#United States #Real Estate #Chevy Chase #Federated Hermes #FCP Fund Manager

Federated Hermes Expands Its Real Estate Investment Horizons

Federated Hermes, Inc., a prominent player in active investment management, has made a strategic move in the real estate sector by agreeing to acquire an 80% stake in FCP Fund Manager, L.P. This acquisition marks a significant milestone for Federated Hermes, which is not only increasing its presence in the U.S. market but also reinforcing its commitment to expanding private markets and alternatives investment capabilities.

The deal, expected to close in the first half of 2026, comes at a time when the multifamily sector in real estate is experiencing robust growth. As of June 30, 2025, FCP managed assets valued at approximately $3.8 billion, primarily focused on multifamily properties across the United States. Since its inception, FCP has handled investments, operations, and financing for over $14.6 billion in gross asset value, showcasing its extensive experience and capabilities in the sector.

Details of the Acquisition

The aggregate purchase price for FCP is set at approximately $331 million, which includes $215.8 million in cash, $23.2 million in Federated Hermes Class B common stock, and contingent considerations that could reach up to $92 million over multiple years following the deal's completion. This significant financial commitment underscores Federated Hermes' confidence in FCP's growth potential and the value it brings to the investment management landscape.

FCP, based in Chevy Chase, Maryland, operates six U.S. offices, which will remain the central hub for its operations post-acquisition. The firm has developed deep local knowledge and expertise in 19 priority U.S. markets, positioning it favorably to capitalize on growth opportunities in high-demand areas. The acquisition will enable Federated Hermes to leverage FCP’s established infrastructure and local insights while enhancing its existing real estate operations in the U.K., where it has managed $5.5 billion in assets as of September 30, 2025.

A Vision for the Future

J. Christopher Donahue, President and CEO of Federated Hermes, expressed enthusiasm about the acquisition, highlighting the strong fundamentals of the multifamily market and the growth prospects available through this transaction. He emphasized FCP’s proven track record of risk-adjusted returns and its commitment to maintaining strong community relationships, which are crucial for success in the real estate sector.

Furthermore, Esko Korhonen, FCP's Founding Managing Partner, echoed similar sentiments, indicating that joining forces with Federated Hermes aligns with their shared values and strategic vision for private market expansion, particularly in the Living sector in the U.S.

This acquisition also reflects a broader trend in financial services, where firms are increasingly seeking to diversify their investment strategies and enhance their capabilities in private markets. Federated Hermes aims to strengthen its offerings in private equity, private credit, and infrastructure, areas that have shown robust demand amidst current market dynamics.

Next Steps and Anticipations

With the board of directors from both Federated Hermes and FCP already approving the transaction, the focus will now shift to fulfilling certain regulatory conditions and obtaining third-party consents required for the closing. This diligence process includes adhering to the Hart-Scott-Rodino Antitrust Improvements Act, ensuring that all regulatory matters are addressed efficiently.

In addition to this acquisition, Federated Hermes has been proactive in enhancing its portfolio; earlier in 2025, it acquired Rivington Energy Management, an infrastructure developer, indicating a strategic shift towards bolstering its private markets business. Federated Hermes will be hosting a conference call to discuss this latest acquisition and provide further insights into its implications for investors and market stakeholders.

As this acquisition unfolds, the investment community will closely monitor Federated Hermes' integration of FCP’s capabilities and its strategic application within the broader landscape of private market investments. With an increasing focus on multifamily dwelling solutions, this move positions Federated Hermes not just as a passive player but as a significant influencer in the future trajectory of U.S. real estate investment.