Federated Hermes to acquire 80% stake in FCP for up to $331 million

PITTSBURGH - Federated Hermes, Inc. (NYSE:FHI), a financial powerhouse managing $845.7 billion in assets and maintaining a "GREAT" financial health score according to InvestingPro, announced Thursday it has reached a definitive agreement to acquire an 80% stake in FCP Fund Manager, L.P., a Maryland-based real estate investment manager specializing in U.S. multifamily assets.

The transaction, valued at up to $331 million, includes $215.8 million in cash, $23.2 million in Federated Hermes Class B common stock at closing, and potential contingent payments of up to $92 million over multiple years following completion. The company’s strong liquidity position, with a current ratio of 3.37, suggests it’s well-positioned to handle the cash component of this acquisition.

FCP, which has invested in over 75,000 multifamily apartment units with more than $14.6 billion in gross asset value since inception, will maintain its current operations across its six U.S. offices. The firm’s 75-plus member team will continue managing investment portfolios from existing locations, with coverage across 19 priority U.S. markets.

The acquisition aligns with Federated Hermes’ strategy to expand its private markets and alternatives investment capabilities, particularly in the United States. The deal will complement Federated Hermes’ existing U.K. real estate operations, which were established in 1983 and manage $5.5 billion in assets as of September 30, 2025. According to InvestingPro analysis, the company appears undervalued at its current market cap of $3.71 billion, trading at an attractive P/E ratio of 11.14. For detailed valuation metrics and more insights, check out the comprehensive Pro Research Report available on InvestingPro.

"Upon closing, this transaction will allow Federated Hermes to enter the U.S. Real Estate Market at a time when the Multifamily sector enjoys strong fundamentals and significant growth opportunities," said J. Christopher Donahue, president and CEO of Federated Hermes, in the press release statement.

Esko Korhonen, FCP Founding Managing Partner, noted that the transaction "provides an opportunity for FCP to strengthen its institutional platform, enhance its growth trajectory, and provide expanded resources."

The transaction is expected to close in the first half of 2026, subject to regulatory approvals and other customary closing conditions. This marks Federated Hermes’ second private markets acquisition since the beginning of 2025, following its purchase of U.K.-based infrastructure developer Rivington Energy Management Limited in April 2025.

Federated Hermes currently manages $845.7 billion in assets as of June 30, 2025. The company has demonstrated strong financial performance with a 28-year track record of consistent dividend payments, reflecting its commitment to shareholder returns. InvestingPro subscribers can access additional insights, including 8 more ProTips and detailed financial metrics that showcase the company’s robust financial position and growth potential.

In other recent news, Federated Hermes reported a slight increase in total revenue for the second quarter of 2025. During their earnings call, the company emphasized its commitment to innovation, particularly in the areas of digital asset infrastructure and tokenized money market funds. These developments underscore Federated Hermes’ strategic focus on expanding its technological capabilities. The company’s financial performance showed stability, with revenue growth from the previous quarter. Analyst firms have yet to provide updates on stock ratings following these announcements. Investors are closely monitoring Federated Hermes’ ongoing efforts to innovate within the financial sector. These recent developments are part of Federated Hermes’ broader strategy to enhance its market position.

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