Q4 2025 Federated Hermes Inc Earnings Call Transcript
Key Points
- Federated Hermes Inc (FHI) ended the year with a record assets under management of $903 billion, driven by gains in money market and equity strategies.
- Equity assets increased by $3.2 billion in Q4, with record gross equity sales of $31 billion for 2025.
- MDT strategies achieved record sales, with $19.1 billion in gross sales and $13 billion in net sales for 2025.
- The company launched the MDT U.S. Equity UCITS fund, which saw strong demand with over $500 million in net sales.
- Money market assets reached a record high of $683 billion, reflecting favorable market conditions for cash as an asset class.
- Fixed income assets decreased by $1.7 billion in Q4, with net redemptions of $2.8 billion.
- The company's market share in money market funds slightly decreased from 7.1% to 7% by the end of 2025.
- Q4 operating expenses increased by $7.3 million, primarily due to higher distribution expenses.
- Transaction costs from the FCP acquisition were $1.3 million in Q4, with additional costs expected in 2026.
- The effective tax rate increased to 24.4%, with an estimated range of 25% to 28% for 2026.
Greetings. Welcome to the FHI Q4 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.
Good morning and thanks for joining us. Today, we'll have brief remarks followed by Q&A. And 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, the CEO of Federated Hermes Limited; and Debbie Cunningham, the Chief Investment Officer for Money Markets.
During today's call, we will 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
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