Carlyle AlpInvest has committed approximately $600m in preferred equity to Horizon II, a private equity programme managed by Federated Hermes on behalf of the BT Pension Scheme (BTPS).

Horizon II is the second of three $1bn mandates awarded by BTPS, one of the UK’s largest private sector pension funds, with £35.7bn in assets under management. The vehicle comprises a globally diversified portfolio of lower and mid-market buyout funds and co-investments.

The preferred equity financing, executed by Federated Hermes’ secondaries team, offers BTPS a bespoke liquidity solution while preserving future upside from the Horizon II programme.

“We believe that the flexibility of preferred equity financing is the optimal solution to deliver BTPS’ investment objectives for Horizon II,” said Sanjeev Phakey, Head of Secondaries at Federated Hermes Private Equity.

The firm has distributed $2.7bn to investors since 2010 via various liquidity strategies, reinforcing its position as a specialist in managing cash flows and unlocking value throughout the fund lifecycle.

Wyn Francis, CIO of Brightwell, the investment manager for BTPS, added: “We are pleased to have delivered this innovative solution for our members.”

The deal further strengthens Carlyle AlpInvest’s position in preferred equity financing and highlights the continued growth of non-traditional liquidity tools in institutional portfolios.

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