Hermes Investment Management has substantially grown its stake in British utility Southern Water, buying a 17% shareholding previously owned by Australia鈥檚 sovereign wealth fund.
Hermes bought the 17.1% stake in Southern, which supplies water to more than 2.4m people in Hampshire and other English regions, months after reports the AUD117bn (鈧�79bn) Future Fund planned to dispose of its 23.4% shareholding, built up since 2008.
In a statement, Hermes said it completed the transaction following the sovereign investor鈥檚 sale, and that the manager now owned 21% of the utility.
Financial terms have not been disclosed.
The last full sale of the company, in 2007, saw Royal Bank of Scotland sell Southern for 拢4.2bn to a group led by JP Morgan.
Its current owners include a number of pension funds, as well as infrastructure funds.
Peter Hofbauer, head of infrastructure at Hermes Investment Management said: 鈥淲e are pleased to have acquired this additional ownership interest in Southern Water, obtaining incremental governance rights, including board representation, on behalf of our clients.鈥�
Hermes, owned by the UK鈥檚 BT Pension Scheme, would not be drawn on the client for which it acquired the stake, but a spokeswoman clarified that the transaction was not conducted on behalf of the Hermes GPE Infrastructure Fund (HIF).
HIF is backed by six UK local government pension schemes (LGPS) 鈥� including those for Dorset, Cornwall and the London borough of Barking and Dagenham 鈥� and, as a result, Hermes has been considering the launch of a .
HIF has previously bought into Associated British Ports, in which .
Hermes was also part of a group to buy the UK government鈥檚 stake in .
Both previous deals were also supported by the Santander UK Group Pension Scheme, for which Hermes runs a segregated infrastructure account.
However, a spokesman for Sandander confirmed that the scheme had not participated in the Southern deal.
