Federated Hermes Achieves Record Assets Under Management in Q1 2025 Earnings Report

Federated Hermes Reports Record Growth for Q1 2025

Federated Hermes, Inc. (NYSE: FHI), a leader in active investment management, has announced remarkable financial results for the first quarter of 2025. The company recorded an astonishing $839.8 billion in assets under management (AUM), marking a significant increase of $61.1 billion, or 8%, from the previous year’s reporting period. This impressive performance highlights the company’s ongoing commitment to delivering strong investment solutions amid a challenging market environment.

The financial statements reveal that for Q1 2025, the earnings per diluted share surged to $1.25, compared to $0.89 in the same quarter last year. The net income climbed to $101.1 million, demonstrating a substantial rise from $75.0 million in Q1 2024. This remarkable growth can be attributed in part to a decrease of $12.9 million in other operating expenses, due to a value-added tax (VAT) refund received from amended filings in the U.K.

“Federated Hermes has achieved record assets under management for the tenth consecutive quarter,” stated J. Christopher Donahue, the company's president and CEO. He attributes this growth to the strong inflows into money market funds and separate accounts as investors sought refuge from market volatility. These products generally offer a higher yield than traditional bank deposit accounts and some securities in the direct market.

During the first quarter, the firm reported total average managed assets of $843.2 billion, a significant increase from $776.5 billion in the previous year. The company’s money market assets specifically reached a historic high of $637.1 billion, reflecting an increase of 10% or $58.3 billion year-over-year.

Additionally, Federated Hermes has seen a robust demand for its Managed Diversified Funds (MDT). Products like the MDT Market Neutral Fund are designed to provide investors with long-term capital appreciation while minimizing exposure to stock market risks. Notably, the company anticipates that its systematic and repeatable evaluation process will lead to continued outperformance in its investment strategies.

In a notable move, Federated Hermes increased its quarterly dividend rate by 9.7% to $0.34 per share, marking a positive step for shareholders. This change reflects the company’s strong financial position and commitment to returning value to its investors. The dividend is scheduled to be payable on May 15, 2025, to shareholders recorded by May 8, 2025.

The equity assets at Federated Hermes stood at $80.9 billion as of March 31, 2025, reflecting a modest increase from the prior year. The firm’s leading equity funds during the quarter included the MDT Mid Cap Growth Fund and the MDT Large Cap Growth Fund, both showing strong net sales.

Fixed-income assets were reported at $99.5 billion, indicating a 3% year-over-year growth. Within this segment, the top-performing funds included the Government Ultrashort Bond Fund and the Municipal Ultrashort Fund.

While there was a slight decrease in alternative/private markets assets to $19.4 billion, officials are optimistic about the capacity to reverse this trend given the firm’s comprehensive investment solutions across multiple asset classes.

Overall, Federated Hermes' performance in the first quarter of 2025 illustrates its resilience and adaptability in an increasingly complex financial landscape. The continued growth in managed assets reflects not only the strength of their investment strategies but also the firm's dedication to understanding and meeting the needs of their clients.

For investors and stakeholders eager for more insights, Federated Hermes will host an earnings conference call at 9 a.m. Eastern on April 25, 2025. Interested parties can arrange to join the call by connecting via the company’s website or by phone, ensuring transparency and direct communication of these pivotal financial results.

Despite the ongoing uncertainties in the global market, Federated Hermes has positioned itself as a reliable entity in the investment management landscape. With record-setting growth and a clear strategy for future performance, the firm is well-equipped to navigate the challenges ahead while delivering value to its clients and shareholders alike.