Carlyle’s AlpInvest injects $600m into Federated Hermes PE

Key Takeaways

Geography: United Kingdom.

Analysis

Carlyle Group’s secondaries and portfolio-finance arm, AlpInvest Partners, has deployed a $600 million preferred-equity facility to Federated Hermes Private Equity. The capital is secured against Horizon II, the second of three $1 billion private-equity mandates awarded to Federated Hermes by the BT Pension Scheme (BTPS).

The transaction gives Horizon II fresh liquidity to support follow-on investments, new co-investments and potential NAV-based distributions to BTPS, while allowing Federated Hermes to extend the portfolio’s holding period without forcing near-term exits.

AlpInvest structured the deal through its Strategic Portfolio Finance platform, which specialises in preferred-equity, NAV-lending and continuation-vehicle solutions for general partners and limited partners. The platform surpassed $4 billion in commitments earlier this year, reflecting rising demand for non-dilutive fund-level financing.

Federated Hermes has run the BTPS Horizon programme since 2015. Horizon I (2015), Horizon II (2018) and Horizon III (2022) each carried $1 billion allocations and follow a 50/50 mix of primary fund commitments and direct co-investments.

Federated Hermes Private Equity now oversees roughly $6.1 billion in assets across co-investment, secondaries and bespoke strategies, following recent leadership changes that installed Brooks Harrington as CIO in 2024.

Why it matters

Preferred-equity solutions are becoming mainstream liquidity tools for large pension mandates.
AlpInvest continues to scale its portfolio-finance franchise amid muted exit markets.
BT Pension Scheme gains flexibility to manage cash flows without trimming private-markets exposure.

Both firms indicated they may replicate similar financing structures for Horizon III and other mature portfolios as market dynamics evolve.