Market Overview

Federated Investors, Inc. Reports Fourth Quarter and Full-Year 2019 Earnings

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PITTSBURGH, Jan. 30, 2020 /PRNewswire/ -- Federated Investors, Inc. (NYSE:FII), a leading global investment manager, today reported earnings per diluted share (EPS) for Q4 2019 of $0.81, compared to $0.61 for the same quarter last year, on net income of $82.1 million for Q4 2019, compared to $61.5 million for Q4 2018. Full-year 2019 EPS was $2.69, compared to $2.18 for 2018 on net income of $272.3 million for 2019, compared to $220.3 million for 2018. Federated's full-year 2018 results included a $27.2 million pre-tax net expense, representing $0.21 per diluted share net of tax, primarily related to two foreign currency forward derivative instruments (FX Forward Loss) entered into in connection with Federated's 2018 acquisition of a majority interest in Hermes Fund Managers Limited (Hermes).

Federated's total managed assets were $575.9 billion at Dec. 31, 2019, up $116.0 billion or 25% from $459.9 billion at Dec. 31, 2018 and up $48.7 billion or 9% from $527.2 billion at Sept. 30, 2019. Average managed assets for Q4 2019 were $550.1 billion, up $106.4 billion or 24% from $443.7 billion reported for Q4 2018 and up $32.1 billion or 6% from $518.0 billion reported for Q3 2019.

"Federated reached new records across all three major asset classes—equity, fixed income and money market—with the latter increasing by $94 billion in 2019 as Federated's diverse lineup of liquidity products offered competitive yields for investors seeking cash-management solutions," said J. Christopher Donahue, president and chief executive officer. "Federated also saw strong sales in the Federated Kaufmann Small Cap Fund, the Hermes Global Equity ESG Fund and a range of other Hermes products."

As announced earlier this month, Federated will change its name to Federated Hermes, Inc., and the company will change its NYSE ticker symbol from FII to FHI. The name change will be effective Jan. 31, 2020, and shares of Federated stock will begin trading on the NYSE under the FHI ticker symbol on Feb. 3, 2020. Also, on Feb. 3, Federated Hermes will launch a multi-faceted campaign to reintroduce the combined company to the investing public. The campaign showcases the combined company as a global leader in active, responsible investing and details its capabilities across asset classes. These changes will come a little more than 18 months after Federated's July 2018 acquisition of a majority interest in London-based Hermes, which operates Hermes Investment Management, a pioneer of integrated ESG investing.

Federated's board of directors declared a quarterly dividend of $0.27 per share. The dividend is payable on Feb. 14, 2020 to shareholders of record as of Feb. 7, 2020. During Q4 2019, Federated purchased 421,052 shares of Federated class B common stock for $11.7 million, bringing the total shares of Class B common stock purchased in 2019 to 614,077 shares for $15.7 million.

Federated's equity assets were a record $89.0 billion at Dec. 31, 2019, up $16.5 billion or 23% from $72.5 billion at Dec. 31, 2018 and up $8.2 billion or 10% from $80.8 billion at Sept. 30, 2019. Top-selling equity funds on a net basis during Q4 2019



were Federated Kaufmann Small Cap Fund, Hermes Global Equity ESG Fund, Hermes Global Emerging Markets Fund, Hermes SDG Engagement Equity Fund and Hermes US SMID Equity Fund.

Federated's fixed-income assets were a record $69.0 billion at Dec. 31, 2019, up $5.8 billion or 9% from $63.2 billion at Dec. 31, 2018 and up $3.2 billion or 5% from $65.8 billion at Sept. 30, 2019. Top-selling fixed-income funds on a net basis during Q4 2019 were Federated Ultrashort Bond Fund, Federated Institutional High Yield Bond Fund, Hermes SDG Engagement High Yield Credit Fund, Federated Total Return Bond Fund and Federated Municipal Ultrashort Fund.

Federated's money market assets were a record $395.5 billion at Dec. 31, 2019, up $93.7 billion or 31% from $301.8 billion at Dec. 31, 2018 and up $36.2 billion or 10% from $359.3 billion at Sept. 30, 2019. Money market mutual fund assets were $286.6 billion at Dec. 31, 2019, up $78.1 billion or 37% from $208.5 billion at Dec. 31, 2018 and up $25.4 billion or 10% from $261.2 billion at Sept. 30, 2019.  Federated's money market separate account assets were $108.9 billion at Dec. 31, 2019, up $15.6 billion or 17% from $93.3 billion at Dec. 31, 2018 and up $10.8 billion or 11% from $98.1 billion at Sept. 30, 2019.

Financial Summary

Q4 2019 vs. Q4 2018

Revenue increased $50.8 million or 17% primarily due to higher average money market and equity assets and an increase in revenue from assets acquired from PNC Bank, N.A in Q4 2019 ("PNC Acquisition").

During Q4 2019, Federated derived 57% of its revenue from long-term assets (39% from equity assets, 13% from fixed-income assets and 5% from alternative/private markets and multi-asset), 42% from money market assets, and 1% from sources other than managed assets.

Operating expenses increased $36.0 million or 16% primarily due to an increase in distribution expenses associated with higher average money market fund assets and an increase in compensation and related expenses.

Nonoperating income (expenses), net increased $15.0 million primarily due to an increase in the market value of investments primarily held by consolidated investment companies and an increase in private equity carried interest income on assets managed by a nonconsolidated entity.

Q4 2019 vs. Q3 2019

Revenue increased $17.7 million or 5% primarily due to higher average money market assets and the PNC Acquisition.

Operating expenses increased by $4.2 million or 2% primarily due to an increase in distribution expenses associated with higher average money market fund assets.

2019 vs. 2018

Revenue increased $191.2 million or 17% primarily due to higher average money market assets and the consolidation of Hermes' revenue for the full year in 2019 as compared to half of the year in 2018. These increases were partially offset by a decrease in revenue from lower average domestic equity and multi-asset assets and a change in the mix of average domestic fixed-income assets.

During 2019, Federated derived 59% of its revenue from long-term assets (40% from equity assets, 14% from fixed-income assets and 5% from alternative/private markets and multi-asset), 40% from money market assets, and 1% from sources other than managed assets.

Operating expenses increased by $173.6 million or 22% primarily due to Hermes' expenses being included for the full year in 2019 as compared to half of the year in 2018 and an increase in distribution expenses associated with higher average money market fund assets.

Nonoperating income (expenses), net increased $51.5 million primarily due to the FX Forward Loss recorded in 2018, an increase in private equity carried interest income on assets managed by a nonconsolidated entity, and an increase in the market value of investments primarily held by consolidated investment companies.

Federated's 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's business activity levels and financial results. Risk factors and uncertainties that can influence Federated's financial results are discussed in the company's annual and quarterly reports as filed with the Securities and Exchange Commission (SEC).

Federated will host an earnings conference call at 9 a.m. Eastern on Jan. 31, 2020. Investors are invited to listen to Federated's earnings teleconference by calling 844-369-8770 (domestic) or 862-298-0840 (international) prior to the 9 a.m. start time. The call may also be accessed in real time via the About section of FederatedInvestors.com. A replay will be available from approximately 12:30 p.m. Eastern on Jan. 31, 2020 until Feb. 7, 2020 by calling 877-481-4010 (domestic) or 919-882-2331 (international) and entering access code 57109. An online replay will be available via FederatedInvestors.com for one year.

Federated Investors, Inc. is a leading global investment manager with $575.9 billion in assets under management as of Dec. 31, 2019.  Our investment solutions span 135 equity, fixed-income, alternative/private markets, multi-asset and money market funds and a range of separately managed account strategies. Providing comprehensive investment management 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's nearly 1,900 employees include those in London, New York, Boston and several other offices worldwide. In 2018, Federated acquired a majority interest in Hermes Investment Management, which provides world-class active management and stewardship services.

Federated ranks in the top 6% of equity fund managers in the industry, the top 7% of money market fund managers and the top 12% of fixed-income fund managers1. Federated also ranks as the 12th-largest SMA manager2. Information regarding Hermes is available at Hermes-Investment.com. An analyst presentation that includes information about Hermes also is available. For more information, visit FederatedInvestors.com.

###

1) Strategic Insight as of Dec. 31, 2019. Based on assets under management in U.S. open-end funds.
2) Money Management Institute/Cerulli Associates, Q3 2019.
Federated Securities Corp. is distributor of the Federated funds.
Separately managed accounts are made available through Federated Global Investment Management Corp., Federated Investment Counseling, Federated MDTA LLC, Hermes Investment Management Limited and Hermes European Equities Limited, each a registered investment adviser.

Certain statements in this press release, such as those related to performance, investor preferences and demand, and asset flows and mix, 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, and 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
Q4 2018 to
Q4 2019

Quarter Ended

 % Change
Q3 2019 to
Q4 2019


Dec. 31, 2019

Dec. 31, 2018

Sept. 30, 2019

Revenue






Investment advisory fees, net

$

243,631


$

213,990


14

%

$

232,106


5

%

Administrative service fees, net

69,568


52,022


34


64,216


8


Other service fees, net

44,826


41,204


9


44,018


2


Total Revenue

358,025


307,216


17


340,340


5








Operating Expenses






Compensation and related

111,436


99,153


12


112,247


(1)


Distribution

92,950


73,482


26


88,082


6


Systems and communications

14,731


11,528


28


13,353


10


Professional service fees

12,269


10,461


17


10,678


15


Office and occupancy

11,643


10,384


12


10,855


7


Advertising and promotional

4,785


5,174


(8)


4,102


17


Travel and related

4,180


4,627


(10)


4,158


1


Other

3,240


4,453


(27)


7,558


(57)


Total Operating Expenses

255,234


219,262


16


251,033


2


Operating Income

102,791


87,954


17


89,307


15








Nonoperating Income (Expenses)






Investment income (loss), net

4,737


(1,666)


384


444


NM


Debt expense

(1,066)


(1,522)


(30)


(1,239)


(14)


Other, net

5,209


(2,972)


275


8,264


(37)


Total Nonoperating Income (Expenses), net

8,880


(6,160)


244


7,469


19


Income before income taxes

111,671


81,794


37


96,776


15


Income tax provision

26,582


20,162


32


23,191


15


Net income including the noncontrolling interests in subsidiaries

85,089


61,632


38


73,585


16


Less: Net income attributable to the noncontrolling interests in subsidiaries

2,982


96


NM


623


379


Net Income

$

82,107


$

61,536


33

%

$

72,962


13

%







Amounts Attributable to Federated Investors, Inc.






Earnings Per Share1






Basic and diluted

$

0.81


$

0.61


33

%

$

0.72


13

%

Weighted-Average Shares Outstanding






Basic and diluted

97,403


96,758



97,306



Dividends Declared Per Share

$

0.27


$

0.27



$

0.27



1)

Unvested share-based awards that receive non-forfeitable dividend rights are deemed participating securities and are required to be considered in the computation of earnings per share under the "two-class method." As such, total net income of $2.9 million, $2.3 million and $2.8 million available to unvested restricted Federated shareholders for the quarterly periods ended Dec. 31, 2019, Dec. 31, 2018 and Sept. 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 Statements of Income

(in thousands, except per share data)









Year Ended





Dec. 31, 2019


Dec. 31, 2018


% Change

Revenue







Investment advisory fees, net


$

907,605


$

773,418


17

%

Administrative service fees, net


245,887


199,269


23


Other service fees, net


173,402


162,990


6


     Total Revenue


1,326,894


1,135,677


17









Operating Expenses







Compensation and related


442,147


354,765


25


Distribution


340,663


287,580


18


Systems and communications


52,988


39,925


33


Office and occupancy


44,926


34,622


30


Professional service fees


43,714


42,903


2


Advertising and promotional


17,774


16,141


10


Travel and related


16,645


15,594


7


Other


20,110


13,867


45


     Total Operating Expenses


978,967


805,397


22


Operating Income


347,927


330,280


5









Nonoperating Income (Expenses)







Investment income, net


9,416


1,628


478


Debt expense


(5,037)


(5,885)


(14)


Other, net


12,965


(29,849)


143


     Total Nonoperating Income (Expenses), net


17,344


(34,106)


151


Income before income taxes


365,271


296,174


23


Income tax provision


88,146


73,875


19


Net income including the noncontrolling interests in subsidiaries


277,125


222,299


25


Less: Net income attributable to the noncontrolling

interests in subsidiaries


4,786


2,002


139


Net Income


$

272,339


$

220,297


24

%








Amounts Attributable to Federated Investors, Inc.







Earnings Per Share1







Basic and diluted


$

2.69


$

2.18


23

%

Weighted-Average Shares Outstanding







    Basic and diluted


97,259


96,949



Dividends Declared Per Share


$

1.08


$

1.06



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 $10.2 million and $8.6 million available to unvested restricted shareholders for the years ended Dec. 31, 2019 and Dec. 31, 2018, respectively, was excluded from the computation of basic earnings per share. In addition to the amounts excluded from the basic earnings per share calculation, the computation of diluted earnings per share excludes net income available to unvested shareholders of a nonpublic consolidated subsidiary.

 

 

Unaudited Condensed Consolidated Balance Sheets



(in thousands)

Dec. 31, 2019


Dec. 31, 2018


Assets



  Cash and other investments

$

340,635


$

190,490


  Other current assets

120,649


113,611


  Intangible assets, net, including goodwill

1,220,762


1,149,247


  Other long-term assets

198,085


90,335


    Total Assets

$

1,880,131


$

1,543,683





Liabilities, Redeemable Noncontrolling Interests and Equity



  Current liabilities

$

230,713


$

181,180


  Long-term debt

100,000


135,000


  Other long-term liabilities

296,052


187,869


  Redeemable noncontrolling interests

212,086


182,513


  Equity excluding treasury stock

1,322,312


1,144,458


  Treasury stock

(281,032)


(287,337)


    Total Liabilities, Redeemable Noncontrolling Interests and Equity

$

1,880,131


$

1,543,683


 

 

Unaudited Changes in Long-Term Assets - By Asset Class

(in millions)

Quarter Ended


Year Ended


Dec. 31, 2019

Sept. 30, 2019

Dec. 31, 2018


Dec. 31, 2019

Dec. 31, 2018

Equity







Beginning assets

$

80,750


$

81,999


$

84,143



$

72,497


$

62,816


Sales1

5,092


5,182


4,274



20,222


13,955


Redemptions1

(5,080)


(6,384)


(6,777)



(21,794)


(22,401)


Net sales (redemptions)1

12


(1,202)


(2,503)



(1,572)


(8,446)


Net exchanges

(12)


(11)


(180)



181


(116)


Acquisition-related

2,244


0


0



2,244


24,700


Impact of foreign exchange2

667


(577)


0



(28)


0


Market gains and (losses)3

5,350


541


(8,963)



15,689


(6,457)


Ending assets

$

89,011


$

80,750


$

72,497



$

89,011


$

72,497









Fixed Income







Beginning assets

$

65,824


$

65,052


$

65,369



$

63,158


$

64,160


Sales1

6,010


4,805


5,330



21,424


20,156


Redemptions1

(4,603)


(5,418)


(7,424)



(21,543)


(23,370)


Net sales (redemptions)1

1,407


(613)


(2,094)



(119)


(3,214)


Net exchanges

6


10


214



(208)


136


Acquisition-related

450


0


0



450


2,732


Impact of foreign exchange2

184


(107)


0



60


0


Market gains and (losses)3

1,152


1,482


(331)



5,682


(656)


Ending assets

$

69,023


$

65,824


$

63,158



$

69,023


$

63,158









Alternative / Private Markets4







Beginning assets

$

17,156


$

17,917


$

18,621



$

18,318


$

366


Sales1

426


384


437



1,443


1,250


Redemptions1

(486)


(813)


(530)



(2,459)


(1,315)


Net redemptions1

(60)


(429)


(93)



(1,016)


(65)


Net exchanges

(1)


(61)


1



(65)


(2)


Acquisition-related

0


0


0



0


18,509


Impact of foreign exchange2

1,302


(560)


0



694


0


Market gains and (losses)3

(295)


289


(211)



171


(490)


Ending assets

$

18,102


$

17,156


$

18,318



$

18,102


$

18,318









Multi-asset







Beginning assets

$

4,140


$

4,213


$

4,790



$

4,093


$

5,014


Sales1

85


65


119



332


493


Redemptions1

(206)


(218)


(369)



(893)


(1,044)


Net redemptions1

(121)


(153)


(250)



(561)


(551)


Net exchanges

(4)


57


(23)



55


(21)


Acquisition-related

11


0


0



11


45


Market gains and (losses)3

173


23


(424)



601


(394)


Ending assets

$

4,199


$

4,140


$

4,093



$

4,199


$

4,093









Total Long-term Assets4







Beginning assets

$

167,870


$

169,181


$

172,923



$

158,066


$

132,356


Sales1

11,613


10,436


10,160



43,421


35,854


Redemptions1

(10,375)


(12,833)


(15,100)



(46,689)


(48,130)


Net sales (redemptions)1

1,238


(2,397)


(4,940)



(3,268)


(12,276)


Net exchanges

(11)


(5)


12



(37)


(3)


Acquisition-related

2,705


0


0



2,705


45,986


Impact of foreign exchange2

2,153


(1,244)


0



726


0


Market gains and (losses)3

6,380


2,335


$

(9,929)



22,143


(7,997)


Ending assets

$

180,335


$

167,870


$

158,066



$

180,335


$

158,066


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.  Reporting only contains foreign exchange separately beginning with Q1 2019, previously included in Market gains and (losses).

3)

Reflects the approximate changes in the fair value of the securities held by the portfolios and, to a lesser extent, reinvested dividends, distributions, net investment income and the impact of changes in foreign exchange rates for periods prior to 2019.

4)

Ending assets includes $8.2 billion, $8.0 billion and $8.3 billion at Dec. 31, 2019, Sept. 30, 2019 and Dec. 31, 2018, respectively, of assets managed by a nonconsolidated entity, Hermes GPE LLP, in which Hermes holds an equity method investment.

 

 

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

(in millions)



Quarter Ended


Dec. 31, 2019


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

$

42,575


$

38,175


$

42,329


$

23,495


$

10,826


$

6,330


$

3,952


$

188


$

99,682


$

68,188


Sales

3,252


1,840


4,464


1,546


367


59


82


3


8,165


3,448


Redemptions

(3,023)


(2,057)


(3,604)


(999)


(470)


(16)


(199)


(7)


(7,296)


(3,079)


Net sales (redemptions)

229


(217)


860


547


(103)


43


(117)


(4)


869


369


Net exchanges

(12)


0


86


(80)


(1)


0


(4)


0


69


(80)


Acquisition-related

2,191


53


450


0


0


0


11


0


2,652


53


Impact of foreign exchange3

387


280


167


17


810


492


0


0


1,364


789


Market gains and (losses)4

2,742


2,608


331


821


(143)


(152)


158


15


3,088


3,292


Ending assets

$

48,112


$

40,899


$

44,223


$

24,800


$

11,389


$

6,713


$

4,000


$

199


$

107,724


$

72,611














Year Ended


Dec. 31, 2019


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

$

36,584


$

35,913


$

40,490


$

22,668


$

11,365


$

6,953


$

3,920


$

173


$

92,359


$

65,707


Sales

12,380


7,842


16,730


4,694


1,062


381


317


15


30,489


12,932


Redemptions

(11,757)


(10,037)


(16,311)


(5,232)


(1,721)


(738)


(864)


(29)


(30,653)


(16,036)


Net sales (redemptions)

623


(2,195)


419


(538)


(659)


(357)


(547)


(14)


(164)


(3,104)


Net exchanges

181


0


(98)


(110)


(65)


0


55


0


73


(110)


Acquisition-related

2,191


53


450


0


0


0


11


0


2,652


53


Impact of foreign exchange3

54


(82)


72


(12)


430


264


0


0


556


170


Market gains and (losses)4

8,479


7,210


2,890


2,792


318


(147)


561


40


12,248


9,895


Ending assets

$

48,112


$

40,899


$

44,223


$

24,800


$

11,389


$

6,713


$

4,000


$

199


$

107,724


$

72,611


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)

Ending assets includes $8.2 billion of assets managed by a nonconsolidated entity, Hermes GPE LLP, in which Hermes holds an equity method investment.

3)

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

4)

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, 2019

Sept. 30, 2019

Dec. 31, 2018


Dec. 31, 2019

Dec. 31, 2018








Total Fund Assets1







Beginning assets

$

99,682


$

100,946


$

101,437



$

92,359


$

79,301


Sales

8,165


6,900


7,868



30,489


26,601


Redemptions

(7,296)


(7,986)


(10,375)



(30,653)


(32,361)


Net sales (redemptions)

869


(1,086)


(2,507)



(164)


(5,760)


Net exchanges

69


0


13



73


0


Acquisition-related

2,652


0


0



2,652


23,564


Impact of foreign exchange2

1,364


(725)


0



556


0


Market gains and (losses)3

3,088


547


(6,584)



12,248


(4,746)


Ending assets

$

107,724


$

99,682


$

92,359



$

107,724


$

92,359









Total Separate Accounts Assets4







Beginning assets

$

68,188


$

68,235


$

71,486



$

65,707


$

53,055


Sales5

3,448


3,536


2,292



12,932


9,253


Redemptions5

(3,079)


(4,847)


(4,725)



(16,036)


(15,769)


Net sales (redemptions)5

369


(1,311)


(2,433)



(3,104)


(6,516)


Net exchanges

(80)


(5)


(1)



(110)


(3)


Acquisition-related

53


0


0



53


22,422


Impact of foreign exchange2

789


(519)


0



170


0


Market gains and (losses)3

3,292


1,788


(3,345)



9,895


(3,251)


Ending assets

$

72,611


$

68,188


$

65,707



$

72,611


$

65,707









Total Long-term Assets1,4







Beginning assets

$

167,870


$

169,181


$

172,923



$

158,066


$

132,356


Sales5

11,613


10,436


10,160



43,421


35,854


Redemptions5

(10,375)


(12,833)


(15,100)



(46,689)


(48,130)


Net sales (redemptions)5

1,238


(2,397)


(4,940)



(3,268)


(12,276)


Net exchanges

(11)


(5)


12



(37)


(3)


Acquisition-related

2,705


0


0



2,705


45,986


Impact of foreign exchange2

2,153


(1,244)


0



726


0


Market gains and (losses)3

6,380


2,335


(9,929)



22,143


(7,997)


Ending assets

$

180,335


$

167,870


$

158,066



$

180,335


$

158,066


1)

Includes $8.2 billion, $8.0 billion and $8.3 billion at Dec. 31, 2019, Sept. 30, 2019 and Dec. 31, 2018, respectively, of assets managed by a nonconsolidated entity, Hermes GPE LLP, in which Hermes holds an equity method investment.

2)

Reflects the impact of translating non-U.S. dollar denominated AUM into U.S. dollars for reporting purposes. Reporting only contains foreign exchange separately beginning with Q1 2019, previously included in Market gains and (losses).

3)

Reflects the approximate changes in the fair value of the securities held by the portfolios and, to a lesser extent, reinvested dividends, distributions, net investment income and the impact of changes in foreign exchange rates for periods prior to 2019.

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)

Dec. 31, 2019

Sept. 30, 2019

June 30, 2019

March 31, 2019

Dec. 31, 2018

By Asset Class






Equity

$

89,011


$

80,750


$

81,999


$

80,245


$

72,497

Fixed-income

69,023


65,824


65,052


64,107


63,158

Alternative / private markets1

18,102


17,156


17,917


17,854


18,318

Multi-asset

4,199


4,140


4,213


4,259


4,093

Total long-term assets

180,335


167,870


169,181


166,465


158,066

 Money market

395,539


359,292


333,066


318,413


301,794

Total Managed Assets

$

575,874


$

527,162


$

502,247


$

484,878


$

459,860







By Product Type






Funds:






Equity

$

48,112


$

42,575


$

43,443


$

42,057


$

36,584

Fixed-income

44,223


42,329


42,084


41,189


40,490

Alternative / private markets1

11,389


10,826


11,400


11,164


11,365

Multi-asset

4,000


3,952


4,019


4,072


3,920

Total long-term assets

107,724


99,682


100,946


98,482


92,359

Money market

286,612


261,215


231,321


214,764


208,480

Total Fund Assets

$

394,336


$

360,897


$

332,267


$

313,246


$

300,839

Separate Accounts:






Equity

$

40,899


$

38,175


$

38,556


$

38,188


$

35,913

Fixed-income

24,800


23,495


22,968


22,918


22,668

Alternative / private markets

6,713


6,330


6,517


6,690


6,953

Multi-asset

199


188


194


187


173

Total long-term assets

72,611


68,188


68,235


67,983


65,707

Money market

108,927


98,077


101,745


103,649


93,314

Total Separate Account Assets

$

181,538


$

166,265


$

169,980


$

171,632


$

159,021

Total Managed Assets

$

575,874


$

527,162


$

502,247


$

484,878


$

459,860

1)

Includes $8.2 billion, $8.0 billion, $8.4 billion, $8.1 billion, and $8.3 billion at Dec. 31, 2019, Sept. 30, 2019, June 30, 2019, March 31, 2019, and Dec. 31, 2018, respectively, of assets managed by a nonconsolidated entity, Hermes GPE LLP, in which Hermes holds an equity method investment.

 

 

Unaudited Average Managed Assets

Quarter Ended

(in millions)

Dec. 31, 2019

Sept. 30, 2019

June 30, 2019

March 31, 2019

Dec. 31, 2018

By Asset Class






Equity

$

84,448


$

82,027


$

80,819


$

77,554


$

78,084


Fixed-income

67,602


65,074


64,913


64,167


63,881


Alternative / private markets1

17,838


17,407


17,772


18,311


18,410


Multi-asset

4,149


4,167


4,225


4,225


4,449


Total long-term assets

174,037


168,675


167,729


164,257


164,824


 Money market

376,029


349,313


325,527


311,150


278,885


Total Avg. Managed Assets

$

550,066


$

517,988


$

493,256


$

475,407


$

443,709


By Product Type






Funds:






Equity

$

44,984


$

43,077


$

42,571


$

40,217


$

39,871


Fixed-income

43,304


41,958


41,652


41,095


41,088


Alternative / private markets1

11,283


11,035


11,146


11,545


11,351


Multi-asset

3,956


3,978


4,034


4,042


4,268


Total long-term assets

103,527


100,048


99,403


96,899


96,578


Money market

274,116


249,846


222,282


209,260


194,009


Total Avg. Fund Assets

$

377,643


$

349,894


$

321,685


$

306,159


$

290,587


Separate Accounts:






Equity

$

39,464


$

38,950


$

38,248


$

37,337


$

38,213


Fixed-income

24,298


23,116


23,261


23,072


22,793


Alternative / private markets

6,555


6,372


6,626


6,766


7,059


Multi-asset

193


189


191


183


181


Total long-term assets

70,510


68,627


68,326


67,358


68,246


Money market

101,913


99,467


103,245


101,890


84,876


Total Avg. Separate Account Assets

$

172,423


$

168,094


$

171,571


$

169,248


$

153,122


Total Avg. Managed Assets

$

550,066


$

517,988


$

493,256


$

475,407


$

443,709


1)

The average balance includes $8.3 billion, $8.1 billion, $8.1 billion, $8.4 billion and $8.3 billion for the quarters ended Dec. 31, 2019, Sept. 30, 2019, June 30, 2019, March 31, 2019 and Dec. 31, 2018, respectively, of assets managed by a nonconsolidated entity, Hermes GPE LLP, in which Hermes holds an equity method investment.

 

 

Unaudited Average Managed Assets


Year Ended

(in millions)


Dec. 31, 2019


Dec. 31, 2018

By Asset Class





Equity


$

81,212


$

70,680

Fixed-income


65,375


63,454

Alternative / private markets1


17,896


9,397

Multi-asset


4,192


4,764

Total long-term assets


168,675


148,295

Money market


340,505


267,093

Total Avg. Managed Assets


$

509,180


$

415,388

By Product Type





Funds:





Equity


$

42,712


$

36,984

Fixed-income


41,938


40,952

Alternative / private markets1


11,317


5,784

Multi-asset


4,003


4,554

Total long-term assets


99,970


88,274

Money market


238,876


182,828

Total Avg. Fund Assets


$

338,846


$

271,102

Separate Accounts:





Equity


$

38,500


$

33,696

Fixed-income


23,437


22,502

Alternative / private markets


6,579


3,613

Multi-asset


189


210

Total long-term assets


68,705


60,021

Money market


101,629


84,265

Total Avg. Separate Account Assets


$

170,334


$

144,286

Total Avg. Managed Assets


$

509,180


$

415,388

1)

The average balance includes $8.2 billion and $4.1 billion for the years ended Dec. 31, 2019 and 2018, respectively, of assets managed by a nonconsolidated entity, Hermes GPE LLP, in which Hermes holds an equity method investment.

 

Cision View original content:http://www.prnewswire.com/news-releases/federated-investors-inc-reports-fourth-quarter-and-full-year-2019-earnings-300996524.html

SOURCE Federated Investors, Inc.

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