Yahoo Finance

• Assets Under Management (AUM): Record AUM of $830 billion, with money market assets at $630 billion.

• Equity Assets: Decreased by $4.2 billion from Q3 due to net redemptions and FX impact.

• MDT Strategies: Assets reached $13 billion, up 70% from year-end 2023, with $1.2 billion in net sales in Q4.

• Fixed Income Assets: Decreased by $2.1 billion in Q4 due to market valuations and net redemptions.

• Money Market Assets: Reached a record high of $462 billion in funds, with total money market assets at $630 billion.

• Revenue: Increased by $16.2 million or 4% from the prior quarter.

• Operating Expenses: Increased by $17.5 million from Q3, mainly due to FX-related expenses.

• Cash and Investments: $641 million at year-end, with $588 million excluding noncontrolling interest.

• Tax Rate: Q4 tax rate was 25.4%, expected to be 26% to 28% for 2025.

• Warning! GuruFocus has detected 2 Warning Sign with FHI.

Release Date: January 31, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Federated Hermes Inc (NYSE:FHI) ended 2024 with record assets under management of $830 billion, driven by record money market assets of $630 billion.

• The MDT fundamental quant strategies saw strong performance, with assets reaching $13 billion at year-end, up 70% from the previous year.

• The company successfully launched four active ETFs and a new collective fund, accumulating approximately $424 million in assets.

• Money market fund assets reached a record high of $462 billion, with total money market assets increasing by about $37 billion in Q4.

• Federated Hermes Inc (NYSE:FHI) has a positive outlook for money market strategies due to favorable short-term interest rate conditions, supporting cash as an attractive asset class.

Negative Points

• Equity assets decreased by $4.2 billion in Q4 due to net redemptions and FX impacts.

• Fixed income assets decreased by about $2.1 billion in Q4, primarily due to market valuations and net redemptions.

• Alternative private markets assets decreased by $1.8 billion in Q4, mainly due to FX rates and net redemptions.

• Q4 operating expenses increased by $17.5 million from Q3, largely due to FX-related expense increases.

• The company's market share in money market mutual funds slightly decreased from 7.32% to 7.22% at the end of 2024.

Q & A Highlights

Q: Could you explain the trends affecting money market fund market share, particularly in comparison to other large asset managers? A: J. Christopher Donahue, CEO, noted that while there was a slight decrease in market share, it was not due to losing clients but rather the natural ebb and flow of large amounts of money. Deborah Cunningham, CIO, added that year-end is typically volatile, and the first quarter often sees weaker mutual fund flows, but this year has started strong, indicating a positive trend.