Hong Kong Stock Exchange.

Ownership and corporate structure

Hermes has operated as a subsidiary at various times, with ownership links to financial groups and private equity. Transactions in the asset management sector involving Federated Investors, The Carlyle Group, KKR, and Temasek Holdings reflect the market context for Hermes’s corporate moves. Governance includes a board with directors drawn from institutions such as HSBC, Lloyds Banking Group, Barclays, and advisory committees connected to trustees from bodies like the National Association of Pension Funds and Institutional Shareholder Services. Regulatory oversight has included interactions with the Prudential Regulation Authority and European Securities and Markets Authority.

Investment strategies and products

Hermes provides active management strategies in global equity, regional equity, emerging markets, multi-asset strategies, liability-driven investment, and fixed income credit. The firm offers private markets products in infrastructure, private debt, and real estate, engaging with co-investors such as Blackstone, Brookfield Asset Management, and Carlyle Group. Quantitative and fundamental research teams use models referencing datasets from Bloomberg L.P., MSCI, Refinitiv, and research providers like Morningstar. Risk management frameworks align with regulations from Basel Committee on Banking Supervision where relevant to counterparties and with reporting standards of International Financial Reporting Standards.

Responsible investing and stewardship

Hermes is known for stewardship, engagement, and voting activities aimed at corporate governance, environmental, and social outcomes. The firm has participated in collaborative initiatives such as the Carbon Disclosure Project, PRI (Principles for Responsible Investment), Climate Action 100+, and the Investor Forum. Stewardship actions have targeted sectors involving BP, ExxonMobil, Rio Tinto, and Glencore in dialogues about emissions, board composition, and human rights, often coordinating with legal teams familiar with UK Companies Act 2006 obligations. Hermes’s stewardship reports reference standards from the Financial Stability Board and interactions with enforcement agencies like the Financial Conduct Authority.

Financial performance and assets under management

Hermes’s assets under management have varied with market cycles, client flows, and strategic divestments, with AUM figures cited in industry reporting by firms such as Morningstar, Lipper, Preqin, and PitchBook. Performance measurement uses benchmarks like the FTSE 100, MSCI World Index, JPMorgan EMBI Global Diversified, and composite indices tracked by S&P Dow Jones Indices. Institutional investor allocations compare Hermes products against offerings from Vanguard Group, BlackRock, State Street Global Advisors, and Amundi. Financial reporting and audits have been prepared under standards used by Deloitte, PwC, KPMG, or Ernst & Young.

Controversies and regulatory matters

Hermes has been subject to debates over stewardship effectiveness, proxy voting, and conflicts of interest, issues common to asset managers alongside peers like BlackRock and Vanguard. Past disputes engaged campaign groups, trade unions, and NGOs such as Amnesty International and Greenpeace over investments linked to extractive industries, involving scrutiny by bodies like the Financial Conduct Authority and parliamentary committees in the United Kingdom Parliament. Regulatory inquiries and industry reviews referenced precedents from actions involving Royal Bank of Scotland, UBS, and Credit Suisse that informed compliance and governance enhancements. Legal and reputational risks have prompted engagement with advisers from law firms active in finance such as Linklaters and Freshfields Bruckhaus Deringer.

Category:Investment management companies