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Hermes Pensions Management

Subject

Strategy and Entrepreneurship

Publication Year

2005

Abstract

Hermes Pensions Management Limited (Hermes) is an independent fund manager with approximately £40 billion invested (as of June 30, 2003) on behalf of over 100 clients including pension funds, insurance companies, government entities, financial institutions, charities and endowments. Hermes’ owner and largest client is BT Pension Scheme (BTPS). Other major clients include CalPERS (USA), Royal Mail Pensions Plan (UK),Nippon Life (Japan), PGGM (Netherlands), the pension plans of Shell (UK) and Unilever (UK) and Varma Sampo (Finland) Hermes places great emphasis on exercising stewardship rights in all the companies in which it invests, because it believes that companies with informed and involved owners perform better than those without. Further, Hermes has long-term “indexed” holdings in equities and is therefore exposed to under performing assets whose performance cannot be addressed by selling the shares. Hermes is also the first major investment institution in the world to have established shareholder engagement funds. The focus Funds invest in companies that are fundamentally sound, but are undervalued due to weaknesses in strategy and governance. Hermes believes that its intervention and active involvement as a long-term shareholder can release the latent value that exists within such companies.

Topic List

Pensions Management

LBS Case Number

CS-05-001

Project Funder

ESRC

Supervisor

Korine, H

Available on ECCH

No


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