Federated Hermes Reports Record AUM and Highlights in Q2 Earnings Call

Federated Hermes reported record assets under management at $846 billion, driven by a 10% increase in equity strategies. Equity net sales grew to $1.8 billion, while money market fund assets reached a record high of $468 billion. The company is innovating in digital assets and has completed acquisitions, but faced challenges with fixed income outflows and rising operating expenses.

Federated Hermes Inc. (NYSE: FHI) reported strong financial results for the second quarter of 2025, with a record assets under management (AUM) of $846 billion, marking a significant milestone for the investment management firm. The company's equity strategies saw a notable increase of $8.1 billion, representing a 10% growth from the prior quarter [1].

Equity net sales for the quarter reached $1.8 billion, indicating a robust organic growth rate of just under 9% [1]. The company's money market fund assets also hit a record high of $468 billion, underscoring the firm's strong position in this sector [1]. Additionally, the company's alternative private markets assets increased by $1.3 billion, or 7%, during the second quarter [1].

Despite these positive developments, Federated Hermes faced challenges in certain areas. Fixed income assets decreased by $800 million, or 1%, due to net redemptions of $2.4 billion [1]. Total carried interest and performance fees for the quarter were significantly lower at $1.4 million compared to $5.9 million in the previous quarter [1]. Operating expenses also increased, partly due to the absence of a $12.9 million VAT refund received in the first quarter [1].

The company is actively innovating in the digital asset space, participating in the development of tokenized money market funds and digital asset infrastructure [1]. Additionally, Federated Hermes completed the acquisition of a majority interest in Rivington Energy Management Limited, enhancing its Private Markets platform [1].

The company's earnings per share (EPS) for Q2 2025 surpassed expectations at $1.16, beating the $1.03 GAAP EPS estimate and up 480% from the prior year [2]. Total revenue (GAAP) was $424.8 million, slightly ahead of the $422.81 million revenue estimate and up compared to last year's $402.6 million [2]. Net income (GAAP) climbed to $91.0 million, a 333% increase from the prior-year period [2].

Federated Hermes' record AUM and robust equity performance highlight the company's continued growth and strategic focus. However, the challenges in fixed income and rising operating expenses underscore the need for ongoing management and innovation to maintain its competitive edge.

References:
[1] https://finance.yahoo.com/news/federated-hermes-inc-fhi-q2-070801602.html
[2] https://www.nasdaq.com/articles/federated-hermes-fhi-q2-eps-jumps-480