UK fund house Hermes is seeking to install a regional head of sales and business development based in Singapore over the next three months to target institutional clients.
The firm, which has £25.6 billion ($39.1 billion) in AUM as at March this year (it no longer includes cash and undrawn commitments for private equity and infrastructure in its AUM), has been aggressively building up its business development function out of London focused initially on its core markets of the UK and northern Europe.
Hermes acts as principal money manager for parent the BT Pension Scheme – the UK’s largest final-salary plan. It was transformed from an internal manager into an external one in 2007, when it first began to target third-party assets.
It now comprises a 12-company boutique structure, some of which came by acquisition and others by rollout. Of its £26 billion, it has about 35.2% in fixed income, 19% in equities and 45.7% in alternatives, including commodities, funds of hedge funds, real estate, private equity and infrastructure.
In Asia it has a 10-strong investment team based in Singapore. Its coverage comprises of private equity and commodities and includes a fund of hedge funds unit following last year’s acquisition of the $100 million Caliburn Greater China Fund, which it subsequently rebranded Hermes BPK Greater China fund. Hermes also had a business development team in Australia.
Harriet Steel joined Hermes a year-and-a-half ago from Portico Advisors as global head of business development in London, with a mandate to expand the team. While she admits there were a couple of false starts before she arrived, it is now 51-strong out of a global staff of just under 400.
Its investment solutions and product strategy team is now housed under business development - it hired Rhodri Mason from Man Investments last November as head of investment solutions and product strategy - while Ian Pascal is also set to join as head of marketing and communications from Barings, based in London.
“Business development was underrepresented and as a percentage of fixed costs it was miniscule compared to what it should have been for an outward-facing manger,” Steel tells AsianInvestor.
“What we were doing as far as the outside world was concerned was largely an untold story. There was some degree of brand awareness around our association with the BT pension scheme, but generally there was a low level of brand understanding.
“My job was to build out the team and increase the number of conversations with the outside world, beyond where our boutiques had existing relationships.”
She suggests that there was nothing happening previously at a systematic, centralised level, which is something she has sought to change. “Since the beginning of 2012 we have been building out business development and I will be making a hire in next three months for someone to run Asian sales based in our Singapore office,” she adds.
She says the firm’s position as principal money manager for the BT Pension Scheme is something that resonates with institutions, including in China and Southeast Asia, where it has won commodities-centric mandates from institutions over the past 18 months – although this represents a tiny percentage of its third-party AUM.
“We also have relationships with some of big Asian institutional investors from within some of our boutiques, particularly in real estate. Given our alignment and our ownership structure, we will be able to offer co-investment in some of our real asset strategies.”
A year ago AsianInvestor interviewed Saker Nusseibeh, who joined Hermes from Fortis Investments in June 2009 as CIO and became CEO in May last year. He said back then that the firm had been seeking to hire an emerging market debt team for over two years, without success.
“We thought about [establishing a presence in] Hong Kong, and maybe that is still on the cards,” Nusseibeh said last year. He also said it was discussing applying for a QFII licence at that time.
When asked for an update on the EM debt team, however, Nusseibeh says the firm is still "of course interested in the asset class, and it is something we will continue to look at. However, we have no plans at present to add to our capability there".
Of Hermes’ most popular strategies in the wholesale arena, Steel points to US small and mid-cap equities, followed by European equities and Asian equities.