Federated Hermes, Inc. reports fourth quarter and full-year 2023 earnings
- Q4 2023 earnings per diluted share of $0.96; full-year 2023 EPS of $3.40
- Total assets under management at record $757.6 billion
- Board declares $0.28 per share quarterly dividend
PITTSBURGH, Jan. 25, 2024 /PRNewswire/ -- Federated Hermes, Inc. (NYSE: FHI), a global leader in active, responsible investing, today reported earnings per diluted share (EPS) for Q4 2023 of $0.96, compared to $0.63 for the same quarter last year, on net income of $82.2 million for Q4 2023, compared to $56.5 million for Q4 2022. Full-year 2023 EPS was $3.40, compared to $2.65 for 2022 on net income of $299.0 million for 2023, compared to $239.5 million for 2022.
Federated Hermes' total managed assets were a record $757.6 billion at Dec. 31, 2023, up $88.7 billion or 13% from $668.9 billion at Dec. 31, 2022 and up $42.4 billion or 6% from $715.2 billion at Sept. 30, 2023. Average managed assets for Q4 2023 were $728.0 billion, up $94.4 billion or 15% from $633.6 billion reported for Q4 2022 and up $16.8 billion or 2% from $711.2 billion reported for Q3 2023.
"Federated Hermes' record assets at year-end were driven by another quarter of money market asset increases, as our liquidity products continued to provide a vital cash management resource for clients," said J. Christopher Donahue, president and chief executive officer. "In addition, as they navigated market volatility, investors turned to a diverse range of our active management strategies—from our fundamentally based MDT equity strategies to high-yield fixed-income to unconstrained credit alternatives."
Federated Hermes' board of directors declared a quarterly dividend of $0.28 per share. The dividend is payable on Feb. 15, 2024 to shareholders of record as of Feb. 8, 2024. During Q4 2023, Federated Hermes purchased 1,902,861 shares of Federated Hermes class B common stock for $61.0 million, bringing the total shares of Class B common stock purchased in 2023 to 5,318,442 shares for $178.0 million.
Federated Hermes' equity assets were $79.3 billion at Dec. 31, 2023, down $2.2 billion or 3% from $81.5 billion at Dec. 31, 2022 and up $2.0 billion or 3% from $77.3 billion at Sept. 30, 2023. Top-selling equity funds on a net basis during Q4 2023 were Federated Hermes MDT Large Cap Growth Fund, Federated Hermes MDT Mid Cap Growth Fund, Federated Hermes International Small-Mid Company Fund, Federated Hermes U.S. SMID Equity Fund and Federated Hermes MDT Small Cap Core Fund.
Federated Hermes' fixed-income assets were $94.9 billion at Dec. 31, 2023, up $8.2 billion or 9% from $86.7 billion at Dec. 31, 2022 and up $5.1 billion or 6% from $89.8 billion at Sept. 30, 2023. Top-selling fixed-income funds on a net basis during Q4 2023 were Federated Hermes High Yield Bond Collective Investment Fund, Federated Hermes Sterling Cash Plus Fund, Federated Hermes Intermediate Municipal Fund, Federated Hermes Total Return Bond Collective Investment Fund and Federated Hermes Conservative Municipal Microshort Fund.
Federated Hermes' alternative/private markets assets were $20.6 billion at Dec. 31, 2023, down $0.2 billion or 1% from $20.8 billion at Dec. 31, 2022 and up $0.3 billion or 1% from $20.3 billion at Sept. 30, 2023.
Federated Hermes' money market assets were a record $560.0 billion at Dec. 31, 2023, up $83.2 billion or 17% from $476.8 billion at Dec. 31, 2022 and up $34.9 billion or 7% from $525.1 billion at Sept. 30, 2023. Money market mutual fund assets were a record $406.2 billion at Dec. 31, 2023, up $70.3 billion or 21% from $335.9 billion at Dec. 31, 2022 and up $21.3 billion or 6% from $384.9 billion at Sept. 30, 2023. Federated Hermes' money market separate account assets were a record $153.8 billion at Dec. 31, 2023, up $12.9 billion or 9% from $140.9 billion at Dec. 31, 2022 and up $13.6 billion or 10% from $140.2 billion at Sept. 30, 2023.
Financial Summary
Q4 2023 vs. Q4 2022
Revenue increased $17.6 million or 5% primarily due to an increase in revenue from higher average money market assets and an increase in total carried interest and performance fees of $6.4 million, including an increase of $2.5 million of carried interest from consolidated carried interest vehicles, which is offset in compensation expense. These increases were partially offset by a decrease in revenue from lower average equity assets.
During Q4 2023, Federated Hermes derived 50% of its revenue from money market assets, 49% from long-term assets (29% from equity assets, 12% from fixed-income assets and 8% from alternative/private markets and multi-asset) and 1% from sources other than managed assets.
Operating expenses decreased $21.2 million or 7% primarily due to an intangible asset impairment in Q4 2022.
Nonoperating income (expenses), net increased $3.3 million primarily due to an increase in investment yields due to rising interest rates.
Q4 2023 vs. Q3 2023
Revenue decreased $11.2 million or 3% primarily due to a decrease in revenue from lower average equity assets and a decrease in total carried interest and performance fees of $5.2 million, including a decrease of $5.5 million of carried interest from consolidated carried interest vehicles, which is offset in compensation expense. These decreases were partially offset by an increase in revenue from higher average money market assets.
Operating expenses decreased $12.3 million or 4% primarily due to decreased compensation expense from consolidated carried interest vehicles of $5.5 million and decreased incentive compensation.
Nonoperating income (expenses), net increased $15.2 million primarily due to an increase in the market value of investments in Q4 2023 compared to a decrease in Q3 2023.
2023 vs. 2022
Revenue increased $163.8 million or 11% primarily due to an increase in revenue from higher average money market assets, 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), and an increase in total carried interest and performance fees of $55.4 million, including $34.4 million of carried interest from consolidated carried interest vehicles, which is offset in compensation expense. 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 2023, Federated Hermes derived 52% of its revenue from long-term assets (30% from equity assets, 12% from fixed-income assets and 10% from alternative/private markets and multi-asset), 47% from money market assets and 1% from sources other than managed assets.
Operating expenses increased by $113.0 million or 10% primarily due to increased distribution expenses predominantly from lower voluntary yield-related fee waivers, an increase in compensation expense primarily due to consolidated carried interest vehicles of $34.2 million and an increase in other expense due to fund reorganization costs. These increases were partially offset by a decrease in expense due to an intangible asset impairment in the prior year.
Nonoperating income (expenses), net increased $54.4 million primarily due to an increase in the market value of investments in 2023 compared to a decrease in the market value of investments in 2022 and an increase in investment yields due to rising interest rates.
Impact of voluntary yield-related fee waivers
There were no voluntary yield-related fee waivers during 2023. During 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 2022.
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. 26, 2024. 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 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 Jan. 26, 2024. To access the telephone replay, dial 877-481-4010 (domestic) or 919-882-2331 (international) and enter access code 49692. The online replay will be available via FederatedHermes.com/us for one year.
Federated Hermes, Inc. is a global leader in active, responsible investment management, with $757.6 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 10,000 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 11% of fixed-income fund managers2. Federated Hermes also ranks as the 8th-largest manager of model-delivered separately managed accounts3. For more information, including an analyst presentation, visit FederatedHermes.com/us.
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1) As of Dec. 31, 2023.
2) Morningstar, Dec. 31, 2023. Based on U.S. fund flows rankings.
3) Money Management Institute/Cerulli Associates, Q3 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.
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, and 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 | Quarter Ended | % Change Q3 | ||
Dec. 31, 2023 | Dec. 31, 2022 | Sept. 30, 2023 | |||
Revenue | |||||
Investment advisory fees, net | $ 264,693 | $ 256,949 | 3 % | $ 276,771 | (4) % |
Administrative service fees, net | 90,930 | 75,847 | 20 | 88,023 | 3 |
Other service fees, net | 35,874 | 41,103 | (13) | 37,862 | (5) |
Total Revenue | 391,497 | 373,899 | 5 | 402,656 | (3) |
Operating Expenses | |||||
Compensation and related | 127,504 | 123,994 | 3 | 139,123 | (8) |
Distribution | 90,940 | 90,718 | 0 | 89,838 | 1 |
Systems and communications | 20,944 | 20,549 | 2 | 21,213 | (1) |
Professional service fees | 16,632 | 16,100 | 3 | 17,561 | (5) |
Office and occupancy | 10,159 | 10,905 | (7) | 10,632 | (4) |
Advertising and promotional | 9,684 | 6,967 | 39 | 3,857 | 151 |
Travel and related | 4,308 | 3,913 | 10 | 4,034 | 7 |
Intangible asset related | 3,676 | 34,746 | (89) | 3,451 | 7 |
Other | 5,080 | 2,258 | 125 | 11,523 | (56) |
Total Operating Expenses | 288,927 | 310,150 | (7) | 301,232 | (4) |
Operating Income | 102,570 | 63,749 | 61 | 101,424 | 1 |
Nonoperating Income (Expenses) | |||||
Investment income (loss), net | 17,418 | 14,413 | 21 | 2,722 | NM |
Debt expense | (3,142) | (3,200) | (2) | (3,133) | 0 |
Other, net | 461 | 191 | 141 | (8) | NM |
Total Nonoperating Income (Expenses), net | 14,737 | 11,404 | 29 | (419) | NM |
Income before income taxes | 117,307 | 75,153 | 56 | 101,005 | 16 |
Income tax provision | 31,260 | 13,518 | 131 | 26,739 | 17 |
Net income including the noncontrolling interests in subsidiaries | 86,047 | 61,635 | 40 | 74,266 | 16 |
Less: Net income attributable to the noncontrolling interests in subsidiaries | 3,869 | 5,138 | (25) | (760) | NM |
Net Income | $ 82,178 | $ 56,497 | 45 % | $ 75,026 | 10 % |
Amounts Attributable to Federated Hermes, Inc. | |||||
Earnings Per Share1 | |||||
Basic and diluted | $ 0.96 | $ 0.63 | 52 % | $ 0.86 | 12 % |
Weighted-Average Shares Outstanding | |||||
Basic | 81,961 | 84,731 | 83,710 | ||
Diluted | 81,973 | 84,743 | 83,710 | ||
Dividends Declared Per Share | $ 0.28 | $ 0.27 | $ 0.28 | ||
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 $3.6 million, $2.8 million and $3.3 million available to unvested restricted Federated Hermes shareholders for the quarterly periods ended Dec. 31, 2023, Dec. 31, 2022 and Sept. 30, 2023, respectively, was excluded from the computation of earnings per share. |
Unaudited Condensed Consolidated Statements of Income | ||||||
(in thousands, except per share data) | ||||||
Year Ended | ||||||
Dec. 31, 2023 | Dec. 31, 2022 | % Change | ||||
Revenue | ||||||
Investment advisory fees, net | $ 1,115,783 | $ 1,011,631 | 10 % | |||
Administrative service fees, net—affiliates | 343,332 | 294,557 | 17 | |||
Other service fees, net | 150,459 | 139,626 | 8 | |||
Total Revenue | 1,609,574 | 1,445,814 | 11 | |||
Operating Expenses | ||||||
Compensation and related | 563,388 | 512,713 | 10 | |||
Distribution | 371,198 | 314,554 | 18 | |||
Systems and communications | 84,203 | 77,783 | 8 | |||
Professional service fees | 69,514 | 57,747 | 20 | |||
Office and occupancy | 45,069 | 43,361 | 4 | |||
Advertising and promotional | 22,992 | 20,931 | 10 | |||
Travel and related | 15,409 | 12,456 | 24 | |||
Intangible asset related | 13,870 | 44,066 | (69) | |||
Other | 36,382 | 25,407 | 43 | |||
Total Operating Expenses | 1,222,025 | 1,109,018 | 10 | |||
Operating Income | 387,549 | 336,796 | 15 | |||
Nonoperating Income (Expenses) | ||||||
Investment income (loss), net | 35,740 | (19,723) | 281 | |||
Debt expense | (12,519) | (11,073) | 13 | |||
Other, net | 562 | 222 | 153 | |||
Total Nonoperating Income (Expenses), net | 23,783 | (30,574) | 178 | |||
Income before income taxes | 411,332 | 306,222 | 34 | |||
Income tax provision | 106,551 | 71,658 | 49 | |||
Net income including the noncontrolling interests in subsidiaries | 304,781 | 234,564 | 30 | |||
Less: Net income attributable to the noncontrolling interests in subsidiaries | 5,801 | (4,932) | 218 | |||
Net Income | $ 298,980 | $ 239,496 | 25 % | |||
Amounts Attributable to Federated Hermes, Inc. | ||||||
Earnings Per Share1 | ||||||
Basic and diluted | $ 3.40 | $ 2.65 | 28 % | |||
Weighted-Average Shares Outstanding | ||||||
Basic | 83,858 | 85,762 | ||||
Diluted | 83,863 | 85,766 | ||||
Dividends Declared Per Share | $ 1.11 | $ 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 $14.0 million and $11.8 million available to unvested restricted Federated Hermes shareholders for the years ended Dec. 31, 2023 and Dec. 31, 2022, respectively, was excluded from the computation of earnings per share. |
Unaudited Condensed Consolidated Balance Sheets | ||
(in thousands) | Dec. 31, 2023 | Dec. 31, 2022 |
Assets | ||
Cash and other investments | $ 560,675 | $ 521,754 |
Other current assets | 160,054 | 129,277 |
Intangible assets, net, including goodwill | 1,216,605 | 1,209,574 |
Other long-term assets | 164,510 | 159,874 |
Total Assets | $ 2,101,844 | $ 2,020,479 |
Liabilities, Redeemable Noncontrolling Interests and Equity | ||
Current liabilities | $ 287,343 | $ 257,413 |
Long-term debt | 347,843 | 347,581 |
Other long-term liabilities | 312,561 | 307,972 |
Redeemable noncontrolling interests | 25,845 | 61,821 |
Equity excluding treasury stock | 1,649,655 | 1,411,055 |
Treasury stock | (521,403) | (365,363) |
Total Liabilities, Redeemable Noncontrolling Interests and Equity | $ 2,101,844 | $ 2,020,479 |
Unaudited Changes in Long-Term Assets - By Asset Class | ||||||
(in millions) | Quarter Ended | Year Ended | ||||
Dec. 31, 2023 | Sept. 30, 2023 | Dec. 31, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | ||
Equity | ||||||
Beginning assets | $ 77,315 | $ 82,992 | $ 74,684 | $ 81,523 | $ 96,716 | |
Sales1 | 3,335 | 3,897 | 5,265 | 17,732 | 23,985 | |
Redemptions1 | (8,005) | (6,304) | (6,015) | (24,742) | (25,600) | |
Net sales (redemptions)1 | (4,670) | (2,407) | (750) | (7,010) | (1,615) | |
Net exchanges | (6) | 18 | 86 | 120 | (59) | |
Impact of foreign exchange2 | 891 | (532) | 1,219 | 538 | (1,621) | |
Market gains and (losses)3 | 5,761 | (2,756) | 6,284 | 4,120 | (11,898) | |
Ending assets | $ 79,291 | $ 77,315 | $ 81,523 | $ 79,291 | $ 81,523 | |
Fixed Income | ||||||
Beginning assets | $ 89,765 | $ 87,425 | $ 85,365 | $ 86,743 | $ 97,550 | |
Sales1 | 7,594 | 8,277 | 5,920 | 26,809 | 28,016 | |
Redemptions1 | (6,669) | (5,133) | (9,755) | (23,892) | (34,726) | |
Net sales (redemptions)1 | 925 | 3,144 | (3,835) | 2,917 | (6,710) | |
Net exchanges | 7 | (25) | (142) | (113) | (64) | |
Acquisitions/(dispositions) | 0 | 0 | 3,524 | 0 | 3,524 | |
Impact of foreign exchange2 | 143 | (96) | 239 | 128 | (321) | |
Market gains and (losses)3 | 4,080 | (683) | 1,592 | 5,245 | (7,236) | |
Ending assets | $ 94,920 | $ 89,765 | $ 86,743 | $ 94,920 | $ 86,743 | |
Alternative / Private Markets | ||||||
Beginning assets | $ 20,337 | $ 21,602 | $ 20,182 | $ 20,802 | $ 22,920 | |
Sales1 | 700 | 660 | 1,127 | 3,268 | 3,833 | |
Redemptions1 | (755) | (866) | (1,190) | (3,158) | (3,715) | |
Net sales (redemptions)1 | (55) | (206) | (63) | 110 | 118 | |
Net exchanges | (3) | (3) | (6) | (9) | 1 | |
Impact of foreign exchange2 | 836 | (762) | 1,513 | 981 | (2,317) | |
Market gains and (losses)3 | (564) | (294) | (824) | (1,333) | 80 | |
Ending assets | $ 20,551 | $ 20,337 | $ 20,802 | $ 20,551 | $ 20,802 | |
Multi-asset | ||||||
Beginning assets | $ 2,728 | $ 2,922 | $ 2,902 | $ 2,989 | $ 3,780 | |
Sales1 | 34 | 30 | 72 | 144 | 243 | |
Redemptions1 | (142) | (119) | (165) | (548) | (572) | |
Net sales (redemptions)1 | (108) | (89) | (93) | (404) | (329) | |
Net exchanges | 8 | 0 | 2 | 11 | 8 | |
Market gains and (losses)3 | 239 | (105) | 178 | 271 | (470) | |
Ending assets | $ 2,867 | $ 2,728 | $ 2,989 | $ 2,867 | $ 2,989 | |
Total Long-term Assets | ||||||
Beginning assets | $ 190,145 | $ 194,941 | $ 183,133 | $ 192,057 | $ 220,966 | |
Sales1 | 11,663 | 12,864 | 12,384 | 47,953 | 56,077 | |
Redemptions1 | (15,571) | (12,422) | (17,125) | (52,340) | (64,613) | |
Net sales (redemptions)1 | (3,908) | 442 | (4,741) | (4,387) | (8,536) | |
Net exchanges | 6 | (10) | (60) | 9 | (114) | |
Acquisitions/(dispositions) | 0 | 0 | 3,524 | 0 | 3,524 | |
Impact of foreign exchange2 | 1,870 | (1,390) | 2,971 | 1,647 | (4,259) | |
Market gains and (losses)3 | 9,516 | (3,838) | 7,230 | 8,303 | (19,524) | |
Ending assets | $ 197,629 | $ 190,145 | $ 192,057 | $ 197,629 | $ 192,057 | |
1) | For certain accounts, including separately managed accounts, institutional accounts, certain sub-advised funds and other managed products, 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 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, 2023 | ||||||||||
Equity | Fixed Income | Alternative / Private | Multi-asset | Total | ||||||
Funds | Separate | Funds | Separate | Funds | Separate | Funds | Separate | Funds | Separate | |
Beginning assets | $ 40,801 | $ 36,514 | $ 42,569 | $ 47,196 | $ 12,409 | $ 7,928 | $ 2,599 | $ 129 | $ 98,378 | $ 91,767 |
Sales | 1,979 | 1,356 | 3,538 | 4,056 | 448 | 252 | 34 | 0 | 5,999 | 5,664 |
Redemptions | (4,189) | (3,816) | (4,526) | (2,143) | (724) | (31) | (139) | (3) | (9,578) | (5,993) |
Net sales (redemptions) | (2,210) | (2,460) | (988) | 1,913 | (276) | 221 | (105) | (3) | (3,579) | (329) |
Net exchanges | (16) | 10 | 4 | 3 | (3) | 0 | 8 | 0 | (7) | 13 |
Impact of foreign exchange2 | 414 | 477 | 99 | 44 | 489 | 347 | 0 | 0 | 1,002 | 868 |
Market gains and (losses)3 | 3,524 | 2,237 | 2,224 | 1,856 | (240) | (324) | 228 | 11 | 5,736 | 3,780 |
Ending assets | $ 42,513 | $ 36,778 | $ 43,908 | $ 51,012 | $ 12,379 | $ 8,172 | $ 2,730 | $ 137 | $ 101,530 | $ 96,099 |
Year Ended | ||||||||||
Dec. 31, 2023 | ||||||||||
Equity | Fixed Income | Alternative / Private | Multi-asset | Total | ||||||
Funds | Separate Accounts1 | Funds | Separate | Funds | Separate | Funds | Separate | Funds | Separate | |
Beginning assets | $ 43,342 | $ 38,181 | $ 43,180 | $ 43,563 | $ 13,050 | $ 7,752 | $ 2,851 | $ 138 | $ 102,423 | $ 89,634 |
Sales | 9,038 | 8,694 | 14,739 | 12,070 | 2,272 | 996 | 142 | 2 | 26,191 | 21,762 |
Redemptions | (13,987) | (10,755) | (16,608) | (7,284) | (2,878) | (280) | (530) | (18) | (34,003) | (18,337) |
Net sales (redemptions) | (4,949) | (2,061) | (1,869) | 4,786 | (606) | 716 | (388) | (16) | (7,812) | 3,425 |
Net exchanges | 69 | 51 | (91) | (22) | 14 | (23) | 11 | 0 | 3 | 6 |
Impact of foreign exchange2 | 345 | 193 | 95 | 33 | 585 | 396 | 0 | 0 | 1,025 | 622 |
Market gains and (losses)3 | 3,706 | 414 | 2,593 | 2,652 | (664) | (669) | 256 | 15 | 5,891 | 2,412 |
Ending assets | $ 42,513 | $ 36,778 | $ 43,908 | $ 51,012 | $ 12,379 | $ 8,172 | $ 2,730 | $ 137 | $ 101,530 | $ 96,099 |
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 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, 2023 | Sept. 30, 2023 | Dec. 31, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | ||
Total Fund Assets | ||||||
Beginning assets | $ 98,378 | $ 104,387 | $ 100,993 | $ 102,423 | $ 135,294 | |
Sales | 5,999 | 5,413 | 8,274 | 26,191 | 34,002 | |
Redemptions | (9,578) | (8,018) | (12,559) | (34,003) | (48,712) | |
Net sales (redemptions) | (3,579) | (2,605) | (4,285) | (7,812) | (14,710) | |
Net exchanges | (7) | 0 | (32) | 3 | (85) | |
Impact of foreign exchange1 | 1,002 | (798) | 1,810 | 1,025 | (2,624) | |
Market gains and (losses)2 | 5,736 | (2,606) | 3,937 | 5,891 | (15,452) | |
Ending assets | $ 101,530 | $ 98,378 | $ 102,423 | $ 101,530 | $ 102,423 | |
Total Separate Accounts Assets3 | ||||||
Beginning assets | $ 91,767 | $ 90,554 | $ 82,140 | $ 89,634 | $ 85,672 | |
Sales4 | 5,664 | 7,451 | 4,110 | 21,762 | 22,075 | |
Redemptions4 | (5,993) | (4,404) | (4,566) | (18,337) | (15,901) | |
Net sales (redemptions)4 | (329) | 3,047 | (456) | 3,425 | 6,174 | |
Net exchanges | 13 | (10) | (28) | 6 | (29) | |
Acquisitions/(dispositions) | 0 | 0 | 3,524 | 0 | 3,524 | |
Impact of foreign exchange1 | 868 | (592) | 1,161 | 622 | (1,635) | |
Market gains and (losses)2 | 3,780 | (1,232) | 3,293 | 2,412 | (4,072) | |
Ending assets | $ 96,099 | $ 91,767 | $ 89,634 | $ 96,099 | $ 89,634 | |
Total Long-term Assets3 | ||||||
Beginning assets | $ 190,145 | $ 194,941 | $ 183,133 | $ 192,057 | $ 220,966 | |
Sales4 | 11,663 | 12,864 | 12,384 | 47,953 | 56,077 | |
Redemptions4 | (15,571) | (12,422) | (17,125) | (52,340) | (64,613) | |
Net sales (redemptions)4 | (3,908) | 442 | (4,741) | (4,387) | (8,536) | |
Net exchanges | 6 | (10) | (60) | 9 | (114) | |
Acquisitions/(dispositions) | 0 | 0 | 3,524 | 0 | 3,524 | |
Impact of foreign exchange1 | 1,870 | (1,390) | 2,971 | 1,647 | (4,259) | |
Market gains and (losses)2 | 9,516 | (3,838) | 7,230 | 8,303 | (19,524) | |
Ending assets | $ 197,629 | $ 190,145 | $ 192,057 | $ 197,629 | $ 192,057 | |
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, 2023 | Sept. 30, 2023 | June 30, 2023 | March 31, 2023 | Dec. 31, 2022 |
By Asset Class | |||||
Equity | $ 79,291 | $ 77,315 | $ 82,992 | $ 83,629 | $ 81,523 |
Fixed-income | 94,920 | 89,765 | 87,425 | 87,461 | 86,743 |
Alternative / private markets | 20,551 | 20,337 | 21,602 | 21,174 | 20,802 |
Multi-asset | 2,867 | 2,728 | 2,922 | 2,973 | 2,989 |
Total long-term assets | 197,629 | 190,145 | 194,941 | 195,237 | 192,057 |
Money market | 559,993 | 525,085 | 509,017 | 505,800 | 476,844 |
Total Managed Assets | $ 757,622 | $ 715,230 | $ 703,958 | $ 701,037 | $ 668,901 |
By Product Type | |||||
Funds: | |||||
Equity | $ 42,513 | $ 40,801 | $ 44,383 | $ 44,732 | $ 43,342 |
Fixed-income | 43,908 | 42,569 | 43,884 | 43,616 | 43,180 |
Alternative / private markets | 12,379 | 12,409 | 13,338 | 13,040 | 13,050 |
Multi-asset | 2,730 | 2,599 | 2,782 | 2,832 | 2,851 |
Total long-term assets | 101,530 | 98,378 | 104,387 | 104,220 | 102,423 |
Money market | 406,166 | 384,896 | 364,014 | 357,346 | 335,937 |
Total Fund Assets | $ 507,696 | $ 483,274 | $ 468,401 | $ 461,566 | $ 438,360 |
Separate Accounts: | |||||
Equity | $ 36,778 | $ 36,514 | $ 38,609 | $ 38,897 | $ 38,181 |
Fixed-income | 51,012 | 47,196 | 43,541 | 43,845 | 43,563 |
Alternative / private markets | 8,172 | 7,928 | 8,264 | 8,134 | 7,752 |
Multi-asset | 137 | 129 | 140 | 141 | 138 |
Total long-term assets | 96,099 | 91,767 | 90,554 | 91,017 | 89,634 |
Money market | 153,827 | 140,189 | 145,003 | 148,454 | 140,907 |
Total Separate Account Assets | $ 249,926 | $ 231,956 | $ 235,557 | $ 239,471 | $ 230,541 |
Total Managed Assets | $ 757,622 | $ 715,230 | $ 703,958 | $ 701,037 | $ 668,901 |
Unaudited Average Managed Assets | Quarter Ended | ||||
(in millions) | Dec. 31, 2023 | Sept. 30, 2023 | June 30, 2023 | March 31, 2023 | Dec. 31, 2022 |
By Asset Class | |||||
Equity | $ 76,009 | $ 82,203 | $ 83,025 | $ 84,155 | $ 79,544 |
Fixed-income | 91,927 | 88,677 | 87,504 | 88,209 | 87,849 |
Alternative / private markets | 20,623 | 21,413 | 21,411 | 20,938 | 20,926 |
Multi-asset | 2,744 | 2,861 | 2,929 | 3,012 | 2,988 |
Total long-term assets | 191,303 | 195,154 | 194,869 | 196,314 | 191,307 |
Money market | 536,727 | 516,046 | 510,418 | 483,083 | 442,334 |
Total Avg. Managed Assets | $ 728,030 | $ 711,200 | $ 705,287 | $ 679,397 | $ 633,641 |
By Product Type | |||||
Funds: | |||||
Equity | $ 40,296 | $ 43,687 | $ 44,218 | $ 45,055 | $ 43,131 |
Fixed-income | 42,705 | 43,437 | 43,827 | 43,961 | 44,099 |
Alternative / private markets | 12,571 | 13,184 | 13,181 | 13,062 | 13,140 |
Multi-asset | 2,615 | 2,724 | 2,787 | 2,869 | 2,855 |
Total long-term assets | 98,187 | 103,032 | 104,013 | 104,947 | 103,225 |
Money market | 392,946 | 373,088 | 362,608 | 333,358 | 309,232 |
Total Avg. Fund Assets | $ 491,133 | $ 476,120 | $ 466,621 | $ 438,305 | $ 412,457 |
Separate Accounts: | |||||
Equity | $ 35,713 | $ 38,516 | $ 38,807 | $ 39,100 | $ 36,413 |
Fixed-income | 49,222 | 45,240 | 43,677 | 44,248 | 43,750 |
Alternative / private markets | 8,052 | 8,229 | 8,230 | 7,876 | 7,786 |
Multi-asset | 129 | 137 | 142 | 143 | 133 |
Total long-term assets | 93,116 | 92,122 | 90,856 | 91,367 | 88,082 |
Money market | 143,781 | 142,958 | 147,810 | 149,725 | 133,102 |
Total Avg. Separate Account Assets | $ 236,897 | $ 235,080 | $ 238,666 | $ 241,092 | $ 221,184 |
Total Avg. Managed Assets | $ 728,030 | $ 711,200 | $ 705,287 | $ 679,397 | $ 633,641 |
Unaudited Average Managed Assets | Year Ended | |||
(in millions) | Dec. 31, 2023 | Dec. 31, 2022 | ||
By Asset Class | ||||
Equity | $ 81,348 | $ 84,793 | ||
Fixed-income | 89,079 | 89,776 | ||
Alternative / private markets | 21,096 | 21,799 | ||
Multi-asset | 2,887 | 3,273 | ||
Total long-term assets | 194,410 | 199,641 | ||
Money market | 511,568 | 432,992 | ||
Total Avg. Managed Assets | $ 705,978 | $ 632,633 | ||
By Product Type | ||||
Funds: | ||||
Equity | $ 43,314 | $ 47,047 | ||
Fixed-income | 43,482 | 50,043 | ||
Alternative / private markets | 12,999 | 13,903 | ||
Multi-asset | 2,749 | 3,130 | ||
Total long-term assets | 102,544 | 114,123 | ||
Money market | 365,500 | 294,490 | ||
Total Avg. Fund Assets | $ 468,044 | $ 408,613 | ||
Separate Accounts: | ||||
Equity | $ 38,034 | $ 37,746 | ||
Fixed-income | 45,597 | 39,733 | ||
Alternative / private markets | 8,097 | 7,896 | ||
Multi-asset | 138 | 143 | ||
Total long-term assets | 91,866 | 85,518 | ||
Money market | 146,068 | 138,502 | ||
Total Avg. Separate Account Assets | $ 237,934 | $ 224,020 | ||
Total Avg. Managed Assets | $ 705,978 | $ 632,633 | ||
SOURCE Federated Hermes, Inc.
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