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U.S. asset manager Federated Investors considers bid for UK's Hermes: source
December 6, 2017 / 5:09 PM / 8 days ago

U.S. asset manager Federated Investors considers bid for UK's Hermes: source

LONDON (Reuters) - U.S. fund manager Federated Investors (FII.N) is considering a bid for Britain’s Hermes Investment Management, a source familiar with the matter said on Wednesday.

Active asset managers are under pressure from index-tracking passive funds, which charge lower fees, and there are other possible bidders for Hermes, which has nearly 31 billion pounds ($41 billion) in assets under management, include Australian fund manager Challenger (CGF.AX) and U.S. firms Old Mutual Asset Management (OMAM.N) and Eaton Vance (EV.N), the source added.

Investors expect more consolidation after deals including U.S. manager Janus merging with Henderson and a tie-up between Standard Life and Aberdeen Asset Management.

    Pittsburgh, Pennsylvania based Federated had $364 billion under management as of Sept. 30. It is best known for its money market funds, but lately has emphasized other products.

    Hermes’ biggest client is the pension fund of British telecoms company BT Group (BT.L) and Federated’s interest was reported earlier by Sky News.

    Hermes, Eaton Vance and Federated Investors declined to comment, while Challenger could not be reached for comment outside of office hours and Old Mutual Asset Management did not immediately respond to request for comment.

    Reporting by Carolyn Cohn and Simon Jessop in London and Ross Kerber in Boston; Editing by John O'Donnell/Mark Potter/Alexander Smith

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