Hermes IM’s Steel: We want to double AUM by 2022

Hermes Investment Management head of business development Harriet Steel has expressed ambitious plans for the firm as it prepares to double assets and revenues in five years.

Having joined the firm in 2011, she says Hermes, which is owned by the BT pensions scheme, will continue to focus on organic growth but is not excluding any new deals or partnerships with existing or new clients.

She says: “We want to double our assets under management and revenues in five years and we can do most of that through organic growth but also look at other growth engines.

“We can grow from within but we want to do it faster. We have plans on how to broaden our franchise in mainstream asset management from out of our existing capabilities, especially on our ESG mandate.”

Third-party revenue at Hermes has tripled since she joined in 2011, with external client revenues going from 18 per cent to 61 per cent of total assets.

Hermes IM has £28.5bn in assets under management and £261.3bn in assets under advice.

Steel, who was made executive board director at the firm in 2013, says: “We are still in quite an organic growth trajectory in terms of net sales and gross sales, which are growing quite aggressively.

“What we will not rule out is looking for inorganic opportunities where they fit our overall corporate strategy framework and where they fill a gap and are culturally aligned to us.

“We look at anything to deal with sustainability and impact, there’s a lot of good intellectual capital out there in small firms that have a good track record in doing that though it is easier for us if they are in Europe.”

The firm is currently working at segmenting its client base as well as expanding relationships in Asia.

Steel adds: “We are moving towards a strategic client model where we are getting chosen by clients in their list of providers that they want to be partnering with.

“Growth is rapid and we are now looking how we segment those clients. We talk to 20 per cent of the allocators that handle 80 per cent of the money because we don’t have the resources to go beyond that and we’d rather serve that client base better. UK and Europe are still our core markets and now Asia is becoming important as well.”