- Q2 2023 earnings per diluted share of $0.81
- Total assets under management reach a record high of
$704.0 billion
- Money market assets reach a record $509.0 billion
- Board declares $0.28 per share
dividend
PITTSBURGH, July 27,
2023 /PRNewswire/ -- Federated Hermes, Inc.
(NYSE: FHI), a global leader in active, responsible investing,
today reported earnings per diluted share (EPS) of $0.81 for Q2 2023, compared to $0.64 for the same quarter last year, on net
income of $72.2 million for Q2 2023,
compared to $57.7 million for Q2
2022.
Federated Hermes' total managed assets were a record
$704.0 billion at June 30,
2023, up $72.1 billion or 11%
from $631.9 billion at
June 30, 2022 and up $3.0
billion or less than 1% from $701.0
billion at March 31, 2023. Total average managed
assets for Q2 2023 were $705.3
billion, up $87.4 billion or
14% from $617.9 billion reported for
Q2 2022 and up $25.9 billion or 4%
from $679.4 billion for Q1 2023.
"In the second quarter, Federated Hermes benefited from a
breadth of investment offerings and robust client relationships, as
record assets under management were again driven by money market
asset increases from the prior quarter," said J. Christopher Donahue, president and chief
executive officer. "Investors showed interest in Federated Hermes'
international equity offerings and strategies that rely on our
proprietary MDT quantitative models. For the second consecutive
quarter, we also saw more than $1
billion of net flows into our core multisector bond
strategies, which seek attractive opportunities by allocating
across investment-grade corporate, high yield, structured product,
municipal and international sectors."
Federated Hermes' board of directors declared a dividend of
$0.28 per share. The dividend is
payable on Aug. 15, 2023 to
shareholders of record as of Aug. 8,
2023. During Q2 2023, Federated Hermes purchased 1,236,199
shares of Federated Hermes class B common stock for $43.4
million.
Equity assets were $83.0 billion
at June 30, 2023, up $2.0
billion or 2% from $81.0
billion at June 30, 2022 and down $0.6 billion or 1% from $83.6 billion at March 31, 2023.
Top-selling equity funds during Q2 2023 on a net basis were
Federated Hermes Asia ex-Japan Equity Fund, Federated Hermes MDT
Large Cap Growth Fund, Federated Hermes MDT Mid Cap Growth Fund,
Federated Hermes International Leaders Fund and Federated Hermes
MDT All Cap Core Fund.
Fixed-income assets were $87.4
billion at June 30, 2023, up $1.1 billion or 1% from $86.3 billion at June 30, 2022
and down $0.1 billion or less
than 1% from $87.5 billion at
March 31, 2023. Top-selling fixed-income funds during Q2
2023 on a net basis were Federated Hermes Total Return Bond Fund,
Federated Hermes Government Ultrashort Fund, Federated Hermes SDG
Engagement High Yield Credit Fund (UCITS), Federated Hermes Total
Return Bond Collective Investment Fund and Federated Hermes
Conservative Municipal Microshort Fund.
Alternative/private markets assets were $21.6 billion at June 30, 2023, down
$0.2 billion or 1% from $21.8 billion at June 30, 2022
and up $0.4 billion or 2% from
$21.2 billion at
March 31, 2023.
Money market assets were a record $509.0
billion at June 30, 2023, up $69.3 billion or 16% from $439.7 billion at June 30, 2022
and up $3.2 billion or 1% from
$505.8 billion at
March 31, 2023. Money market fund assets were a
record $364.0 billion at June 30, 2023, up $66.0 billion or 22% from $298.0 billion at June 30, 2022
and up $6.7 billion or 2% from
$357.3 billion at
March 31, 2023.
Financial Summary
Two transactions impacted Q2 2023 results, with the net
after-tax impact of these two transactions resulting in a loss of
approximately $800,000.
In the first transaction, a shareholder in a private equity fund
sold a portion of their investment to a third-party. As part of the
terms of this sale, $25.1 million of carried interest was
recorded as revenue, $17.5 million
was recorded as related compensation expense and
approximately $175,000 was recorded as professional service
fee expense.
In the second transaction, as part of a restructuring of an
infrastructure fund, Federated Hermes purchased certain limited
partners' rights to receive future carried interest at fair value,
which was calculated by a third-party to be approximately $9.8
million. This expense is included in Other expense.
Due to the restructuring, an existing clawback risk on
previously earned carried interest was removed, resulting in
revenue recognition of $14.2 million
of carried interest, as well as $8.8
million of related compensation expense.
The purchase of limited partners' carried interest rights and
related legal and professional fees were not deductible for tax
purposes. As a result, the effective tax rate of 27.4% in Q2 2023
was higher than the expected rate of 24%-26%.
Total carried interest and performance fee revenue for Q2 2023
was $39.4 million, of which $25.5 million was recorded as
compensation expense and paid to the other carried interest
holders.
Q2 2023 vs. Q2 2022
Revenue increased $67.2 million or
18% primarily due to an increase in total carried interest and
performance fees of $36.9 million,
including $24.6 million of carried
interest from consolidated carried interest vehicles, an increase
in revenue due to higher average money market assets and the
elimination of voluntary fee waivers related to certain money
market funds in order for those funds to maintain positive or zero
net yields (voluntary yield-related fee waivers). For further
information on the waivers, see "Impact of voluntary yield-related
fee waivers" below. These increases were partially offset by a
decrease in revenue due to lower average long-term assets.
During Q2 2023, Federated Hermes derived 54% of its revenue
from long-term assets (28% from equity, 15% from
alternative/private markets and multi-asset, and 11% from
fixed-income), 45% from money market assets, and 1% from sources
other than managed assets.
Operating expenses increased $61.2
million or 22% primarily due to increased compensation
expenses resulting from consolidated carried interest vehicles of
$24.4 million and an increase in
distribution expense due to the elimination of voluntary
yield-related fee waivers and higher average managed money
market fund assets.
Nonoperating income (expenses), net increased $24.8 million primarily due to a decrease in the
market value of investments in Q2 2022 compared to a minimal change
in the market value of investments in Q2 2023.
Q2 2023 vs. Q1 2023
Revenue increased $51.0 million or
13% primarily due to an increase in total carried interest and
performance fees of $38.0 million,
including $25.9 million of carried
interest from consolidated carried interest vehicles, and
an increase in revenue from higher average money market
assets. These increases were partially offset by a decrease in
revenue due to lower average equity assets.
Operating expenses increased $37.8
million or 13% due to increased compensation expenses
resulting from consolidated carried interest vehicles of
$25.7 million and an increase in
other expense due to fund reorganization costs.
Nonoperating income (expenses), net decreased $5.2 million primarily due to an increase in the
market value of investments in Q1 2023 compared to a minimal change
in the market value of investments in Q2 2023.
YTD 2023 vs. YTD 2022
Revenue increased $124.6 million
or 18% primarily due to the elimination of voluntary yield-related
fee waivers, an increase in revenue from higher average money
market assets and an increase in total carried interest and
performance fees of $38.2 million,
including $24.4 million of carried
interest from consolidated carried interest vehicles. These
increases were partially offset by a decrease in revenue due to
lower average long-term assets.
For the first half of 2023, Federated Hermes derived 53% of its
revenue from long-term assets (30% from equity, 12% from
fixed-income and 11% from alternative/private markets and
multi-asset), 46% from money market assets, and 1% from sources
other than managed assets.
Operating expenses increased $117.4
million or 23% primarily due to an increase in distribution
expense resulting from the elimination of voluntary yield-related
fee waivers and increased compensation expenses resulting from
consolidated carried interest vehicles of $24.3 million.
Nonoperating income (expenses), net increased $43.9 million primarily due to an increase in the
market value of investments in the first six months of 2023
compared to a decrease in the market value of investments for the
same period in 2022.
Impact of voluntary yield-related fee waivers
There were no voluntary yield-related fee waivers during the
three and six months ended June 30, 2023. During the three and
six months ended June 30, 2022, voluntary yield-related fee
waivers totaled $9.5 million and
$85.3 million, respectively. These
fee waivers were partially offset by related reductions in
distribution expenses of $9.0 million
and $66.5 million, respectively, such
that the net negative pre-tax impact to Federated Hermes was
$0.5 million and $18.8 million, respectively, for the three and
six months ended June 30, 2022.
Earnings call information
Federated Hermes will host an earnings conference call at
9 a.m. Eastern on July 28, 2023.
Investors are invited to listen to the earnings teleconference by
calling 888-506-0062 (domestic) or 973-528-0011 (international)
prior to the 9 a.m. start time. To listen online, go to the
About section of FederatedHermes.com/us at least 15 minutes prior
to register and join the call. A replay will be available at
approximately 12:30 p.m. Eastern on
July 28, 2023. To access the telephone replay, dial
877-481-4010 (domestic) or 919-882-2331 (international) and enter
access code 48660. The online replay will be available via
FederatedHermes.com/us for one year.
About Federated Hermes
Federated Hermes, Inc. is a global leader in active, responsible
investment management, with $704.0
billion in assets under management1. We deliver
investment solutions that help investors target a broad range of
outcomes and provide equity, fixed-income, alternative/private
markets, multi-asset and liquidity management strategies to more
than 11,000 institutions and intermediaries worldwide. Our clients
include corporations, government entities, insurance companies,
foundations and endowments, banks and broker/dealers. Headquartered
in Pittsburgh, Federated Hermes
has more than 2,000 employees in London, New
York, Boston and offices
worldwide.
Federated Hermes ranks in the top 7% of equity fund managers in
the industry, the top 9% of money market fund managers and the top
10% of fixed-income fund managers2. Federated Hermes
also ranks as the 5th-largest manager of model-delivered
SMAs3. For more information, including an analyst
presentation, which is updated periodically, visit
FederatedHermes.com/us.
###
1) As of June 30, 2023.
2) Morningstar,
June 30, 2023. Based on U.S. fund flows rankings.
3)
Money Management Institute/Cerulli,Q1 2023.
Federated
Securities Corp. is distributor of the Federated Hermes
funds.
Separately managed accounts are made available through
Federated Global Investment Management Corp., Federated Investment
Counseling, Federated MDTA LLC, Hermes Fund Managers Ireland
Limited, Hermes Investment Management Limited, and Hermes GPE LLP,
each a registered investment advisor in one or more of the U.S.,
U.K. or Ireland.
Cautionary statements
Certain statements in this press release, such as those related
to performance, investor preferences and demand, asset flows, asset
mix, interest rates and fee waivers constitute or may constitute
forward-looking statements, which involve known and unknown risks,
uncertainties and other factors that may cause the actual results,
levels of activity, performance or achievements of the company, or
industry results, to be materially different from any future
results, levels of activity, performance or achievements expressed
or implied by such forward-looking statements. Forward-looking
statements can include statements that do not relate strictly to
historical or current facts and are typically identified by words
or phrases such as "trend," "forecast," "project," "predict,"
"potential," "approximate," "opportunity," "believe," "expect,"
"anticipate," "current," "intention," "estimate," "position,"
"projection," "plan," "assume," "continue," "remain," "maintain,"
"sustain," "seek," "achieve," and similar expressions, or future or
conditional verbs such as "will," "would," "should," "could,"
"can," "may" and similar expressions. Any forward-looking
statement, and Federated Hermes' level of business activity and
financial results, are inherently subject to significant business,
market, economic, competitive, regulatory and other risks and
uncertainties, many of which are difficult to predict and beyond
Federated Hermes' control. Other risks and uncertainties include
the ability of the company to predict the level of fee waivers and
expenses in future quarters, predict whether performance fees or
carried interest will be earned and retained, the ability of the
company to sustain product demand, the timing and level of product
sales and redemptions, market appreciation or depreciation,
revenues, asset levels, flows and mix, which could vary
significantly depending on various factors, such as market
conditions, investment performance and investor behavior. Other
risks and uncertainties include the risk factors discussed in the
company's annual and quarterly reports as filed with the Securities
and Exchange Commission. As a result, no assurance can be given as
to future results, levels of activity, performance or achievements,
and neither the company nor any other person assumes responsibility
for the accuracy and completeness, or updating, of such statements
in the future.
Unaudited
Condensed Consolidated Statements of Income
|
(in thousands,
except per share data)
|
|
|
|
|
|
|
|
Quarter
Ended
|
% Change
Q2 2022 to
Q2 2023
|
|
Quarter
Ended
|
% Change
Q1 2023 to
Q2 2023
|
|
June 30,
2023
|
June 30, 2022
|
|
March 31, 2023
|
Revenue
|
|
|
|
|
|
|
Investment advisory
fees, net
|
$
310,337
|
$
258,043
|
20 %
|
|
$
263,982
|
18 %
|
Administrative service
fees, net—affiliates
|
85,199
|
70,182
|
21
|
|
79,180
|
8
|
Other service fees,
net
|
37,696
|
37,783
|
0
|
|
39,027
|
(3)
|
Total
Revenue
|
433,232
|
366,008
|
18
|
|
382,189
|
13
|
|
|
|
|
|
|
|
Operating
Expenses
|
|
|
|
|
|
|
Compensation and
related
|
159,883
|
128,086
|
25
|
|
136,878
|
17
|
Distribution
|
97,086
|
84,243
|
15
|
|
93,333
|
4
|
Systems and
communications
|
22,074
|
18,446
|
20
|
|
19,972
|
11
|
Professional service
fees
|
19,099
|
13,976
|
37
|
|
16,220
|
18
|
Office and
occupancy
|
11,404
|
10,512
|
8
|
|
12,874
|
(11)
|
Advertising and
promotional
|
5,109
|
4,736
|
8
|
|
4,342
|
18
|
Travel and
related
|
3,835
|
3,328
|
15
|
|
3,231
|
19
|
Intangible asset
related
|
3,418
|
3,091
|
11
|
|
3,326
|
3
|
Other
|
12,935
|
7,272
|
78
|
|
6,847
|
89
|
Total
Operating Expenses
|
334,843
|
273,690
|
22
|
|
297,023
|
13
|
Operating
Income
|
98,389
|
92,318
|
7
|
|
85,166
|
16
|
|
|
|
|
|
|
|
Nonoperating Income
(Expenses)
|
|
|
|
|
|
|
Investment income
(loss), net
|
5,289
|
(19,308)
|
127
|
|
10,312
|
(49)
|
Debt
expense
|
(3,118)
|
(3,350)
|
(7)
|
|
(3,125)
|
0
|
Other, net
|
(15)
|
(13)
|
(15)
|
|
122
|
(112)
|
Total Nonoperating
Income (Expenses), net
|
2,156
|
(22,671)
|
110
|
|
7,309
|
(71)
|
Income before income
taxes
|
100,545
|
69,647
|
44
|
|
92,475
|
9
|
Income tax
provision
|
27,543
|
18,889
|
46
|
|
21,009
|
31
|
Net income including
the noncontrolling interests in subsidiaries
|
73,002
|
50,758
|
44
|
|
71,466
|
2
|
Less: Net income
(loss) attributable to the noncontrolling interests in
subsidiaries
|
827
|
(6,899)
|
112
|
|
1,865
|
(56)
|
Net Income
|
$
72,175
|
$
57,657
|
25 %
|
|
$
69,601
|
4 %
|
|
|
|
|
|
|
|
Amounts Attributable
to Federated Hermes, Inc.
|
|
|
|
|
|
|
Earnings Per
Share1
|
|
|
|
|
|
|
Basic and
diluted
|
$
0.81
|
$
0.64
|
27 %
|
|
$
0.78
|
4 %
|
Weighted-Average
Shares Outstanding
|
|
|
|
|
|
|
Basic
|
84,930
|
85,563
|
|
|
84,875
|
|
Diluted
|
84,939
|
85,563
|
|
|
84,875
|
|
Dividends Declared
Per Share
|
$
0.28
|
$
0.27
|
|
|
$
0.27
|
|
1)
|
Unvested share-based
awards that receive non-forfeitable dividend rights are deemed
participating securities and are required to be considered in the
computation of earnings per share under the "two-class method." As
such, total net income of $3.5 million, $3.1 million and $3.5
million available to unvested restricted Federated Hermes
shareholders for the quarterly periods ended June 30, 2023, June
30, 2022 and March 31, 2023, respectively, was excluded from the
computation of earnings per share.
|
Unaudited
Condensed Consolidated Statements of Income
|
|
|
|
(in thousands,
except per share data)
|
|
|
|
|
Six Months
Ended
|
|
June 30,
2023
|
June 30, 2022
|
%
Change
|
Revenue
|
|
|
|
Investment advisory
fees, net
|
$
574,318
|
$
491,037
|
17 %
|
Administrative service
fees, net—affiliates
|
164,378
|
143,689
|
14
|
Other service fees,
net
|
76,725
|
56,046
|
37
|
Total
Revenue
|
815,421
|
690,772
|
18
|
|
|
|
|
Operating
Expenses
|
|
|
|
Compensation and
related
|
296,761
|
262,051
|
13
|
Distribution
|
190,420
|
132,804
|
43
|
Systems and
communications
|
42,046
|
37,940
|
11
|
Professional service
fees
|
35,320
|
27,444
|
29
|
Office and
occupancy
|
24,278
|
21,835
|
11
|
Advertising and
promotional
|
9,451
|
7,468
|
27
|
Travel and
related
|
7,066
|
5,123
|
38
|
Intangible Asset
Related
|
6,743
|
6,425
|
5
|
Other
|
19,781
|
13,415
|
47
|
Total
Operating Expenses
|
631,866
|
514,505
|
23
|
Operating
Income
|
183,555
|
176,267
|
4
|
|
|
|
|
Nonoperating Income
(Expenses)
|
|
|
|
Investment income
(loss), net
|
15,601
|
(29,909)
|
152
|
Debt
expense
|
(6,243)
|
(4,571)
|
37
|
Other, net
|
107
|
68
|
57
|
Total Nonoperating
Income (Expenses), net
|
9,465
|
(34,412)
|
128
|
Income before income
taxes
|
193,020
|
141,855
|
36
|
Income tax
provision
|
48,552
|
36,500
|
33
|
Net income including
the noncontrolling interests in subsidiaries
|
144,468
|
105,355
|
37
|
Less: Net income
(loss) attributable to the noncontrolling interests in
subsidiaries
|
2,692
|
(8,165)
|
133
|
Net Income
|
$
141,776
|
$
113,520
|
25 %
|
|
|
|
|
Amounts Attributable
to Federated Hermes, Inc.
|
|
|
|
Earnings Per
Share1
|
|
|
|
Basic and
diluted
|
$
1.59
|
$
1.24
|
28 %
|
Weighted-Average
Shares Outstanding
|
|
|
|
Basic
|
84,902
|
86,911
|
|
Diluted
|
84,907
|
86,911
|
|
Dividends Declared
Per Share
|
$
0.55
|
$
0.54
|
|
1)
|
Unvested share-based
awards that receive non-forfeitable dividend rights are deemed
participating securities and are required to be considered in the
computation of basic earnings per share under the "two-class
method." As such, total net income of $7.0 million and $5.5 million
available to unvested restricted Federated Hermes shareholders for
the six months ended June 30, 2023 and June 30, 2022, respectively,
was excluded from the computation of basic earnings per
share.
|
Unaudited
Condensed Consolidated Balance Sheets
|
|
|
(in
thousands)
|
June 30,
2023
|
Dec. 31,
2022
|
Assets
|
|
|
Cash and other
investments
|
$
520,808
|
$
521,754
|
Other current
assets
|
173,540
|
129,277
|
Intangible
assets, net, including goodwill
|
1,221,786
|
1,209,574
|
Other long-term
assets
|
143,609
|
159,874
|
Total
Assets
|
$
2,059,743
|
$
2,020,479
|
|
|
|
Liabilities,
Redeemable Noncontrolling Interests and Equity
|
|
|
Current
liabilities
|
$
234,496
|
$
257,413
|
Long-term
debt
|
347,711
|
347,581
|
Other long-term
liabilities
|
285,668
|
307,972
|
Redeemable
noncontrolling interests
|
58,012
|
61,821
|
Equity excluding
treasury stock
|
1,537,357
|
1,411,055
|
Treasury
stock
|
(403,501)
|
(365,363)
|
Total
Liabilities, Redeemable Noncontrolling Interests and
Equity
|
$
2,059,743
|
$
2,020,479
|
Unaudited Changes
in Long-Term Assets - By Asset Class
|
|
|
|
(in
millions)
|
Quarter
Ended
|
|
Six Months
Ended
|
|
June 30,
2023
|
March 31, 2023
|
June 30, 2022
|
|
June 30,
2023
|
June 30, 2022
|
Equity
|
|
|
|
|
|
|
Beginning
assets
|
$
83,629
|
$
81,523
|
$
91,676
|
|
$
81,523
|
$
96,716
|
Sales1
|
4,869
|
5,631
|
6,595
|
|
10,500
|
13,587
|
Redemptions1
|
(5,697)
|
(4,736)
|
(7,564)
|
|
(10,433)
|
(14,634)
|
Net sales
(redemptions)1
|
(828)
|
895
|
(969)
|
|
67
|
(1,047)
|
Net
exchanges
|
5
|
103
|
20
|
|
108
|
(154)
|
Impact of
foreign exchange2
|
71
|
108
|
(1,199)
|
|
179
|
(1,653)
|
Market gains and
(losses)3
|
115
|
1,000
|
(8,540)
|
|
1,115
|
(12,874)
|
Ending
assets
|
$
82,992
|
$
83,629
|
$
80,988
|
|
$
82,992
|
$
80,988
|
|
|
|
|
|
|
|
Fixed
Income
|
|
|
|
|
|
|
Beginning
assets
|
$
87,461
|
$
86,743
|
$
92,146
|
|
$
86,743
|
$
97,550
|
Sales1
|
4,891
|
6,047
|
6,991
|
|
10,938
|
14,415
|
Redemptions1
|
(4,963)
|
(7,127)
|
(8,950)
|
|
(12,090)
|
(18,387)
|
Net sales
(redemptions)1
|
(72)
|
(1,080)
|
(1,959)
|
|
(1,152)
|
(3,972)
|
Net
exchanges
|
6
|
(101)
|
(51)
|
|
(95)
|
95
|
Impact of
foreign exchange2
|
43
|
38
|
(225)
|
|
81
|
(329)
|
Market gains and
(losses)3
|
(13)
|
1,861
|
(3,658)
|
|
1,848
|
(7,091)
|
Ending
assets
|
$
87,425
|
$
87,461
|
$
86,253
|
|
$
87,425
|
$
86,253
|
|
|
|
|
|
|
|
Alternative/Private
Markets
|
|
|
|
|
|
|
Beginning
assets
|
$
21,174
|
$
20,802
|
$
23,109
|
|
$
20,802
|
$
22,920
|
Sales1
|
643
|
1,265
|
1,116
|
|
1,908
|
1,760
|
Redemptions1
|
(745)
|
(792)
|
(1,091)
|
|
(1,537)
|
(1,596)
|
Net sales
(redemptions)1
|
(102)
|
473
|
25
|
|
371
|
164
|
Net
exchanges
|
(4)
|
1
|
4
|
|
(3)
|
4
|
Impact of
foreign exchange2
|
539
|
368
|
(1,555)
|
|
907
|
(2,192)
|
Market gains and
(losses)3
|
(5)
|
(470)
|
202
|
|
(475)
|
889
|
Ending
assets
|
$
21,602
|
$
21,174
|
$
21,785
|
|
$
21,602
|
$
21,785
|
|
|
|
|
|
|
|
Multi-asset
|
|
|
|
|
|
|
Beginning
assets
|
$
2,973
|
$
2,989
|
$
3,555
|
|
$
2,989
|
$
3,780
|
Sales1
|
33
|
47
|
43
|
|
80
|
117
|
Redemptions1
|
(143)
|
(144)
|
(143)
|
|
(287)
|
(275)
|
Net sales
(redemptions)1
|
(110)
|
(97)
|
(100)
|
|
(207)
|
(158)
|
Net
exchanges
|
1
|
2
|
1
|
|
3
|
6
|
Market gains and
(losses)3
|
58
|
79
|
(321)
|
|
137
|
(493)
|
Ending
assets
|
$
2,922
|
$
2,973
|
$
3,135
|
|
$
2,922
|
$
3,135
|
|
|
|
|
|
|
|
Total Long-term
Assets
|
|
|
|
|
|
|
Beginning
assets
|
$
195,237
|
$
192,057
|
$
210,486
|
|
$
192,057
|
$
220,966
|
Sales1
|
10,436
|
12,990
|
14,745
|
|
23,426
|
29,879
|
Redemptions1
|
(11,548)
|
(12,799)
|
(17,748)
|
|
(24,347)
|
(34,892)
|
Net sales
(redemptions)1
|
(1,112)
|
191
|
(3,003)
|
|
(921)
|
(5,013)
|
Net
exchanges
|
8
|
5
|
(26)
|
|
13
|
(49)
|
Impact of
foreign exchange2
|
653
|
514
|
(2,979)
|
|
1,167
|
(4,174)
|
Market gains and
(losses)3
|
155
|
2,470
|
(12,317)
|
|
2,625
|
(19,569)
|
Ending
assets
|
$
194,941
|
$
195,237
|
$
192,161
|
|
$
194,941
|
$
192,161
|
1)
|
For certain accounts, Sales and Redemptions are
calculated as the remaining difference between beginning and ending
assets after the calculation of total investment
return.
|
2)
|
Reflects the impact of translating non-U.S. dollar
denominated assets under management (AUM) into U.S. dollars for
reporting purposes.
|
3)
|
Reflects the approximate changes in the fair value of
the securities held by portfolios and, to a lesser extent,
reinvested dividends, distributions and net investment
income.
|
Unaudited Changes
in Long-Term Assets - By Asset Class and Product
Type
|
(in
millions)
|
|
|
Quarter
Ended
|
|
June 30,
2023
|
|
Equity
|
Fixed
Income
|
Alternative /
Private
Markets
|
Multi-asset
|
Total
|
|
Funds
|
Separate
Accounts1
|
Funds
|
Separate
Accounts1
|
Funds
|
Separate
Accounts1
|
Funds
|
Separate
Accounts1
|
Funds.
|
Separate
Accounts1
|
Beginning
assets
|
$
44,732
|
$
38,897
|
$ 43,616
|
$ 43,845
|
$
13,040
|
$ 8,134
|
$ 2,832
|
$
141
|
$ 104,220
|
$ 91,017
|
Sales
|
2,155
|
2,714
|
3,836
|
1,055
|
439
|
204
|
32
|
1
|
6,462
|
3,974
|
Redemptions
|
(3,548)
|
(2,149)
|
(3,589)
|
(1,374)
|
(641)
|
(104)
|
(138)
|
(5)
|
(7,916)
|
(3,632)
|
Net sales
(redemptions)
|
(1,393)
|
565
|
247
|
(319)
|
(202)
|
100
|
(106)
|
(4)
|
(1,454)
|
342
|
Net
exchanges
|
(8)
|
13
|
6
|
0
|
(4)
|
0
|
1
|
0
|
(5)
|
13
|
Impact of foreign
exchange2
|
131
|
(60)
|
34
|
9
|
322
|
217
|
0
|
0
|
487
|
166
|
Market gains and
(losses)3
|
921
|
(806)
|
(19)
|
6
|
182
|
(187)
|
55
|
3
|
1,139
|
(984)
|
Ending
assets
|
$
44,383
|
$
38,609
|
$ 43,884
|
$ 43,541
|
$
13,338
|
$ 8,264
|
$ 2,782
|
$
140
|
$ 104,387
|
$ 90,554
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months
Ended
|
|
June 30,
2023
|
|
Equity
|
Fixed
Income
|
Alternative /
Private
Markets
|
Multi-asset
|
Total
|
|
Funds
|
Separate
Accounts1
|
Funds
|
Separate
Accounts1
|
Funds
|
Separate
Accounts1
|
Funds
|
Separate
Accounts1
|
Funds
|
Separate
Accounts1
|
Beginning
assets
|
$
43,342
|
$
38,181
|
$ 43,180
|
$ 43,563
|
$
13,050
|
$ 7,752
|
$ 2,851
|
$
138
|
$ 102,423
|
$ 89,634
|
Sales
|
5,326
|
5,174
|
8,091
|
2,847
|
1,283
|
625
|
79
|
1
|
14,779
|
8,647
|
Redemptions
|
(6,544)
|
(3,889)
|
(8,288)
|
(3,802)
|
(1,298)
|
(239)
|
(277)
|
(10)
|
(16,407)
|
(7,940)
|
Net sales
(redemptions)
|
(1,218)
|
1,285
|
(197)
|
(955)
|
(15)
|
386
|
(198)
|
(9)
|
(1,628)
|
707
|
Net
exchanges
|
82
|
26
|
(95)
|
0
|
20
|
(23)
|
3
|
0
|
10
|
3
|
Impact of foreign
exchange2
|
216
|
(37)
|
59
|
22
|
546
|
361
|
0
|
0
|
821
|
346
|
Market gains and
(losses)3
|
1,961
|
(846)
|
937
|
911
|
(263)
|
(212)
|
126
|
11
|
2,761
|
(136)
|
Ending
assets
|
$
44,383
|
$
38,609
|
$ 43,884
|
$ 43,541
|
$
13,338
|
$ 8,264
|
$ 2,782
|
$
140
|
$ 104,387
|
$ 90,554
|
1)
|
Includes separately
managed accounts, institutional accounts, certain sub-advised funds
and other managed products. For certain accounts, Sales and
Redemptions are calculated as the remaining difference between
beginning and ending assets after the calculation of total
investment return.
|
2)
|
Reflects the impact
of translating non-U.S. dollar denominated AUM into U.S.
dollars for reporting purposes.
|
3)
|
Reflects the
approximate changes in the fair value of the securities held by
portfolios and, to a lesser extent, reinvested dividends,
distributions and net investment income.
|
Unaudited Changes
in Long-Term Assets - By Product Type
|
|
|
|
(in
millions)
|
Quarter
Ended
|
|
Six Months
Ended
|
|
June 30,
2023
|
March 31, 2023
|
June 30, 2022
|
|
June 30,
2023
|
June 30, 2022
|
Total Fund
Assets
|
|
|
|
|
|
|
Beginning
assets
|
$
104,220
|
$
102,423
|
$
124,968
|
|
$
102,423
|
$
135,294
|
Sales
|
6,462
|
8,317
|
8,743
|
|
14,779
|
18,600
|
Redemptions
|
(7,916)
|
(8,491)
|
(12,993)
|
|
(16,407)
|
(26,097)
|
Net sales
(redemptions)
|
(1,454)
|
(174)
|
(4,250)
|
|
(1,628)
|
(7,497)
|
Net
exchanges
|
(5)
|
15
|
(27)
|
|
10
|
(48)
|
Impact of foreign
exchange1
|
487
|
334
|
(1,827)
|
|
821
|
(2,593)
|
Market gains and
(losses)2
|
1,139
|
1,622
|
(9,530)
|
|
2,761
|
(15,822)
|
Ending
assets
|
$
104,387
|
$
104,220
|
$
109,334
|
|
$
104,387
|
$
109,334
|
|
|
|
|
|
|
|
Total Separate
Account Assets3
|
|
|
|
|
|
|
Beginning
assets
|
$
91,017
|
$
89,634
|
$
85,518
|
|
$
89,634
|
$
85,672
|
Sales4
|
3,974
|
4,673
|
6,002
|
|
8,647
|
11,279
|
Redemptions4
|
(3,632)
|
(4,308)
|
(4,755)
|
|
(7,940)
|
(8,795)
|
Net sales
(redemptions)4
|
342
|
365
|
1,247
|
|
707
|
2,484
|
Net
exchanges
|
13
|
(10)
|
1
|
|
3
|
(1)
|
Impact of foreign
exchange1
|
166
|
180
|
(1,152)
|
|
346
|
(1,581)
|
Market gains and
(losses)2
|
(984)
|
848
|
(2,787)
|
|
(136)
|
(3,747)
|
Ending
assets
|
$
90,554
|
$
91,017
|
$
82,827
|
|
$
90,554
|
$
82,827
|
|
|
|
|
|
|
|
Total Long-term
Assets3
|
|
|
|
|
|
|
Beginning
assets
|
$
195,237
|
$
192,057
|
$
210,486
|
|
$
192,057
|
$
220,966
|
Sales4
|
10,436
|
12,990
|
14,745
|
|
23,426
|
29,879
|
Redemptions4
|
(11,548)
|
(12,799)
|
(17,748)
|
|
(24,347)
|
(34,892)
|
Net sales
(redemptions)4
|
(1,112)
|
191
|
(3,003)
|
|
(921)
|
(5,013)
|
Net
exchanges
|
8
|
5
|
(26)
|
|
13
|
(49)
|
Impact of foreign
exchange1
|
653
|
514
|
(2,979)
|
|
1,167
|
(4,174)
|
Market gains and
(losses)2
|
155
|
2,470
|
(12,317)
|
|
2,625
|
(19,569)
|
Ending
assets
|
$
194,941
|
$
195,237
|
$
192,161
|
|
$
194,941
|
$
192,161
|
1)
|
Reflects the impact
of translating non-U.S. dollar denominated AUM into U.S.
dollars for reporting purposes.
|
2)
|
Reflects the
approximate changes in the fair value of the securities held by
portfolios and, to a lesser extent, reinvested dividends,
distributions and net investment income.
|
3)
|
Includes separately
managed accounts, institutional accounts, certain sub-advised funds
and other managed products.
|
4)
|
For certain
accounts, Sales and Redemptions are calculated as the
remaining difference between beginning and ending assets after the
calculation of total investment return.
|
Unaudited Managed
Assets
|
|
(in
millions)
|
June 30,
2023
|
March 31, 2023
|
Dec. 31, 2022
|
Sept. 30, 2022
|
June 30, 2022
|
By Asset
Class
|
|
|
|
|
|
Equity
|
$
82,992
|
$
83,629
|
$
81,523
|
$
74,684
|
$
80,988
|
Fixed-income
|
87,425
|
87,461
|
86,743
|
85,365
|
86,253
|
Alternative /
private markets
|
21,602
|
21,174
|
20,802
|
20,182
|
21,785
|
Multi-asset
|
2,922
|
2,973
|
2,989
|
2,902
|
3,135
|
Total long-term
assets
|
194,941
|
195,237
|
192,057
|
183,133
|
192,161
|
Money
market
|
509,017
|
505,800
|
476,844
|
441,294
|
439,697
|
Total Managed
Assets
|
$
703,958
|
$
701,037
|
$
668,901
|
$
624,427
|
$
631,858
|
|
|
|
|
|
|
By Product
Type
|
|
|
|
|
|
Funds:
|
|
|
|
|
|
Equity
|
$
44,383
|
$
44,732
|
$
43,342
|
$
40,633
|
$
44,207
|
Fixed-income
|
43,884
|
43,616
|
43,180
|
44,896
|
48,215
|
Alternative / private
markets
|
13,338
|
13,040
|
13,050
|
12,680
|
13,911
|
Multi-asset
|
2,782
|
2,832
|
2,851
|
2,784
|
3,001
|
Total long-term
assets
|
104,387
|
104,220
|
102,423
|
100,993
|
109,334
|
Money
market
|
364,014
|
357,346
|
335,937
|
309,859
|
298,031
|
Total Fund
Assets
|
$
468,401
|
$
461,566
|
$
438,360
|
$
410,852
|
$
407,365
|
Separate
Accounts:
|
|
|
|
|
|
Equity
|
$
38,609
|
$
38,897
|
$
38,181
|
$
34,051
|
$
36,781
|
Fixed-income
|
43,541
|
43,845
|
43,563
|
40,469
|
38,038
|
Alternative / private
markets
|
8,264
|
8,134
|
7,752
|
7,502
|
7,874
|
Multi-asset
|
140
|
141
|
138
|
118
|
134
|
Total long-term
assets
|
90,554
|
91,017
|
89,634
|
82,140
|
82,827
|
Money
market
|
145,003
|
148,454
|
140,907
|
131,435
|
141,666
|
Total Separate
Account Assets
|
$
235,557
|
$
239,471
|
$
230,541
|
$
213,575
|
$
224,493
|
Total Managed
Assets
|
$
703,958
|
$
701,037
|
$
668,901
|
$
624,427
|
$
631,858
|
Unaudited Average
Managed Assets
|
Quarter
Ended
|
(in
millions)
|
June 30,
2023
|
March 31, 2023
|
Dec. 31, 2022
|
Sept. 30, 2022
|
June 30, 2022
|
By Asset
Class
|
|
|
|
|
|
Equity
|
$
83,025
|
$
84,155
|
$
79,544
|
$
81,809
|
$
85,785
|
Fixed-income
|
87,504
|
88,209
|
87,849
|
87,042
|
88,740
|
Alternative /
private markets
|
21,411
|
20,938
|
20,926
|
21,193
|
22,230
|
Multi-asset
|
2,929
|
3,012
|
2,988
|
3,144
|
3,337
|
Total long-term
assets
|
194,869
|
196,314
|
191,307
|
193,188
|
200,092
|
Money
market
|
510,418
|
483,083
|
442,334
|
438,601
|
417,778
|
Total Avg. Managed
Assets
|
$
705,287
|
$
679,397
|
$
633,641
|
$
631,789
|
$
617,870
|
|
|
|
|
|
|
By Product
Type
|
|
|
|
|
|
Funds:
|
|
|
|
|
|
Equity
|
$
44,218
|
$
45,055
|
$
43,131
|
$
45,135
|
$
47,504
|
Fixed-income
|
43,827
|
43,961
|
44,099
|
47,489
|
51,173
|
Alternative /
private markets
|
13,181
|
13,062
|
13,140
|
13,432
|
14,297
|
Multi-asset
|
2,787
|
2,869
|
2,855
|
3,012
|
3,193
|
Total long-term
assets
|
104,013
|
104,947
|
103,225
|
109,068
|
116,167
|
Money
market
|
362,608
|
333,358
|
309,232
|
301,940
|
275,631
|
Total Avg. Fund
Assets
|
$
466,621
|
$
438,305
|
$
412,457
|
$
411,008
|
$
391,798
|
Separate
Accounts:
|
|
|
|
|
|
Equity
|
$
38,807
|
$
39,100
|
$
36,413
|
$
36,674
|
$
38,281
|
Fixed-income
|
43,677
|
44,248
|
43,750
|
39,553
|
37,567
|
Alternative /
private markets
|
8,230
|
7,876
|
7,786
|
7,761
|
7,933
|
Multi-asset
|
142
|
143
|
133
|
132
|
144
|
Total long-term
assets
|
90,856
|
91,367
|
88,082
|
84,120
|
83,925
|
Money
market
|
147,810
|
149,725
|
133,102
|
136,661
|
142,147
|
Total Avg. Separate
Account Assets
|
$
238,666
|
$
241,092
|
$
221,184
|
$
220,781
|
$
226,072
|
Total Avg. Managed
Assets
|
$
705,287
|
$
679,397
|
$
633,641
|
$
631,789
|
$
617,870
|
Unaudited Average
Managed Assets
|
|
Six Months
Ended
|
(in
millions)
|
|
June 30,
2023
|
|
June 30, 2022
|
By Asset
Class
|
|
|
|
|
Equity
|
|
$
83,590
|
|
$
88,910
|
Fixed-income
|
|
87,856
|
|
92,108
|
Alternative / private
markets
|
|
21,174
|
|
22,539
|
Multi-asset
|
|
2,971
|
|
3,479
|
Total long-term
assets
|
|
195,591
|
|
207,036
|
Money
market
|
|
496,751
|
|
425,516
|
Total Avg. Managed
Assets
|
|
$
692,342
|
|
$
632,552
|
|
|
|
|
|
By Product
Type
|
|
|
|
|
Funds:
|
|
|
|
|
Equity
|
|
$
44,637
|
|
$
49,962
|
Fixed-income
|
|
43,893
|
|
54,293
|
Alternative / private
markets
|
|
13,121
|
|
14,521
|
Multi-asset
|
|
2,828
|
|
3,326
|
Total long-term
assets
|
|
104,479
|
|
122,102
|
Money
market
|
|
347,983
|
|
283,394
|
Total Avg. Fund
Assets
|
|
$
452,462
|
|
$
405,496
|
Separate
Accounts:
|
|
|
|
|
Equity
|
|
$
38,953
|
|
$
38,948
|
Fixed-income
|
|
43,963
|
|
37,815
|
Alternative / private
markets
|
|
8,053
|
|
8,018
|
Multi-asset
|
|
143
|
|
153
|
Total long-term
assets
|
|
91,112
|
|
84,934
|
Money
market
|
|
148,768
|
|
142,122
|
Total Avg. Separate
Account Assets
|
|
$
239,880
|
|
$
227,056
|
Total Avg. Managed
Assets
|
|
$
692,342
|
|
$
632,552
|
View original
content:https://www.prnewswire.com/news-releases/federated-hermes-inc-reports-second-quarter-2023-earnings-301887797.html
SOURCE Federated Hermes, Inc.