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Federated Hermes, Inc. reports fourth quarter and full-year 2020 earnings

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- Q4 2020 earnings per diluted share of $0.93 ; full-year 2020 EPS of $3.23

- Total long-term assets under management reach record $199.1 billion

- Board declares $0.27 per share quarterly dividend

PITTSBURGH , Jan. 28, 2021 /PRNewswire/ -- Federated Hermes, Inc. (NYSE: FHI), a global leader in active, responsible investing, today reported earnings per diluted share (EPS) for Q4 2020 of $0.93 , compared to $0.81 for the same quarter last year, on net income of $95.2 million for Q4 2020, compared to $82.1 million for Q4 2019. Full-year 2020 EPS was $3.23 , compared to $2.69 for 2019 on net income of $326.4 million for 2020, compared to $272.3 million for 2019.

Federated Hermes' total managed assets were $619.4 billion at Dec. 31, 2020 , up $43.5 billion or 8% from $575.9 billion at Dec. 31, 2019 and up $4.6 billion or 1% from $614.8 billion at Sept. 30, 2020. Average managed assets for Q4 2020 were $610.5 billion , up $60.4 billion or 11% from $550.1 billion reported for Q4 2019 and down $17.6 billion or 3% from $628.1 billion reported for Q3 2020.

"Federated Hermes reached record assets in equity, fixed income and alternative/private markets. Fixed-income assets increased by 22 percent in 2020 on strong net sales for short-duration, high-yield and total return strategies," said J. Christopher Donahue , president and chief executive officer. "Federated Hermes also saw record gross sales for the year in equity funds, which earned strong performance across growth, value, dividend income and international strategies."

Federated Hermes' board of directors declared a quarterly dividend of $0.27 per share. The dividend is payable on Feb. 12, 2021 to shareholders of record as of Feb. 5, 2021 . During Q4 2020, Federated Hermes purchased 515,700 shares of Federated Hermes class B common stock for $13.8 million , bringing the total shares of Class B common stock purchased in 2020 to 2,940,267 shares for $67.9 million .

Federated Hermes' equity assets were a record $91.8 billion at Dec. 31, 2020 , up $2.8 billion or 3% from $89.0 billion at Dec. 31, 2019 and up $11.4 billion or 14% from $80.4 billion at Sept. 30, 2020. Top-selling equity funds on a net basis during Q4 2020 were Federated Hermes Kaufmann Small Cap Fund, Federated Hermes Global Emerging Markets Equity Fund, Federated Hermes SDG Engagement Equity Fund (UCITS), Federated Hermes Global Equity ESG Fund and Federated Hermes Impact Opportunities Equity Fund.

Federated Hermes' fixed-income assets were a record $84.3 billion at Dec. 31, 2020 , up $15.3 billion or 22% from $69.0 billion at Dec. 31, 2019 and up $4.8 billion or 6% from $79.5 billion at Sept. 30, 2020. Top-selling fixed-income funds on a net basis during Q4 2020 were Federated Hermes Ultrashort Bond Fund, Federated Hermes Institutional High Yield Bond Fund, Federated Hermes Short-Intermediate Total Return Bond Fund, Federated Hermes Total Return Bond Fund and Federated Hermes Short-Term Income Fund.

Federated Hermes' alternative/private markets assets were a record $19.1 billion at Dec. 31, 2020 , up $1.0 billion or 5% from $18.1 billion at both Dec. 31, 2019 and Sept. 30, 2020.

Federated Hermes' money market assets were $420.3 billion at Dec. 31, 2020 , up $24.8 billion or 6% from $395.5 billion at Dec. 31, 2019 and down $12.7 billion or 3% from $433.0 billion at Sept. 30, 2020. Money market mutual fund assets were $301.9 billion at Dec. 31, 2020 , up $15.3 billion or 5% from $286.6 billion at Dec. 31, 2019 and down $24.0 billion or 7% from $325.9 billion at Sept. 30, 2020.  Federated Hermes' money market separate account assets were $118.5 billion at Dec. 31, 2020 , up $9.6 billion or 9% from $108.9 billion at Dec. 31, 2019 and up $11.5 billion or 11% from $107.0 billion at Sept. 30, 2020.

Financial Summary

Q4 2020 vs. Q4 2019

Revenue increased $5.9 million or 2% primarily due to higher average money market, equity and fixed-income assets. Revenue also increased as a result of revenue from a previously nonconsolidated entity being recorded in operating income beginning March 2020 and an increase in performance fees. These increases in revenue were partially offset by voluntary fee waivers related to certain money market funds in order for those funds to maintain positive or zero net yields (voluntary yield-related fee waivers).  See "Impact of voluntary yield-related fee waivers."

During Q4 2020, Federated Hermes derived 67% of its revenue from long-term assets (42% from equity assets, 15% from fixed-income assets and 10% from alternative/private markets and multi-asset), 32% from money market assets, and 1% from sources other than managed assets.

Operating expenses decreased $6.1 million or 2% primarily due to decreased distribution expenses primarily resulting from voluntary yield-related fee waivers, partially offset by increases in compensation expense.

Nonoperating income (expenses), net increased $5.8 million or 65% primarily due to an increase in the market value of investments, partially offset by revenue of a previously nonconsolidated entity being recorded in operating revenue beginning March 2020 .

Q4 2020 vs. Q3 2020

Revenue decreased slightly due to an increase in voluntary yield-related fee waivers and lower average money market assets, partially offset by higher average long-term assets, led by equity and fixed-income assets, and an increase in performance fees.

Operating expenses decreased by $1.9 million or 1% primarily due to decreased distribution expenses resulting from higher voluntary yield-related fee waivers, partially offset by increases in compensation expense.

Nonoperating income (expenses), net increased $8.4 million or 136% primarily due to an increase in the market value of investments.

2020 vs. 2019

Revenue increased $121.4 million or 9% primarily due to higher average money market and fixed-income assets, a change in the mix of equity assets, revenue of a previously nonconsolidated entity being recorded in operating revenue beginning March 2020 and an increase in performance fees. These increases were partially offset by voluntary yield-related fee waivers.

During 2020, Federated Hermes derived 59% of its revenue from long-term assets (38% from equity assets, 13% from fixed-income assets and 8% from alternative/private markets and multi-asset), 40% from money market assets, and 1% from sources other than managed assets.   

Operating expenses increased by $51.2 million or 5% primarily due to increased incentive compensation expense and an increase due to expenses of a previously nonconsolidated entity being recorded in expenses beginning March 2020 . These increases were partially offset by a decrease in distribution expenses as a result of voluntary yield-related fee waivers.

Nonoperating income (expenses), net increased $10.6 million or 61% primarily due to an increase in the market value of investments and a gain from a fair value adjustment to the equity investment of a previously nonconsolidated entity. These increases were partially offset by revenue of this previously nonconsolidated entity being recorded in operating revenue beginning March 2020 .

Impact of voluntary yield-related fee waivers

For Q4 2020 and full-year 2020, voluntary yield-related fee waivers totaled $56.1 million and $113.0 million , respectively. These fee waivers were largely offset by related reductions in distribution expenses of $47.4 million and $98.4 million , respectively, such that the net negative pre-tax impact to Federated Hermes was $8.7 million and $14.6 million , respectively.

Federated Hermes' level of business activity and financial results are dependent upon many factors, including market conditions, investment performance and investor behavior. These factors and others, including asset levels and mix, product sales and redemptions, market appreciation or depreciation, revenues, fee waivers, expenses and regulatory changes, can significantly impact Federated Hermes' business activity levels and financial results. Risk factors and uncertainties that can influence Federated Hermes' financial results are discussed in the company's annual and quarterly reports as filed with the Securities and Exchange Commission (SEC).

Federated Hermes will host an earnings conference call at 9 a.m. Eastern on Jan. 29, 2021 . Investors are invited to listen to the earnings teleconference by calling 877-407-0782 (domestic) or 201-689-8567 (international) prior to the 9 a.m. start time. To listen online, go to the Investor Relations section and the Analyst Information tab of FederatedHermes.com at least 15 minutes prior to register and join the call. A replay will be available at approximately 12:30 p.m. Eastern on Jan. 29, 2021 . To access the telephone replay, dial 877-481-4010 (domestic) or 919-882-2331 (international) and enter access code 39442. The online replay will be available via FederatedHermes.com for one year.

Federated Hermes, Inc. is a leading global investment manager with $619.4 billion in assets under management as of Dec. 31, 2020 . Our investment solutions span 163 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 Hermes' more than 1,900 employees include those in London , New York , Boston and several other offices worldwide.

Federated Hermes ranks in the top 6% of equity fund managers in the industry, the top 9% of money market fund managers and the top 11% of fixed-income fund managers 1 . Federated Hermes also ranks as the 6th-largest manager of model-delivered SMAs 2 . For more information, including an analyst presentation, visit FederatedHermes.com .

###

1)  ISS Market Intelligence (SIMFUND), Dec. 31, 2020 . Based on assets under management in U.S. open-end funds.
2) Money Management Institute/Cerulli Associates, Q3 2020.
Federated Securities Corp. is distributor of the Federated Hermes funds. 
Separately managed accounts are made available through Federated Global Investment Management Corp., Federated Investment Counseling, Federated MDTA LLC, Hermes Fund Managers Ireland Limited, Hermes Investment Management Limited, and Hermes GPE LLP, each a registered investment 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 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. 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 of such statements in the future.

 

Unaudited Condensed Consolidated Statements of Income

(in thousands, except per share data)







Quarter Ended

% Change Q4
2019 to Q4
2020

Quarter Ended

 % Change Q3
2020 to Q4
2020


Dec. 31, 2020

Dec. 31, 2019

Sept. 30, 2020

Revenue






Investment advisory fees, net

$

265,593


$

243,631


9

%

$

260,089


2

%

Administrative service fees, net

79,192


69,568


14


83,028


(5)


Other service fees, net

19,133


44,826


(57)


21,338


(10)


Total Revenue

363,918


358,025


2


364,455


0








Operating Expenses






Compensation and related

138,296


111,436


24


126,186


10


Distribution

59,419


92,950


(36)


73,726


(19)


Systems and communications

18,518


14,731


26


16,193


14


Professional service fees

13,961


12,269


14


14,006


0


Office and occupancy

6,436


11,643


(45)


10,578


(39)


Advertising and promotional

4,853


4,785


1


2,921


66


Travel and related

540


4,180


(87)


542


0


Other

7,120


3,240


120


6,922


3


Total Operating Expenses

249,143


255,234


(2)


251,074


(1)


Operating Income

114,775


102,791


12


113,381


1








Nonoperating Income (Expenses)






Investment income (loss), net

15,175


4,737


220


6,622


129


Debt expense

(468)


(1,066)


(56)


(494)


(5)


Other, net

(27)


5,209


(101)


103


(126)


Total Nonoperating Income (Expenses), net

14,680


8,880


65


6,231


136


Income before income taxes

129,455


111,671


16


119,612


8


Income tax provision

28,183


26,582


6


32,928


(14)


Net income including the noncontrolling interests in subsidiaries

101,272


85,089


19


86,684


17


Less: Net income attributable to the noncontrolling interests in
subsidiaries

6,104


2,982


105


862


NM


Net Income

$

95,168


$

82,107


16

%

$

85,822


11

%







Amounts Attributable to Federated Hermes, Inc.






Earnings Per Share 1






Basic

$

0.94


$

0.81


16

%

$

0.86


9

%

Diluted

$

0.93


$

0.81


15

%

$

0.85


9

%

Weighted-Average Shares Outstanding






Basic and diluted

95,504


97,403



96,039



Dividends Declared Per Share

$

1.27


$

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 $5.0 million, $2.9 million and $3.4 million available to unvested restricted Federated Hermes shareholders for the quarterly periods ended Dec. 31, 2020, Dec. 31, 2019 and Sept. 30, 2020, respectively, was excluded from the computation of basic earnings per share. In addition to the amounts excluded from the basic earnings per share calculation, the computation of diluted earnings per share excludes net income available to unvested shareholders of a nonpublic consolidated subsidiary.

 

Unaudited Condensed Consolidated Statements of Income

(in thousands, except per share data)









Year Ended



Dec. 31, 2020


Dec. 31, 2019


% Change

Revenue







Investment advisory fees, net


$

1,011,467



$

907,605



11

%

Administrative service fees, netaffiliates


318,152



245,887



29


Other service fees, net


118,649



173,402



(32)


     Total Revenue


1,448,268



1,326,894



9









Operating Expenses







Compensation and related


503,400



442,147



14


Distribution


318,343



340,663



(7)


Systems and communications


64,698



52,988



22


Professional service fees


55,123



43,714



26


Office and occupancy


38,975



44,926



(13)


Advertising and promotional


15,834



17,774



(11)


Travel and related


4,566



16,645



(73)


Other


29,178



20,110



45


     Total Operating Expenses


1,030,117



978,967



5


Operating Income


418,151



347,927



20









Nonoperating Income (Expenses)







Investment income (loss), net


22,186



9,416



136


Debt expense


(2,678)



(5,037)



(47)


Other, net


8,398



12,965



(35)


     Total Nonoperating Income (Expenses), net


27,906



17,344



61


Income before income taxes


446,057



365,271



22


Income tax provision


110,035



88,146



25


Net income including the noncontrolling interests in subsidiaries


336,022



277,125



21


Less: Net income attributable to the noncontrolling
interests in subsidiaries


9,658



4,786



102


Net Income


$

326,364



$

272,339



20

%








Amounts Attributable to Federated Hermes, Inc.







Earnings Per Share 1







Basic


$

3.25



$

2.69



21

%

Diluted


$

3.23



$

2.69



20

%

Weighted-Average Shares Outstanding







    Basic and diluted


96,419



97,259




Dividends Declared Per Share


$

2.08



$

1.08






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 $12.8 million and $10.2 million available to unvested restricted Federated Hermes shareholders for the years ended Dec. 31, 2020 and Dec. 31, 2019, respectively, was excluded from the computation of basic earnings per share. In addition to the amounts excluded from the basic earnings per share calculation, the computation of diluted earnings per share excludes net income available to unvested shareholders of a nonpublic consolidated subsidiary.

 

Unaudited Condensed Consolidated Balance Sheets



(in thousands)

Dec. 31, 2020

Dec. 31, 2019

Assets



  Cash and other investments

$

438,771


$

340,635


  Other current assets

136,572


120,649


  Intangible assets, net, including goodwill

1,282,020


1,220,762


  Other long-term assets

203,476


198,085


...

Total Assets

$

2,060,839


$

1,880,131





Liabilities, Redeemable Noncontrolling Interests and Equity



Current liabilities

$

265,446


$

230,713


Long-term debt

75,000


100,000


Other long-term liabilities

346,409


296,052


Redeemable noncontrolling interests

236,987


212,086


Equity excluding treasury stock

1,461,728


1,322,312


Treasury stock

(324,731)


(281,032)


Total Liabilities, Redeemable Noncontrolling Interests and Equity

$

2,060,839


$

1,880,131


Unaudited Changes in Long-Term Assets - By Asset Class

(in millions)

Quarter Ended


Year Ended


Dec. 31, 2020

Sept. 30, 2020

Dec. 31, 2019


Dec. 31, 2020

Dec. 31, 2019

Equity







Beginning assets

$

80,405


$

76,859


$

80,750



$

89,011


$

72,497


Sales1

5,618


4,186


5,092



20,463


20,222


Redemptions1

(6,047)


(5,552)


(5,080)



(26,721)


(21,794)


Net sales (redemptions)1

(429)


(1,366)


12



(6,258)


(1,572)


Net exchanges

(8)


31


(12)



(70)


181


Acquisitions/(dispositions)

0


0


2,244



(71)


2,244


Impact of foreign exchange2

946


578


667



1,195


(28)


Market gains and (losses)3

10,874


4,303


5,350



7,981


15,689


Ending assets

$

91,788


$

80,405


$

89,011



$

91,788


$

89,011









Fixed Income5







Beginning assets

$

79,546


$

73,143


$

65,824



$

69,023


$

63,158


Sales1

9,046


9,859


6,010



37,283


21,424


Redemptions1

(6,046)


(4,897)


(4,603)



(26,138)


(21,543)


Net sales (redemptions)1

3,000


4,962


1,407



11,145


(119)


Net exchanges

(10)


(36)


6



(15)


(208)


Acquisitions/(dispositions)

0


0


450



(1)


450


Impact of foreign exchange2

181


135


184



190


60


Market gains and (losses)3

1,560


1,342


1,152



3,935


5,682


Ending assets

$

84,277


$

79,546


$

69,023



$

84,277


$

69,023









Alternative / Private Markets4







Beginning assets

$

18,146


$

17,485


$

17,156



$

18,102


$

18,318


Sales1

574


586


426



2,840


1,443


Redemptions1

(661)


(411)


(486)



(2,615)


(2,459)


Net sales (redemptions)1

(87)


175


(60)



225


(1,016)


Net exchanges

(3)


0


(1)



(4)


(65)


Acquisitions/(dispositions)

0


0


0



452


0


Impact of foreign exchange2

1,061


708


1,302



615


694


Market gains and (losses)3

(33)


(222)


(295)



(306)


171


Ending assets

$

19,084


$

18,146


$

18,102



$

19,084


$

18,102









Multi-asset







Beginning assets

$

3,737


$

3,705


$

4,140



$

4,199


$

4,093


Sales1

50


45


85



241


332


Redemptions1

(166)


(155)


(206)



(724)


(893)


Net sales (redemptions)1

(116)


(110)


(121)



(483)


(561)


Net exchanges

3


(4)


(4)



(20)


55


Acquisitions/(dispositions)

0


0


11



0


11


Impact of foreign exchange2

0


1


0



1


0


Market gains and (losses)3

324


145


173



251


601


Ending assets

$

3,948


$

3,737


$

4,199



$

3,948


$

4,199









Total Long-term Assets4,5







Beginning assets

$

181,834


$

171,192


$

167,870



$

180,335


$

158,066


Sales1,5

15,288


14,676


11,613



60,827


43,421


Redemptions1,5

(12,920)


(11,015)


(10,375)



(56,198)


(46,689)


Net sales (redemptions)1,5

2,368


3,661


1,238



4,629


(3,268)


Net exchanges

(18)


(9)


(11)



(109)


(37)


Acquisitions/(dispositions)

0


0


2,705



380


2,705


Impact of foreign exchange2

2,188


1,422


2,153



2,001


726


Market gains and (losses)3,5

12,725


5,568


$

6,380



11,861


22,143


Ending assets

$

199,097


$

181,834


$

180,335



$

199,097


$

180,335




1)

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

2)

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

3)

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

4)

The balance at Dec. 31, 2019 includes $8.2 billion of assets managed by a previously nonconsolidated entity, Hermes GPE LLP, in which Federated Hermes held an equity method investment. As of March 1, 2020, Hermes GPE LLP is a consolidated subsidiary as a result of Federated Hermes' acquisition of the remaining equity interests in Hermes GPE LLP.

5)

For one fixed-income separate account, sales, redemptions, net sales (redemptions) and market gains and (losses) were previously incorrectly reported for the quarters ended March 31, 2020 and June 30, 2020. Total assets were reported correctly and were not impacted. The year ended Dec. 31, 2020, includes corrections that increased redemptions by $390 million and decreased sales by $1.1 billion, with the offset increasing market gains and losses by $1.5 billion.

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

(in millions)



Quarter Ended


Dec. 31, 2020


Equity

Fixed Income

Alternative / Private
Markets

Multi-asset

Total


Funds

Separate
Accounts1

Funds

Separate
Accounts1

Funds

Separate
Accounts1

Funds

Separate
Accounts1

Funds

Separate
Accounts1

Beginning assets

$

46,093


$

34,312


$

49,779


$

29,767


$

11,393


$

6,753


$

3,546


$

191


$

110,811


$

71,023


Sales

4,034


1,584


7,642


1,404


478


96


50


0


12,204


3,084


Redemptions

(3,244)


(2,803)


(5,090)


(956)


(536)


(125)


(150)


(16)


(9,020)


(3,900)


Net sales (redemptions)

790


(1,219)


2,552


448


(58)


(29)


(100)


(16)


3,184


(816)


Net exchanges

(8)


0


(11)


1


(3)


0


4


(1)


(18)


0


Impact of foreign exchange2

448


498


152


29


658


403


0


0


1,258


930


Market gains and (losses)3

6,989


3,885


1,085


475


110


(143)


294


30


8,478


4,247


Ending assets

$

54,312


$

37,476


$

53,557


$

30,720


$

12,100


$

6,984


$

3,744


$

204


$

123,713


$

75,384














Year Ended


Dec. 31, 2020


Equity

Fixed Income

Alternative / Private
Markets

Multi-asset

Total


Funds

Separate
Accounts1

Funds

Separate
Accounts1,4

Funds

Separate
Accounts1

Funds

Separate
Accounts1

Funds

Separate
Accounts1,4

Beginning assets

$

48,112


$

40,899


$

44,223


$

24,800


$

11,389


$

6,713


$

4,000


$

199


$

107,724


$

72,611


Sales4

14,457


6,006


29,453


7,830


2,277


563


214


27


46,401


14,426


Redemptions4

(15,675)


(11,046)


(22,564)


(3,574)


(2,047)


(568)


(688)


(36)


(40,974)


(15,224)


Net sales (redemptions)4

(1,218)


(5,040)


6,889


4,256


230


(5)


(474)


(9)


5,427


(798)


Net exchanges

(64)


(6)


(16)


1


(4)


0


(19)


(1)


(103)


(6)


Acquisitions/(dispositions)

0


(71)


0


(1)


0


452


0


0


0


380


Impact of foreign exchange2

509


686


129


61


400


215


0


1


1,038


963


Market gains and (losses)3 ,4

6,973


1,008


2,332


1,603


85


(391)


237


14


9,627


2,234


Ending assets

$

54,312


$

37,476


$

53,557


$

30,720


$

12,100


$

6,984


$

3,744


$

204


$

123,713


$

75,384




1)

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

2)

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

3)

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

4)

For one fixed-income separate account, sales, redemptions, net sales (redemptions) and market gains and (losses) were previously incorrectly reported for the quarters ended March 31, 2020 and June 30, 2020. Total assets were reported correctly and were not impacted. The year ended Dec. 31, 2020, includes corrections that increased redemptions by $390 million and decreased sales by $1.1 billion, with the offset increasing market gains and losses by $1.5 billion.

Unaudited Changes in Long-Term Assets - By Product Type

(in millions)





Quarter Ended


Year Ended


Dec. 31, 2020

Sept. 30, 2020

Dec. 31, 2019


Dec. 31, 2020

Dec. 31, 2019








Total Fund Assets1







Beginning assets

$

110,811


$

104,322


$

99,682



$

107,724


$

92,359


Sales

12,204


10,635


8,165



46,401


30,489


Redemptions

(9,020)


(8,328)


(7,296)



(40,974)


(30,653)


Net sales (redemptions)

3,184


2,307


869



5,427


(164)


Net exchanges

(18)


(9)


69



(103)


73


Acquisitions/(dispositions)

0


0


2,652



0


2,652


Impact of foreign exchange2

1,258


851


1,364



1,038


556


Market gains and (losses)3

8,478


3,340


3,088



9,627


12,248


Ending assets

$

123,713


$

110,811


$

107,724



$

123,713


$

107,724









Total Separate Accounts Assets4,6







Beginning assets

$

71,023


$

66,870


$

68,188



$

72,611


$

65,707


Sales5,6

3,084


4,041


3,448



14,426


12,932


Redemptions5,6

(3,900)


(2,687)


(3,079)



(15,224)


(16,036)


Net sales (redemptions)5, 6

(816)


1,354


369



(798)


(3,104)


Net exchanges

0


0


(80)



(6)


(110)


Acquisitions/(dispositions)

0


0


53



380


53


Impact of foreign exchange2

930


571


789



963


170


Market gains and (losses)3,6

4,247


2,228


3,292



2,234


9,895


Ending assets

$

75,384


$

71,023


$

72,611



$

75,384


$

72,611









Total Long-term Assets1,4, 6







Beginning assets

$

181,834


$

171,192


$

167,870



$

180,335


$

158,066


Sales5,6

15,288


14,676


11,613



60,827


43,421


Redemptions5, 6

(12,920)


(11,015)


(10,375)



(56,198)


(46,689)


Net sales (redemptions)5,6

2,368


3,661


1,238



4,629


(3,268)


Net exchanges

(18)


(9)


(11)



(109)


(37)


Acquisitions/(dispositions)

0


0


2,705



380


2,705


Impact of foreign exchange2

2,188


1,422


2,153



2,001


726


Market gains and (losses)3,6

12,725


5,568


6,380



11,861


22,143


Ending assets

$

199,097


$

181,834


$

180,335



$

199,097


$

180,335




1)

The balance at Dec. 31, 2019 includes $8.2 billion of assets managed by a previously nonconsolidated entity, Hermes GPE LLP, in which Federated Hermes held an equity method investment. As of March 1, 2020, Hermes GPE LLP is a consolidated subsidiary as a result of Federated Hermes' acquisition of the remaining equity interests in Hermes GPE LLP.

2)

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

3)

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

4)

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

5)

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

6)

For one fixed-income separate account, sales, redemptions, net sales (redemptions) and market gains and (losses) were previously incorrectly reported for the quarters ended March 31, 2020 and June 30, 2020. Total assets were reported correctly and were not impacted. The year ended Dec. 31, 2020, includes corrections that increased redemptions by $390 million and decreased sales by $1.1 billion, with the offset increasing market gains and losses by $1.5 billion.

Unaudited Managed Assets
(in millions)

Dec. 31, 2020

Sept. 30, 2020

June 30, 2020

March 31, 2020

Dec. 31, 2019

By Asset Class






Equity

$

91,788


$

80,405


$

76,859


$

68,239


$

89,011


Fixed-income

84,277


79,546


73,143


64,715


69,023


Alternative / private markets1

19,084


18,146


17,485


18,061


18,102


Multi-asset

3,948


3,737


3,705


3,494


4,199


Total long-term assets

199,097


181,834


171,192


154,509


180,335


Money market

420,333


432,952


457,624


451,330


395,539


Total Managed Assets

$

619,430


$

614,786


$

628,816


$

605,839


$

575,874








By Product Type






Funds:






Equity

$

54,312


$

46,093


$

43,723


$

36,955


$

48,112


Fixed-income

53,557


49,779


46,046


40,601


44,223


Alternative / private markets1

12,100


11,393


11,037


11,365


11,389


Multi-asset

3,744


3,546


3,516


3,330


4,000


Total long-term assets

123,713


110,811


104,322


92,251


107,724


Money market

301,855


325,940


344,846


336,133


286,612


Total Fund Assets

$

425,568


$

436,751


$

449,168


$

428,384


$

394,336


Separate Accounts:






Equity

$

37,476


$

34,312


$

33,136


$

31,284


$

40,899


Fixed-income

30,720


29,767


27,097


24,114


24,800


Alternative / private markets

6,984


6,753


6,448


6,696


6,713


Multi-asset

204


191


189


164


199


Total long-term assets

75,384


71,023


66,870


62,258


72,611


Money market

118,478


107,012


112,778


115,197


108,927


Total Separate Account Assets

$

193,862


$

178,035


$

179,648


$

177,455


$

181,538


Total Managed Assets

$

619,430


$

614,786


$

628,816


$

605,839


$

575,874




1)

The balance at Dec. 31, 2019 includes $8.2 billion of assets managed by a previously nonconsolidated entity, Hermes GPE LLP, in which Federated Hermes held an equity method investment. As of March 1, 2020, Hermes GPE LLP is a consolidated subsidiary as a result of Federated Hermes' acquisition of the remaining equity interests in Hermes GPE LLP.

Unaudited Average Managed Assets

Quarter Ended

(in millions)

Dec. 31, 2020

Sept. 30, 2020

June 30, 2020

March 31, 2020

Dec. 31, 2019

By Asset Class






Equity

$

85,572


$

80,403


$

73,620


$

82,767


$

84,448


Fixed-income

82,144


76,798


69,603


69,068


67,602


Alternative / private markets1

18,549


18,270


18,022


17,983


17,838


Multi-asset

3,831


3,786


3,630


4,006


4,149


Total long-term assets

190,096


179,257


164,875


173,824


174,037


Money market

420,436


448,795


471,984


406,365


376,029


Total Avg. Managed Assets

$

610,532


$

628,052


$

636,859


$

580,189


$

550,066


By Product Type






Funds:






Equity

$

50,022


$

46,020


$

41,301


$

44,996


$

44,984


Fixed-income

51,934


48,418


43,229


44,017


43,304


Alternative / private markets1

11,670


11,539


11,345


11,143


11,283


Multi-asset

3,634


3,590


3,453


3,814


3,956


Total long-term assets

117,260


109,567


99,328


103,970


103,527


Money market

311,769


338,814


356,736


290,641


274,116


Total Avg. Fund Assets

$

429,029


$

448,381


$

456,064


$

394,611


$

377,643


Separate Accounts:






Equity

$

35,550


$

34,383


$

32,319


$

37,771


$

39,464


Fixed-income

30,210


28,380


26,374


25,051


24,298


Alternative / private markets

6,879


6,731


6,677


6,840


6,555


Multi-asset

197


196


177


192


193


Total long-term assets

72,836


69,690


65,547


69,854


70,510


Money market

108,667


109,981


115,248


115,724


101,913


Total Avg. Separate Account Assets

$

181,503


$

179,671


$

180,795


$

185,578


$

172,423


Total Avg. Managed Assets

$

610,532


$

628,052


$

636,859


$

580,189


$

550,066




1)

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


Unaudited Average Managed Assets


Year Ended

(in millions)


Dec. 31, 2020


Dec. 31, 2019

By Asset Class





Equity


$

80,591



$

81,212


Fixed-income


74,403



65,375


Alternative / private markets1


18,206



17,896


Multi-asset


3,813



4,192


Total long-term assets


177,013



168,675


Money market


436,895



340,505


Total Avg. Managed Assets


$

613,908



$

509,180


By Product Type





Funds:





Equity


$

45,585



$

42,712


Fixed-income


46,899



41,938


Alternative / private markets1


11,424



11,317


Multi-asset


3,622



4,003


Total long-term assets


107,530



99,970


Money market


324,490



238,876


Total Avg. Fund Assets


$

432,020



$

338,846


Separate Accounts:





Equity


$

35,006



$

38,500


Fixed-income


27,504



23,437


Alternative / private markets


6,782



6,579


Multi-asset


191



189


Total long-term assets


69,483



68,705


Money market


112,405



101,629


Total Avg. Separate Account Assets


$

181,888



$

170,334


Total Avg. Managed Assets


$

613,908



$

509,180




1)

The average balance at Dec. 31, 2019 includes $8.2 billion of assets managed by a previously nonconsolidated entity, Hermes GPE LLP, in which Federated Hermes held an equity method investment. As of March 1, 2020, Hermes GPE LLP is a consolidated subsidiary as a result of Federated Hermes' acquisition of the remaining equity interests in Hermes GPE LLP.

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SOURCE Federated Hermes, Inc.