fhi-20231026
0001056288false00010562882023-10-262023-10-26

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Form 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): October 26, 2023


FEDERATED HERMES, INC.
(Exact name of registrant as specified in its charter)
Pennsylvania001-1481825-1111467
  (State or other jurisdiction(Commission File Number)(I.R.S. Employer
of incorporation)Identification No.)

1001 Liberty Avenue
Pittsburgh, Pennsylvania 15222-3779
(Address of principal executive offices, including zip code)


(412) 288-1900
(Registrant's telephone number, including area code)


Not Applicable
(Former name or former address, if changed since last report)


Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Class B common stock, no par valueFHINew York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.    ☐



ITEM 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION.

On October 26, 2023, Federated Hermes, Inc. (Federated Hermes) issued the earnings press release attached hereto as Exhibit 99.1 to report third quarter 2023 results.
    

ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS.

(d) Exhibits:
Earnings press release issued by Federated Hermes, Inc. dated October 26, 2023
Exhibit 104Cover Page Interactive Data File (embedded within the Inline XBRL document)




SIGNATURES

    Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
                                    
FEDERATED HERMES, INC.
(REGISTRANT)
DateOctober 26, 2023By:/s/ Thomas R. Donahue
Thomas R. Donahue
Chief Financial Officer




Exhibit 99.1

fhipressreleaseimageq12020.gif
Federated Hermes, Inc. reports third quarter 2023 earnings
•Q3 2023 earnings per diluted share of $0.86
•Total assets under management reach a record high of $715.2 billion
•Money market assets reach a record $525.1 billion
•Board declares $0.28 per share dividend; authorizes new share repurchase program
(PITTSBURGH, Pa., Oct. 26, 2023) — Federated Hermes, Inc. (NYSE: FHI), a global leader in active, responsible investing, today reported earnings per diluted share (EPS) of $0.86 for Q3 2023, compared to $0.78 for the same quarter last year, on net income of $75.0 million for Q3 2023, compared to $69.5 million for Q3 2022. Federated Hermes reported YTD 2023 EPS of $2.44, compared to $2.02 for the same period in 2022, on YTD 2023 net income of $216.8 million, compared to $183.0 million for the same period in 2022.
Federated Hermes' total managed assets were a record $715.2 billion at Sept. 30, 2023, up $90.8 billion or 15% from $624.4 billion at Sept. 30, 2022 and up $11.2 billion or 2% from $704.0 billion at June 30, 2023. Total average managed assets for Q3 2023 were $711.2 billion, up $79.4 billion or 13% from $631.8 billion reported for Q3 2022 and up $5.9 billion or 1% from $705.3 billion for Q2 2023.
"Record assets under management at the end of the third quarter were again driven by money market asset increases, particularly investor demand for our prime money market offerings in the current interest rate environment, where general market volatility made the improved yields of our cash offerings an appealing haven for investors," said J. Christopher Donahue, president and chief executive officer. "Net sales of fixed-income products were led by multi-sector fixed-income separate accounts and net sales of our flagship core-plus offering, Federated Hermes Total Return Bond Fund. In equities, we saw demand for Federated Hermes' international equity products and our MDT strategies, which take a quantitative approach to stock selection with proprietary research and technology."
Federated Hermes' board of directors declared a dividend of $0.28 per share. The dividend is payable on Nov. 15, 2023 to shareholders of record as of Nov. 8, 2023. During Q3 2023, Federated Hermes purchased 2,046,790 shares of Federated Hermes class B common stock for $68.9 million. The board of directors also authorized an additional share repurchase program, which is the firm's 16th, allowing the buyback of up to an additional 5 million shares of Federated Hermes class B common stock in the open market with no expiration date. The repurchased stock is to be held in treasury for employee share-based compensation plans, potential acquisitions and other corporate activities. The company's existing 5 million share repurchase program, approved in June 2022, has approximately 1.4 million shares remaining.
Equity assets were $77.3 billion at Sept. 30, 2023, up $2.6 billion or 4% from $74.7 billion at Sept. 30, 2022 and down $5.7 billion or 7% from $83.0 billion at June 30, 2023. Top-selling equity funds during Q3 2023 on a net basis were Federated Hermes MDT Large Cap Growth Fund, Federated Hermes International Leaders Fund, Federated Hermes U.S. SMID Equity Fund, Federated Hermes International Small-Mid Company Fund and Federated Hermes MDT All Cap Core Fund.
Fixed-income assets were $89.8 billion at Sept. 30, 2023, up $4.4 billion or 5% from $85.4 billion at Sept. 30, 2022 and up $2.4 billion or 3% from $87.4 billion at June 30, 2023. Top-selling fixed-income funds during Q3 2023 on a net basis were Federated
MEDIA:MEDIA:ANALYSTS:
Ed Costello 412-288-7538Meghan McAndrew 412-288-8103Ray Hanley 412-288-1920
    
Federated Hermes reports Q3 2023 earnings
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Hermes Total Return Bond Fund, Federated Hermes Intermediate Corporate Bond Fund, Federated Hermes Sterling Cash Plus Fund, Federated Hermes Total Return Bond Collective Investment Fund and Federated Hermes SDG Engagement High Yield Credit Fund.
Alternative/private markets assets were $20.3 billion at Sept. 30, 2023, up $0.1 billion or less than 1% from $20.2 billion at Sept. 30, 2022 and down $1.3 billion or 6% from $21.6 billion at June 30, 2023.
Money market assets were a record $525.1 billion at Sept. 30, 2023, up $83.8 billion or 19% from $441.3 billion at Sept. 30, 2022 and up $16.1 billion or 3% from $509.0 billion at June 30, 2023. Money market fund assets were a record $384.9 billion at Sept. 30, 2023, up $75.0 billion or 24% from $309.9 billion at Sept. 30, 2022 and up $20.9 billion or 6% from $364.0 billion at June 30, 2023.
Financial Summary
Q3 2023 vs. Q3 2022
Revenue increased $21.5 million or 6% primarily due to an increase in revenue from money market assets and an increase in carried interest and performance fees of $10.8 million, including $7.5 million of carried interest from consolidated carried interest vehicles and is offset in compensation expense. These increases were partially offset by a decrease in revenue related to changes in the mix of average equity and fixed-income assets.
During Q3 2023, Federated Hermes derived 53% of its revenue from long-term assets (31% from equity, 12% from fixed-income, and 10% from alternative/private markets and multi-asset), 46% from money market assets, and 1% from sources other than managed assets.
Operating expenses increased $16.9 million or 6% primarily due to increased compensation expenses resulting from consolidated carried interest vehicles of $7.6 million.
Nonoperating income (expenses), net increased $7.1 million primarily due to an increase in investment yields due to rising interest rates and a larger decrease in the market value of investments in Q3 2022 compared to the decrease in Q3 2023.
Q3 2023 vs. Q2 2023
Revenue decreased $30.6 million or 7% primarily due to a decrease in carried interest and performance fees of $24.5 million, including $15.5 million of carried interest from consolidated carried interest vehicles and is offset in compensation expense. Revenue from money market assets decreased by $9.0 million, offset by an $8.2 million decrease in related distribution expense due to changes in asset levels, asset mix and product structures. These decreases were partially offset by an increase in revenue due to one additional day in Q3 2023.
Operating expenses decreased $33.6 million or 10% primarily due to decreased compensation expenses resulting from consolidated carried interest vehicles of $15.9 million and the decrease in distribution expense from money market assets mentioned above.
Nonoperating income (expenses), net decreased $2.6 million primarily due to a decrease in the market value of investments in Q3 2023 compared to Q2 2023.
YTD 2023 vs. YTD 2022
Revenue increased $146.2 million or 14% primarily due to the elimination of voluntary fee waivers related to certain money market funds in order for those funds to maintain positive or zero net yields (voluntary yield-related fee waivers), an increase in

    
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revenue from money market assets and an increase in carried interest and performance fees of $49.0 million, including $31.9 million of carried interest from consolidated carried interest vehicles and is offset in compensation expense. For further information on the waivers, see “Impact of voluntary yield-related fee waivers” below. These increases were partially offset by a decrease in revenue due to lower average long-term assets.
For the first nine months of 2023, Federated Hermes derived 53% of its revenue from long-term assets (30% from equity, 12% from fixed-income and 11% from alternative/private markets and multi-asset), 46% from money market assets, and 1% from sources other than managed assets.
Operating expenses increased $134.2 million or 17% primarily due to an increase in distribution expense mainly due to the elimination of voluntary yield-related fee waivers, increased compensation expenses resulting from consolidated carried interest vehicles of $32.8 million, and an increase in professional service fees.
Nonoperating income (expenses), net increased $51.0 million primarily due to an increase in the market value of investments in the first nine months of 2023 compared to a decrease in the market value of investments for the same period in 2022 and an increase in investment yields due to rising interest rates.
Impact of voluntary yield-related fee waivers
There were no voluntary yield-related fee waivers during the three and nine months ended Sept. 30, 2023, and no material voluntary yield-related fee waivers for the three months 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 expense 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.
Earnings call information
Federated Hermes will host an earnings conference call at 9 a.m. Eastern on Oct. 27, 2023. Investors are invited to listen to the earnings teleconference by calling 888-506-0062 (domestic) or 973-528-0011 (international) prior to the 9 a.m. start time. To listen online, go to the About section of FederatedHermes.com/us at least 15 minutes prior to register and join the call. A replay will be available at approximately 12:30 p.m. Eastern on Oct. 27, 2023. To access the telephone replay, dial 877-481-4010 (domestic) or 919-882-2331 (international) and enter access code 49196. The online replay will be available via FederatedHermes.com/us for one year.
About Federated Hermes
Federated Hermes, Inc. is a global leader in active, responsible investment management, with $715.2 billion in assets under management1. We deliver investment solutions that help investors target a broad range of outcomes and provide equity, fixed-income, alternative/private markets, multi-asset and liquidity management strategies to more than 10,000 institutions and intermediaries worldwide. Our clients include corporations, government entities, insurance companies, foundations and endowments, banks and broker/dealers. Headquartered in Pittsburgh, Federated Hermes has more than 2,000 employees in London, New York, Boston and offices worldwide.
Federated Hermes ranks in the top 7% of equity fund managers in the industry, the top 9% of money market fund managers and the top 11% of fixed-income fund managers2. Federated Hermes also ranks as the 8th-largest manager of model-delivered separately managed accounts3. For more information, including an analyst presentation, which is updated periodically, visit FederatedHermes.com/us.

    
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###
1) As of Sept. 30, 2023.
2) Morningstar, Sept. 30, 2023. Based on U.S. fund flows rankings.
3) Money Management Institute/Cerulli,Q2 2023.
Federated Securities Corp. is distributor of the Federated Hermes funds.
Separately managed accounts are made available through Federated Global Investment Management Corp., Federated Investment Counseling, Federated MDTA LLC, Hermes Fund Managers Ireland Limited, Hermes Investment Management Limited, and Hermes GPE LLP, each a registered investment advisor in one or more of the U.S., U.K. or Ireland.

Cautionary statements
Certain statements in this press release, such as those related to performance, investor preferences and demand, asset flows, asset mix, interest rates and fee waivers constitute or may constitute forward-looking statements, which involve known and unknown risks, uncertainties and other factors that may cause the actual results, levels of activity, performance or achievements of the company, or industry results, to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. Forward-looking statements can include statements that do not relate strictly to historical or current facts and are typically identified by words or phrases such as “trend,” “forecast,” “project,” “predict,” “potential,” “approximate,” “opportunity,” “believe,” “expect,” “anticipate,” “current,” “intention,” “estimate,” “position,” “projection,” “plan,” “assume,” “continue,” “remain,” “maintain,” “sustain,” “seek,” “achieve,” and similar expressions, or future or conditional verbs such as “will,” “would,” “should,” “could,” “can,” “may” and similar expressions. Any forward-looking statement, and Federated Hermes' level of business activity and financial results, are inherently subject to significant business, market, economic, competitive, regulatory and other risks and uncertainties, many of which are difficult to predict and beyond Federated Hermes’ control. Other risks and uncertainties include the ability of the company to predict the level of fee waivers and expenses in future quarters, predict whether performance fees or carried interest will be earned and retained, the ability of the company to sustain product demand, the timing and level of product sales and redemptions, market appreciation or depreciation, revenues, and asset levels, flows and mix, which could vary significantly depending on various factors, such as market conditions, investment performance and investor behavior. Other risks and uncertainties include the risk factors discussed in the company's annual and quarterly reports as filed with the Securities and Exchange Commission. As a result, no assurance can be given as to future results, levels of activity, performance or achievements, and neither the company nor any other person assumes responsibility for the accuracy and completeness, or updating, of such statements in the future.


    
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Unaudited Condensed Consolidated Statements of Income
(in thousands, except per share data)
Quarter Ended% Change Q3 2022 to Q3 2023Quarter Ended% Change Q2 2023 to Q3 2023
Sept. 30, 2023Sept. 30, 2022June 30, 2023
Revenue
Investment advisory fees, net$276,771 $263,644 5 %$310,337 (11) %
Administrative service fees, net—affiliates88,023 75,021 17 85,199 3 
Other service fees, net37,862 42,478 (11)37,696 0 
Total Revenue402,656 381,143 6 433,232 (7)
Operating Expenses
Compensation and related139,123 126,668 10 159,883 (13)
Distribution89,838 91,032 (1)97,086 (7)
Systems and communications21,213 19,294 10 22,074 (4)
Professional service fees17,561 14,203 24 19,099 (8)
Office and occupancy10,632 10,622 0 11,404 (7)
Advertising and promotional3,857 6,496 (41)5,109 (25)
Travel and related4,034 3,421 18 3,835 5 
Intangible asset related3,451 2,894 19 3,418 1 
Other11,523 9,733 18 12,935 (11)
Total Operating Expenses301,232 284,363 6 334,843 (10)
Operating Income101,424 96,780 5 98,389 3 
Nonoperating Income (Expenses)
Investment income (loss), net2,722 (4,226)164 5,289 (49)
Debt expense(3,133)(3,302)(5)(3,118)0 
Other, net(8)(38)79 (15)47 
Total Nonoperating Income (Expenses), net(419)(7,566)94 2,156 (119)
Income before income taxes101,005 89,214 13 100,545 0 
Income tax provision26,739 21,640 24 27,543 (3)
Net income including the noncontrolling interests in subsidiaries74,266 67,574 10 73,002 2 
Less: Net income (loss) attributable to the noncontrolling interests in subsidiaries(760)(1,905)60 827 (192)
Net Income$75,026 $69,479 8 %$72,175 4  %
Amounts Attributable to Federated Hermes, Inc.
Earnings Per Share1
Basic and diluted$0.86 $0.78 10 %$0.81 6  %
Weighted-Average Shares Outstanding
Basic83,710 84,531 84,930 
Diluted83,710 84,536 84,939 
Dividends Declared Per Share$0.28 $0.27 $0.28 
1) Unvested share-based awards that receive non-forfeitable dividend rights are deemed participating securities and are required to be considered in the computation of earnings per share under the "two-class method." As such, total net income of $3.3 million, $3.6 million and $3.5 million available to unvested restricted Federated Hermes shareholders for the quarterly periods ended Sept. 30, 2023, Sept. 30, 2022 and June 30, 2023, respectively, was excluded from the computation of earnings per share.

    
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Unaudited Condensed Consolidated Statements of Income
(in thousands, except per share data)
Nine Months Ended
Sept. 30, 2023Sept. 30, 2022% Change
Revenue
Investment advisory fees, net$851,089 $754,681 13 %
Administrative service fees, net—affiliates252,402 218,710 15 
Other service fees, net114,586 98,524 16 
Total Revenue1,218,077 1,071,915 14 
Operating Expenses
Compensation and related435,884 388,719 12 
Distribution280,258 223,837 25 
Systems and communications63,259 57,234 11 
Professional service fees52,881 41,647 27 
Office and occupancy34,910 32,457 8 
Advertising and promotional13,308 13,965 (5)
Travel and related11,101 8,543 30 
Intangible asset related10,194 9,319 9 
Other31,303 23,147 35 
Total Operating Expenses933,098 798,868 17 
Operating Income284,979 273,047 4 
Nonoperating Income (Expenses)
Investment income (loss), net18,322 (34,136)154 
Debt expense(9,377)(7,873)19 
Other, net101 31 226 
Total Nonoperating Income (Expenses), net9,046 (41,978)122 
Income before income taxes294,025 231,069 27 
Income tax provision75,291 58,140 29 
Net income including the noncontrolling interests in subsidiaries218,734 172,929 26 
Less: Net income (loss) attributable to the noncontrolling interests in subsidiaries1,932 (10,070)119 
Net Income$216,802 $182,999 18 %
Amounts Attributable to Federated Hermes, Inc.
Earnings Per Share1
Basic and diluted$2.44 $2.02 21 %
Weighted-Average Shares Outstanding
Basic84,499 86,109 
Diluted84,502 86,111 
Dividends Declared Per Share$0.83 $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 earnings per share under the "two-class method." As such, total net income of $10.3 million and $9.1 million available to unvested restricted Federated Hermes shareholders for the nine months ended Sept. 30, 2023 and Sept. 30, 2022, respectively, was excluded from the computation of earnings per share.




    
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Unaudited Condensed Consolidated Balance Sheets
(in thousands)Sept. 30, 2023Dec. 31, 2022
Assets
  Cash and other investments$554,433 $521,754 
  Other current assets157,227 129,277 
  Intangible assets, net, including goodwill1,203,527 1,209,574 
  Other long-term assets165,153 159,874 
  Total Assets$2,080,340 $2,020,479 
Liabilities, Redeemable Noncontrolling Interests and Equity
  Current liabilities$255,587 $257,413 
  Long-term debt347,777 347,581 
  Other long-term liabilities306,307 307,972 
  Redeemable noncontrolling interests70,631 61,821 
Equity excluding treasury stock1,573,370 1,411,055 
Treasury stock(473,332)(365,363)
  Total Liabilities, Redeemable Noncontrolling Interests and Equity$2,080,340 $2,020,479 



    
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Unaudited Changes in Long-Term Assets - By Asset Class
(in millions)Quarter EndedNine Months Ended
Sept. 30, 2023June 30, 2023Sept. 30, 2022Sept. 30, 2023Sept. 30, 2022
Equity
Beginning assets$82,992 $83,629 $80,988 $81,523 $96,716 
Sales1
3,897 4,869 5,133 14,397 18,720 
Redemptions1
(6,304)(5,697)(4,951)(16,737)(19,585)
Net sales (redemptions)1
(2,407)(828)182 (2,340)(865)
Net exchanges18 5 9 126 (145)
Impact of foreign exchange2
(532)71 (1,187)(353)(2,840)
Market gains and (losses)3
(2,756)115 (5,308)(1,641)(18,182)
Ending assets$77,315 $82,992 $74,684 $77,315 $74,684 
Fixed Income
Beginning assets$87,425 $87,461 $86,253 $86,743 $97,550 
Sales1
8,277 4,891 7,681 19,215 22,096 
Redemptions1
(5,133)(4,963)(6,584)(17,223)(24,971)
Net sales (redemptions)1
3,144 (72)1,097 1,992 (2,875)
Net exchanges(25)6 (17)(120)78 
Impact of foreign exchange2
(96)43 (231)(15)(560)
Market gains and (losses)3
(683)(13)(1,737)1,165 (8,828)
Ending assets$89,765 $87,425 $85,365 $89,765 $85,365 
Alternative/Private Markets
Beginning assets$21,602 $21,174 $21,785 $20,802 $22,920 
Sales1
660 643 946 2,568 2,706 
Redemptions1
(866)(745)(929)(2,403)(2,525)
Net sales (redemptions)1
(206)(102)17 165 181 
Net exchanges(3)(4)3 (6)7 
Impact of foreign exchange2
(762)539 (1,638)145 (3,830)
Market gains and (losses)3
(294)(5)15 (769)904 
Ending assets$20,337 $21,602 $20,182 $20,337 $20,182 
Multi-asset
Beginning assets$2,922 $2,973 $3,135 $2,989 $3,780 
Sales1
30 33 54 110 171 
Redemptions1
(119)(143)(132)(406)(407)
Net sales (redemptions)1
(89)(110)(78)(296)(236)
Net exchanges0 1 0 3 6 
Market gains and (losses)3
(105)58 (155)32 (648)
Ending assets$2,728 $2,922 $2,902 $2,728 $2,902 
Total Long-term Assets
Beginning assets$194,941 $195,237 $192,161 $192,057 $220,966 
Sales1
12,864 10,436 13,814 36,290 43,693 
Redemptions1
(12,422)(11,548)(12,596)(36,769)(47,488)
Net sales (redemptions)1
442 (1,112)1,218 (479)(3,795)
Net exchanges(10)8 (5)3 (54)
Impact of foreign exchange2
(1,390)653 (3,056)(223)(7,230)
Market gains and (losses)3
(3,838)155 (7,185)(1,213)(26,754)
Ending assets$190,145 $194,941 $183,133 $190,145 $183,133 
1) For certain accounts, Sales and Redemptions are calculated as the remaining difference between beginning and ending assets after the calculation of total investment return.
2) Reflects the impact of translating non-U.S. dollar denominated assets under management (AUM) into U.S. dollars for reporting purposes.
3) Reflects the approximate changes in the fair value of the securities held by portfolios and, to a lesser extent, reinvested dividends, distributions and net investment income.




    
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Unaudited Changes in Long-Term Assets - By Asset Class and Product Type
(in millions)
Quarter Ended
Sept. 30, 2023
EquityFixed IncomeAlternative / Private MarketsMulti-assetTotal
Funds
Separate Accounts1
Funds
Separate Accounts1
Funds
Separate Accounts1
Funds
Separate Accounts1
Funds.
Separate Accounts1
Beginning assets$44,383 $38,609 $43,884 $43,541 $13,338 $8,264 $2,782 $140 $104,387 $90,554 
Sales1,733 2,164 3,110 5,167 541 119 29 1 5,413 7,451 
Redemptions(3,254)(3,050)(3,794)(1,339)(856)(10)(114)(5)(8,018)(4,404)
Net sales (redemptions)(1,521)(886)(684)3,828 (315)109 (85)(4)(2,605)3,047 
Net exchanges3 15 0 (25)(3)0 0 0 0 (10)
Impact of foreign exchange2
(285)(247)(63)(33)(450)(312)0 0 (798)(592)
Market gains and (losses)3
(1,779)(977)(568)(115)(161)(133)(98)(7)(2,606)(1,232)
Ending assets$40,801 $36,514 $42,569 $47,196 $12,409 $7,928 $2,599 $129 $98,378 $91,767 
Nine Months Ended
Sept. 30, 2023
EquityFixed IncomeAlternative / Private MarketsMulti-assetTotal
Funds
Separate Accounts1
Funds
Separate Accounts1
Funds
Separate Accounts1
Funds
Separate Accounts1
Funds
Separate Accounts1
Beginning assets$43,342 $38,181 $43,180 $43,563 $13,050 $7,752 $2,851 $138 $102,423 $89,634 
Sales7,059 7,338 11,201 8,014 1,824 744 108 2 20,192 16,098 
Redemptions(9,798)(6,939)(12,082)(5,141)(2,154)(249)(391)(15)(24,425)(12,344)
Net sales (redemptions) (2,739)399 (881)2,873 (330)495 (283)(13)(4,233)3,754 
Net exchanges85 41 (95)(25)17 (23)3 0 10 (7)
Impact of foreign exchange2
(69)(284)(4)(11)96 49 0 0 23 (246)
Market gains and (losses)3
182 (1,823)369 796 (424)(345)28 4 155 (1,368)
Ending assets$40,801 $36,514 $42,569 $47,196 $12,409 $7,928 $2,599 $129 $98,378 $91,767 
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.









    
Federated Hermes reports Q3 2023 earnings
Page 10 of 13

Unaudited Changes in Long-Term Assets - By Product Type
(in millions)
Quarter EndedNine Months Ended
Sept. 30, 2023June 30, 2023Sept. 30, 2022Sept. 30, 2023Sept. 30, 2022
Total Fund Assets
Beginning assets$104,387 $104,220 $109,334 $102,423 $135,294 
Sales5,413 6,462 7,128 20,192 25,728 
Redemptions(8,018)(7,916)(10,056)(24,425)(36,153)
Net sales (redemptions)(2,605)(1,454)(2,928)(4,233)(10,425)
Net exchanges0 (5)(5)10 (53)
Impact of foreign exchange1
(798)487 (1,841)23 (4,434)
Market gains and (losses)2
(2,606)1,139 (3,567)155 (19,389)
Ending assets$98,378 $104,387 $100,993 $98,378 $100,993 
Total Separate Account Assets3
Beginning assets$90,554 $91,017 $82,827 $89,634 $85,672 
Sales4
7,451 3,974 6,686 16,098 17,965 
Redemptions4
(4,404)(3,632)(2,540)(12,344)(11,335)
Net sales (redemptions)4
3,047 342 4,146 3,754 6,630 
Net exchanges(10)13 0 (7)(1)
Impact of foreign exchange1
(592)166 (1,215)(246)(2,796)
Market gains and (losses)2
(1,232)(984)(3,618)(1,368)(7,365)
Ending assets$91,767 $90,554 $82,140 $91,767 $82,140 
Total Long-term Assets3
Beginning assets$194,941 $195,237 $192,161 $192,057 $220,966 
Sales4
12,864 10,436 13,814 36,290 43,693 
Redemptions4
(12,422)(11,548)(12,596)(36,769)(47,488)
Net sales (redemptions)4
442 (1,112)1,218 (479)(3,795)
Net exchanges(10)8 (5)3 (54)
Impact of foreign exchange1
(1,390)653 (3,056)(223)(7,230)
Market gains and (losses)2
(3,838)155 (7,185)(1,213)(26,754)
Ending assets$190,145 $194,941 $183,133 $190,145 $183,133 
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.




















    
Federated Hermes reports Q3 2023 earnings
Page 11 of 13
Unaudited Managed Assets

(in millions)
Sept. 30, 2023June 30, 2023March 31, 2023Dec. 31, 2022Sept. 30, 2022
By Asset Class
Equity$77,315 $82,992 $83,629 $81,523 $74,684 
Fixed-income89,765 87,425 87,461 86,743 85,365 
Alternative / private markets20,337 21,602 21,174 20,802 20,182 
Multi-asset2,728 2,922 2,973 2,989 2,902 
Total long-term assets190,145 194,941 195,237 192,057 183,133 
Money market525,085 509,017 505,800 476,844 441,294 
Total Managed Assets$715,230 $703,958 $701,037 $668,901 $624,427 
By Product Type
Funds:
Equity$40,801 $44,383 $44,732 $43,342 $40,633 
Fixed-income42,569 43,884 43,616 43,180 44,896 
Alternative / private markets12,409 13,338 13,040 13,050 12,680 
Multi-asset2,599 2,782 2,832 2,851 2,784 
Total long-term assets98,378 104,387 104,220 102,423 100,993 
Money market384,896 364,014 357,346 335,937 309,859 
Total Fund Assets$483,274 $468,401 $461,566 $438,360 $410,852 
Separate Accounts:
Equity$36,514 $38,609 $38,897 $38,181 $34,051 
Fixed-income47,196 43,541 43,845 43,563 40,469 
Alternative / private markets7,928 8,264 8,134 7,752 7,502 
Multi-asset129 140 141 138 118 
Total long-term assets91,767 90,554 91,017 89,634 82,140 
Money market140,189 145,003 148,454 140,907 131,435 
Total Separate Account Assets$231,956 $235,557 $239,471 $230,541 $213,575 
Total Managed Assets$715,230 $703,958 $701,037 $668,901 $624,427 

    
Federated Hermes reports Q3 2023 earnings
Page 12 of 13
Unaudited Average Managed AssetsQuarter Ended
(in millions)
Sept. 30, 2023June 30, 2023March 31, 2023Dec. 31, 2022Sept. 30, 2022
By Asset Class
Equity$82,203 $83,025 $84,155 $79,544 $81,809 
Fixed-income88,677 87,504 88,209 87,849 87,042 
Alternative / private markets21,413 21,411 20,938 20,926 21,193 
Multi-asset2,861 2,929 3,012 2,988 3,144 
Total long-term assets195,154 194,869 196,314 191,307 193,188 
Money market516,046 510,418 483,083 442,334 438,601 
Total Avg. Managed Assets$711,200 $705,287 $679,397 $633,641 $631,789 
By Product Type
Funds:
Equity$43,687 $44,218 $45,055 $43,131 $45,135 
Fixed-income43,437 43,827 43,961 44,099 47,489 
Alternative / private markets13,184 13,181 13,062 13,140 13,432 
Multi-asset2,724 2,787 2,869 2,855 3,012 
Total long-term assets103,032 104,013 104,947 103,225 109,068 
Money market373,088 362,608 333,358 309,232 301,940 
Total Avg. Fund Assets$476,120 $466,621 $438,305 $412,457 $411,008 
Separate Accounts:
Equity$38,516 $38,807 $39,100 $36,413 $36,674 
Fixed-income45,240 43,677 44,248 43,750 39,553 
Alternative / private markets8,229 8,230 7,876 7,786 7,761 
Multi-asset137 142 143 133 132 
Total long-term assets92,122 90,856 91,367 88,082 84,120 
Money market142,958 147,810 149,725 133,102 136,661 
Total Avg. Separate Account Assets$235,080 $238,666 $241,092 $221,184 $220,781 
Total Avg. Managed Assets$711,200 $705,287 $679,397 $633,641 $631,789 


    
Federated Hermes reports Q3 2023 earnings
Page 13 of 13
Unaudited Average Managed AssetsNine Months Ended
(in millions)Sept. 30, 2023Sept. 30, 2022
By Asset Class
Equity$83,128 $86,543 
Fixed-income88,130 90,419 
Alternative / private markets21,254 22,090 
Multi-asset2,934 3,368 
Total long-term assets195,446 202,420 
Money market503,182 429,878 
Total Avg. Managed Assets$698,628 $632,298 
By Product Type
Funds:
Equity$44,320 $48,353 
Fixed-income43,741 52,025 
Alternative / private markets13,143 14,158 
Multi-asset2,794 3,222 
Total long-term assets103,998 117,758 
Money market356,351 289,577 
Total Avg. Fund Assets$460,349 $407,335 
Separate Accounts:
Equity$38,808 $38,190 
Fixed-income44,389 38,394 
Alternative / private markets8,111 7,932 
Multi-asset140 146 
Total long-term assets91,448 84,662 
Money market146,831 140,301 
Total Avg. Separate Account Assets$238,279 $224,963 
Total Avg. Managed Assets$698,628 $632,298