Federated Hermes has launched the sixth vintage of its flagship Private Equity Co-investment series, PEC VI, securing approximately $320 million in initial commitments as the firm continues expanding its lower mid-market buyout strategy. The new vehicle follows PEC V, which closed at $486 million in 2023, reflecting ongoing momentum across the firm’s global private equity platform.
The first close drew support from several returning limited partners, including one of Australia’s largest superannuation funds and major South Korean institutional investors such as a leading pension fund and a top-tier insurance company. The latest round also brought the first Italian pension fund into the PEC series. Additional closings are expected in 2026.
The announcement builds on the broader growth of Federated Hermes’ private equity business, now led by Chief Investment Officer Brooks Harrington, who assumed the CIO role last year after more than a decade with the firm. The PEC program, active since 2011, has established a globally diversified co-investment strategy centered on lower mid-market transactions, a segment the firm says continues to offer compelling entry valuations, inefficient pricing, a broad range of target companies, and expanded exit optionality. PEC V previously recorded a median entry enterprise value of $144 million.
Federated Hermes highlights its 30-year history as a pioneer in co-investments, deploying more than $5 billion across over 300 transactions. The firm cites its long-standing relationships with general partners worldwide and its reputation for supporting complex, time-sensitive deals. According to the firm, investors continue to be drawn to the PEC series for its record of risk-adjusted performance and consistent distributions.
Additional details from the announcement note that PEC I and PEC II have now been fully liquidated, which the firm views as evidence of its continued focus on proactive exits, cash-on-cash returns, and liquidity for clients.
KEY QUOTES
“We are grateful for the support of existing and new LPs in our global co-investment program. The global lower mid-market continues to deliver strong relative performance and offers investors downside mitigation and portfolio diversification, complementing mid and large-cap private equity allocations. We are proud to announce this latest milestone for the sixth vintage of our PEC strategy, supported by investors who are drawn to the consistency of our performance, resilient cash-on-cash returns, as well as exposure to a hard-to-access and compelling segment of the market.”
“Delivering real returns is core to our investment philosophy, and the latest vintage continues that commitment. We take a proactive approach to exits, seeking to maintain healthy cash distributions to investors in a challenging exit environment. This is demonstrated by the full liquidation of PEC I and II, continuing our track record of consistent distributions and meeting the liquidity needs of clients.”
Brooks Harrington, Chief Investment Officer, Private Equity
