Federated Hermes, Inc. reports fourth quarter and full-year 2022 earnings
- Q4 2022 earnings per diluted share of $0.63; full-year 2022 EPS of $2.65, each including a ($0.27) per diluted share non-cash intangible asset impairment charge
- Total assets under management at record $668.9 billion
- Board declares $0.27 per share quarterly dividend
PITTSBURGH, Jan. 26, 2023 /PRNewswire/ -- Federated Hermes, Inc. (NYSE: FHI), a global leader in active, responsible investing, today reported earnings per diluted share (EPS) for Q4 2022 of $0.63, compared to $0.71 for the same quarter last year, on net income of $56.5 million for Q4 2022, compared to $68.6 million for Q4 2021. Full-year 2022 EPS was $2.65, compared to $2.75 for 2021 on net income of $239.5 million for 2022, compared to $270.3 million for 2021. Federated Hermes' results include a $31.5 million non-cash expense, or ($0.27) per diluted share, related to the impairment of an intangible asset associated with the 2018 acquisition of Hermes Fund Managers Limited.
Federated Hermes' total managed assets were a record $668.9 billion at Dec. 31, 2022, up $28 million from $668.9 billion at Dec. 31, 2021 and up $44.5 billion or 7% from $624.4 billion at Sept. 30, 2022. Average managed assets for Q4 2022 were $633.6 billion, down $6.8 billion or 1% from $640.4 billion reported for Q4 2021 and up $1.8 billion from $631.8 billion reported for Q3 2022.
"Federated Hermes' record assets at year-end 2022 were driven by money market asset increases and investor interest in our flagship Total Return Bond Fund and related separate accounts, as well as continued demand for our popular dividend income equity products," said J. Christopher Donahue, president and chief executive officer. "In addition, investors valued our investment perspective as they sought haven from market volatility in a diverse range of Federated Hermes products—from money market funds to low-duration fixed-income options to market neutral and bear market alternative strategies."
Federated Hermes' board of directors declared a quarterly dividend of $0.27 per share. The dividend is payable on Feb. 15, 2023 to shareholders of record as of Feb. 8, 2023. During Q4 2022, Federated Hermes purchased 327,132 shares of Federated Hermes class B common stock for $8.4 million, bringing the total shares of Class B common stock purchased in 2022 to 6,456,625 shares for $207.4 million.
Federated Hermes' equity assets were $81.5 billion at Dec. 31, 2022, down $15.2 billion or 16% from $96.7 billion at Dec. 31, 2021 and up $6.8 billion or 9% from $74.7 billion at Sept. 30, 2022. Top-selling equity funds on a net basis during Q4 2022 were Federated Hermes Strategic Value Dividend Fund, Federated Hermes Asia Ex-Japan Fund, Federated Hermes International Strategic Value Dividend Fund, Federated Hermes MDT Large Cap Growth Fund and Federated Hermes SDG Engagement Equity Fund.
Federated Hermes' fixed-income assets were $86.7 billion at Dec. 31, 2022, down $10.9 billion or 11% from $97.6 billion at Dec. 31, 2021 and up $1.3 billion from $85.4 billion at Sept. 30, 2022. Top-selling fixed-income funds on a net basis during Q4 2022 were Federated Hermes Total Return Bond Fund, Federated Hermes Conservative Municipal Microshort Fund, Federated Hermes Institutional High Yield Bond Fund, Federated Hermes Conservative Microshort Fund and Federated Hermes Intermediate Corporate Bond Fund.
Federated Hermes' alternative/private markets assets were $20.8 billion at Dec. 31, 2022, down $2.1 billion or 9% from $22.9 billion at Dec. 31, 2021 and up $0.6 billion or 3% from $20.2 billion at Sept. 30, 2022.
Federated Hermes' money market assets were a record $476.8 billion at Dec. 31, 2022, up $28.9 billion or 6% from $447.9 billion at Dec. 31, 2021 and up $35.5 billion or 8% from $441.3 billion at Sept. 30, 2022. Money market mutual fund assets were $335.9 billion at Dec. 31, 2022, up $23.1 billion or 7% from $312.8 billion at Dec. 31, 2021 and up $26.0 billion or 8% from $309.9 billion at Sept. 30, 2022. Federated Hermes' money market separate account assets were $140.9 billion at Dec. 31, 2022, up $5.8 billion or 4% from $135.1 billion at Dec. 31, 2021 and up $9.5 billion or 7% from $131.4 billion at Sept. 30, 2022.
Financial Summary
Q4 2022 non-cash intangible asset impairment charge
Federated Hermes' Q4 2022 results include a $31.5 million non-cash expense, or ($0.27) per diluted share, related to the impairment of an intangible asset associated with the 2018 acquisition of Hermes Fund Managers Limited, which was driven by changes in projected cash flows and a higher discount rate as compared to the prior quarter.
Q4 2022 vs. Q4 2021
Revenue increased $52.3 million or 16% primarily due to a decrease 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). For further information on the waivers, see "Impact of voluntary yield-related fee waivers" below. This increase was partially offset by a decrease in revenue due to lower average long-term assets.
During Q4 2022, Federated Hermes derived 53% of its revenue from long-term assets (33% from equity assets, 13% from fixed-income assets and 7% from alternative/private markets and multi-asset), 46% from money market assets, and 1% from sources other than managed assets.
Operating expenses increased $77.1 million or 33% primarily due to increased distribution expenses resulting mainly from lower voluntary yield-related fee waivers partially offset by a decrease due to lower average managed long-term fund assets and the mix of average money market fund assets. Additionally, other expenses increased due to the intangible asset impairment.
Nonoperating income (expenses), net increased $8.4 million primarily due to a larger increase in the market value of investments in Q4 2022 compared to Q4 2021, partially offset by an increase in debt expense in Q4 2022 compared to Q4 2021.
Q4 2022 vs. Q3 2022
Revenue decreased $7.2 million or 2% primarily due to a decrease in revenue from lower average equity assets and a change in the mix of average fixed-income assets. These decreases were partially offset by an increase in revenue from higher average money market assets.
Operating expenses increased by $25.8 million or 9% primarily due to an increase in other expenses due to the intangible asset impairment.
Nonoperating income (expenses), net increased $19.0 million primarily due to an increase in the market value of investments in Q4 2022 compared to the decrease in the market value of investments in Q3 2022.
2022 vs. 2021
Revenue increased $145.4 million or 11% primarily due to a decrease in voluntary yield-related fee waivers. This increase was partially offset by a decrease in revenue due to lower average equity assets, a decrease in revenue due to a change in the mix of average fixed-income assets, and a decrease in performance fees and carried interest.
During 2022, Federated Hermes derived 59% of its revenue from long-term assets (36% from equity assets, 14% from fixed-income assets and 9% from alternative/private markets and multi-asset), 40% from money market assets, and 1% from sources other than managed assets.
Operating expenses increased by $174.8 million or 19% primarily due to increased distribution expenses resulting primarily from lower voluntary yield-related fee waivers partially offset by a decrease due to lower average managed long-term fund assets and the mix of average money market fund assets. The current year also includes an increase in other expenses due to the intangible asset impairment. These increases were offset by a decrease in compensation and related primarily due to exchange rate fluctuations.
Nonoperating income (expenses), net decreased $40.6 million primarily due to a decrease in the market value of investments in 2022 compared to an increase in the market value of investments in 2021, as well as an increase in debt expense in 2022.
Impact of voluntary yield-related fee waivers
There were no voluntary yield-related fee waivers during the quarter that ended Dec. 31, 2022. For the year that ended Dec. 31, 2022, voluntary yield-related fee waivers totaled $85.3 million. These fee waivers were largely offset by related reductions in distribution expenses of $66.5 million, such that the net negative pre-tax impact to Federated Hermes was $18.8 million for the 12 months ended Dec. 31, 2022. During the three and 12 months ended Dec. 31, 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 $277.1 million, respectively, such that the net negative pre-tax impact to Federated Hermes was $37.8 million and $143.2 million for the three and 12 months ended Dec. 31, 2021, respectively.
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. 27, 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, visit FederatedInvestors.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. 27, 2023. To access the telephone replay, dial 877-481-4010 (domestic) or 919-882-2331 (international) and enter access code 47392. The online replay will be available via FederatedInvestors.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 11% of fixed-income fund managers2. Federated Hermes also ranks as the 4th-largest manager of model-delivered SMAs3. For more information, including an analyst presentation, visit FederatedHermes.com.
1) As of Dec. 31, 2022
2) ISS Market Intelligence (SIMFUND), Dec. 31, 2022. Based on assets under management in U.S. open-end funds.
3) Money Management Institute/Cerulli Associates, Q3 2022.
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.
Certain statements in this press release, such as those related to performance, investor preferences and demand, asset flows, asset mix, impairment 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 is inherently subject to significant business, 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, 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, 2022 | Dec. 31, 2021 | Sept. 30, 2022 | ||||
Revenue | ||||||
Investment advisory fees, net | $ 256,949 | $ 223,796 | 15 % | $ 263,644 | (3) % | |
Administrative service fees, net | 75,847 | 77,734 | (2) | 75,021 | 1 | |
Other service fees, net | 41,103 | 20,115 | 104 | 42,478 | (3) | |
Total Revenue | 373,899 | 321,645 | 16 | 381,143 | (2) | |
Operating Expenses | ||||||
Compensation and related | 123,994 | 124,107 | 0 | 126,668 | (2) | |
Distribution | 90,718 | 39,894 | 127 | 91,032 | (0) | |
Systems and communications | 20,549 | 19,343 | 6 | 19,294 | 7 | |
Professional service fees | 16,100 | 16,279 | (1) | 14,203 | 13 | |
Office and occupancy | 10,905 | 11,215 | (3) | 10,622 | 3 | |
Advertising and promotional | 6,967 | 9,493 | (27) | 6,496 | 7 | |
Travel and related | 3,913 | 2,499 | 57 | 3,421 | 14 | |
Other | 37,004 | 10,232 | 262 | 12,627 | 193 | |
Total Operating Expenses | 310,150 | 233,062 | 33 | 284,363 | 9 | |
Operating Income | 63,749 | 88,583 | (28) | 96,780 | (34) | |
Nonoperating Income (Expenses) | ||||||
Investment income (loss), net | 14,413 | 3,257 | 343 | (4,226) | 441 | |
Debt expense | (3,200) | (472) | NM | (3,302) | (3) | |
Other, net | 191 | 258 | (26) | (38) | NM | |
Total Nonoperating Income (Expenses), net | 11,404 | 3,043 | 275 | (7,566) | 251 | |
Income before income taxes | 75,153 | 91,626 | (18) | 89,214 | (16) | |
Income tax provision | 13,518 | 20,629 | (34) | 21,640 | (38) | |
Net income including the noncontrolling interests in subsidiaries | 61,635 | 70,997 | (13) | 67,574 | (9) | |
Less income/(expense): Net income attributable to the | 5,138 | 2,434 | 111 | (1,905) | 370 | |
Net Income | $ 56,497 | $ 68,563 | (18) % | $ 69,479 | (19) % | |
Amounts Attributable to Federated Hermes, Inc. | ||||||
Earnings Per Share1 | ||||||
Basic and diluted | $ 0.63 | $ 0.71 | (11) % | $ 0.78 | (19) % | |
Weighted-Average Shares Outstanding | ||||||
Basic | 84,731 | 92,141 | 84,531 | |||
Diluted | 84,743 | 92,141 | 84,536 | |||
Dividends Declared Per Share | $ 0.27 | $ 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 $2.8 million, $2.8 million and $3.6 million available to unvested restricted Federated Hermes shareholders for the quarterly periods ended Dec. 31, 2022, Dec. 31, 2021 and Sept. 30, 2022, 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 for the quarterly period ended Dec. 31, 2021 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, 2022 | Dec. 31, 2021 | % Change | ||||
Revenue | ||||||
Investment advisory fees, net | $ 1,011,631 | $ 915,984 | 10 % | |||
Administrative service fees, net—affiliates | 294,557 | 306,639 | (4) | |||
Other service fees, net | 139,626 | 77,824 | 79 | |||
Total Revenue | 1,445,814 | 1,300,447 | 11 | |||
Operating Expenses | ||||||
Compensation and related | 512,713 | 532,492 | (4) | |||
Distribution | 314,554 | 160,884 | 96 | |||
Systems and communications | 77,783 | 75,429 | 3 | |||
Professional service fees | 57,747 | 60,331 | (4) | |||
Office and occupancy | 43,361 | 44,573 | (3) | |||
Advertising and promotional | 20,931 | 21,600 | (3) | |||
Travel and related | 12,456 | 5,337 | 133 | |||
Other | 69,473 | 33,529 | 107 | |||
Total Operating Expenses | 1,109,018 | 934,175 | 19 | |||
Operating Income | 336,796 | 366,272 | (8) | |||
Nonoperating Income (Expenses) | ||||||
Investment income (loss), net | (19,723) | 12,703 | (255) | |||
Debt expense | (11,073) | (1,785) | NM | |||
Other, net | 222 | (900) | 125 | |||
Total Nonoperating Income (Expenses), net | (30,574) | 10,018 | (405) | |||
Income before income taxes | 306,222 | 376,290 | (19) | |||
Income tax provision | 71,658 | 103,982 | (31) | |||
Net income including the noncontrolling interests in subsidiaries | 234,564 | 272,308 | (14) | |||
Less: Net income attributable to the noncontrolling interests in subsidiaries | (4,932) | 2,015 | (345) | |||
Net Income | $ 239,496 | $ 270,293 | (11) % | |||
Amounts Attributable to Federated Hermes, Inc. | ||||||
Earnings Per Share1 | ||||||
Basic | $ 2.65 | $ 2.77 | (4) % | |||
Diluted | $ 2.65 | $ 2.75 | (4) % | |||
Weighted-Average Shares Outstanding | ||||||
Basic | 85,762 | 93,754 | ||||
Diluted | 85,766 | 93,771 | ||||
Dividends Declared Per Share | $ 1.08 | $ 1.08 | ||||
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 $11.8 million and $10.9 million available to unvested restricted Federated Hermes shareholders for the years ended Dec. 31, 2022 and Dec. 31, 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 for the year ended Dec. 31, 2021 excludes net income available to unvested shareholders of a nonpublic consolidated subsidiary. |
Unaudited Condensed Consolidated Balance Sheets | ||
(in thousands) | Dec. 31, 2022 | Dec. 31, 2021 |
Assets | ||
Cash and other investments | $ 521,754 | $ 426,674 |
Other current assets | 129,277 | 132,773 |
Intangible assets, net, including goodwill | 1,209,574 | 1,270,080 |
Other long-term assets | 159,874 | 188,660 |
Total Assets | $ 2,020,479 | $ 2,018,187 |
Liabilities, Redeemable Noncontrolling Interests and Equity | ||
Current liabilities | $ 257,413 | $ 270,707 |
Long-term debt | 347,581 | 223,350 |
Other long-term liabilities | 307,972 | 346,911 |
Redeemable noncontrolling interests | 61,821 | 63,202 |
Equity excluding treasury stock1 | 1,411,055 | 1,652,481 |
Treasury stock1 | (365,363) | (538,464) |
Total Liabilities, Redeemable Noncontrolling Interests and Equity | $ 2,020,479 | $ 2,018,187 |
1) | During the third quarter 2022, the board of directors authorized the retirement of 10 million treasury shares, which restored them to authorized but unissued status. There was no impact to total equity as a result of this transaction. |
Unaudited Changes in Long-Term Assets - By Asset Class | ||||||
(in millions) | Quarter Ended | Year Ended | ||||
Dec. 31, 2022 | Sept. 30, 2022 | Dec. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | ||
Equity | ||||||
Beginning assets | $ 74,684 | $ 80,988 | $ 97,425 | $ 96,716 | $ 91,788 | |
Sales1 | 5,265 | 5,133 | 4,371 | 23,985 | 21,829 | |
Redemptions1 | (6,015) | (4,951) | (7,106) | (25,600) | (26,761) | |
Net sales (redemptions)1 | (750) | 182 | (2,735) | (1,615) | (4,932) | |
Net exchanges | 86 | 9 | (2) | (59) | 41 | |
Acquisitions/(dispositions) | 0 | 0 | 0 | 0 | 408 | |
Impact of foreign exchange2 | 1,219 | (1,187) | (162) | (1,621) | (1,096) | |
Market gains and (losses)3 | 6,284 | (5,308) | 2,190 | (11,898) | 10,507 | |
Ending assets | $ 81,523 | $ 74,684 | $ 96,716 | $ 81,523 | $ 96,716 | |
Fixed Income | ||||||
Beginning assets | $ 85,365 | $ 86,253 | $ 97,226 | $ 97,550 | $ 84,277 | |
Sales1 | 5,920 | 7,681 | 7,920 | 28,016 | 42,626 | |
Redemptions1 | (9,755) | (6,584) | (7,438) | (34,726) | (29,744) | |
Net sales (redemptions)1 | (3,835) | 1,097 | 482 | (6,710) | 12,882 | |
Net exchanges | (142) | (17) | (23) | (64) | (81) | |
Acquisitions/(dispositions) | 3,524 | 0 | 0 | 3,524 | 17 | |
Impact of foreign exchange2 | 239 | (231) | (9) | (321) | (133) | |
Market gains and (losses)3 | 1,592 | (1,737) | (126) | (7,236) | 588 | |
Ending assets | $ 86,743 | $ 85,365 | $ 97,550 | $ 86,743 | $ 97,550 | |
Alternative / Private Markets | ||||||
Beginning assets | $ 20,182 | $ 21,785 | $ 22,064 | $ 22,920 | $ 19,084 | |
Sales1 | 1,127 | 946 | 1,696 | 3,833 | 4,823 | |
Redemptions1 | (1,190) | (929) | (1,460) | (3,715) | (3,170) | |
Net sales (redemptions)1 | (63) | 17 | 236 | 118 | 1,653 | |
Net exchanges | (6) | 3 | 0 | 1 | (2) | |
Acquisitions/(dispositions) | 0 | 0 | 0 | 0 | 81 | |
Impact of foreign exchange2 | 1,513 | (1,638) | 107 | (2,317) | (254) | |
Market gains and (losses)3 | (824) | 15 | 513 | 80 | 2,358 | |
Ending assets | $ 20,802 | $ 20,182 | $ 22,920 | $ 20,802 | $ 22,920 | |
Multi-asset | ||||||
Beginning assets | $ 2,902 | $ 3,135 | $ 3,692 | $ 3,780 | $ 3,948 | |
Sales1 | 72 | 54 | 75 | 243 | 301 | |
Redemptions1 | (165) | (132) | (119) | (572) | (936) | |
Net sales (redemptions)1 | (93) | (78) | (44) | (329) | (635) | |
Net exchanges | 2 | 0 | 14 | 8 | 42 | |
Acquisitions/(dispositions) | 0 | 0 | 0 | 0 | 54 | |
Impact of foreign exchange2 | 0 | 0 | 0 | 0 | (1) | |
Market gains and (losses)3 | 178 | (155) | 118 | (470) | 372 | |
Ending assets | $ 2,989 | $ 2,902 | $ 3,780 | $ 2,989 | $ 3,780 | |
Total Long-term Assets | ||||||
Beginning assets | $ 183,133 | $ 192,161 | $ 220,407 | $ 220,966 | $ 199,097 | |
Sales1 | 12,384 | 13,814 | 14,062 | 56,077 | 69,579 | |
Redemptions1 | (17,125) | (12,596) | (16,123) | (64,613) | (60,611) | |
Net sales (redemptions)1 | (4,741) | 1,218 | (2,061) | (8,536) | 8,968 | |
Net exchanges | (60) | (5) | (11) | (114) | 0 | |
Acquisitions/(dispositions) | 3,524 | 0 | 0 | 3,524 | 560 | |
Impact of foreign exchange2 | 2,971 | (3,056) | (64) | (4,259) | (1,484) | |
Market gains and (losses)3 | 7,230 | (7,185) | 2,695 | (19,524) | 13,825 | |
Ending assets | $ 192,057 | $ 183,133 | $ 220,966 | $ 192,057 | $ 220,966 | |
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. |
Unaudited Changes in Long-Term Assets - By Asset Class and Product Type | ||||||||||
(in millions) | ||||||||||
Quarter Ended | ||||||||||
Dec. 31, 2022 | ||||||||||
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 | $ 40,633 | $ 34,051 | $ 44,896 | $ 40,469 | $ 12,680 | $ 7,502 | $ 2,784 | $ 118 | $ 100,993 | $ 82,140 |
Sales | 2,586 | 2,679 | 4,692 | 1,228 | 925 | 202 | 71 | 1 | 8,274 | 4,110 |
Redemptions | (4,012) | (2,003) | (7,255) | (2,500) | (1,130) | (60) | (162) | (3) | (12,559) | (4,566) |
Net sales (redemptions) | (1,426) | 676 | (2,563) | (1,272) | (205) | 142 | (91) | (2) | (4,285) | (456) |
Net exchanges | 114 | (28) | (142) | 0 | (6) | 0 | 2 | 0 | (32) | (28) |
Acquisitions/(dispositions) | 0 | 0 | 0 | 3,524 | 0 | 0 | 0 | 0 | 0 | 3,524 |
Impact of foreign exchange2 | 727 | 492 | 156 | 83 | 927 | 586 | 0 | 0 | 1,810 | 1,161 |
Market gains and (losses)3 | 3,294 | 2,990 | 833 | 759 | (346) | (478) | 156 | 22 | 3,937 | 3,293 |
Ending assets | $ 43,342 | $ 38,181 | $ 43,180 | $ 43,563 | $ 13,050 | $ 7,752 | $ 2,851 | $ 138 | $ 102,423 | $ 89,634 |
Year Ended | ||||||||||
Dec. 31, 2022 | ||||||||||
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 | $ 57,036 | $ 39,680 | $ 59,862 | $ 37,688 | $ 14,788 | $ 8,132 | $ 3,608 | $ 172 | $ 135,294 | $ 85,672 |
Sales | 12,796 | 11,189 | 18,403 | 9,613 | 2,562 | 1,271 | 241 | 2 | 34,002 | 22,075 |
Redemptions | (15,134) | (10,466) | (29,869) | (4,857) | (3,150) | (565) | (559) | (13) | (48,712) | (15,901) |
Net sales (redemptions) | (2,338) | 723 | (11,466) | 4,756 | (588) | 706 | (318) | (11) | (14,710) | 6,174 |
Net exchanges | (31) | (28) | (63) | (1) | 1 | 0 | 8 | 0 | (85) | (29) |
Acquisitions/(dispositions) | 0 | 0 | 0 | 3,524 | 0 | 0 | 0 | 0 | 0 | 3,524 |
Impact of foreign exchange2 | (908) | (713) | (253) | (68) | (1,463) | (854) | 0 | 0 | (2,624) | (1,635) |
Market gains and (losses)3 | (10,417) | (1,481) | (4,900) | (2,336) | 312 | (232) | (447) | (23) | (15,452) | (4,072) |
Ending assets | $ 43,342 | $ 38,181 | $ 43,180 | $ 43,563 | $ 13,050 | $ 7,752 | $ 2,851 | $ 138 | $ 102,423 | $ 89,634 |
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 | ||||||
Quarter Ended | Year Ended | |||||
Dec. 31, 2022 | Sept. 30, 2022 | Dec. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | ||
Total Fund Assets | ||||||
Beginning assets | $ 100,993 | $ 109,334 | $ 136,297 | $ 135,294 | $ 123,713 | |
Sales | 8,274 | 7,128 | 10,094 | 34,002 | 49,125 | |
Redemptions | (12,559) | (10,056) | (11,955) | (48,712) | (44,368) | |
Net sales (redemptions) | (4,285) | (2,928) | (1,861) | (14,710) | 4,757 | |
Net exchanges | (32) | (5) | (11) | (85) | (356) | |
Acquisitions/(dispositions) | 0 | 0 | 0 | 0 | 560 | |
Impact of foreign exchange1 | 1,810 | (1,841) | 4 | (2,624) | (774) | |
Market gains and (losses)2 | 3,937 | (3,567) | 865 | (15,452) | 7,394 | |
Ending assets | $ 102,423 | $ 100,993 | $ 135,294 | $ 102,423 | $ 135,294 | |
Total Separate Accounts Assets3 | ||||||
Beginning assets | $ 82,140 | $ 82,827 | $ 84,110 | $ 85,672 | $ 75,384 | |
Sales4 | 4,110 | 6,686 | 3,968 | 22,075 | 20,454 | |
Redemptions4 | (4,566) | (2,540) | (4,168) | (15,901) | (16,243) | |
Net sales (redemptions)4 | (456) | 4,146 | (200) | 6,174 | 4,211 | |
Net exchanges | (28) | 0 | 0 | (29) | 356 | |
Acquisitions/(dispositions) | 3,524 | 0 | 0 | 3,524 | 0 | |
Impact of foreign exchange1 | 1,161 | (1,215) | (68) | (1,635) | (710) | |
Market gains and (losses)2 | 3,293 | (3,618) | 1,830 | (4,072) | 6,431 | |
Ending assets | $ 89,634 | $ 82,140 | $ 85,672 | $ 89,634 | $ 85,672 | |
Total Long-term Assets3 | ||||||
Beginning assets | $ 183,133 | $ 192,161 | $ 220,407 | $ 220,966 | $ 199,097 | |
Sales4 | 12,384 | 13,814 | 14,062 | 56,077 | 69,579 | |
Redemptions4 | (17,125) | (12,596) | (16,123) | (64,613) | (60,611) | |
Net sales (redemptions)4 | (4,741) | 1,218 | (2,061) | (8,536) | 8,968 | |
Net exchanges | (60) | (5) | (11) | (114) | 0 | |
Acquisitions/(dispositions) | 3,524 | 0 | 0 | 3,524 | 560 | |
Impact of foreign exchange1 | 2,971 | (3,056) | (64) | (4,259) | (1,484) | |
Market gains and (losses)2 | 7,230 | (7,185) | 2,695 | (19,524) | 13,825 | |
Ending assets | $ 192,057 | $ 183,133 | $ 220,966 | $ 192,057 | $ 220,966 | |
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. |
Unaudited Managed Assets | Dec. 31, 2022 | Sept. 30, 2022 | June 30, 2022 | March 31, 2022 | Dec. 31, 2021 |
By Asset Class | |||||
Equity | $ 81,523 | $ 74,684 | $ 80,988 | $ 91,676 | $ 96,716 |
Fixed-income | 86,743 | 85,365 | 86,253 | 92,146 | 97,550 |
Alternative / private markets | 20,802 | 20,182 | 21,785 | 23,109 | 22,920 |
Multi-asset | 2,989 | 2,902 | 3,135 | 3,555 | 3,780 |
Total long-term assets | 192,057 | 183,133 | 192,161 | 210,486 | 220,966 |
Money market | 476,844 | 441,294 | 439,697 | 420,596 | 447,907 |
Total Managed Assets | $ 668,901 | $ 624,427 | $ 631,858 | $ 631,082 | $ 668,873 |
By Product Type | |||||
Funds: | |||||
Equity | $ 43,342 | $ 40,633 | $ 44,207 | $ 51,890 | $ 57,036 |
Fixed-income | 43,180 | 44,896 | 48,215 | 54,830 | 59,862 |
Alternative / private markets | 13,050 | 12,680 | 13,911 | 14,847 | 14,788 |
Multi-asset | 2,851 | 2,784 | 3,001 | 3,401 | 3,608 |
Total long-term assets | 102,423 | 100,993 | 109,334 | 124,968 | 135,294 |
Money market | 335,937 | 309,859 | 298,031 | 279,514 | 312,834 |
Total Fund Assets | $ 438,360 | $ 410,852 | $ 407,365 | $ 404,482 | $ 448,128 |
Separate Accounts: | |||||
Equity | $ 38,181 | $ 34,051 | $ 36,781 | $ 39,786 | $ 39,680 |
Fixed-income | 43,563 | 40,469 | 38,038 | 37,316 | 37,688 |
Alternative / private markets | 7,752 | 7,502 | 7,874 | 8,262 | 8,132 |
Multi-asset | 138 | 118 | 134 | 154 | 172 |
Total long-term assets | 89,634 | 82,140 | 82,827 | 85,518 | 85,672 |
Money market | 140,907 | 131,435 | 141,666 | 141,082 | 135,073 |
Total Separate Account Assets | $ 230,541 | $ 213,575 | $ 224,493 | $ 226,600 | $ 220,745 |
Total Managed Assets | $ 668,901 | $ 624,427 | $ 631,858 | $ 631,082 | $ 668,873 |
Unaudited Average Managed Assets | Quarter Ended | ||||
(in millions) | Dec. 31, 2022 | Sept. 30, 2022 | June 30, 2022 | March 31, 2022 | Dec. 31, 2021 |
By Asset Class | |||||
Equity | $ 79,544 | $ 81,809 | $ 85,785 | $ 92,034 | $ 97,751 |
Fixed-income | 87,849 | 87,042 | 88,740 | 95,475 | 97,229 |
Alternative / private markets | 20,926 | 21,193 | 22,230 | 22,848 | 22,243 |
Multi-asset | 2,988 | 3,144 | 3,337 | 3,621 | 3,763 |
Total long-term assets | 191,307 | 193,188 | 200,092 | 213,978 | 220,986 |
Money market | 442,334 | 438,601 | 417,778 | 433,254 | 419,392 |
Total Avg. Managed Assets | $ 633,641 | $ 631,789 | $ 617,870 | $ 647,232 | $ 640,378 |
By Product Type | |||||
Funds: | |||||
Equity | $ 43,131 | $ 45,135 | $ 47,504 | $ 52,419 | $ 58,290 |
Fixed-income | 44,099 | 47,489 | 51,173 | 57,413 | 60,339 |
Alternative / private markets | 13,140 | 13,432 | 14,297 | 14,746 | 14,419 |
Multi-asset | 2,855 | 3,012 | 3,193 | 3,460 | 3,590 |
Total long-term assets | 103,225 | 109,068 | 116,167 | 128,038 | 136,638 |
Money market | 309,232 | 301,940 | 275,631 | 291,157 | 294,618 |
Total Avg. Fund Assets | $ 412,457 | $ 411,008 | $ 391,798 | $ 419,195 | $ 431,256 |
Separate Accounts: | |||||
Equity | $ 36,413 | $ 36,674 | $ 38,281 | $ 39,615 | $ 39,461 |
Fixed-income | 43,750 | 39,553 | 37,567 | 38,062 | 36,890 |
Alternative / private markets | 7,786 | 7,761 | 7,933 | 8,102 | 7,824 |
Multi-asset | 133 | 132 | 144 | 161 | 173 |
Total long-term assets | 88,082 | 84,120 | 83,925 | 85,940 | 84,348 |
Money market | 133,102 | 136,661 | 142,147 | 142,097 | 124,774 |
Total Avg. Separate Account Assets | $ 221,184 | $ 220,781 | $ 226,072 | $ 228,037 | $ 209,122 |
Total Avg. Managed Assets | $ 633,641 | $ 631,789 | $ 617,870 | $ 647,232 | $ 640,378 |
Unaudited Average Managed Assets | Year Ended | |||
(in millions) | Dec. 31, 2022 | Dec. 31, 2021 | ||
By Asset Class | ||||
Equity | $ 84,793 | $ 98,040 | ||
Fixed-income | 89,776 | 91,564 | ||
Alternative / private markets | 21,799 | 20,754 | ||
Multi-asset | 3,273 | 3,879 | ||
Total long-term assets | 199,641 | 214,237 | ||
Money market | 432,992 | 418,562 | ||
Total Avg. Managed Assets | $ 632,633 | $ 632,799 | ||
By Product Type | ||||
Funds: | ||||
Equity | $ 47,047 | $ 58,426 | ||
Fixed-income | 50,043 | 58,095 | ||
Alternative / private markets | 13,903 | 13,266 | ||
Multi-asset | 3,130 | 3,696 | ||
Total long-term assets | 114,123 | 133,483 | ||
Money market | 294,490 | 293,644 | ||
Total Avg. Fund Assets | $ 408,613 | $ 427,127 | ||
Separate Accounts: | ||||
Equity | $ 37,746 | $ 39,614 | ||
Fixed-income | 39,733 | 33,469 | ||
Alternative / private markets | 7,896 | 7,488 | ||
Multi-asset | 143 | 183 | ||
Total long-term assets | 85,518 | 80,754 | ||
Money market | 138,502 | 124,918 | ||
Total Avg. Separate Account Assets | $ 224,020 | $ 205,672 | ||
Total Avg. Managed Assets | $ 632,633 | $ 632,799 | ||
SOURCE Federated Hermes, Inc.
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