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