Legal & General and Federated Hermes Limited Announce £4.7bn Fund Merger

Federated Hermes Property Unit Trust has been merged into the L&G Managed Property Fund expanding the MPF to £4.7bn.

A substantial portion of FHPUT unit holders’ holdings will be transferred to the MPF, which will take ownership of FHPUT’s real estate portfolio. All FHPUT unit holders will either have their holdings transferred or receive liquidity.

L&G said the enlarged L&G Managed Property Fund would unlock the potential for it to deliver greater scale and liquidity while maintaining long-term performance for all investors.

Michael Barrie, head of real estate, UK and Europe, at L&G, said: “Bringing together two of the UK’s most established property funds is a significant step in our strategy to strengthen our market position. It reinforces the collaborative approach that underpins L&G’s private market platform growth, our credibility as a partner of choice for consolidation opportunities and our abilities to execute innovative solutions. Through combining deep sector expertise with strong partnerships, we will continue to seek resilient, long-term value for investors. The overwhelming support from FHPUT unit holders is a clear vote of confidence – both in our strategy and in our partnership with Federated Hermes.”

Mark Russell, chief investment officer at Federated Hermes Real Estate, added: “We are proud to be able to announce today the successful merger of FHPUT with the L&G Managed Property Fund. It is also with a sense of pride, and some nostalgia, that we bring our 24-year association with FHPUT, a consistent strong performer, to a close. As the market has evolved, the needs of our clients have likewise changed and, we therefore sought this merger to provide the best options possible for them.

“This outcome follows months of detailed and thoughtful planning, undertaken in close consultation with FHPUT’s unit holders. Our goal throughout has been to deliver a solution for our investors that offers continued market exposure to the majority, where feasible, while enhancing both stability and liquidity over the long term. We are confident that the L&G Managed Property Fund – managed by a like-minded and highly experienced team – will continue to serve our clients with the same excellence and integrity they have come to expect. We are grateful to the L&G team for their collaborative and constructive approach throughout this process.”

Rob Codling, head of commercial funds – real estate equity, at L&G, said: “The MPF has been very acquisitive over the last 18 months, and this merger will continue to expand and strengthen our property portfolio. The assets complement existing holdings, and we expect the combined portfolios to drive strong returns for all investors. It has been a pleasure to collaborate with Federated Hermes through this process, to deliver a compelling solution for the FHPUT unit holders who we look forward to welcoming into the MPF.”

Source