Q1 2025 Federated Hermes Inc Earnings Call Transcript
Key Points
- Federated Hermes Inc (FHI) ended Q1 with record assets under management of $840 billion, driven by record money market assets of $637 billion.
- Equity sales in the first quarter were strong, with net sales of $2.5 billion in MDT strategies, more than double the prior quarter's $1.2 billion.
- The company completed the acquisition of a majority interest in a UK renewable energy company, enhancing its private markets platform.
- Federated Hermes Inc (FHI) declared a $0.34 per share dividend, an increase of nearly 10% from the prior quarter dividend.
- The company repurchased over 3 million shares, or almost 4% of its stock, for about $120 million, indicating strong capital management.
- Total revenue for Q1 decreased slightly from the prior quarter due to lower revenue from equity assets and fewer days.
- The company's money market fund market share decreased slightly from about 7.22% at the end of 2024 to about 7.10% at the end of Q1 2025.
- Fixed income assets experienced net redemptions, with combined fixed income fund and SMAs having net redemptions of $888 million in the first three weeks of Q2.
- The Q1 tax rate of 23.6% was lower than expected due to non-recurring factors, but the expected tax rate for 2025 is higher, in the 25% to 28% range.
- The company faced substantial outflows in March due to corporate taxes and margin calls, impacting money market fund performance.
Greetings. Welcome to the Federated Hermes Q1 2025 analyst call and webcast. (Operator Instructions) Please note, this conference is being recorded.
I will now turn the conference over to your host, Ray Hanley, President of Federated Investors Management Company. You may begin.
Thank you, Holly. Hello and welcome to our call. Leading today's call will be Chris Donahue, CEO and President of Federated Hermes; and Tom Donahue, Chief Financial Officer. And joining us for the Q&A are Saker Nusseibeh, who is the CEO of Federated Hermes Limited; and Debbie Cunningham, our Chief Investment Officer for the money markets.
During today's call, we may make forward-looking statements, and we want to note that Federated Hermes actual results may be materially different than the results implied by such statements. Please review the risk disclosures in our SEC filings. No assurance can be given as to future results, and Federated Hermes assumes no duty to update any of these forward-looking
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