FHI - Federated Hermes Inc. reports third quarter 2022 earnings
PR Newswire
- Q3 2022 earnings per diluted share of $0.78
- Board declares $0.27 per share quarterly dividend
PITTSBURGH , Oct. 27, 2022 /PRNewswire/ -- Federated Hermes, Inc. (NYSE: FHI), a global leader in active, responsible investing, today reported earnings per diluted share (EPS) of $0.78 for Q3 2022, compared to $0.73 for the same quarter last year, on net income of $69.5 million for Q3 2022, compared to $71.4 million for Q3 2021. Federated Hermes reported YTD 2022 EPS of $2.02 , compared to $2.04 for the same period in 2021, on YTD 2022 net income of $183.0 million , compared to $201.7 million for the same period in 2021. The results for Q3 2022 and YTD 2022 include net realized and unrealized losses on investments of $6.8 million and $39.4 million , respectively, due to the reduction in the market value of equity and fixed-income investments. These losses reduced Q3 2022 and YTD 2022 EPS by $0.04 per diluted share and $0.22 per diluted share, respectively, after excluding the losses attributable to noncontrolling interests and including tax effects.
Federated Hermes' total managed assets were $624.4 billion at Sept. 30, 2022, down $9.7 billion or 2% from $634.1 billion at Sept. 30, 2021 and down $7.5 billion or 1% from $631.9 billion at June 30, 2022. Total average managed assets for Q3 2022 were $631.8 billion , down $1.3 billion or less than 1% from $633.1 billion reported for Q3 2021 and up $13.9 billion or 2% from $617.9 billion for Q2 2022.
"Federated Hermes offered our clients a diverse range of active strategies for the volatile inflationary environment, and we saw net positive sales in our equity, fixed-income and alternative/private markets asset categories," said J. Christopher Donahue , president and chief executive officer. "In the third quarter, Federated Hermes also achieved record gross and net positive sales of fixed-income separately managed accounts, and we further diversified our investment solutions in that area by closing on the acquisition of the business of C.W. Henderson & Associates, Inc., a specialist in municipal-bond SMA products, which was effective Oct. 1, 2022 . Investors also continued to seek haven in Federated Hermes' alternative strategies, such as private equity products and Federated Hermes Prudent Bear Fund."
Federated Hermes' board of directors declared a dividend of $0.27 per share. The dividend is payable on Nov. 15, 2022 to shareholders of record as of Nov. 8, 2022. During Q3 2022, Federated Hermes purchased 211,885 shares of Federated Hermes class B common stock for $6.9 million.
Equity assets were $74.7 billion at Sept. 30, 2022, down $22.7 billion or 23% from $97.4 billion at Sept. 30, 2021 and down $6.3 billion or 8% from $81.0 billion at June 30, 2022. Top-selling equity funds during Q3 2022 on a net basis were Federated Hermes Strategic Value Dividend Fund, Federated Hermes Asia ex-Japan Equity Fund, Federated Hermes International Strategic Value Dividend Fund, Federated Hermes China Equity Fund and Federated Hermes MDT Small Cap Core Fund.
Fixed-income assets were $85.4 billion at Sept. 30, 2022, down $11.8 billion or 12% from $97.2 billion at Sept. 30, 2021 and down $0.9 billion or 1% from $86.3 billion at June 30, 2022. Top-selling fixed-income funds during Q3 2022 on a net basis were Federated Hermes Total Return Bond Fund, Federated Hermes Conservative Municipal Microshort Fund, Federated Hermes Municipal High Yield Advantage Fund, Federated Hermes Total Return Government Bond Fund and Federated Hermes Conservative Microshort Fund.
Alternative/private markets assets were $20.2 billion at Sept. 30, 2022, down $1.9 billion or 9% from $22.1 billion at Sept. 30, 2021 and down $1.6 billion or 7% from $21.8 billion at June 30, 2022.
Money market assets were $441.3 billion at Sept. 30, 2022, up $27.6 billion or 7% from $413.7 billion at Sept. 30, 2021 and up $1.6 billion or less than 1% from $439.7 billion at June 30, 2022. Money market fund assets were $309.9 billion at Sept. 30, 2022, up $17.6 billion or 6% from $292.3 billion at Sept. 30, 2021 and up $11.9 billion or 4% from $298.0 billion at June 30, 2022.
Financial Summary
Q3 2022 vs. Q3 2021
Revenue increased $54.6 million or 17% primarily due to a decrease in voluntary fee waivers related to certain money market funds in order for those funds to maintain positive or zero net yields (voluntary yield-related fee waivers). For further information on the waivers, see "Impact of voluntary yield-related fee waivers" below. This increase was partially offset by a decrease in revenue due to lower average long-term assets.
During Q3 2022, Federated Hermes derived 54% of its revenue from long-term assets (33% from equity, 13% from fixed-income and 8% from alternative/private markets and multi-asset), 45% from money market assets, and 1% from sources other than managed assets.
Operating expenses increased $56.2 million or 25% due to increased distribution expenses resulting primarily from lower voluntary yield-related fee waivers, partially offset by a decrease due to lower average managed fund assets.
Nonoperating income (expenses), net decreased $5.8 million primarily due to a larger decrease in the market value of investments in Q3 2022 as compared to the decrease in the market value of investments in Q3 2021.
Q3 2022 vs. Q2 2022
Revenue increased $15.1 million or 4% primarily due to a decrease in voluntary yield-related and other fee waivers and an increase in revenue from higher average money market assets. This increase was partially offset by a decrease in revenue due to lower average long-term assets.
Operating expenses increased $10.7 million or 4% primarily due to increased distribution expenses predominantly resulting from lower voluntary yield-related fee waivers.
Nonoperating income (expenses), net increased $15.1 million or 67% primarily due to a lesser decrease in the market value of investments in Q3 2022 as compared to the decrease in the market value of investments in Q2 2022.
YTD 2022 vs. YTD 2021
Revenue increased $93.1 million or 10% primarily due to a decrease in voluntary yield-related fee waivers. This increase was partially offset by decreases in revenue due to lower average equity assets, a change in the mix of average fixed-income assets and a decrease in performance fees and carried interest.
For the first nine months of 2022, Federated Hermes derived 62% of its revenue from long-term assets (38% from equity, 15% from fixed-income and 9% from alternative/private markets and multi-asset), 37% from money market assets and 1% from sources other than managed assets.
Operating expenses increased $97.8 million or 14% primarily due to increased distribution expenses predominantly resulting from lower voluntary yield-related fee waivers partially offset by lower average managed fund assets and a decrease in compensation and related expense.
Nonoperating income (expenses), net decreased $49.0 million primarily due to a decrease in the market value of investments in the first nine months of 2022 compared to an increase in the market value of investments for the same period in 2021.
Income tax provision decreased $25.2 million primarily due to legislation enacted in the U.K. in Q2 2021, increasing the U.K. corporate income tax rate from 19% to 25% effective April 1, 2023 , resulting in the revaluation of certain net deferred tax liabilities in Q2 2021, and lower income before income taxes.
Impact of voluntary yield-related fee waivers
There were no material voluntary yield-related fee waivers during the quarter ended Sept. 30, 2022. During the nine months ended Sept. 30, 2022, voluntary yield-related fee waivers totaled $85.3 million . These fee waivers were partially offset by related reductions in distribution expenses of $66.5 million , such that the net negative pre-tax impact to Federated Hermes was $18.8 million for the nine months ended Sept. 30, 2022. During the three and nine months ended Sept. 30, 2021, voluntary yield-related fee waivers totaled $109.2 million and $310.2 million , respectively. These fee waivers were partially offset by related reductions in distribution expenses of $72.3 million and $204.9 million , respectively, such that the net negative pre-tax impact to Federated Hermes was $36.9 million and $105.3 million for the three and nine months ended Sept. 30, 2021, respectively.
Due to increases in the yields of securities held by money market portfolios, the net negative pre-tax impact of the voluntary yield-related fee waivers has been eliminated. The amount of voluntary yield-related fee waivers can vary based on a number of factors, including, among others, interest rates, yields, asset levels, asset flows and the ability of distributors to share in waivers. Any change in these factors can impact the amount and level of voluntary yield-related fee waivers, including in a material way.
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 Oct. 28, 2022. 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 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 Oct. 28, 2022. To access the telephone replay, dial 877-481-4010 (domestic) or 919-882-2331 (international) and enter access code 46773. The online replay will be available via FederatedHermes.com for one year.
Federated Hermes, Inc. is a global leader in active, responsible investment management, with $624.4 billion in assets under management 1 . 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 nearly 2,000 employees in London , New York and offices worldwide.
Federated Hermes ranks in the top 7% of equity fund managers in the industry, the top 10% of fixed-income fund managers and the top 10% of money market fund managers 2 . Federated Hermes also ranks as the 5th-largest manager of model-delivered SMAs 3 . For more information, including an analyst presentation, which is updated periodically, visit FederatedHermes.com .
###
1) As of Sept. 30, 2022.
2) ISS Market Intelligence (SIMFUND), Sept. 30, 2022. Based on assets under management in open-end funds.
3) Money Management Institute/Cerulli,Q2 2022.
Federated Securities Corp. is distributor of the Federated Hermes funds.
Separately managed accounts are made available through Federated Global Investment Management Corp., Federated Investment Counseling, Federated MDTA LLC, Hermes Fund Managers Ireland Limited, Hermes Investment Management Limited, and Hermes GPE LLP, each a registered investment advisor in one or more of the U.S., U.K. or Ireland .
Certain statements in this press release, such as those related to performance, investor preferences and demand, asset flows, asset mix, 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 is inherently subject to significant business, economic, competitive, regulatory and other risks and uncertainties, many of which are difficult to predict and beyond Federated Hermes' control. Other risks and uncertainties include the ability of the company to predict the level of fee waivers and expenses in future quarters, predict whether performance fees or carried interest will be earned and retained, and sustain product demand, asset flows and mix, which could vary significantly depending on various factors, such as market conditions, investment performance and investor behavior. Other risks and uncertainties include the risk factors discussed in the company's annual and quarterly reports as filed with the SEC. As a result, no assurance can be given as to future results, levels of activity, performance or achievements, and neither the company nor any other person assumes responsibility for the accuracy and completeness, or updating, of such statements in the future.
| Unaudited Condensed Consolidated Statements of Income |
| (in thousands, except per share data) |
| |
| |
| |
| |
| |
| |
| |
| Quarter Ended |
| % Change |
| |
| Quarter Ended |
| % Change |
| |
| Sept. 30, 2022 |
| Sept. 30, 2021 |
| |
| June 30, 2022 |
| Revenue |
| |
| |
| |
| |
| |
| |
| Investment advisory fees, net |
| 263,644 |
| 230,210 |
| 15 % |
| |
| 258,043 |
| 2 % |
| Administrative service fees, net—affiliates |
| 75,021 |
| 76,853 |
| (2) |
| |
| 70,182 |
| 7 |
| Other service fees, net |
| 42,478 |
| 19,526 |
| 118 |
| |
| 37,783 |
| 12 |
| Total Revenue |
| 381,143 |
| 326,589 |
| 17 |
| |
| 366,008 |
| 4 |
| |
| |
| |
| |
| |
| |
| |
| Operating Expenses |
| |
| |
| |
| |
| |
| |
| Compensation and related |
| 126,668 |
| 131,996 |
| (4) |
| |
| 128,086 |
| (1) |
| Distribution |
| 91,032 |
| 38,486 |
| 137 |
| |
| 84,243 |
| 8 |
| Systems and communications |
| 19,294 |
| 18,537 |
| 4 |
| |
| 18,446 |
| 5 |
| Professional service fees |
| 14,203 |
| 14,294 |
| (1) |
| |
| 13,976 |
| 2 |
| Office and occupancy |
| 10,622 |
| 11,036 |
| (4) |
| |
| 10,512 |
| 1 |
| Advertising and promotional |
| 6,496 |
| 4,660 |
| 39 |
| |
| 4,736 |
| 37 |
| Travel and related |
| 3,421 |
| 1,643 |
| 108 |
| |
| 3,328 |
| 3 |
| Other |
| 12,627 |
| 7,535 |
| 68 |
| |
| 10,363 |
| 22 |
| Total Operating Expenses |
| 284,363 |
| 228,187 |
| 25 |
| |
| 273,690 |
| 4 |
| Operating Income |
| 96,780 |
| 98,402 |
| (2) |
| |
| 92,318 |
| 5 |
| |
| |
| |
| |
| |
| |
| |
| Nonoperating Income (Expenses) |
| |
| |
| |
| |
| |
| |
| Investment income (loss), net |
| (4,226) |
| 42 |
| NM |
| |
| (19,308) |
| 78 |
| Debt expense |
| (3,302) |
| (476) |
| NM |
| |
| (3,350) |
| (1) |
| Other, net |
| (38) |
| (1,319) |
| 97 |
| |
| (13) |
| (192) |
| Total Nonoperating Income (Expenses), net |
| (7,566) |
| (1,753) |
| (332) |
| |
| (22,671) |
| 67 |
| Income before income taxes |
| 89,214 |
| 96,649 |
| (8) |
| |
| 69,647 |
| 28 |
| Income tax provision |
| 21,640 |
| 23,163 |
| (7) |
| |
| 18,889 |
| 15 |
| Net income including the noncontrolling interests in subsidiaries |
| 67,574 |
| 73,486 |
| (8) |
| |
| 50,758 |
| 33 |
| Less: Net income (loss) attributable to the noncontrolling interests in subsidiaries |
| (1,905) |
| 2,124 |
| (190) |
| |
| (6,899) |
| 72 |
| Net Income |
| 69,479 |
| 71,362 |
| (3) % |
| |
| 57,657 |
| 21 % |
| |
| |
| |
| |
| |
| |
| |
| Amounts Attributable to Federated Hermes, Inc. |
| |
| |
| |
| |
| |
| |
| Earnings Per Share 1 |
| |
| |
| |
| |
| |
| |
| Basic and Diluted |
| 0.78 |
| 0.73 |
| 7 % |
| |
| 0.64 |
| 22 % |
| Weighted-Average Shares Outstanding |
| |
| |
| |
| |
| |
| |
| Basic and Diluted |
| 84,341 |
| 93,320 |
| |
| |
| 85,373 |
| |
| 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 $3.7 million, $3.0 million and $3.2 million available to unvested restricted Federated Hermes shareholders for the quarterly periods ended Sept. 30, 2022, Sept. 30, 2021 and June 30, 2022, respectively, was excluded from the computation of basic earnings per share. In addition to the amounts excluded from the basic earnings per share calculation, the computation of diluted earnings per share for the quarterly period ended Sept. 30, 2021 excludes net income available to unvested shareholders of a nonpublic consolidated subsidiary. |
| Unaudited Condensed Consolidated Statements of Income |
| |
| |
| |
| (in thousands, except per share data) |
| |
| |
| |
| |
| Nine Months Ended |
| |
| Sept. 30, 2022 |
| Sept. 30, 2021 |
| % Change |
| Revenue |
| |
| |
| |
| Investment advisory fees, net |
| 754,681 |
| 692,188 |
| 9 % |
| Administrative service fees, net—affiliates |
| 218,710 |
| 228,904 |
| (4) |
| Other service fees, net |
| 98,524 |
| 57,710 |
| 71 |
| Total Revenue |
| 1,071,915 |
| 978,802 |
| 10 |
| |
| |
| |
| |
| Operating Expenses |
| |
| |
| |
| Compensation and related |
| 388,719 |
| 408,385 |
| (5) |
| Distribution |
| 223,837 |
| 120,990 |
| 85 |
| Systems and communications |
| 57,234 |
| 56,086 |
| 2 |
| Professional service fees |
| 41,647 |
| 44,052 |
| (5) |
| Office and occupancy |
| 32,457 |
| 33,358 |
| (3) |
| Advertising and promotional |
| 13,965 |
| 12,107 |
| 15 |
| Travel and related |
| 8,543 |
| 2,838 |
| 201 |
| Other |
| 32,466 |
| 23,297 |
| 39 |
| Total Operating Expenses |
| 798,868 |
| 701,113 |
| 14 |
| Operating Income |
| 273,047 |
| 277,689 |
| (2) |
| |
| |
| |
| |
| Nonoperating Income (Expenses) |
| |
| |
| |
| Investment income (loss), net |
| (34,136) |
| 9,446 |
| (461) |
| Debt expense |
| (7,873) |
| (1,313) |
| 500 |
| Other, net |
| 31 |
| (1,158) |
| 103 |
| Total Nonoperating Income (Expenses), net |
| (41,978) |
| 6,975 |
| NM |
| Income before income taxes |
| 231,069 |
| 284,664 |
| (19) |
| Income tax provision |
| 58,140 |
| 83,353 |
| (30) |
| Net income including the noncontrolling interests in subsidiaries |
| 172,929 |
| 201,311 |
| (14) |
| Less: Net income (loss) attributable to the noncontrolling interests in subsidiaries |
| (10,070) |
| (419) |
| NM |
| Net Income |
| 182,999 |
| 201,730 |
| (9) % |
| |
| |
| |
| |
| Amounts Attributable to Federated Hermes, Inc. |
| |
| |
| |
| Earnings Per Share 1 |
| |
| |
| |
| Basic |
| 2.02 |
| 2.05 |
| (1) % |
| Diluted |
| 2.02 |
| 2.04 |
| (1) % |
| Weighted-Average Shares Outstanding |
| |
| |
| |
| Basic and Diluted |
| 85,909 |
| 94,160 |
| |
| Dividends Declared Per Share |
| 0.81 |
| 0.81 |
| |
| |
| |
| 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 $9.5 million and $8.4 million available to unvested restricted Federated Hermes shareholders for the nine months ended Sept. 30, 2022 and Sept. 30, 2021, respectively, was excluded from the computation of basic earnings per share. In addition to the amounts excluded from the basic earnings per share calculation, the computation of diluted earnings per share excludes net income available to unvested shareholders of a nonpublic consolidated subsidiary for the nine months ended Sept. 30, 2021. |
| Unaudited Condensed Consolidated Balance Sheets |
| |
| |
| (in thousands) |
| Sept. 30, 2022 |
| Dec. 31, 2021 |
| Assets |
| |
| |
| Cash and other investments |
| 481,196 |
| 426,674 |
| Other current assets |
| 149,087 |
| 132,773 |
| Intangible assets, net, including goodwill |
| 1,181,383 |
| 1,270,080 |
| Other long-term assets |
| 160,904 |
| 188,660 |
| Total Assets |
| 1,972,570 |
| 2,018,187 |
| |
| |
| |
| Liabilities, Redeemable Noncontrolling Interests and Equity |
| |
| |
| Current liabilities |
| 238,929 |
| 270,707 |
| Long-term debt |
| 397,514 |
| 223,350 |
| Other long-term liabilities |
| 310,112 |
| 346,911 |
| Redeemable noncontrolling interests |
| 54,586 |
| 63,202 |
| Equity excluding treasury stock 1 |
| 1,348,816 |
| 1,652,481 |
| Treasury stock 1 |
| (377,387) |
| (538,464) |
| Total Liabilities, Redeemable Noncontrolling Interests and Equity |
| 1,972,570 |
| 2,018,187 |
| |
| |
| 1) |
| During the third quarter 2022, the board of directors authorized the retirement of 10 million treasury shares, which restored them to authorized but unissued status. There was no impact to total equity as a result of this transaction. |
| Unaudited Changes in Long-Term Assets - By Asset Class |
| |
| |
| |
| (in millions) |
| Quarter Ended |
| |
| Nine Months Ended |
| |
| Sept. 30, 2022 |
| June 30, 2022 |
| Sept. 30, 2021 |
| |
| Sept. 30, 2022 |
| Sept. 30, 2021 |
| Equity |
| |
| |
| |
| |
| |
| |
| Beginning assets |
| 80,988 |
| 91,676 |
| 100,506 |
| |
| 96,716 |
| 91,788 |
| Sales 1 |
| 5,133 |
| 6,595 |
| 4,332 |
| |
| 18,720 |
| 17,458 |
| Redemptions 1 |
| (4,951) |
| (7,564) |
| (5,707) |
| |
| (19,585) |
| (19,655) |
| Net sales (redemptions) 1 |
| 182 |
| (969) |
| (1,375) |
| |
| (865) |
| (2,197) |
| Net exchanges |
| 9 |
| 20 |
| 3 |
| |
| (145) |
| 43 |
| Acquisitions/(dispositions) |
| 0 |
| 0 |
| 408 |
| |
| 0 |
| 408 |
| Impact of foreign exchange 2 |
| (1,187) |
| (1,199) |
| (510) |
| |
| (2,840) |
| (934) |
| Market gains and (losses) 3 |
| (5,308) |
| (8,540) |
| (1,607) |
| |
| (18,182) |
| 8,317 |
| Ending assets |
| 74,684 |
| 80,988 |
| 97,425 |
| |
| 74,684 |
| 97,425 |
| |
| |
| |
| |
| |
| |
| |
| Fixed Income |
| |
| |
| |
| |
| |
| |
| Beginning assets |
| 86,253 |
| 92,146 |
| 90,801 |
| |
| 97,550 |
| 84,277 |
| Sales 1 |
| 7,681 |
| 6,991 |
| 12,935 |
| |
| 22,096 |
| 34,706 |
| Redemptions 1 |
| (6,584) |
| (8,950) |
| (6,604) |
| |
| (24,971) |
| (22,306) |
| Net sales (redemptions) 1 |
| 1,097 |
| (1,959) |
| 6,331 |
| |
| (2,875) |
| 12,400 |
| Net exchanges |
| (17) |
| (51) |
| (7) |
| |
| 78 |
| (58) |
| Acquisitions/(dispositions) |
| 0 |
| 0 |
| 17 |
| |
| 0 |
| 17 |
| Impact of foreign exchange 2 |
| (231) |
| (225) |
| (89) |
| |
| (560) |
| (124) |
| Market gains and (losses) 3 |
| (1,737) |
| (3,658) |
| 173 |
| |
| (8,828) |
| 714 |
| Ending assets |
| 85,365 |
| 86,253 |
| 97,226 |
| |
| 85,365 |
| 97,226 |
| |
| |
| |
| |
| |
| |
| |
| Alternative/Private Markets |
| |
| |
| |
| |
| |
| |
| Beginning assets |
| 21,785 |
| 23,109 |
| 20,962 |
| |
| 22,920 |
| 19,084 |
| Sales 1 |
| 946 |
| 1,116 |
| 1,319 |
| |
| 2,706 |
| 3,127 |
| Redemptions 1 |
| (929) |
| (1,091) |
| (533) |
| |
| (2,525) |
| (1,710) |
| Net sales (redemptions) 1 |
| 17 |
| 25 |
| 786 |
| |
| 181 |
| 1,417 |
| Net exchanges |
| 3 |
| 4 |
| 0 |
| |
| 7 |
| (2) |
| Acquisitions/(dispositions) |
| 0 |
| 0 |
| 81 |
| |
| 0 |
| 81 |
| Impact of foreign exchange 2 |
| (1,638) |
| (1,555) |
| (554) |
| |
| (3,830) |
| (361) |
| Market gains and (losses) 3 |
| 15 |
| 202 |
| 789 |
| |
| 904 |
| 1,845 |
| Ending assets |
| 20,182 |
| 21,785 |
| 22,064 |
| |
| 20,182 |
| 22,064 |
| |
| |
| |
| |
| |
| |
| |
| Multi-asset |
| |
| |
| |
| |
| |
| |
| Beginning assets |
| 3,135 |
| 3,555 |
| 3,699 |
| |
| 3,780 |
| 3,948 |
| Sales 1 |
| 54 |
| 43 |
| 71 |
| |
| 171 |
| 226 |
| Redemptions 1 |
| (132) |
| (143) |
| (103) |
| |
| (407) |
| (817) |
| Net sales (redemptions) 1 |
| (78) |
| (100) |
| (32) |
| |
| (236) |
| (591) |
| Net exchanges |
| 0 |
| 1 |
| 9 |
| |
| 6 |
| 28 |
| Acquisitions/(dispositions) |
| 0 |
| 0 |
| 54 |
| |
| 0 |
| 54 |
| Impact of foreign exchange 2 |
| 0 |
| 0 |
| 0 |
| |
| 0 |
| (1) |
| Market gains and (losses) 3 |
| (155) |
| (321) |
| (38) |
| |
| (648) |
| 254 |
| Ending assets |
| 2,902 |
| 3,135 |
| 3,692 |
| |
| 2,902 |
| 3,692 |
| |
| |
| |
| |
| |
| |
| |
| Total Long-term Assets |
| |
| |
| |
| |
| |
| |
| Beginning assets |
| 192,161 |
| 210,486 |
| 215,968 |
| |
| 220,966 |
| 199,097 |
| Sales 1 |
| 13,814 |
| 14,745 |
| 18,657 |
| |
| 43,693 |
| 55,517 |
| Redemptions 1 |
| (12,596) |
| (17,748) |
| (12,947) |
| |
| (47,488) |
| (44,488) |
| Net sales (redemptions) 1 |
| 1,218 |
| (3,003) |
| 5,710 |
| |
| (3,795) |
| 11,029 |
| Net exchanges |
| (5) |
| (26) |
| 5 |
| |
| (54) |
| 11 |
| Acquisitions/(dispositions) |
| 0 |
| 0 |
| 560 |
| |
| 0 |
| 560 |
| Impact of foreign exchange 2 |
| (3,056) |
| (2,979) |
| (1,153) |
| |
| (7,230) |
| (1,420) |
| Market gains and (losses) 3 |
| (7,185) |
| (12,317) |
| (683) |
| |
| (26,754) |
| 11,130 |
| Ending assets |
| 183,133 |
| 192,161 |
| 220,407 |
| |
| 183,133 |
| 220,407 |
| |
| |
| 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 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 |
| |
| Sept. 30, 2022 |
| |
| Equity |
| Fixed Income |
| Alternative / Private |
| Multi-asset |
| Total |
| |
| Funds |
| Separate |
| Funds |
| Separate |
| Funds |
| Separate |
| Funds |
| Separate |
| Funds . |
| Separate Accounts 1 |
| Beginning assets |
| 44,207 |
| 36,781 |
| 48,215 |
| 38,038 |
| 13,911 |
| 7,874 |
| 3,001 |
| 134 |
| $ 109,334 |
| 82,827 |
| Sales |
| 2,581 |
| 2,552 |
| 3,956 |
| 3,725 |
| 537 |
| 409 |
| 54 |
| 0 |
| 7,128 |
| 6,686 |
| Redemptions |
| (3,033) |
| (1,918) |
| (6,058) |
| (526) |
| (835) |
| (94) |
| (130) |
| (2) |
| (10,056) |
| (2,540) |
| Net sales (redemptions) |
| (452) |
| 634 |
| (2,102) |
| 3,199 |
| (298) |
| 315 |
| (76) |
| (2) |
| (2,928) |
| 4,146 |
| Net exchanges |
| 9 |
| 0 |
| (17) |
| 0 |
| 3 |
| 0 |
| 0 |
| 0 |
| (5) |
| 0 |
| Impact of foreign exchange 2 |
| (667) |
| (520) |
| (161) |
| (70) |
| (1,013) |
| (625) |
| 0 |
| 0 |
| (1,841) |
| (1,215) |
| Market gains and (losses) 3 |
| (2,464) |
| (2,844) |
| (1,039) |
| (698) |
| 77 |
| (62) |
| (141) |
| (14) |
| (3,567) |
| (3,618) |
| Ending assets |
| 40,633 |
| 34,051 |
| 44,896 |
| 40,469 |
| 12,680 |
| 7,502 |
| 2,784 |
| 118 |
| $ 100,993 |
| 82,140 |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| |
| Nine Months Ended |
| |
| Sept. 30, 2022 |
| |
| Equity |
| Fixed Income |
| Alternative / Private |
| Multi-asset |
| Total |
| |
| Funds |
| Separate |
| Funds |
| Separate |
| Funds |
| Separate |
| Funds |
| Separate |
| Funds |
| Separate |
| Beginning assets |
| 57,036 |
| 39,680 |
| 59,862 |
| 37,688 |
| 14,788 |
| 8,132 |
| 3,608 |
| 172 |
| $ 135,294 |
| 85,672 |
| Sales |
| 10,210 |
| 8,510 |
| 13,711 |
| 8,385 |
| 1,637 |
| 1,069 |
| 170 |
| 1 |
| 25,728 |
| 17,965 |
| Redemptions |
| (11,122) |
| (8,463) |
| (22,614) |
| (2,357) |
| (2,020) |
| (505) |
| (397) |
| (10) |
| (36,153) |
| (11,335) |
| Net sales (redemptions) |
| (912) |
| 47 |
| (8,903) |
| 6,028 |
| (383) |
| 564 |
| (227) |
| (9) |
| (10,425) |
| 6,630 |
| Net exchanges |
| (145) |
| 0 |
| 79 |
| (1) |
| 7 |
| 0 |
| 6 |
| 0 |
| (53) |
| (1) |
| Impact of foreign exchange 2 |
| (1,635) |
| (1,205) |
| (409) |
| (151) |
| (2,390) |
| (1,440) |
| 0 |
| 0 |
| (4,434) |
| (2,796) |
| Market gains and (losses) 3 |
| (13,711) |
| (4,471) |
| (5,733) |
| (3,095) |
| 658 |
| 246 |
| (603) |
| (45) |
| (19,389) |
| (7,365) |
| Ending assets |
| 40,633 |
| 34,051 |
| 44,896 |
| 40,469 |
| 12,680 |
| 7,502 |
| 2,784 |
| 118 |
| $ 100,993 |
| 82,140 |
| 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 |
| |
| Nine Months Ended |
| |
| Sept. 30, 2022 |
| June 30, 2022 |
| Sept. 30, 2021 |
| |
| Sept. 30, 2022 |
| Sept. 30, 2021 |
| Total Fund Assets |
| |
| |
| |
| |
| |
| |
| Beginning assets |
| 109,334 |
| 124,968 |
| 135,161 |
| |
| 135,294 |
| 123,713 |
| Sales |
| 7,128 |
| 8,743 |
| 11,139 |
| |
| 25,728 |
| 39,031 |
| Redemptions |
| (10,056) |
| (12,993) |
| (9,702) |
| |
| (36,153) |
| (32,413) |
| Net sales (redemptions) |
| (2,928) |
| (4,250) |
| 1,437 |
| |
| (10,425) |
| 6,618 |
| Net exchanges |
| (5) |
| (27) |
| 55 |
| |
| (53) |
| (345) |
| Acquisitions/(dispositions) |
| 0 |
| 0 |
| 560 |
| |
| 0 |
| 560 |
| Impact of foreign exchange 1 |
| (1,841) |
| (1,827) |
| (699) |
| |
| (4,434) |
| (778) |
| Market gains and (losses) 2 |
| (3,567) |
| (9,530) |
| (217) |
| |
| (19,389) |
| 6,529 |
| Ending assets |
| 100,993 |
| 109,334 |
| 136,297 |
| |
| 100,993 |
| 136,297 |
| |
| |
| |
| |
| |
| |
| |
| Total Separate Account Assets 3 |
| |
| |
| |
| |
| |
| |
| Beginning assets |
| 82,827 |
| 85,518 |
| 80,807 |
| |
| 85,672 |
| 75,384 |
| Sales 4 |
| 6,686 |
| 6,002 |
| 7,518 |
| |
| 17,965 |
| 16,486 |
| Redemptions 4 |
| (2,540) |
| (4,755) |
| (3,245) |
| |
| (11,335) |
| (12,075) |
| Net sales (redemptions) 4 |
| 4,146 |
| 1,247 |
| 4,273 |
| |
| 6,630 |
| 4,411 |
| Net exchanges |
| 0 |
| 1 |
| (50) |
| |
| (1) |
| 356 |
| Impact of foreign exchange 1 |
| (1,215) |
| (1,152) |
| (454) |
| |
| (2,796) |
| (642) |
| Market gains and (losses) 2 |
| (3,618) |
| (2,787) |
| (466) |
| |
| (7,365) |
| 4,601 |
| Ending assets |
| 82,140 |
| 82,827 |
| 84,110 |
| |
| 82,140 |
| 84,110 |
| |
| |
| |
| |
| |
| |
| |
| Total Long-term Assets 3 |
| |
| |
| |
| |
| |
| |
| Beginning assets |
| 192,161 |
| 210,486 |
| 215,968 |
| |
| 220,966 |
| 199,097 |
| Sales 4 |
| 13,814 |
| 14,745 |
| 18,657 |
| |
| 43,693 |
| 55,517 |
| Redemptions 4 |
| (12,596) |
| (17,748) |
| (12,947) |
| |
| (47,488) |
| (44,488) |
| Net sales (redemptions) 4 |
| 1,218 |
| (3,003) |
| 5,710 |
| |
| (3,795) |
| 11,029 |
| Net exchanges |
| (5) |
| (26) |
| 5 |
| |
| (54) |
| 11 |
| Acquisitions/(dispositions) |
| 0 |
| 0 |
| 560 |
| |
| 0 |
| 560 |
| Impact of foreign exchange 1 |
| (3,056) |
| (2,979) |
| (1,153) |
| |
| (7,230) |
| (1,420) |
| Market gains and (losses) 2 |
| (7,185) |
| (12,317) |
| (683) |
| |
| (26,754) |
| 11,130 |
| Ending assets |
| 183,133 |
| 192,161 |
| 220,407 |
| |
| 183,133 |
| 220,407 |
| |
| |
| 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) |
| Sept. 30, 2022 |
| June 30, 2022 |
| March 31, 2022 |
| Dec. 31, 2021 |
| Sept. 30, 2021 |
| By Asset Class |
| |
| |
| |
| |
| |
| Equity |
| 74,684 |
| 80,988 |
| 91,676 |
| 96,716 |
| 97,425 |
| Fixed-income |
| 85,365 |
| 86,253 |
| 92,146 |
| 97,550 |
| 97,226 |
| Alternative / private markets |
| 20,182 |
| 21,785 |
| 23,109 |
| 22,920 |
| 22,064 |
| Multi-asset |
| 2,902 |
| 3,135 |
| 3,555 |
| 3,780 |
| 3,692 |
| Total long-term assets |
| 183,133 |
| 192,161 |
| 210,486 |
| 220,966 |
| 220,407 |
| Money market |
| 441,294 |
| 439,697 |
| 420,596 |
| 447,907 |
| 413,713 |
| Total Managed Assets |
| 624,427 |
| 631,858 |
| 631,082 |
| 668,873 |
| 634,120 |
| |
| |
| |
| |
| |
| |
| By Product Type |
| |
| |
| |
| |
| |
| Funds: |
| |
| |
| |
| |
| |
| Equity |
| 40,633 |
| 44,207 |
| 51,890 |
| 57,036 |
| 58,218 |
| Fixed-income |
| 44,896 |
| 48,215 |
| 54,830 |
| 59,862 |
| 60,262 |
| Alternative / private markets |
| 12,680 |
| 13,911 |
| 14,847 |
| 14,788 |
| 14,299 |
| Multi-asset |
| 2,784 |
| 3,001 |
| 3,401 |
| 3,608 |
| 3,518 |
| Total long-term assets |
| 100,993 |
| 109,334 |
| 124,968 |
| 135,294 |
| 136,297 |
| Money market |
| 309,859 |
| 298,031 |
| 279,514 |
| 312,834 |
| 292,311 |
| Total Fund Assets |
| 410,852 |
| 407,365 |
| 404,482 |
| 448,128 |
| 428,608 |
| Separate Accounts: |
| |
| |
| |
| |
| |
| Equity |
| 34,051 |
| 36,781 |
| 39,786 |
| 39,680 |
| 39,207 |
| Fixed-income |
| 40,469 |
| 38,038 |
| 37,316 |
| 37,688 |
| 36,964 |
| Alternative / private markets |
| 7,502 |
| 7,874 |
| 8,262 |
| 8,132 |
| 7,765 |
| Multi-asset |
| 118 |
| 134 |
| 154 |
| 172 |
| 174 |
| Total long-term assets |
| 82,140 |
| 82,827 |
| 85,518 |
| 85,672 |
| 84,110 |
| Money market |
| 131,435 |
| 141,666 |
| 141,082 |
| 135,073 |
| 121,402 |
| Total Separate Account Assets |
| 213,575 |
| 224,493 |
| 226,600 |
| 220,745 |
| 205,512 |
| Total Managed Assets |
| 624,427 |
| 631,858 |
| 631,082 |
| 668,873 |
| 634,120 |
| Unaudited Average Managed Assets |
| Quarter Ended |
| ( in millions) |
| Sept. 30, 2022 |
| June 30, 2022 |
| March 31, 2022 |
| Dec. 31, 2021 |
| Sept. 30, 2021 |
| By Asset Class |
| |
| |
| |
| |
| |
| Equity |
| 81,809 |
| 85,785 |
| 92,034 |
| 97,751 |
| 100,076 |
| Fixed-income |
| 87,042 |
| 88,740 |
| 95,475 |
| 97,229 |
| 93,685 |
| Alternative / private markets |
| 21,193 |
| 22,230 |
| 22,848 |
| 22,243 |
| 21,446 |
| Multi-asset |
| 3,144 |
| 3,337 |
| 3,621 |
| 3,763 |
| 3,713 |
| Total long-term assets |
| 193,188 |
| 200,092 |
| 213,978 |
| 220,986 |
| 218,920 |
| Money market |
| 438,601 |
| 417,778 |
| 433,254 |
| 419,392 |
| 414,141 |
| Total Avg. Managed Assets |
| 631,789 |
| 617,870 |
| 647,232 |
| 640,378 |
| 633,061 |
| |
| |
| |
| |
| |
| |
| By Product Type |
| |
| |
| |
| |
| |
| Funds: |
| |
| |
| |
| |
| |
| Equity |
| 45,135 |
| 47,504 |
| 52,419 |
| 58,290 |
| 59,918 |
| Fixed-income |
| 47,489 |
| 51,173 |
| 57,413 |
| 60,339 |
| 59,618 |
| Alternative / private markets |
| 13,432 |
| 14,297 |
| 14,746 |
| 14,419 |
| 13,704 |
| Multi-asset |
| 3,012 |
| 3,193 |
| 3,460 |
| 3,590 |
| 3,533 |
| Total long-term assets |
| 109,068 |
| 116,167 |
| 128,038 |
| 136,638 |
| 136,773 |
| Money market |
| 301,940 |
| 275,631 |
| 291,157 |
| 294,618 |
| 289,566 |
| Total Avg. Fund Assets |
| 411,008 |
| 391,798 |
| 419,195 |
| 431,256 |
| 426,339 |
| Separate Accounts: |
| |
| |
| |
| |
| |
| Equity |
| 36,674 |
| 38,281 |
| 39,615 |
| 39,461 |
| 40,158 |
| Fixed-income |
| 39,553 |
| 37,567 |
| 38,062 |
| 36,890 |
| 34,067 |
| Alternative / private markets |
| 7,761 |
| 7,933 |
| 8,102 |
| 7,824 |
| 7,742 |
| Multi-asset |
| 132 |
| 144 |
| 161 |
| 173 |
| 180 |
| Total long-term assets |
| 84,120 |
| 83,925 |
| 85,940 |
| 84,348 |
| 82,147 |
| Money market |
| 136,661 |
| 142,147 |
| 142,097 |
| 124,774 |
| 124,575 |
| Total Avg. Separate Account Assets |
| 220,781 |
| 226,072 |
| 228,037 |
| 209,122 |
| 206,722 |
| Total Avg. Managed Assets |
| 631,789 |
| 617,870 |
| 647,232 |
| 640,378 |
| 633,061 |
| Unaudited Average Managed Assets |
| |
| Nine Months Ended |
| (in millions) |
| |
| Sept. 30, 2022 |
| |
| Sept. 30, 2021 |
| By Asset Class |
| |
| |
| |
| |
| Equity |
| |
| 86,543 |
| |
| 98,136 |
| Fixed-income |
| |
| 90,419 |
| |
| 89,676 |
| Alternative / private markets |
| |
| 22,090 |
| |
| 20,257 |
| Multi-asset |
| |
| 3,368 |
| |
| 3,918 |
| Total long-term assets |
| |
| 202,420 |
| |
| 211,987 |
| Money market |
| |
| 429,878 |
| |
| 418,285 |
| Total Avg. Managed Assets |
| |
| 632,298 |
| |
| 630,272 |
| |
| |
| |
| |
| |
| By Product Type |
| |
| |
| |
| |
| Funds: |
| |
| |
| |
| |
| Equity |
| |
| 48,353 |
| |
| 58,471 |
| Fixed-income |
| |
| 52,025 |
| |
| 57,346 |
| Alternative / private markets |
| |
| 14,158 |
| |
| 12,882 |
| Multi-asset |
| |
| 3,222 |
| |
| 3,732 |
| Total long-term assets |
| |
| 117,758 |
| |
| 132,431 |
| Money market |
| |
| 289,577 |
| |
| 293,320 |
| Total Avg. Fund Assets |
| |
| 407,335 |
| |
| 425,751 |
| Separate Accounts: |
| |
| |
| |
| |
| Equity |
| |
| 38,190 |
| |
| 39,665 |
| Fixed-income |
| |
| 38,394 |
| |
| 32,330 |
| Alternative / private markets |
| |
| 7,932 |
| |
| 7,375 |
| Multi-asset |
| |
| 146 |
| |
| 186 |
| Total long-term assets |
| |
| 84,662 |
| |
| 79,556 |
| Money market |
| |
| 140,301 |
| |
| 124,965 |
| Total Avg. Separate Account Assets |
| |
| 224,963 |
| |
| 204,521 |
| Total Avg. Managed Assets |
| |
| 632,298 |
| |
| 630,272 |
SOURCE Federated Hermes, Inc.
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