Federated Hermes (FHI) RBC Capital Markets Global Financial Institutions Conference 2025 summary

Business overview and asset growth

• Assets under management reached $847 billion, with $643 billion in money market assets and $204 billion across fixed income, equity, private markets, and multi-asset strategies.

• Money market funds represent three-fourths of AUM but only 42% of revenues; longer-term strategies drive 58% of revenues.

• Private markets business, acquired in 2018, includes real estate, private equity, and infrastructure, with $1.5 billion in unfunded institutional mandates.

• Equity franchise MDT grew from $6 billion to $17 billion in AUM, with strong recent inflows.

• Global expansion includes a 19-person office in Singapore and active client engagement in Asia.

Flows and product performance

• Long-term flows netted $700 million in the first two months, led by $1 billion in equities and a $300 million outflow in fixed income.

• Fixed income saw positive flows in munis, corporates, and governments, despite overall negative net flows.

• Strategic Value Dividend Fund and ETF are now in the top percentile of their category, with flows turning positive after a year of outflows.

• ETFs and Collective Investment Trusts are growing, with $600 million and $1.1 billion in AUM, respectively.

Money market and rate environment

• Money market funds benefit from higher rates, with steady growth expected as retail clients seek better yields than banks.

• Institutional flows are stable, with retail providing a key growth engine due to lower bank rates.