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Hermes Investment Management eyes launch of ESG credit fund in 2018

Hermes Investment Management Ltd. will launch later in 2018 a credit fund that incorporates environmental, social and governance considerations to strengthen its position in the fixed-income segment, Portfolio Adviser reported March 19.

The "undertakings for collective investment in transferable securities" — or UCITS — fund will aim for a return equivalent to the London Interbank Offered Rate plus 5% on investments in emerging market debt, convertible bonds, asset-backed securities and loans. The fund will be managed by fixed income head Andrew Jackson and credit co-head Fraser Lundie, according to the report.

"Future fund launches will seek to further diversify the underlying universe of global assets," Jackson said.

U.S.-based Federated Investors Inc. was reported in early March to be in exclusive talks to acquire Hermes, which is owned by BT PLC's pension scheme. Sky News reported March 20 that the takeover was close to being sealed for a price tag of roughly £400 million.