Pittsburgh-based active investment management firm Federated Hermes Inc. reached an agreement to acquire 80 percent of FCP Fund Manager L.P., a privately held U.S. real estate investment manager based in Chevy Chase, Md.
“We are delighted to announce the signing of the purchase agreement for this transaction today,” J. Christopher Donahue, president and chief executive officer of Federated Hermes, said Oct. 23. “Upon closing, 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.”
The aggregate purchase price of up to $331 million includes $215.8 million in cash consideration and $23.2 million in Federated Hermes Class B common stock that will be paid and issued at closing, and opportunities to earn contingent consideration of up to $92 million over multiple year periods after closing, according to Donahue.
Specifically, the transaction will introduce additional expertise as Federated Hermes seeks to develop product solutions for its clients at a time of increasing demand for the private markets asset class.
It also will expand Federated Hermes real estate capabilities into the U.S. market, complementing its existing real estate operations in the United Kingdom, which had $5.5 billion of assets under management as of Sept. 30.
Additionally, the transaction will reinforce Federated Hermes’ desire to enhance and grow its private markets/alternatives offerings, where it already has a mix of businesses operated primarily outside of the U.S. across several areas with assets totaling $19 billion as of Sept. 30.
“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,” said Donahue. “An additional attraction is the complementary experience and knowledge of the residential sector, which will be vital as we seek to continue to grow our U.S. and U.K. real estate businesses.”
FCP — which specializes in investing across the U.S. multifamily asset class deploying capital through predominantly equity and several debt vehicles — and its 75-plus member team will continue to manage investment portfolios and other aspects of the business from its current six locations.
“In Federated Hermes, we have identified a firm with shared values and a strong commitment to building a private markets business,” said Esko Korhonen, FCP founding managing partner, who said FCP is uniquely positioned to lead the private market expansion with Federated Hermes into living sector assets in the United States.
The transaction has been approved by the board of directors of Federated Hermes and executive management of FCP, and is expected to close in the first half of 2026, subject to certain conditions being satisfied.