Federated Hermes, Inc. (NYSE: FHI), a global leader in active investing, has announced a definitive agreement to acquire an 80% majority interest in FCP Fund Manager, L.P. (FCP). This strategic move, valued at up to $331 million, is set to significantly expand Federated Hermes' private markets and real estate investment capabilities, particularly within the United States market.
The acquisition underscores Federated Hermes' commitment to growing its alternative investment offerings and strengthening its presence in the U.S. real estate sector. FCP, a privately held U.S. real estate investment manager based in Chevy Chase, Maryland, specializes in the multifamily asset class, deploying capital through equity and debt vehicles.
Key Takeaways
- Federated Hermes acquires 80% of FCP Fund Manager for up to $331 million.
- The deal expands Federated Hermes' U.S. private markets and real estate presence.
- FCP specializes in U.S. multifamily real estate investments.
- FCP's team and operations will remain in place post-acquisition.
- The transaction is expected to close in the first half of 2026.
Strategic Expansion into U.S. Real Estate
The acquisition of FCP represents a pivotal step for Federated Hermes, aligning with its publicly stated goal to enhance its private markets and alternatives investment capabilities, especially in the United States. Federated Hermes already manages a diverse portfolio of private equity, private credit, infrastructure, and real estate strategies, totaling $19 billion as of September 30, 2025, primarily outside the U.S.
FCP brings to the table significant expertise in the U.S. multifamily sector. Since its inception, FCP has invested in, operated, or financed more than $14.6 billion in gross asset value, which includes over 75,000 multifamily apartment units. This focus on residential assets complements Federated Hermes' existing real estate operations in the U.K., which were founded in 1983 and managed $5.5 billion in assets as of September 30, 2025.
"This transaction will allow Federated Hermes to enter the U.S. Real Estate Market at a time when the Multifamily sector enjoys strong fundamentals and significant growth opportunities," said J. Christopher Donahue, president and chief executive officer of Federated Hermes. "FCP brings a long-term record of real estate investment performance, which has been driven by a focus on risk-adjusted returns, extensive local and regional market knowledge and deep community relationships."
FCP at a Glance
- Client Assets: $3.8 billion (as of June 30, 2025)
- Team Members: Over 75 professionals
- Offices: Six U.S. locations, including headquarters in Chevy Chase, Maryland
- Market Coverage: Deep local coverage in 19 priority U.S. markets
- Total Assets Invested: Over $14.6 billion since founding in 1999
Financial Details and Future Outlook
The total purchase price for the 80% stake in FCP could reach up to $331 million. This includes an upfront payment of $215.8 million in cash and $23.2 million in Federated Hermes Class B common stock, which will be issued at closing. Additionally, FCP has opportunities to earn contingent consideration of up to $92 million over multiple years following the completion of the transaction.
The acquisition is expected to boost FCP's institutional strength, providing enhanced resources to support its ambitious growth plans. FCP's existing management team and its more than 75 employees will continue to manage investment portfolios and other business aspects from their current locations, ensuring continuity for clients and ongoing operations.
Federated Hermes: A Global Investment Leader
Headquartered in Pittsburgh, Federated Hermes, Inc. is a global leader in active investment management. As of June 30, 2025, the firm managed $845.7 billion in assets. Federated Hermes provides a wide range of investment solutions, including equity, fixed-income, alternative/private markets, multi-asset, and liquidity management strategies, serving over 10,000 institutions and intermediaries worldwide.
Synergies and Market Positioning
The combination of Federated Hermes' global reach and institutional platform with FCP's specialized U.S. multifamily expertise creates a powerful synergy. This move positions Federated Hermes to capitalize on the strong fundamentals and growth opportunities within the U.S. residential sector, particularly in high-growth areas where FCP maintains deep local coverage across 19 priority markets.
Esko Korhonen, FCP Founding Managing Partner, expressed enthusiasm for the partnership. "In Federated Hermes, we have identified a firm with shared values and a strong commitment to building a private markets business," he stated. Korhonen believes the transaction will strengthen FCP's institutional platform and accelerate its growth trajectory.
Expanding Private Markets Offerings
This transaction marks the second private markets acquisition for Federated Hermes in 2025 alone. Earlier this year, in April, the firm acquired Rivington Energy Management Limited, a U.K.-based infrastructure developer. These acquisitions highlight Federated Hermes' strategic focus on expanding its alternatives offerings to meet increasing client demand for private markets asset classes.
The deal received approval from the board of directors of Federated Hermes, Inc. and the executive management of FCP. It is anticipated to close in the first half of 2026, pending certain conditions, including third-party consents and the expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976.
The integration of FCP's residential sector knowledge will be crucial as Federated Hermes continues to grow its real estate businesses both in the U.S. and the U.K., reinforcing its position as a comprehensive global investment manager.
