Hermes loses BT pension fund’s £8.4bn mandate

BT’s pension fund has withdrawn a bond mandate of £8.4bn from its former in-house retirement scheme manager, Hermes, in an attempt to cut costs, reducing the fund’s assets under management by almost a third.

The mandate loss will see total assets under management at Hermes fall by just under a third to around £21bn, according to the Reuters, costing the investment firm just over £3m in lost revenues, or around 3% of its total income for the year.

Hermes was set up in 1983, the year before BT was privatised, to run the BT Pension Scheme (BTPS) but now serves hundreds of other institutional investors.

“Hermes has delivered strong performance for this mandate and across the portfolios they manage for us”, BTPS said in a statement.