Q2 2025 Federated Hermes Inc Earnings Call Transcript
Key Points
- Federated Hermes Inc (FHI) achieved record assets under management of $846 billion, with significant gains in equity strategies.
- Equity assets increased by $8.1 billion or 10% from the prior quarter, with equity net sales of $1.8 billion representing an organic growth rate of just under 9%.
- The MDT fundamental quant strategies continued to perform well, with net sales of $3.8 billion in the second quarter.
- The company completed the acquisition of a majority interest in Rivington Energy Management Limited, enhancing its Private Markets platform.
- Federated Hermes Inc (FHI) is actively participating in the development of tokenized money market funds and digital asset infrastructure, highlighting its commitment to innovation in the digital asset space.
- Fixed income assets decreased by about $800 million or 1% in the second quarter due to net redemptions of $2.4 billion.
- Total Q2 carried interest and performance fees were significantly lower at $1.4 million compared to $5.9 million in the previous quarter.
- Operating expenses increased from the prior quarter, partly due to the absence of a $12.9 million VAT refund received in Q1.
- Money market separate accounts decreased by $5.9 billion, reflecting usual seasonal patterns.
- The restructuring of the UK Property Trust will result in $1.2 billion in redemptions in the third quarter.
Greetings, and welcome to the Federated Hermes, Inc. second-quarter 2025 analyst call and webcast. (Operator Instructions) Please note this conference is being recorded.
I will now turn the conference over to your host, Mr. Raymond Hanley. Sir, the floor is yours.
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. Joining us for the Q&A are Saker Nusseibeh, who is the CEO of Federated Hermes Limited; and Debbie Cunningham, the Chief Investment Officer for 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 statements.
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