Hermes GPE, the firm which invests in private equity funds and deals, has raised around $620m (£472m) for its co-investment strategy.
The fund raked in commitments from a club of pension funds, professional investors and asset managers – including the Local Pensions Partnership, a collaboration between Lancashire County Pension Fund and the London Pensions Fund Authority.
The money will be co-invested in deals led by direct private equity funds, sourced through the investors' relationships with private equity managers and Hermes GPE's own contacts.
“Our approach to allocating capital where we ‘should’ rather than where we ‘can’ hinges around identifying investment themes which we believe will generate the best growth investment opportunities,” said Hermes GPE's head of private equity Peter Gale.
Already the fund has invested $200m in 30 growth and mid-market deals, focused demographic themes such as emerging middle classes and ageing populations, and innovation such as medtech, fintech and artificial intelligence.
Other investors included European private equity firm Ardian, US public sector retirement system the State Teachers Retirement System of Ohio, the Canada Pension Plan Investment Board and Australian superannuation fund Hostplus.
These groups committed a total of $389m to the fund, exceeding its target size of $300m.
The remaining $230m was added outside the main fund by longstanding Hermes GPE clients, and will stand under segregated mandates.
Hermes GPE is part of Hermes Investment Management, which was set up to manage investments for the BT Pension Scheme but now also manages money for more than 400 clients across the world.
This will be the firm's third co-investment fund, and its predecessor generated net returns of 1.6 times the amount paid in.