Federated Hermes, Inc. reports fourth quarter and full-year 2021 earnings
- Q4 2021 earnings per diluted share of $0.71; full-year 2021 EPS of $2.75
- Total assets under management reach a record $668.9 billion
- Long-term assets reach a record $221.0 billion
- Board declares $0.27 per share quarterly dividend
PITTSBURGH, Jan. 27, 2022 /PRNewswire/ -- Federated Hermes, Inc. (NYSE: FHI), a global leader in active, responsible investing, today reported earnings per diluted share (EPS) for Q4 2021 of $0.71, compared to $0.93 for the same quarter last year, on net income of $68.6 million for Q4 2021, compared to $95.2 million for Q4 2020. Full-year 2021 EPS was $2.75, compared to $3.23 for 2020 on net income of $270.3 million for 2021, compared to $326.4 million for 2020. As reported for Q2 2021, Federated Hermes' results include a $14.5 million noncash U.K. tax expense, which had an $0.11 per diluted share impact for 2021.
Federated Hermes' total managed assets were a record $668.9 billion at Dec. 31, 2021, up $49.5 billion or 8% from $619.4 billion at Dec. 31, 2020 and up $34.8 billion or 5% from $634.1 billion at Sept. 30, 2021. Average managed assets for Q4 2021 were $640.4 billion, up $29.9 billion or 5% from $610.5 billion reported for Q4 2020 and up $7.3 billion or 1% from $633.1 billion reported for Q3 2021.
"Federated Hermes' record assets at year-end 2021 were driven by fourth-quarter money market asset increases, market gains in long-term assets and our highest-ever annual net sales of $9 billion in long-term products," said J. Christopher Donahue, president and chief executive officer. "As a result of the historical low interest rates during the year, we derived 80% of our 2021 revenue from the diverse range of our actively managed strategies that comprise long-term categories—equity, fixed income, alternative/private markets and multi-asset."
Federated Hermes' board of directors declared a quarterly dividend of $0.27 per share. The dividend is payable on Feb. 15, 2022 to shareholders of record as of Feb. 8, 2022. During Q4 2021, Federated Hermes purchased 4,054,119 shares of Federated Hermes class B common stock for $145.2 million, bringing the total shares of Class B common stock purchased in 2021 to 7,145,838 shares for $239.7 million.
Federated Hermes' equity assets were $96.7 billion at Dec. 31, 2021, up $4.9 billion or 5% from $91.8 billion at Dec. 31, 2020 and down $0.7 billion or 1% from $97.4 billion at Sept. 30, 2021. Top-selling equity funds on a net basis during Q4 2021 were Federated Hermes Global Emerging Markets SMID Equity Fund, Federated Hermes U.S. SMID Equity Fund, Federated Hermes Global Equity ESG Fund, Federated Hermes Impact Opportunities Equity Fund and Federated Hermes MDT All Cap Core Fund.
Federated Hermes' fixed-income assets were a record $97.6 billion at Dec. 31, 2021, up $13.3 billion or 16% from $84.3 billion at Dec. 31, 2020 and up $0.4 billion from $97.2 billion at Sept. 30, 2021. Top-selling fixed-income funds on a net basis during Q4 2021 were Federated Hermes SDG Engagement High Yield Credit Fund (UCITS), Federated Hermes Strategic Income Fund, Federated Hermes Municipal Ultrashort Fund, Federated Hermes Government Ultrashort Fund and Federated Hermes Inflation Protected Securities Fund.
Federated Hermes' alternative/private markets assets were a record $22.9 billion at Dec. 31, 2021, up $3.8 billion or 20% from $19.1 billion at Dec. 31, 2020 and up $0.8 billion or 4% from $22.1 billion at Sept. 30, 2021.
Federated Hermes' money market assets were $447.9 billion at Dec. 31, 2021, up $27.6 billion or 7% from $420.3 billion at Dec. 31, 2020 and up $34.2 billion or 8% from $413.7 billion at Sept. 30, 2021. Money market mutual fund assets were $312.8 billion at Dec. 31, 2021, up $10.9 billion or 4% from $301.9 billion at Dec. 31, 2020 and up $20.5 billion or 7% from $292.3 billion at Sept. 30, 2021. Federated Hermes' money market separate account assets were a record $135.1 billion at Dec. 31, 2021, up $16.6 billion or 14% from $118.5 billion at Dec. 31, 2020 and up $13.7 billion or 11% from $121.4 billion at Sept. 30, 2021.
Financial Summary
Q4 2021 vs. Q4 2020
Revenue decreased $42.3 million or 12% primarily due to an increase in 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), a decrease in performance fees and lower average money market assets. These decreases were partially offset by an increase in revenue due to higher average long-term assets. For further information on fee waivers, see "Impact of voluntary yield-related fee waivers," below.
During Q4 2021, Federated Hermes derived 81% of its revenue from long-term assets (52% from equity assets, 19% from fixed-income assets and 10% from alternative/private markets and multi-asset), 17% from money market assets, and 2% from sources other than managed assets.
Operating expenses decreased $16.1 million or 6% primarily due to decreased distribution expenses predominantly resulting from higher voluntary yield-related fee waivers and lower incentive compensation and related expenses.
Nonoperating income (expenses), net decreased $11.6 million or 79% primarily due to a larger increase in the market value of investments in Q4 2020 compared to Q4 2021.
Q4 2021 vs. Q3 2021
Revenue decreased $4.9 million or 2% primarily due to lower average equity assets.
Operating expenses increased by $4.9 million or 2% primarily due to an increase in advertising and promotional expenses and other expenses, partially offset by lower incentive compensation and related expenses.
Nonoperating income (expenses), net increased $4.8 million or 274% primarily due to a larger increase in the market value of investments in Q4 2021 compared to Q3 2021.
2021 vs. 2020
Revenue decreased $147.8 million or 10% primarily due to an increase in voluntary yield-related fee waivers and a decrease in revenue from lower average money market assets. These decreases were partially offset by an increase in revenue due to higher average long-term assets.
During 2021, Federated Hermes derived 80% of its revenue from long-term assets (52% from equity assets, 18% from fixed-income assets and 10% from alternative/private markets and multi-asset), 19% from money market assets, and 1% from sources other than managed assets.
Operating expenses decreased by $95.9 million or 9% primarily due to decreased distribution expenses predominantly resulting from higher voluntary yield-related fee waivers.
Nonoperating income (expenses), net decreased $17.9 million or 64% primarily due to a larger increase in the market value of investments in 2020 compared to 2021 and a gain recorded in 2020 from a fair value adjustment to the equity investment of a previously nonconsolidated entity.
Impact of voluntary yield-related fee waivers
For Q4 2021 and full-year 2021, voluntary yield-related fee waivers totaled $110.1 million and $420.3 million, respectively. These fee waivers were largely offset by related reductions in distribution expenses of $72.3 million and $277.2 million, respectively, such that the net negative pre-tax impact to Federated Hermes was $37.8 million and $143.2 million, respectively. During the three and 12 months ended Dec. 31, 2020, voluntary yield-related fee waivers totaled $56.1 million and $113.0 million, respectively. These fee waivers were largely offset by related reductions in distribution expenses of $47.4 million and $98.4 million, respectively, such that the net negative pre-tax impact to Federated Hermes was $8.7 million and $14.6 million for the three and 12 months ended Dec. 31, 2020, respectively.
Short-term interest rates remained near historic lows during Q4 2021 as technical factors at the front end of the yield curve kept yields on short-term government securities—including repurchase agreements and Treasury bills—just above zero. Market expectations are that the central bank will raise interest rates multiple times in 2022, starting in March. Higher yields in 2022 will lower the impact of voluntary yield-related fee waivers. The net negative impact on pre-tax income from voluntary yield-related fee waivers on money market mutual funds and certain separate accounts may be approximately $22 million during Q1 2022. Assuming an increase in interest rates of 25 basis points by the Federal Reserve in March 2022, the Q1 estimated $22 million of net negative impact on pre-tax income from voluntary yield-related waivers is expected to be reduced by approximately 90% for Q2. The amount of voluntary yield-related fee waivers can vary based on a number of factors, including, among others, interest rates, yields, asset levels, asset flows and the ability of distributors to share in waivers. Any change in these factors can impact the amount and level of voluntary yield-related fee waivers, including in a material way.
Federated Hermes' level of business activity and financial results are dependent upon many factors, including market conditions, investment performance and investor behavior. These factors and others, including asset levels and mix, product sales and redemptions, market appreciation or depreciation, revenues, fee waivers, expenses and regulatory changes, can significantly impact Federated Hermes' business activity levels and financial results. Risk factors and uncertainties that can influence Federated Hermes' financial results are discussed in the company's annual and quarterly reports as filed with the Securities and Exchange Commission (SEC).
Federated Hermes will host an earnings conference call at 9 a.m. Eastern on Jan. 28, 2022. 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 Investor Relations section and the Analyst Information tab of FederatedHermes.com at least 15 minutes prior to register and join the call. A replay will be available at approximately 12:30 p.m. Eastern on Jan. 28, 2022. To access the telephone replay, dial 877-481-4010 (domestic) or 919-882-2331 (international) and enter access code 44043. The online replay will be available via FederatedHermes.com for one year.
Federated Hermes, Inc. is a global leader in active, responsible investment management, with $668.9 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. At Federated Hermes, responsibility is central to our client relationships, our long-term perspective and our fiduciary mindset. It's part of our heritage and the foundation of our future.
Headquartered in Pittsburgh, Federated Hermes has nearly 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 10% of money market fund managers and the top 10% of fixed-income fund managers2. Federated Hermes also ranks as the 10th-largest manager of model-delivered SMAs3. For more information, including an analyst presentation, visit FederatedHermes.com.
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1) As of Dec. 31, 2021
2) ISS Market Intelligence (SIMFUND), Dec. 31, 2021. Based on assets under management in U.S. open-end funds.
3) Money Management Institute/Cerulli Associates, Q3 2021.
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 (HGPE), each a registered investment advisor in one or more of the U.S., U.K. or Ireland.
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. 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, and sustain product demand, asset 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 SEC. 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 | Quarter Ended | % Change | ||
Dec. 31, 2021 | Dec. 31, 2020 | Sept. 30, 2021 | |||
Revenue | |||||
Investment advisory fees, net | $ 223,796 | $ 265,593 | (16)% | $ 230,210 | (3)% |
Administrative service fees, net | 77,734 | 79,192 | (2) | 76,853 | 1 |
Other service fees, net | 20,115 | 19,133 | 5 | 19,526 | 3 |
Total Revenue | 321,645 | 363,918 | (12) | 326,589 | (2) |
Operating Expenses | |||||
Compensation and related | 124,107 | 138,296 | (10) | 131,996 | (6) |
Distribution | 39,894 | 59,419 | (33) | 38,486 | 4 |
Systems and communications | 19,343 | 18,518 | 4 | 18,537 | 4 |
Professional service fees | 16,279 | 13,961 | 17 | 14,294 | 14 |
Office and occupancy | 11,215 | 6,436 | 74 | 11,036 | 2 |
Advertising and promotional | 9,493 | 4,853 | 96 | 4,660 | 104 |
Travel and related | 2,499 | 540 | 363 | 1,643 | 52 |
Other | 10,232 | 7,120 | 44 | 7,535 | 36 |
Total Operating Expenses | 233,062 | 249,143 | (6) | 228,187 | 2 |
Operating Income | 88,583 | 114,775 | (23) | 98,402 | (10) |
Nonoperating Income (Expenses) | |||||
Investment income (loss), net | 3,257 | 15,175 | (79) | 42 | NM |
Debt expense | (472) | (468) | 1 | (476) | (1) |
Other, net | 258 | (27) | NM | (1,319) | 120 |
Total Nonoperating Income (Expenses), net | 3,043 | 14,680 | (79) | (1,753) | 274 |
Income before income taxes | 91,626 | 129,455 | (29) | 96,649 | (5) |
Income tax provision | 20,629 | 28,183 | (27) | 23,163 | (11) |
Net income including the noncontrolling interests in subsidiaries | 70,997 | 101,272 | (30) | 73,486 | (3) |
Less: Net income attributable to the noncontrolling interests in subsidiaries | 2,434 | 6,104 | (60) | 2,124 | 15 |
Net Income | $ 68,563 | $ 95,168 | (28)% | $ 71,362 | (4)% |
Amounts Attributable to Federated Hermes, Inc. | |||||
Earnings Per Share1 | |||||
Basic | $ 0.71 | $ 0.94 | (24)% | $ 0.73 | (3)% |
Diluted | $ 0.71 | $ 0.93 | (24)% | $ 0.73 | (3)% |
Weighted-Average Shares Outstanding | |||||
Basic and diluted | 91,924 | 95,504 | 93,320 | ||
Dividends Declared Per Share | $ 0.27 | $ 1.27 | $ 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 $2.9 million, $5.0 million and $3.0 million available to unvested restricted Federated Hermes shareholders for the quarterly periods ended Dec. 31, 2021, Dec. 31, 2020 and Sept. 30, 2021, respectively, was excluded from the computation of basic earnings per share. In addition to the amounts excluded from the basic earnings per share calculation, the computation of diluted earnings per share excludes net income available to unvested shareholders of a nonpublic consolidated subsidiary. |
Unaudited Condensed Consolidated Statements of Income | ||||||
(in thousands, except per share data) | ||||||
Year Ended | ||||||
Dec. 31, 2021 | Dec. 31, 2020 | % Change | ||||
Revenue | ||||||
Investment advisory fees, net | $ 915,984 | $ 1,011,467 | (9)% | |||
Administrative service fees, net—affiliates | 306,639 | 318,152 | (4) | |||
Other service fees, net | 77,824 | 118,649 | (34) | |||
Total Revenue | 1,300,447 | 1,448,268 | (10) | |||
Operating Expenses | ||||||
Compensation and related | 532,492 | 503,400 | 6 | |||
Distribution | 160,884 | 318,343 | (49) | |||
Systems and communications | 75,429 | 64,698 | 17 | |||
Professional service fees | 60,331 | 55,123 | 9 | |||
Office and occupancy | 44,573 | 38,975 | 14 | |||
Advertising and promotional | 21,600 | 15,834 | 36 | |||
Travel and related | 5,337 | 4,566 | 17 | |||
Other | 33,529 | 29,178 | 15 | |||
Total Operating Expenses | 934,175 | 1,030,117 | (9) | |||
Operating Income | 366,272 | 418,151 | (12) | |||
Nonoperating Income (Expenses) | ||||||
Investment income (loss), net | 12,703 | 22,186 | (43) | |||
Debt expense | (1,785) | (2,678) | (33) | |||
Other, net | (900) | 8,398 | (111) | |||
Total Nonoperating Income (Expenses), net | 10,018 | 27,906 | (64) | |||
Income before income taxes | 376,290 | 446,057 | (16) | |||
Income tax provision | 103,982 | 110,035 | (6) | |||
Net income including the noncontrolling interests in subsidiaries | 272,308 | 336,022 | (19) | |||
Less: Net income attributable to the noncontrolling | 2,015 | 9,658 | (79) | |||
Net Income | $ 270,293 | $ 326,364 | (17)% | |||
Amounts Attributable to Federated Hermes, Inc. | ||||||
Earnings Per Share1 | ||||||
Basic | $ 2.77 | $ 3.25 | (15)% | |||
Diluted | $ 2.75 | $ 3.23 | (15)% | |||
Weighted-Average Shares Outstanding | ||||||
Basic and diluted | 93,597 | 96,419 | ||||
Dividends Declared Per Share | $ 1.08 | $ 2.08 | ||||
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 $11.3 million and $12.8 million available to unvested restricted Federated Hermes shareholders for the years ended Dec. 31, 2021 and Dec. 31, 2020, respectively, was excluded from the computation of basic earnings per share. In addition to the amounts excluded from the basic earnings per share calculation, the computation of diluted earnings per share excludes net income available to unvested shareholders of a nonpublic consolidated subsidiary. |
Unaudited Condensed Consolidated Balance Sheets | ||
(in thousands) | Dec. 31, 2021 | Dec. 31, 2020 |
Assets | ||
Cash and other investments | $ 426,674 | $ 438,771 |
Other current assets | 132,773 | 136,572 |
Intangible assets, net, including goodwill | 1,270,080 | 1,282,020 |
Other long-term assets | 188,660 | 203,476 |
Total Assets | $ 2,018,187 | $ 2,060,839 |
Liabilities, Redeemable Noncontrolling Interests and Equity | ||
Current liabilities | $ 270,707 | $ 265,446 |
Long-term debt | 223,350 | 75,000 |
Other long-term liabilities | 346,911 | 346,409 |
Redeemable noncontrolling interests | 63,202 | 236,987 |
Equity excluding treasury stock | 1,652,481 | 1,461,728 |
Treasury stock | (538,464) | (324,731) |
Total Liabilities, Redeemable Noncontrolling Interests and Equity | $ 2,018,187 | $ 2,060,839 |
Unaudited Changes in Long-Term Assets - By Asset Class | ||||||
(in millions) | Quarter Ended | Year Ended | ||||
Dec. 31, 2021 | Sept. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | ||
Equity | ||||||
Beginning assets | $ 97,425 | $ 100,506 | $ 80,405 | $ 91,788 | $ 89,011 | |
Sales1 | 4,371 | 4,332 | 5,618 | 21,829 | 20,463 | |
Redemptions1 | (7,106) | (5,707) | (6,047) | (26,761) | (26,721) | |
Net sales (redemptions)1 | (2,735) | (1,375) | (429) | (4,932) | (6,258) | |
Net exchanges | (2) | 3 | (8) | 41 | (70) | |
Acquisitions/(dispositions) | 0 | 408 | 0 | 408 | (71) | |
Impact of foreign exchange2 | (162) | (510) | 946 | (1,096) | 1,195 | |
Market gains and (losses)3 | 2,190 | (1,607) | 10,874 | 10,507 | 7,981 | |
Ending assets | $ 96,716 | $ 97,425 | $ 91,788 | $ 96,716 | $ 91,788 | |
Fixed Income | ||||||
Beginning assets | $ 97,226 | $ 90,801 | $ 79,546 | $ 84,277 | $ 69,023 | |
Sales1 | 7,920 | 12,935 | 9,046 | 42,626 | 37,283 | |
Redemptions1 | (7,438) | (6,604) | (6,046) | (29,744) | (26,138) | |
Net sales (redemptions)1 | 482 | 6,331 | 3,000 | 12,882 | 11,145 | |
Net exchanges | (23) | (7) | (10) | (81) | (15) | |
Acquisitions/(dispositions) | 0 | 17 | 0 | 17 | (1) | |
Impact of foreign exchange2 | (9) | (89) | 181 | (133) | 190 | |
Market gains and (losses)3 | (126) | 173 | 1,560 | 588 | 3,935 | |
Ending assets | $ 97,550 | $ 97,226 | $ 84,277 | $ 97,550 | $ 84,277 | |
Alternative / Private Markets | ||||||
Beginning assets4 | $ 22,064 | $ 20,962 | $ 18,146 | $ 19,084 | $ 18,102 | |
Sales1 | 1,696 | 1,319 | 574 | 4,823 | 2,840 | |
Redemptions1 | (1,460) | (533) | (661) | (3,170) | (2,615) | |
Net sales (redemptions)1 | 236 | 786 | (87) | 1,653 | 225 | |
Net exchanges | 0 | 0 | (3) | (2) | (4) | |
Acquisitions/(dispositions) | 0 | 81 | 0 | 81 | 452 | |
Impact of foreign exchange2 | 107 | (554) | 1,061 | (254) | 615 | |
Market gains and (losses)3 | 513 | 789 | (33) | 2,358 | (306) | |
Ending assets | $ 22,920 | $ 22,064 | $ 19,084 | $ 22,920 | $ 19,084 | |
Multi-asset | ||||||
Beginning assets | $ 3,692 | $ 3,699 | $ 3,737 | $ 3,948 | $ 4,199 | |
Sales1 | 75 | 71 | 50 | 301 | 241 | |
Redemptions1 | (119) | (103) | (166) | (936) | (724) | |
Net sales (redemptions)1 | (44) | (32) | (116) | (635) | (483) | |
Net exchanges | 14 | 9 | 3 | 42 | (20) | |
Acquisitions/(dispositions) | 0 | 54 | 0 | 54 | 0 | |
Impact of foreign exchange2 | 0 | 0 | 0 | (1) | 1 | |
Market gains and (losses)3 | 118 | (38) | 324 | 372 | 251 | |
Ending assets | $ 3,780 | $ 3,692 | $ 3,948 | $ 3,780 | $ 3,948 | |
Total Long-term Assets | ||||||
Beginning assets4 | $ 220,407 | $ 215,968 | $ 181,834 | $ 199,097 | $ 180,335 | |
Sales1 | 14,062 | 18,657 | 15,288 | 69,579 | 60,827 | |
Redemptions1 | (16,123) | (12,947) | (12,920) | (60,611) | (56,198) | |
Net sales (redemptions)1 | (2,061) | 5,710 | 2,368 | 8,968 | 4,629 | |
Net exchanges | (11) | 5 | (18) | 0 | (109) | |
Acquisitions/(dispositions) | 0 | 560 | 0 | 560 | 380 | |
Impact of foreign exchange2 | (64) | (1,153) | 2,188 | (1,484) | 2,001 | |
Market gains and (losses)3 | 2,695 | (683) | 12,725 | 13,825 | 11,861 | |
Ending assets | $ 220,966 | $ 220,407 | $ 199,097 | $ 220,966 | $ 199,097 | |
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 AUM into U.S. dollars for reporting purposes. |
3) | Reflects the approximate changes in the fair value of the securities held by the portfolios and, to a lesser extent, reinvested dividends, distributions and net investment income. |
4) | The beginning assets for the year ended December 31, 2020 include $8.2 billion of fund assets managed by a previously non-consolidated entity, HGPE, in which Federated Hermes held an equity method investment. Effective March 1, 2020, HGPE became a consolidated subsidiary. |
Unaudited Changes in Long-Term Assets - By Asset Class and Product Type | ||||||||||
(in millions) | ||||||||||
Quarter Ended | ||||||||||
Dec. 31, 2021 | ||||||||||
Equity | Fixed Income | Alternative / Private | Multi-asset | Total | ||||||
Funds | Separate | Funds | Separate | Funds | Separate | Funds | Separate | Funds | Separate | |
Beginning assets | $ 58,218 | $ 39,207 | $ 60,262 | $ 36,964 | $ 14,299 | $ 7,765 | $ 3,518 | $ 174 | $ 136,297 | $ 84,110 |
Sales | 2,507 | 1,864 | 6,138 | 1,782 | 1,374 | 322 | 75 | 0 | 10,094 | 3,968 |
Redemptions | (4,198) | (2,908) | (6,468) | (970) | (1,174) | (286) | (115) | (4) | (11,955) | (4,168) |
Net sales (redemptions) | (1,691) | (1,044) | (330) | 812 | 200 | 36 | (40) | (4) | (1,861) | (200) |
Net exchanges | (2) | 0 | (23) | 0 | 0 | 0 | 14 | 0 | (11) | 0 |
Impact of foreign exchange2 | (59) | (103) | 0 | (9) | 63 | 44 | 0 | 0 | 4 | (68) |
Market gains and (losses)3 | 570 | 1,620 | (47) | (79) | 226 | 287 | 116 | 2 | 865 | 1,830 |
Ending assets | $ 57,036 | $ 39,680 | $ 59,862 | $ 37,688 | $ 14,788 | $ 8,132 | $ 3,608 | $ 172 | $ 135,294 | $ 85,672 |
Year Ended | ||||||||||
Dec. 31, 2021 | ||||||||||
Equity | Fixed Income | Alternative / Private | Multi-asset | Total | ||||||
Funds | Separate | Funds | Separate | Funds | Separate | Funds | Separate | Funds | Separate | |
Beginning assets | $ 54,312 | $ 37,476 | $ 53,557 | $ 30,720 | $ 12,100 | $ 6,984 | $ 3,744 | $ 204 | $ 123,713 | $ 75,384 |
Sales | 14,265 | 7,564 | 30,862 | 11,764 | 3,699 | 1,124 | 299 | 2 | 49,125 | 20,454 |
Redemptions | (15,915) | (10,846) | (24,902) | (4,842) | (2,657) | (513) | (894) | (42) | (44,368) | (16,243) |
Net sales (redemptions) | (1,650) | (3,282) | 5,960 | 6,922 | 1,042 | 611 | (595) | (40) | 4,757 | 4,211 |
Net exchanges | (362) | 403 | (33) | (48) | (2) | 0 | 41 | 1 | (356) | 356 |
Acquisitions/(dispositions) | 408 | 0 | 17 | 0 | 81 | 0 | 54 | 0 | 560 | 0 |
Impact of foreign exchange2 | (522) | (574) | (90) | (43) | (162) | (92) | 0 | (1) | (774) | (710) |
Market gains and (losses)3 | 4,850 | 5,657 | 451 | 137 | 1,729 | 629 | 364 | 8 | 7,394 | 6,431 |
Ending assets | $ 57,036 | $ 39,680 | $ 59,862 | $ 37,688 | $ 14,788 | $ 8,132 | $ 3,608 | $ 172 | $ 135,294 | $ 85,672 |
1) | Includes separately managed accounts, institutional accounts, 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 the 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 | Year Ended | |||||
Dec. 31, 2021 | Sept. 30, 2021 | Dec. 31, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | ||
Total Fund Assets | ||||||
Beginning assets5 | $ 136,297 | $ 135,161 | $ 110,811 | $ 123,713 | $ 107,724 | |
Sales | 10,094 | 11,139 | 12,204 | 49,125 | 46,401 | |
Redemptions | (11,955) | (9,702) | (9,020) | (44,368) | (40,974) | |
Net sales (redemptions) | (1,861) | 1,437 | 3,184 | 4,757 | 5,427 | |
Net exchanges | (11) | 55 | (18) | (356) | (103) | |
Acquisitions/(dispositions) | 0 | 560 | 0 | 560 | 0 | |
Impact of foreign exchange1 | 4 | (699) | 1,258 | (774) | 1,038 | |
Market gains and (losses)2 | 865 | (217) | 8,478 | 7,394 | 9,627 | |
Ending assets | $ 135,294 | $ 136,297 | $ 123,713 | $ 135,294 | $ 123,713 | |
Total Separate Accounts Assets3 | ||||||
Beginning assets | $ 84,110 | $ 80,807 | $ 71,023 | $ 75,384 | $ 72,611 | |
Sales4 | 3,968 | 7,518 | 3,084 | 20,454 | 14,426 | |
Redemptions4 | (4,168) | (3,245) | (3,900) | (16,243) | (15,224) | |
Net sales (redemptions)4 | (200) | 4,273 | (816) | 4,211 | (798) | |
Net exchanges | 0 | (50) | 0 | 356 | (6) | |
Acquisitions/(dispositions) | 0 | 0 | 0 | 0 | 380 | |
Impact of foreign exchange1 | (68) | (454) | 930 | (710) | 963 | |
Market gains and (losses)2 | 1,830 | (466) | 4,247 | 6,431 | 2,234 | |
Ending assets | $ 85,672 | $ 84,110 | $ 75,384 | $ 85,672 | $ 75,384 | |
Total Long-term Assets3 | ||||||
Beginning assets5 | $ 220,407 | $ 215,968 | $ 181,834 | $ 199,097 | $ 180,335 | |
Sales4 | 14,062 | 18,657 | 15,288 | 69,579 | 60,827 | |
Redemptions4 | (16,123) | (12,947) | (12,920) | (60,611) | (56,198) | |
Net sales (redemptions)4 | (2,061) | 5,710 | 2,368 | 8,968 | 4,629 | |
Net exchanges | (11) | 5 | (18) | 0 | (109) | |
Acquisitions/(dispositions) | 0 | 560 | 0 | 560 | 380 | |
Impact of foreign exchange1 | (64) | (1,153) | 2,188 | (1,484) | 2,001 | |
Market gains and (losses)2 | 2,695 | (683) | 12,725 | 13,825 | 11,861 | |
Ending assets | $ 220,966 | $ 220,407 | $ 199,097 | $ 220,966 | $ 199,097 | |
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 the 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. |
5) | The beginning assets for the year ended December 31, 2020 includes $8.2 billion of fund assets managed by a previously non-consolidated entity, HGPE, in which Federated Hermes held an equity method investment. Effective March 1, 2020, HGPE became a consolidated subsidiary. |
Unaudited Managed Assets | Dec. 31, 2021 | Sept. 30, 2021 | June 30, 2021 | March 31, 2021 | Dec. 31, 2020 |
By Asset Class | |||||
Equity | $ 96,716 | $ 97,425 | $ 100,506 | $ 96,170 | $ 91,788 |
Fixed-income | 97,550 | 97,226 | 90,801 | 86,464 | 84,277 |
Alternative / private markets | 22,920 | 22,064 | 20,962 | 19,301 | 19,084 |
Multi-asset | 3,780 | 3,692 | 3,699 | 3,981 | 3,948 |
Total long-term assets | 220,966 | 220,407 | 215,968 | 205,916 | 199,097 |
Money market | 447,907 | 413,713 | 429,804 | 419,080 | 420,333 |
Total Managed Assets | $ 668,873 | $ 634,120 | $ 645,772 | $ 624,996 | $ 619,430 |
By Product Type | |||||
Funds: | |||||
Equity | $ 57,036 | $ 58,218 | $ 59,933 | $ 56,767 | $ 54,312 |
Fixed-income | 59,862 | 60,262 | 58,486 | 55,581 | 53,557 |
Alternative / private markets | 14,788 | 14,299 | 13,225 | 12,231 | 12,100 |
Multi-asset | 3,608 | 3,518 | 3,517 | 3,797 | 3,744 |
Total long-term assets | 135,294 | 136,297 | 135,161 | 128,376 | 123,713 |
Money market | 312,834 | 292,311 | 301,971 | 297,182 | 301,855 |
Total Fund Assets | $ 448,128 | $ 428,608 | $ 437,132 | $ 425,558 | $ 425,568 |
Separate Accounts: | |||||
Equity | $ 39,680 | $ 39,207 | $ 40,573 | $ 39,403 | $ 37,476 |
Fixed-income | 37,688 | 36,964 | 32,315 | 30,883 | 30,720 |
Alternative / private markets | 8,132 | 7,765 | 7,737 | 7,070 | 6,984 |
Multi-asset | 172 | 174 | 182 | 184 | 204 |
Total long-term assets | 85,672 | 84,110 | 80,807 | 77,540 | 75,384 |
Money market | 135,073 | 121,402 | 127,833 | 121,898 | 118,478 |
Total Separate Account Assets | $ 220,745 | $ 205,512 | $ 208,640 | $ 199,438 | $ 193,862 |
Total Managed Assets | $ 668,873 | $ 634,120 | $ 645,772 | $ 624,996 | $ 619,430 |
Unaudited Average Managed Assets | Quarter Ended | ||||
(in millions) | Dec. 31, 2021 | Sept. 30, 2021 | June 30, 2021 | March 31, 2021 | Dec. 31, 2020 |
By Asset Class | |||||
Equity | $ 97,751 | $ 100,076 | $ 99,165 | $ 95,167 | $ 85,572 |
Fixed-income | 97,229 | 93,685 | 88,405 | 86,939 | 82,144 |
Alternative / private markets | 22,243 | 21,446 | 20,047 | 19,278 | 18,549 |
Multi-asset | 3,763 | 3,713 | 4,067 | 3,974 | 3,831 |
Total long-term assets | 220,986 | 218,920 | 211,684 | 205,358 | 190,096 |
Money market | 419,392 | 414,141 | 427,993 | 412,720 | 420,436 |
Total Avg. Managed Assets | $ 640,378 | $ 633,061 | $ 639,677 | $ 618,078 | $ 610,532 |
By Product Type | |||||
Funds: | |||||
Equity | $ 58,290 | $ 59,918 | $ 58,662 | $ 56,832 | $ 50,022 |
Fixed-income | 60,339 | 59,618 | 57,006 | 55,416 | 51,934 |
Alternative / private markets | 14,419 | 13,704 | 12,703 | 12,239 | 11,670 |
Multi-asset | 3,590 | 3,533 | 3,880 | 3,783 | 3,634 |
Total long-term assets | 136,638 | 136,773 | 132,251 | 128,270 | 117,260 |
Money market | 294,618 | 289,566 | 301,990 | 288,403 | 311,769 |
Total Avg. Fund Assets | $ 431,256 | $ 426,339 | $ 434,241 | $ 416,673 | $ 429,029 |
Separate Accounts: | |||||
Equity | $ 39,461 | $ 40,158 | $ 40,503 | $ 38,335 | $ 35,550 |
Fixed-income | 36,890 | 34,067 | 31,399 | 31,523 | 30,210 |
Alternative / private markets | 7,824 | 7,742 | 7,344 | 7,039 | 6,879 |
Multi-asset | 173 | 180 | 187 | 191 | 197 |
Total long-term assets | 84,348 | 82,147 | 79,433 | 77,088 | 72,836 |
Money market | 124,774 | 124,575 | 126,003 | 124,317 | 108,667 |
Total Avg. Separate Account Assets | $ 209,122 | $ 206,722 | $ 205,436 | $ 201,405 | $ 181,503 |
Total Avg. Managed Assets | $ 640,378 | $ 633,061 | $ 639,677 | $ 618,078 | $ 610,532 |
Unaudited Average Managed Assets | Year Ended | |||
(in millions) | Dec. 31, 2021 | Dec. 31, 2020 | ||
By Asset Class | ||||
Equity | $ 98,040 | $ 80,591 | ||
Fixed-income | 91,564 | 74,403 | ||
Alternative / private markets1 | 20,754 | 18,206 | ||
Multi-asset | 3,879 | 3,813 | ||
Total long-term assets | 214,237 | 177,013 | ||
Money market | 418,562 | 436,895 | ||
Total Avg. Managed Assets | $ 632,799 | $ 613,908 | ||
By Product Type | ||||
Funds: | ||||
Equity | $ 58,426 | $ 45,585 | ||
Fixed-income | 58,095 | 46,899 | ||
Alternative / private markets1 | 13,266 | 11,424 | ||
Multi-asset | 3,696 | 3,622 | ||
Total long-term assets | 133,483 | 107,530 | ||
Money market | 293,644 | 324,490 | ||
Total Avg. Fund Assets | $ 427,127 | $ 432,020 | ||
Separate Accounts: | ||||
Equity | $ 39,614 | $ 35,006 | ||
Fixed-income | 33,469 | 27,504 | ||
Alternative / private markets | 7,488 | 6,782 | ||
Multi-asset | 183 | 191 | ||
Total long-term assets | 80,754 | 69,483 | ||
Money market | 124,918 | 112,405 | ||
Total Avg. Separate Account Assets | $ 205,672 | $ 181,888 | ||
Total Avg. Managed Assets | $ 632,799 | $ 613,908 | ||
1) | The average balance at Dec. 31, 2020 includes $8.2 billion of assets managed by a previously nonconsolidated entity, Hermes GPE LLP, in which Federated Hermes held an equity method investment. As of March 1, 2020, Hermes GPE LLP is a consolidated subsidiary as a result of Federated Hermes' acquisition of the remaining equity interests in Hermes GPE LLP. |
SOURCE Federated Hermes, Inc.
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