Federated Hermes, Inc. Reports Second Quarter 2020 Earnings

PITTSBURGH, July 30, 2020 /PRNewswire/ -- Federated Hermes, Inc. FHI, a leading global, active, responsible investment manager, today reported earnings per diluted share (EPS) of $0.80 for Q2 2020, compared to $0.62 for the same quarter last year, on net income of $81.2 million for Q2 2020, compared to $62.7 million for Q2 2019. Federated Hermes reported YTD 2020 EPS of $1.44, compared to $1.16 for the same period in 2019, on YTD 2020 net income of $145.4 million, compared to $117.3 million for the same period in 2019.

Federated Hermes' total managed assets were a record $628.8 billion at June 30, 2020, up $126.6 billion or 25% from $502.2 billion at June 30, 2019 and up $23.0 billion or 4% from $605.8 billion at March 31, 2020. Total average managed assets for Q2 2020 were $636.9 billion, up $143.6 billion or 29% from $493.3 billion reported for Q2 2019 and up $56.7 billion or 10% from $580.2 billion reported for Q1 2020.

"While the economy continued to be challenged by the coronavirus in the second quarter, investors sought haven in a range of Federated Hermes investment strategies that offered diversification, performance and competitive yields," said J. Christopher Donahue, president and chief executive officer. "Federated Hermes' high-yield and multi-sector fixed-income strategies saw strong sales, leading to record fixed-income assets under management of $73.1 billion at quarter end. Money market assets under management also reached an all-time high of $457.6 billion."

Federated Hermes' board of directors declared a quarterly dividend of $0.27 per share. The dividend is payable on Aug. 14, 2020 to shareholders of record as of Aug. 7, 2020. During Q2 2020, Federated Hermes purchased 843,416 shares of Federated Hermes class B common stock for $18.1 million.

Equity assets were $76.9 billion at June 30, 2020, down $5.1 billion or 6% from $82.0 billion at June 30, 2019 and up $8.7 billion or 13% from $68.2 billion at March 31, 2020. The decrease from Q2 2019 was primarily due to net redemptions and market depreciation partially offset by acquisitions, while the increase from the prior quarter largely resulted from a partial recovery in the market value of investments following the impact of the coronavirus. Top-selling equity funds during Q2 2020 on a net basis were Federated Hermes Kaufmann Small Cap Fund, Federated Hermes Global Equity ESG Fund, Federated Hermes Global Small Cap Equity Fund, Federated Hermes MDT All Cap Core Fund and Federated Hermes SDG Engagement Equity Fund (UCITS).

Fixed-income assets were a record $73.1 billion at June 30, 2020, up $8.0 billion or 12% from $65.1 billion at June 30, 2019 and up $8.4 billion or 13% from $64.7 billion at March 31, 2020. Top-selling fixed-income funds during Q2 2020 on a net basis were Federated Hermes Institutional High Yield Bond Fund, Federated Hermes Short-Intermediate Total Return Bond Fund, Federated Hermes Total Return Bond Fund, Federated Hermes Sterling Cash Plus Fund and Federated Hermes Ultrashort Bond Fund.

Money market assets were a record $457.6 billion at June 30, 2020, up $124.5 billion or 37% from $333.1 billion at June 30, 2019 and up $6.3 billion or 1% from $451.3 billion at March 31, 2020. Money market fund assets were $344.8 billion at June 30, 2020, up $113.5 billion or 49% from $231.3 billion at June 30, 2019 and up $8.7 billion or 3% from $336.1 billion at March 31, 2020.

Financial Summary

Q2 2020 vs. Q2 2019

Revenue increased $39.2 million or 12% primarily due to higher average money market assets, an increase in revenue from alternative/private markets primarily due to the revenue of a previously nonconsolidated entity being recorded in operating revenue beginning March 2020 and higher performance fees. These increases in revenue were partially offset by 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 a decrease in revenue due to lower average equity assets. See additional information about voluntary yield-related fee waivers in the paragraph at the end of this financial summary.

During Q2 2020, Federated Hermes derived 55% of its revenue from long-term assets (34% from equity assets, 12% from fixed-income assets and 9% from alternative/private markets and multi-asset), 44% from money market assets and 1% from sources other than managed assets.

Operating expenses increased $26.9 million or 11% primarily due to increased incentive compensation and increased distribution expenses associated with higher average money market fund assets. The distribution expenses include a reduction resulting from  voluntary yield–related fee waivers.

Nonoperating income (expenses), net increased $14.7 million primarily due to an increase in the market value of investments, which significantly recovered from the Q1 2020 coronavirus impact on the markets.

Q2 2020 vs. Q1 2020

Revenue increased $1.5 million primarily due to higher average money market assets, an increase in revenue from alternative/private markets primarily due to the revenue of a previously nonconsolidated entity being recorded in operating revenue beginning March 2020 and higher performance fees. These increases were partially offset by an increase in voluntary yield-related fee waivers and lower average equity assets.

Operating expenses decreased $3.0 million or 1% primarily due to decreased distribution expenses resulting from higher voluntary yield–related fee waivers on certain money market fund assets offset by increased incentive compensation.

Nonoperating income (expenses), net increased $21.1 million primarily due to an increase in the market value of investments, which significantly recovered from the Q1 2020 coronavirus impact on the markets. This increase was partially offset by a gain from a fair value adjustment to the equity investment of a previously nonconsolidated entity reported in Q1 2020.

YTD 2020 vs. YTD 2019

Revenue increased $91.4 million or 15% primarily due to higher average money market assets, revenue of a previously nonconsolidated entity being recorded in operating revenue beginning March 2020 and an increase in performance fees. These increases were partially offset by voluntary yield-related fee waivers.                                    

For the first half of 2020, Federated derived 56% of its revenue from long-term assets (36% from equity assets, 13% from fixed-income assets and 7% from alternative/private markets and multi-asset), 43% from money market assets and 1% from sources other than managed assets.

Operating expenses increased $57.2 million or 12% primarily due to increased incentive compensation and an increase in distribution expenses associated with higher average money market fund assets. These increases were partially offset by voluntary yield–related fee waivers.

Nonoperating (expenses) income, net increased $6.0 million primarily due to a gain from a fair value adjustment to the equity investment of a previously nonconsolidated entity.

Impact of voluntary yield-related fee waivers

During the three and six months ended June 30, 2020, voluntary yield-related fee waivers totaled $20.0 million and $20.4 million, respectively. These fee waivers were partially offset by related reductions in distribution expenses of $18.0 million and $18.3 million, respectively, such that the net negative pre-tax impact to Federated Hermes was $2.0 million and $2.1 million for the three and six months ended June 30, 2020, 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 July 31, 2020. Investors are invited to listen to the earnings teleconference by calling 877-407-0782 (domestic) or 201-689-8567 (international) prior to the 9 a.m. start time. To listen online, go to the Investor Relations section and the Analyst Information tab of FederatedHermes.com at least 15 minutes prior to register and join the call. A replay will be available at approximately 12:30 p.m. Eastern on July 31, 2020. To access the telephone replay, dial 877-481-4010 (domestic) or 919-882-2331 (international) and enter access code 35618. The online replay will be available via FederatedHermes.com for one year.

Federated Hermes, Inc. is a leading global investment manager with $628.8 billion in assets under management as of June 30, 2020. Guided by our conviction that responsible investing is the best way to create wealth over the long term, our investment solutions span 162 equity, fixed-income, alternative/private markets, multi-asset and liquidity management strategies and a range of separately managed account strategies. Providing world-class active investment management and engagement services to more than 11,000 institutions and intermediaries, our clients include corporations, government entities, insurance companies, foundations and endowments, banks and broker/dealers. Headquartered in Pittsburgh, Federated Hermes' more than 1,900 employees include those in London, New York, Boston and several other offices worldwide. For more information, visit FederatedHermes.com.

Federated Hermes ranks in the top 6% of equity fund managers in the industry, the top 8% of money market fund managers and the top 10% of fixed-income fund managers1. Federated Hermes also ranks as the 14th-largest SMA manager2. For more information, including an analyst presentation, visit FederatedHermes.com.

1) ISS Market Intelligence (SIMFUND), June 30, 2020. Based on assets under management in open-end funds.

2) Money Management Institute/Cerulli, Q1 2020.

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 adviser.

Certain statements in this press release, such as those related to performance, investor preferences and demand, asset flows and mix, fee waivers, and the coronavirus and efforts to combat it, constitute or may constitute forward-looking statements, which involve known and unknown risks, uncertainties and other factors that may cause the actual results, levels of activity, performance or achievements of the company, or industry results, to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. Other risks and uncertainties include the ability of the company to predict the level of fee waivers and expenses in future quarters, predict whether performance fees or carried interest will be earned and retained, 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 of such statements in the future.

Unaudited Condensed Consolidated Statements of Income

(in thousands, except per share data)































Quarter Ended

% Change

Q2 2019 to

Q2 2020



Quarter Ended

% Change

Q1 2020 to

Q2 2020



June 30, 2020

June 30, 2019



March 31, 2020

Revenue













Investment advisory fees, net

$

245,126



$

220,669



11

%



$

240,660



2

%

Administrative service fees, net—affiliates

83,733



57,968



44





72,199



16



Other service fees, net

31,853



42,842



(26)





46,324



(31)



  Total Revenue

360,712



321,479



12





359,183



0

















Operating Expenses













Compensation and related

123,583



107,248



15





115,335



7



Distribution

89,038



82,000



9





96,160



(7)



Systems and communications

15,091



12,111



25





14,896



1



Professional service fees

13,888



10,281



35





13,268



5



Office and occupancy

10,190



11,066



(8)





11,771



(13)



Advertising and promotional

3,065



4,697



(35)





4,995



(39)



Travel and related

325



4,459



(93)





3,159



(90)



Other

8,281



4,677



77





6,855



21



  Total Operating Expenses

263,461



236,539



11





266,439



(1)



Operating Income

97,251



84,940



14





92,744



5

















Nonoperating Income (Expenses)













Investment income (loss), net

14,841



1,526



NM





(14,451)



203



Debt expense

(785)



(1,332)



(41)





(931)



(16)



Other, net

(24)



(832)



(97)





8,345



(100)



  Total Nonoperating Income (Expenses), net

14,032



(638)



NM





(7,037)



(299)



Income before income taxes

111,283



84,302



32





85,707



30



Income tax provision

26,482



20,462



29





22,442



18



Net income including the noncontrolling interests in subsidiaries

84,801



63,840



33





63,265



34



  Less: Net income (loss) attributable to the noncontrolling interests in subsidiaries

3,605



1,116



223





(913)



(495)



Net Income

$

81,196



$

62,724



29

%



$

64,178



27

%















Amounts Attributable to Federated Hermes, Inc.













Earnings Per Share1













Basic

$

0.81



$

0.62



31

%



$

0.63



29

%

Diluted

$

0.80



$

0.62



29

%



$

0.63



27

%

Weighted-Average Shares Outstanding













Basic and Diluted

96,800



97,330







97,345





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 basic earnings per share under the "two-class method." As such, total net income of $3.2 million, $2.4 million and $2.4 million available to unvested restricted Federated Hermes shareholders for the quarterly periods ended June 30, 2020, June 30, 2019 and March 31, 2020, respectively, was excluded from the computation of basic earnings per share. In addition to the amounts excluded from the basic earnings per share calculation, the computation of diluted earnings per share excludes net income available to unvested shareholders of a nonpublic consolidated subsidiary.

 

Unaudited Condensed Consolidated Statements of Income

(in thousands, except per share data)



















Six Months Ended





June 30, 2020

June 30, 2019

% Change

Revenue







Investment advisory fees, net

$

485,787



$

431,868



12

%

Administrative service fees, net—affiliates

155,932



112,103



39



Other service fees, net

78,176



84,558



(8)



  Total Revenue

719,895



628,529



15











Operating Expenses







Compensation and related

238,918



218,464



9



Distribution

185,198



159,632



16



Systems and communications

29,987



24,905



20



Professional service fees

27,156



20,767



31



Office and occupancy

21,961



22,428



(2)



Advertising and promotional

8,061



8,886



(9)



Travel and related

3,484



8,307



(58)



Other

15,135



9,311



63



  Total Operating Expenses

529,900



472,700



12



Operating Income

189,995



155,829



22











Nonoperating Income (Expenses)







Investment income (loss), net

390



4,235



(91)



Debt expense

(1,717)



(2,732)



(37)



Other, net

8,322



(508)



NM



  Total Nonoperating Income (Expenses), net

6,995



995



NM



Income before income taxes

196,990



156,824



26



Income tax provision

48,924



38,373



27



Net income including the noncontrolling interests in subsidiaries

148,066



118,451



25



  Less: Net income (loss) attributable to the noncontrolling interests in subsidiaries

2,692



1,181



128



Net Income

$

145,374



$

117,270



24

%









Amounts Attributable to Federated Hermes, Inc.







Earnings Per Share1







Basic and Diluted

$

1.44



$

1.16



24

%

Weighted-Average Shares Outstanding







Basic and Diluted

97,073



97,163





Dividends Declared Per Share

$

0.54



$

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 $5.6 million and $4.5 million available to unvested restricted Federated Hermes shareholders for the six months ended June 30, 2020 and June 30, 2019, respectively, was excluded from the computation of basic earnings per share. In addition to the amounts excluded from the basic earnings per share calculation, the computation of diluted earnings per share excludes net income available to unvested shareholders of a nonpublic consolidated subsidiary.

 

Unaudited Condensed Consolidated Balance Sheets





(in thousands)

June 30, 2020

Dec. 31, 2019

Assets





  Cash and other investments

$

372,603



$

340,635



  Other current assets

148,797



120,649



  Intangible assets, net, including goodwill

1,241,808



1,220,762



  Other long-term assets

170,687



198,085



  Total Assets

$

1,933,895



$

1,880,131









Liabilities, Redeemable Noncontrolling Interests and Equity





  Current liabilities

$

248,996



$

230,713



  Long-term debt

90,000



100,000



  Other long-term liabilities

303,560



296,052



  Redeemable noncontrolling interests

204,672



212,086



  Equity excluding treasury stock

1,384,809



1,322,312



  Treasury stock

(298,142)



(281,032)



  Total Liabilities, Redeemable Noncontrolling Interests and Equity

$

1,933,895



$

1,880,131



 

Unaudited Changes in Long-Term Assets - By Asset Class

(in millions)

Quarter Ended



Six Months Ended



June 30, 2020

March 31, 2020

June 30, 2019



June 30, 2020

June 30, 2019

Equity













Beginning assets

$

68,239



$

89,011



$

80,245





$

89,011



$

72,497



Sales1

4,579



6,080



4,812





10,659



9,948



Redemptions1

(7,280)



(7,842)



(4,404)





(15,122)



(10,330)



  Net sales (redemptions)1

(2,701)



(1,762)



408





(4,463)



(382)



Net exchanges

(56)



(37)



191





(93)



204



Acquisitions/(dispositions)

0



(71)



0





(71)



0



Impact of foreign exchange2

439



(768)



4





(329)



(118)



Market gains and (losses)3

10,938



(18,134)



1,151





(7,196)



9,798



Ending assets

$

76,859



$

68,239



$

81,999





$

76,859



$

81,999

















Fixed Income













Beginning assets

$

64,715



$

69,023



$

64,107





$

69,023



$

63,158



Sales1

11,755



7,687



5,193





19,442



10,609



Redemptions1

(5,407)



(9,398)



(5,181)





(14,805)



(11,522)



  Net sales (redemptions)1

6,348



(1,711)



12





4,637



(913)



Net exchanges

146



(115)



(191)





31



(224)



Acquisitions/(dispositions)

0



(1)



0





(1)



0



Impact of foreign exchange2

29



(155)



(25)





(126)



(17)



Market gains and (losses)3

1,905



(2,326)



1,149





(421)



3,048



Ending assets

$

73,143



$

64,715



$

65,052





$

73,143



$

65,052

















Alternative/Private Markets4













Beginning assets

$

18,061



$

18,102



$

17,854





$

18,102



$

18,318



Sales1

792



888



320





1,680



633



Redemptions1

(961)



(582)



(302)





(1,543)



(1,160)



   Net sales (redemptions)1

(169)



306



18





137



(527)



Net exchanges

(3)



2



(1)





(1)



(3)



Acquisitions/(dispositions)

0



452



0





452



0



Impact of foreign exchange2

(33)



(1,121)



(435)





(1,154)



(48)



Market gains and (losses)3

(371)



320



481





(51)



177



Ending assets

$

17,485



$

18,061



$

17,917





$

17,485



$

17,917

















Multi-asset













Beginning assets

$

3,494



$

4,199



$

4,259





$

4,199



$

4,093



Sales1

48



98



78





146



182



Redemptions1

(168)



(235)



(228)





(403)



(469)



  Net sales (redemptions)1

(120)



(137)



(150)





(257)



(287)



Net exchanges

(5)



(14)



0





(19)



2



Market gains and (losses)3

336



(554)



104





(218)



405



Ending assets

$

3,705



$

3,494



$

4,213





$

3,705



$

4,213

















Total Long-term Assets4













Beginning assets

$

154,509



$

180,335



$

166,465





$

180,335



$

158,066



Sales1

17,174



14,753



10,403





31,927



21,372



Redemptions1

(13,816)



(18,057)



(10,115)





(31,873)



(23,481)



  Net sales (redemptions)1

3,358



(3,304)



288





54



(2,109)



Net exchanges

82



(164)



(1)





(82)



(21)



Acquisitions/(dispositions)

0



380



0





380



0



Impact of foreign exchange2

435



(2,044)



(456)





(1,609)



(183)



Market gains and (losses)3

12,808



(20,694)



2,885





(7,886)



13,428



Ending assets

$

171,192



$

154,509



$

169,181





$

171,192



$

169,181







1)

For certain accounts, Sales and Redemptions are calculated as the remaining difference between beginning and ending assets after the calculation of total investment return.

2)

Reflects the impact of translating non-U.S. dollar denominated AUM into U.S. dollars for reporting purposes.

3)

Reflects the approximate changes in the fair value of the securities held by the portfolios and, to a lesser extent, reinvested dividends, distributions and net investment income.

4)

The balance at June 30, 2019 includes $8.4 billion of assets managed by a previously nonconsolidated entity, Hermes GPE LLP, in which Federated Hermes held an equity method investment. As of March 1, 2020, Hermes GPE LLP is a consolidated subsidiary as a result of Federated Hermes' acquisition of the remaining equity interests in Hermes GPE LLP.

 

Unaudited Changes in Long-Term Assets - By Asset Class and Product Type

(in millions)





Quarter Ended



June 30, 2020



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

$

36,955



$

31,284



$

40,601



$

24,114



$

11,365



$

6,696



$

3,330



$

164



$

92,251



$

62,258



Sales

3,094



1,485



8,356



3,399



704



88



47



1



12,201



4,973



Redemptions

(4,330)



(2,950)



(4,845)



(562)



(684)



(277)



(163)



(5)



(10,022)



(3,794)



  Net sales (redemptions)

(1,236)



(1,465)



3,511



2,837



20



(189)



(116)



(4)



2,179



1,179



Net exchanges

(56)



0



146



0



(3)



0



(5)



0



82



0



Impact of foreign exchange2

99



340



13



16



(19)



(14)



0



0



93



342



Market gains and (losses)3

7,961



2,977



1,775



130



(326)



(45)



307



29



9,717



3,091



Ending assets

$

43,723



$

33,136



$

46,046



$

27,097



$

11,037



$

6,448



$

3,516



$

189



$

104,322



$

66,870



























Six Months Ended



June 30, 2020



Equity

Fixed Income

Alternative / Private

Markets

Multi-asset

Total



Funds

Separate

Accounts1

Funds

Separate

Accounts1

Funds2

Separate

Accounts1

Funds

Separate

Accounts1

Funds2

Separate

Accounts1

Beginning assets

$

48,112



$

40,899



$

44,223



$

24,800



$

11,389



$

6,713



$

4,000



$

199



$

107,724



$

72,611



Sales

7,486



3,173



14,628



4,814



1,328



352



120



26



23,562



8,365



Redemptions

(9,132)



(5,990)



(12,977)



(1,828)



(1,125)



(418)



(392)



(11)



(23,626)



(8,247)



  Net sales (redemptions)

(1,646)



(2,817)



1,651



2,986



203



(66)



(272)



15



(64)



118



Net exchanges

(87)



(6)



31



0



(1)



0



(19)



0



(76)



(6)



Acquisition-related

0



(71)



0



(1)



0



452



0



0



0



380



Impact of foreign exchange2

(245)



(84)



(128)



2



(698)



(456)



0



0



(1,071)



(538)



Market gains and (losses)3

(2,411)



(4,785)



269



(690)



144



(195)



(193)



(25)



(2,191)



(5,695)



Ending assets

$

43,723



$

33,136



$

46,046



$

27,097



$

11,037



$

6,448



$

3,516



$

189



$

104,322



$

66,870







1)

Includes separately managed accounts, institutional accounts, sub-advised funds and other managed products. For certain accounts, Sales and Redemptions are calculated as the remaining difference between beginning and ending assets after the calculation of total investment return.

2)

Reflects the impact of translating non-U.S. dollar denominated AUM into U.S. dollars for reporting purposes.

3)

Reflects the approximate changes in the fair value of the securities held by the portfolios and, to a lesser extent, reinvested dividends, distributions and net investment income.

 

Unaudited Changes in Long-Term Assets - By Product Type

(in millions)

Quarter Ended



Six Months Ended



June 30, 2020

March 31, 2020

June 30, 2019



June 30, 2020

June 30, 2019

Total Fund Assets1













Beginning assets

$

92,251



$

107,724



$

98,482





$

107,724



$

92,359



Sales

12,201



11,361



7,502





23,562



15,424



Redemptions

(10,022)



(13,604)



(7,020)





(23,626)



(15,371)



  Net sales (redemptions)

2,179



(2,243)



482





(64)



53



Net exchanges

82



(158)



(1)





(76)



4



Impact of foreign exchange2

93



(1,164)



(331)





(1,071)



(83)



Market gains and (losses)3

9,717



(11,908)



2,314





(2,191)



8,613



Ending assets

$

104,322



$

92,251



$

100,946





$

104,322



$

100,946

















Total Separate Account Assets4













Beginning assets

$

62,258



$

72,611



$

67,983





$

72,611



$

65,707



Sales5

4,973



3,392



2,901





8,365



5,948



Redemptions5

(3,794)



(4,453)



(3,095)





(8,247)



(8,110)



  Net sales (redemptions)5

1,179



(1,061)



(194)





118



(2,162)



Net exchanges

0



(6)



0





(6)



(25)



Acquisitions/(dispositions)

0



380



0





380



0



Impact of foreign exchange2

342



(880)



(125)





(538)



(100)



Market gains and (losses)3

3,091



(8,786)



571





(5,695)



4,815



Ending assets

$

66,870



$

62,258



$

68,235





$

66,870



$

68,235

















Total Long-term Assets1,4













Beginning assets

$

154,509



$

180,335



$

166,465





$

180,335



$

158,066



Sales5

17,174



14,753



10,403





31,927



21,372



Redemptions5

(13,816)



(18,057)



(10,115)





(31,873)



(23,481)



  Net sales (redemptions)5

3,358



(3,304)



288





54



(2,109)



Net exchanges

82



(164)



(1)





(82)



(21)



Acquisitions/(dispositions)

0



380



0





380



0



Impact of foreign exchange2

435



(2,044)



(456)





(1,609)



(183)



Market gains and (losses)3

12,808



(20,694)



2,885





(7,886)



13,428



Ending assets

$

171,192



$

154,509



$

169,181





$

171,192



$

169,181







1)

The balance at June 30, 2019 includes $8.4 billion of assets managed by a previously nonconsolidated entity, Hermes GPE LLP, in which Federated Hermes held an equity method investment.  As of March 1, 2020, Hermes GPE LLP is a consolidated subsidiary as a result of Federated Hermes' acquisition of the remaining equity interests in Hermes GPE LLP.

2)

Reflects the impact of translating non-U.S. dollar denominated AUM into U.S. dollars for reporting purposes.

3)

Reflects the approximate changes in the fair value of the securities held by the portfolios and, to a lesser extent, reinvested dividends, distributions and net investment income.

4)

Includes separately managed accounts, institutional accounts, sub-advised funds and other managed products.

5)

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, 2020

March 31, 2020

Dec. 31, 2019

Sept. 30, 2019

June 30, 2019

By Asset Class











Equity

$

76,859



$

68,239



$

89,011



$

80,750



$

81,999



Fixed-income

73,143



64,715



69,023



65,824



65,052



Alternative / private markets1

17,485



18,061



18,102



17,156



17,917



Multi-asset

3,705



3,494



4,199



4,140



4,213



  Total long-term assets

171,192



154,509



180,335



167,870



169,181



Money market

457,624



451,330



395,539



359,292



333,066



Total Managed Assets

$

628,816



$

605,839



$

575,874



$

527,162



$

502,247















By Product Type











Funds:











Equity

$

43,723



$

36,955



$

48,112



$

42,575



$

43,443



Fixed-income

46,046



40,601



44,223



42,329



42,084



Alternative / private markets1

11,037



11,365



11,389



10,826



11,400



Multi-asset

3,516



3,330



4,000



3,952



4,019



  Total long-term assets

104,322



92,251



107,724



99,682



100,946



Money market

344,846



336,133



286,612



261,215



231,321



Total Fund Assets

$

449,168



$

428,384



$

394,336



$

360,897



$

332,267



Separate Accounts:











Equity

$

33,136



$

31,284



$

40,899



$

38,175



$

38,556



Fixed-income

27,097



24,114



24,800



23,495



22,968



Alternative / private markets

6,448



6,696



6,713



6,330



6,517



Multi-asset

189



164



199



188



194



  Total long-term assets

66,870



62,258



72,611



68,188



68,235



Money market

112,778



115,197



108,927



98,077



101,745



Total Separate Account Assets

$

179,648



$

177,455



$

181,538



$

166,265



$

169,980



Total Managed Assets

$

628,816



$

605,839



$

575,874



$

527,162



$

502,247







1)

Includes $8.2 billion, $8.0 billion and $8.4 billion at Dec. 31, 2019, Sept. 30, 2019 and June 30, 2019, respectively, of assets managed by a previously nonconsolidated entity, Hermes GPE LLP, in which Federated Hermes held an equity method investment. As of March 1, 2020, Hermes GPE LLP is a consolidated subsidiary as a result of Federated Hermes' acquisition of the remaining equity interests in Hermes GPE LLP.

 

Unaudited Average Managed Assets

Quarter Ended

(in millions)

June 30, 2020

March 31, 2020

Dec. 31, 2019

Sept. 30, 2019

June 30, 2019

By Asset Class











Equity

$

73,620



$

82,767



$

84,448



$

82,027



$

80,819



Fixed-income

69,603



69,068



67,602



65,074



64,913



Alternative / private markets1

18,022



17,983



17,838



17,407



17,772



Multi-asset

3,630



4,006



4,149



4,167



4,225



  Total long-term assets

164,875



173,824



174,037



168,675



167,729



Money market

471,984



406,365



376,029



349,313



325,527



Total Avg. Managed Assets

$

636,859



$

580,189



$

550,066



$

517,988



$

493,256















By Product Type











Funds:











Equity

$

41,301



$

44,996



$

44,984



$

43,077



$

42,571



Fixed-income

43,229



44,017



43,304



41,958



41,652



Alternative / private markets1

11,345



11,143



11,283



11,035



11,146



Multi-asset

3,453



3,814



3,956



3,978



4,034



  Total long-term assets

99,328



103,970



103,527



100,048



99,403



Money market

356,736



290,641



274,116



249,846



222,282



Total Avg. Fund Assets

$

456,064



$

394,611



$

377,643



$

349,894



$

321,685



Separate Accounts:











Equity

$

32,319



$

37,771



$

39,464



$

38,950



$

38,248



Fixed-income

26,374



25,051



24,298



23,116



23,261



Alternative / private markets

6,677



6,840



6,555



6,372



6,626



Multi-asset

177



192



193



189



191



  Total long-term assets

65,547



69,854



70,510



68,627



68,326



Money market

115,248



115,724



101,913



99,467



103,245



Total Avg. Separate Account Assets

$

180,795



$

185,578



$

172,423



$

168,094



$

171,571



Total Avg. Managed Assets

$

636,859



$

580,189



$

550,066



$

517,988



$

493,256







1)

The average balance includes $8.3 billion, $8.1 billion and $8.1 billion for the quarters ended Dec. 31, 2019, Sept. 30, 2019 and June 30, 2019, respectively, of assets managed by a previously nonconsolidated entity, Hermes GPE LLP, in which Federated Hermes held an equity method investment.  As of March 1, 2020, Hermes GPE LLP is a consolidated subsidiary as a result of Federated Hermes' acquisition of the remaining equity interests in Hermes GPE LLP.

 

Unaudited Average Managed Assets



Six Months Ended

(in millions)



June 30, 2020



June 30, 2019

By Asset Class









Equity



$

78,194





$

79,187



Fixed-income



69,336





64,540



Alternative / private markets1



18,002





18,041



Multi-asset



3,818





4,225



  Total long-term assets



169,350





165,993



Money market



439,174





318,339



Total Avg. Managed Assets



$

608,524





$

484,332













By Product Type









Funds:









Equity



$

43,149





$

41,394



Fixed-income



43,623





41,373



Alternative / private markets1



11,244





11,346



Multi-asset



3,633





4,038



  Total long-term assets



101,649





98,151



Money market



323,688





215,771



Total Avg. Fund Assets



$

425,337





$

313,922



Separate Accounts:









Equity



$

35,045





$

37,793



Fixed-income



25,713





23,167



Alternative / private markets



6,758





6,695



Multi-asset



185





187



  Total long-term assets



67,701





67,842



Money market



115,486





102,568



Total Avg. Separate Account Assets



$

183,187





$

170,410



Total Avg. Managed Assets



$

608,524





$

484,332







1)

The average balance for the six months ended June 30, 2019 includes $8.3 billion of assets managed by a previously nonconsolidated entity, Hermes GPE LLP, in which Federated Hermes held an equity method investment. As of March 1, 2020, Hermes GPE LLP is a consolidated subsidiary as a result of Federated Hermes' acquisition of the remaining equity interests in Hermes GPE LLP.

 

Cision View original content:http://www.prnewswire.com/news-releases/federated-hermes-inc-reports-second-quarter-2020-earnings-301103466.html

SOURCE Federated Hermes, Inc.

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