Federated Hermes reported record high Assets Under Management (AUM) at $871 billion, driven by strong performance in equity and money market strategies. Equity AUM grew by $5.7 billion, with net sales slightly negative at $130 million due to separate account redemptions offsetting fund sales. The MDT equity strategies saw $2 billion in net sales, with several strategies ranking in Morningstar’s top quartile for performance. Fixed income AUM reached a record $101.8 billion, with net sales of $1.7 billion in Q3. Alternative/private markets AUM decreased by $1.7 billion, primarily from a UK property trust restructure. The acquisition of FCP and plans for digital asset initiatives signal strategic growth opportunities for Federated Hermes. Federated Hermes reached a record high of $871 billion in Assets Under Management (AUM) by the end of fiscal Q3 2025, with equity AUM increasing by $5.7 billion. Equity net sales were slightly negative at $130 million, with MDT equity net sales reaching $2 billion. Fixed income AUM rose to $101.8 billion, while alternative/private markets AUM decreased by $1.7 billion. The acquisition of FCP, a U.S. real estate manager with $3.8 billion AUM, is expected to close by the end of 2026. Money market AUM reached a record $653 billion, with digital asset initiatives underway. Operating expenses increased by $32.2 million from the prior quarter, mainly due to higher distribution and FX expenses. Assets Under Management (AUM) reached a record high of $871 billion in fiscal Q3 2025, with equity AUM growing by $5.7 billion primarily due to market gains. Equity net sales were slightly negative at $130 million, with MDT equity net sales reaching $2 billion. International MDT distribution saw success with $340 million in net sales. 53% of equity funds outperformed peers over three years. Fixed income AUM rose to a record $101.8 billion. Alternative/private markets AUM decreased by $1.7 billion. Carried interest and performance fees totaled $3.6 million. The company announced an agreement to acquire FCP, a U.S. real estate manager with $3.8 billion AUM.
Expenses increased by $32.2 million, with an effective tax rate of 24.4%. Share repurchases were paused during negotiations with FCP. In Q3, expenses included a $2.8 million U.S. withholding tax matter. Cash and investments were $647 million at the end of Q3. The company plans to use cash and Class B stock for the FCP acquisition. Institutional pipeline funding started Q4 with $2.1 billion in unfunded mandates. Money market AUM reached a record $653 billion. The company announced digital asset initiatives and participation in a blockchain project. Market share in money market mutual funds was estimated at 7.11% in Q3. Operating expenses increased by 10%.
In Q4, the company expects to resume share repurchases and continue growth in MDT and institutional pipeline funding. The pipeline is strong, with over $2 billion in unfunded mandates. The company anticipates growth in sales globally and sees opportunities for expansion in various regions and client types. The institutional pipeline is expected to drive continued success in 2026. – Assets Under Management (AUM) reached a record high of $871 billion by the end of fiscal Q3 2025, with equity AUM growing by $5.7 billion primarily due to market gains.
– Notable equity net sales include $2 billion for MDT equity and 53% of equity funds outperforming peers over the trailing three years.
– Fixed income AUM rose to a record $101.8 billion, with top contributors being ultra-short funds and sustainable global investment grade UCITS.
– Alternative/private markets AUM decreased by $1.7 billion, with notable fundraising for European Direct Lending III and global private equity co-invest fund sixth vintage.
– A significant acquisition was announced to acquire a controlling interest in FCP, a U.S. real estate manager with $3.8 billion AUM.
– Money market AUM reached a record $653 billion, with digital asset initiatives and estimates of a 7.11% market share in money market mutual funds.
– Operating expenses increased by $32.2 million, with an effective tax rate of 24.4% and plans to resume share repurchases in fiscal Q4.
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Morningstar: Federated Hermes (FHI) Q3 2025 Earnings Transcript