Federated Hermes Completes Acquisition of 80% Stake in FCP Fund Manager, L.P.: Key Details for Investors

Key Points of the Transaction

• Federated Hermes, Inc. (NYSE: FHI) has announced the completion of its acquisition of an 80% majority interest in FCP Fund Manager, L.P. (FCP®), a leading privately held US real estate investment manager.
• FCP’s client assets: \$3.5 billion as of December 31, 2025.
• Aggregate purchase price: Up to \$331 million, consisting of \$215.8 million in cash, \$23.2 million in Federated Hermes Class B common stock, and up to \$92 million in potential contingent consideration over multiple periods.
• Corporate Structure Update: With the closing, FCP Fund Manager, L.P. has converted into a Delaware limited liability company, now named Federated Hermes FCP Manager, LLC.

Strategic Rationale and Business Impact

• Strengthening US Presence: This acquisition marks a significant expansion of Federated Hermes’ real estate footprint into major US markets, complementing its established UK real estate operations (which held \$5 billion AUM as of December 31, 2025).
• Expanding Alternatives Platform: FCP’s integration is set to enhance Federated Hermes’ alternatives and private markets offerings, building on the firm’s \$19.1 billion platform across Private Equity, Private Credit, Infrastructure, Real Estate, and Market Neutral strategies.
• FCP’s Track Record: Since inception, FCP has invested, operated, and/or financed over \$14.8 billion in gross asset value, including more than 75,000 multifamily units, and currently manages portfolios from six US offices, providing coverage across 19 priority markets.
• Team Continuity: FCP’s 75-plus-member team will remain in place, operating from their existing locations and maintaining deep local market expertise.

Management Commentary

• J. Christopher Donahue, President and CEO of Federated Hermes:

  “We are pleased to complete this strategically important acquisition, which accelerates our entry into the US real estate market at a time when the multifamily sector is characterized by strong fundamentals and durable demand. FCP’s long-standing track record of delivering attractive risk-adjusted returns, together with its deep local market knowledge, provides an exceptional platform for long-term growth.”

• Esko Korhonen, Founding Managing Partner of FCP:

  “Joining Federated Hermes strengthens our institutional foundation and provides the resources to support our next phase of growth while enabling us to expand our leadership position in US living-sector assets. Federated Hermes shares our values and long-term investment philosophy, and we are confident this alliance will benefit our clients, stakeholders, and the communities where we invest.”

About Federated Hermes and FCP

• Federated Hermes, Inc.: A global active investment management leader with \$902.6 billion in assets under management as of December 31, 2025, serving more than 11,000 institutions and intermediaries worldwide.
• FCP: Founded in 1999, FCP is a privately held real estate investment company specializing in US multifamily and commercial assets, with both equity and structured investments, and a strong footprint in major US real estate markets.

Potential Shareholder and Share Price Impact

• Strategic Growth: This acquisition is likely to be viewed positively by shareholders, as it diversifies Federated Hermes’ real estate platform, significantly broadens its US presence, and strengthens its alternatives franchise at a time of robust demand for US multifamily assets.
• Price Sensitivity: The deal’s size (up to \$331 million), mix of cash and stock consideration, and exposure to potential contingent payments may be price-sensitive. Investors should note the alignment with Federated Hermes’ long-term strategy to expand its alternatives platform globally.
• Synergies and Growth Prospects: The transaction offers potential for revenue growth, increased assets under management, and long-term value creation as Federated Hermes leverages FCP’s expertise, market reach, and investment track record.
• Risks: The announcement includes forward-looking statements, and actual results could differ due to market, competitive, regulatory, and economic uncertainties. The transaction’s success depends on integration, market conditions, and ongoing performance.

Forward-Looking Statements

The press release includes forward-looking statements regarding the anticipated benefits of the acquisition, expansion of Federated Hermes’ private market offerings, and FCP’s future leadership. These statements are subject to substantial risks and uncertainties, including those outlined in Federated Hermes’ SEC filings. No assurance can be given regarding future results, and investors should not rely unduly on these statements.

Disclaimer: This article is for informational purposes only and does not constitute investment advice or a recommendation to buy or sell any securities. Investors should conduct their own research and consult with financial advisors before making investment decisions. Past performance is not indicative of future results. Federated Hermes and FCP’s forward-looking statements are subject to various risks and uncertainties, and actual results may differ materially.

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