Key Takeaways
- • Federated Hermes closed its first tranche for PEC VI at $320 million in initial commitments, launching the sixth vintage of its flagship Private Equity Co-investment fund focused on lower mid-market buyout transactions.
- • The fund attracted a diversified institutional investor base including returning limited partners from Australia's superannuation sector, major South Korean pension funds and insurance companies, and marks the entry of the first Italian pension fund into the PEC series.
- • PEC VI builds on proven execution across the platform's 30-year co-investment track record, which has deployed over $5 billion across 300+ transactions; the predecessor fund (PEC V) closed at $486 million in 2023 and achieved a median entry enterprise value of $144 million.
- • Brooks Harrington, appointed Chief Investment Officer last year, is leading the broader expansion of Federated Hermes' private equity business, with additional closings for PEC VI expected in 2026.
- • The fund's investment thesis centers on the lower mid-market segment's structural advantages: compelling entry valuations, inefficient pricing dynamics, broad target company universe, and expanded exit optionality.
Summary
Federated Hermes has successfully launched the sixth vintage of its Private Equity Co-investment (PEC) series, securing approximately $320 million in initial commitments at first close. This represents a strategic continuation of the firm's lower mid-market buyout platform, which has demonstrated consistent institutional demand and strong performance metrics over three decades.
The capital raise reflects solid institutional backing, with commitments from both repeat and new limited partners across multiple geographies. The investor base includes one of Australia's largest superannuation funds, major South Korean institutional investors encompassing a leading pension fund and top-tier insurance company, and notably, the first Italian pension fund to participate in the PEC series. This geographic and sectoral diversification underscores institutional confidence in the strategy and the fund's ability to source and execute on lower mid-market opportunities globally.
PEC VI follows PEC V, which closed at $486 million in 2023, demonstrating sustained momentum in Federated Hermes' private equity fundraising despite broader market volatility. The predecessor fund established a median entry enterprise value of $144 million, illustrating the fund's focus on mid-market scale transactions where valuations remain less efficient than upper-market deals and GPs maintain greater flexibility on deal structure and timing. Federated Hermes emphasizes that this segment continues to offer compelling risk-adjusted return potential through access to innovative companies and hard-to-reach GP relationships built over the firm's 30-year co-investment history.
The expansion is led by Chief Investment Officer Brooks Harrington, who transitioned to the CIO role last year following more than a decade with the firm. His leadership reflects Federated Hermes' commitment to scaling the private equity platform while maintaining disciplined investment standards. The firm anticipates additional closings for PEC VI in 2026, with the fund expected to continue its proven strategy of supporting time-sensitive, complex transactions where its GP relationships and co-investment expertise provide competitive advantage. The firm's track record of over $5 billion deployed across 300+ transactions provides institutional investors with substantial evidence of consistent execution and risk-adjusted performance delivery.
The capital raise reflects solid institutional backing, with commitments from both repeat and new limited partners across multiple geographies. The investor base includes one of Australia's largest superannuation funds, major South Korean institutional investors encompassing a leading pension fund and top-tier insurance company, and notably, the first Italian pension fund to participate in the PEC series. This geographic and sectoral diversification underscores institutional confidence in the strategy and the fund's ability to source and execute on lower mid-market opportunities globally.
PEC VI follows PEC V, which closed at $486 million in 2023, demonstrating sustained momentum in Federated Hermes' private equity fundraising despite broader market volatility. The predecessor fund established a median entry enterprise value of $144 million, illustrating the fund's focus on mid-market scale transactions where valuations remain less efficient than upper-market deals and GPs maintain greater flexibility on deal structure and timing. Federated Hermes emphasizes that this segment continues to offer compelling risk-adjusted return potential through access to innovative companies and hard-to-reach GP relationships built over the firm's 30-year co-investment history.
The expansion is led by Chief Investment Officer Brooks Harrington, who transitioned to the CIO role last year following more than a decade with the firm. His leadership reflects Federated Hermes' commitment to scaling the private equity platform while maintaining disciplined investment standards. The firm anticipates additional closings for PEC VI in 2026, with the fund expected to continue its proven strategy of supporting time-sensitive, complex transactions where its GP relationships and co-investment expertise provide competitive advantage. The firm's track record of over $5 billion deployed across 300+ transactions provides institutional investors with substantial evidence of consistent execution and risk-adjusted performance delivery.
Go deeper than the headline
Research every firm in this story, track the ones that matter and get the daily briefing — free for 7 days.