Earnings call transcript: Federated Hermes beats Q2 2025 earnings expectations

Federated Hermes reported its Q2 2025 earnings, exceeding analyst expectations with an EPS of $1.16, compared to the forecasted $1.03. Revenue also surpassed predictions, reaching $424.84 million against a forecast of $422.02 million. Despite these positive results, the company’s stock price dipped by 2.62%, closing at $49.57, down from the previous day’s close. According to InvestingPro data, the stock has delivered impressive returns of 51.87% over the past year and remains near its 52-week high of $50.09. Analysis suggests the stock is currently trading above its Fair Value.

Key Takeaways

• Federated Hermes exceeded EPS expectations by 12.62%.
• Revenue slightly surpassed forecasts, marking a modest 0.67% surprise.
• Stock price fell by 2.62% post-earnings, despite positive financial results.
• Record assets under management reached $846 billion.
• New share repurchase program approved for 5 million shares.

Company Performance

Federated Hermes demonstrated robust performance in Q2 2025, achieving record assets under management of $846 billion. The company saw a 10% growth in equity assets, contributing to its overall revenue increase. Despite a decrease in carried interest and performance fees to $1.4 million from $5.9 million in the previous quarter, the company maintained a competitive position in the market.

Financial Highlights

• Revenue: $424.84 million, slightly above forecast.
• Earnings per share: $1.16, 12.62% above expectations.
• Effective tax rate: 26.1%.
• Share repurchase: 1.5 million shares for $64.5 million.

Earnings vs. Forecast

Federated Hermes reported an EPS of $1.16, exceeding the forecasted $1.03 by a significant margin of 12.62%. Revenue also slightly surpassed expectations, with a 0.67% surprise. This marks a continued trend of outperforming forecasts, reflecting strong operational execution.

Market Reaction

Despite the positive earnings surprise, Federated Hermes’ stock price fell by 2.62% to $49.57. This decline may reflect broader market trends or investor concerns about future growth prospects. The stock remains within its 52-week range, having recently approached its high of $50.09.

Outlook & Guidance

Looking forward, Federated Hermes anticipates a tax rate between 25-28% for 2025. The company is focusing on digital asset opportunities and potential acquisitions, particularly in private markets. With $1 billion in net institutional mandates yet to fund, the company remains optimistic about future growth. The company’s strong financial position is evidenced by its healthy current ratio of 3.04 and moderate debt-to-equity ratio of 0.43. Discover more detailed insights and metrics in the comprehensive Pro Research Report, available exclusively on InvestingPro.

Executive Commentary

CEO Chris Donahue emphasized the strategic focus on acquisitions, stating, "The highest and best use of our cash is doing acquisitions." CIO Debbie Cunningham highlighted the potential of digital assets, remarking, "We think this is the tip of the iceberg."

Risks and Challenges

• Decline in performance fees could impact future revenue.
• Market volatility may affect stock price stability.
• Regulatory changes could influence operational strategies.
• Competition in the money market fund space remains intense.
• Economic uncertainties may impact investor sentiment.

Q&A

During the earnings call, analysts inquired about the impact of stablecoins on the money market industry and the company’s capacity in MDT investment strategies. Executives addressed these concerns, emphasizing the incremental opportunities in tokenization and the strategic priorities for capital return and potential mergers and acquisitions.

Full transcript - Federated Investors Inc B (FHI) Q2 2025:

Conference Operator: Greetings, and welcome to the Federated Hermes Incorporated Second Quarter twenty twenty five Analyst Call and Webcast. At this time, all participants are in a listen only mode and a question and answer session will follow the formal presentation. Please note, this conference is being recorded. I will now turn the conference over to your host, Mr. Raymond Hanley.

Sir, the floor is yours.

Raymond Hanley, Host, Federated Hermes: Hello and welcome to our call. Leading today’s call will be Chris Donahue, CEO and President of Federated Hermes and Tom Donahue, Chief Financial Officer. Joining us for the Q and A are Safran Nasebe, who is the CEO of Federated Hermes Limited and Debbie Cunningham, the Chief Investment Officer for Money Market. During today’s call, we may 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 these forward looking statements. Chris?

Chris Donahue, CEO and President, Federated Hermes: Thank you, Ray, good morning. I will review Federated Hermes business performance and Tom will comment on our financial results. We ended Q2 with record assets under management of $846,000,000,000 led by gains from our equity strategies. Equity assets increased by $8,100,000,000 or 10% from the prior quarter. Second quarter equity net sales of $1,800,000,000 represent an organic growth rate of just under 9%.

Our MDT fundamental quant strategies produced solid sales results again in the second quarter. MDT equity strategies had net sales of $3,800,000,000 in the second quarter, up from $3,300,000,000 in the first quarter. For Q3 through July 25, these strategies have had net sales in combined funds and SMAs of $730,000,000 Seven of the eight MDT equity mutual fund strategies are in the top performance quartile of their Morningstar categories for the trailing three years ended June 30. Four of these strategies are in the top decile. The second quarter saw further improvement in flows from strategic value dividend strategies.

These strategies had second quarter net sales of $344,000,000 compared to $131,000,000 in the prior quarter. And this includes the funds, the SMA and the institutional separate accounts under these strategies. We had net sales in 19 equity fund strategies during the second quarter, including a variety of the MDT offerings and including the Asia ex Japan fund. MDT’s offerings included by highlight, MDT MidCap Growth, MDT MidCap Collective and the AllCap Core. Looking at our equity fund performance at the end of the second quarter and using Morningstar data for the trailing three years, 56% of our equity funds were beating peers and 26% were in the top quartile of their category.

: For

Chris Donahue, CEO and President, Federated Hermes: Q3 through seventwenty five combined equity funds and SMAs had net sales of $480,000,000 Now turning to fixed income, assets decreased by about $800,000,000 or 1% in the second quarter from the prior quarter due mainly to net redemptions of $2,400,000,000 partially offset by higher market valuations and FX of 1,600,000,000.0 Redemptions included about $1,500,000,000 from two large public entities that have regular sizable inflows and outflows. We had 15 fixed income funds with net sales in the second quarter, including the conservative micro short fund and the total return bond fund ETF. Regarding performance at the end of the second quarter and using Morningstar data for the trailing three years, 46% of our fixed income funds were beating peers and 21% were in the top quartile of their category. For Q3 through seventwenty five combined fixed income and SMAs had net sales of 47,000,000 In the alternative private markets category, assets increased by $1,300,000,000 or 7% in the second quarter due mainly to the impact of FX rates, which was 1,100,000,000 and net sales of $231,000,000 mostly in the MDT market neutral fund. Now we are in the market, as I’ve said in previous calls, with European Direct Lending III, the third vintage of our European Direct Lending Fund.

Today, we’ve closed on $450,000,000 target raises $750,000,000 and EDL-one raised 300,000,000 EDL-two raised $6.40 We’re also in the market with the global private equity co invest fund, which is the sixth vintage of the PEC series. Our first close in April was for about $114,000,000 the target raises $500,000,000 and PEC PEC one to five raised approximately 400,000,000 to $600,000,000 in each fund. The Federated Hermes GPE Innovation Fund II, the second vintage of our pan European growth private equity innovation fund is in

Raymond Hanley, Host, Federated Hermes: the

Chris Donahue, CEO and President, Federated Hermes: market. To date, we’ve closed on $110,000,000 with a target raise of 300,000,000 and the first vehicle raised $240,000,000 We’re also in the market with the European Real Estate Debt Fund, a new pooled European debt fund. Our marketing is here in 2025 and our target is 300,000,000 Early in the second quarter, we completed the acquisition of a majority interest in Rivington Energy Management Limited, a UK renewable energy company. The acquisition enhances our private markets platform by adding project development expertise and specialist energy transition sector experience to our institutional investment and asset management capabilities in the infrastructure asset class. We are actively working on product development plans with the Rivington team.

Across our long term investment platform, we began Q3 with about $1,000,000,000 in net institutional mandates yet to fund in both funds and separate accounts. Fixed income expected net additions total about $545,000,000 with wins in multi sector, high yield and active cash. Approximately $439,000,000 of total wins are expected to come into private market strategies. We have approximately 1,600,000,000 in wins yet to fund mostly in direct lending, private equity and trade finance, partially offset by $1,200,000,000 in redemptions from the restructuring of our UK property trust, which will occur in the third quarter. We have managed this particular fund for decades and it has delivered solid performance to our investors.

The restructuring and transition of the fund to a third party is a result of changing market demand for such products. It is being done in collaboration with our investors and with the goal of providing them liquidity options to suit their preferences as expressed in their recent voting. The wins in this area are obviously in direct lending and private equity and trade finance. Equities expected additions total about $59,000,000 driven by MDT and some offset by some outflows. Moving on to money markets.

We reached another record high at the end of Q2 for money market fund assets, which increased by $3,100,000,000 to reach $468,000,000,000 These assets moved higher in the second quarter despite seasonal factors that often result in lower assets. Money market separate accounts decreased by 5,900,000,000 reflecting usual seasonal patterns. Market conditions remain favorable for cash as an asset class. In addition to the appeal of relative safety in periods of volatility, money market strategies present opportunities to earn attractive yields compared to alternatives such as bank deposits and direct investments in T bills and commercial paper. We are actively participating in the development of tokenized money market funds and digital asset infrastructure and continue to rigorously explore opportunities ranging from tokenized share classes to offering fully digitized assets.

Over the past several years, we have engaged with a broad array of innovators and well regarded financial institutions to identify and evaluate opportunities in the digital assets arena, going along with a significant amount of knowledge gained and experience along the way. We are sub advisor for the Super State Short Duration U. S. Government Securities Fund, a private tokenized fund that has assets of about $425,000,000 It was also recently announced that Federated Hermes will participate in the launch of a collaborative initiative between Bank of New York and Goldman Sachs that will use blockchain technology to maintain a record of their customers’ ownership of select money market funds. This is a significant step towards enhancing the utility and transferability of existing money market fund shares.

Our participation highlights our commitment to the digital asset space where we expect ongoing innovation and growth. Our estimate of money market mutual fund market share, including sub advised funds was about 7.11 at the end of the second quarter, up slightly from about 7.1% at the end of the first quarter. Now looking at recent asset totals as of the last few days, managed assets were approximately $854,000,000,000 including six forty two billion dollars in money markets, 91,000,000,000 in equities, 98,000,000,000 in fixed income, 20,000,000,000 in alternative private markets, 3,000,000,000 in multi asset. Money market mutual fund assets were $476,000,000,000 Tom?

Raymond Hanley, Host, Federated Hermes: Thanks, Chris. Total revenue for Q2 increased slightly from the prior quarter due mainly to higher revenue from more days in the quarter and revenue related to the Rivington acquisition, which were partially offset by lower revenue from performance fees and carried interest. Total Q2 carried interest and performance fees were $1,400,000 compared to $5,900,000 last quarter. Approximately $829,000 of the Q2 fees were offset by nearly the same amount of compensation expense. Q2 operating expenses increased from the prior quarter due mainly to the $12,900,000 VAT refund in Q1.

In the other expense line item, FX and related expense was a credit of $5,800,000 for Q2 compared to a credit of $5,600,000 in Q1 as the pound strengthened against the dollar again. We have lowered the notional amount of our foreign currency forwards to £31,500,000 down from £86,700,000 at the end of Q2. Compensation and related expense increased by $1,600,000 from the prior quarter due mainly to higher incentive comp and base pay merit increases of 6,900,000 partially offset by seasonally lower expense for stock based compensation of $4,700,000 and payroll taxes of about 600,000 Advertising and promotional expense increased due mainly to the timing of our advertising campaign spend. The Q2 effective tax rate was 26.1. We expect the rate to be in the 25% to 28% range for 2025.

At the end of Q2, cash and investments were $6.00 7,000,000 Cash and investments excluding the portion attributable to non controlling interests were $474,000,000 During Q, the company purchased approximately 1,500,000.0 shares of its stock for about $64,500,000 The Board of Directors approved a new share repurchase program yesterday for 5,000,000 shares in addition to the 1,100,000.0 shares remaining from the prior program. Ali, that concludes our prepared comments. We’d like to open up the call for questions.

Conference Operator: Thank you. At this time, we’ll be conducting our question and answer If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue and you may press 2 if you would like to remove your question from the queue. Our first question is coming from Patrick Davitt with Autonomous Research. Line is live.

Patrick Davitt, Analyst, Autonomous Research: Good morning everyone.

Chris Donahue, CEO and President, Federated Hermes: Morning.

Patrick Davitt, Analyst, Autonomous Research: On the back of your stablecoin tokenization comments, I think it’d be helpful maybe if you could update us on your broader thoughts around the extent to which you think these products could disintermediate the traditional money fund business? Or do you see it more as incremental to that traditional money fund cash exposure? Thank you.

Chris Donahue, CEO and President, Federated Hermes: Baseline, we would see it as incremental. New customers, new things. There’s not an avalanche of use of these things right now. And don’t forget, the basic thing on people with cash is they want daily liquidity at par. Now they’re willing to go with a stable point that doesn’t pay a yield, but then they also like a respectable daily yield.

And we think that the Goldman Bank of New York methodology where Goldman creates a platform. Bank of New York is the custody and transfer agent, and the money fund sits there just like it always sat there as a money fund, and yet someone else is taking care of the tokenization. So that from the customer standpoint, it is in fact a tokenized money fund. But from the money fund operator standpoint, it’s operating a regular 2A7 money fund in order to provide daily liquidity at par. So this is a very sound strategy.

I’m not saying it’s the only one that will go into the future, but overall, we think that’s a very good one. One of the reasons that people are getting excited about this is because you can get seventwenty 4 activity trade anytime, but you still have to work out some of the mechanics of who gets the dividend. The way our program will work with Bony and Goldman right now is whoever owns the token at the end of the day is going to get the dividend. And this is not as much a tokenized money fund as others have full tokenized money funds. So our overall view is that you have to play in this space and we are talking to people, I got a list of them and there are many of them on there including European players where we’re dealing with all the ideas of innovation.

I can’t go through all of them with you. One with Bank of New York and and Goldman, obviously, has been made public as as have super super safe.

Debbie Cunningham, Chief Investment Officer for Money Market, Federated Hermes: Super safe.

Chris Donahue, CEO and President, Federated Hermes: Yeah. So Debbie, what would you add to that?

Debbie Cunningham, Chief Investment Officer for Money Market, Federated Hermes: You know, you covered it very, very, very succinctly. The only thing I’d add is right now, we think this is the tip of the iceberg, Patrick. This is for our current products, that are on this platform, a different way to distribute. So we distribute through various types of intermediaries, through states, through insurers, through, broker dealers, through banks. We distribute directly.

This is another way of distributing our product, and in the process, turning it into a, a a ledger, product that has better transferability than a typical money market fund share, does. So we think it’s a very, clever and new way, to be able to distribute product. And as Chris mentioned, there’s lots of innovation that we think can happen that provide additional bells and whistles to why this is a product that will, you know, take over to some degree the future, but that’s not what what is in existence today. What is in existence today is a traditional money fund being distributed to a different group of clients, particularly from a collateralization standpoint. So money funds, stablecoins you mentioned, they need to be backed by something.

They need to be backed by treasury bills or or money funds containing those treasury bills. That’s what the Genius Act is all about. Money funds will provide that collateral, and we we will provide it on chain so that the ease of use is basically seamless. But lots of innovation to come as it exists today, distribution changes that are beneficial.

Patrick Davitt, Analyst, Autonomous Research: Great. Thanks. This is just a quick follow-up Debbie. I feel like we’ve been talking about this for a couple of years now, but as we get closer to likely Fed cuts, you starting to see any more institutions come in to talk to you about this long awaited rotation into money funds that we’ve been talking about for a while now? Thanks.

Debbie Cunningham, Chief Investment Officer for Money Market, Federated Hermes: It’s been alive and well, Patrick, through all of, 2000 you know, through from from the 2024 and all of 2025 year to date, so for the last year. But it’s not really started in earnest because what we saw in Fed rate cuts at the 2024 didn’t materialize into anything yet in 2025. So it’s one of those wait till you see the whites of their eyes sort of thing, I I think, as far as volume goes. But we were basically flat on a money fund asset basis for the second quarter, which had really two different aspects to it. The first month, April, was very much personal tax outflows, so huge personal taxes, and from an institutional side, outflows due to margin calls.

If you recall, April 6 was the, you know, Liberation Day announcements, tariff announcements, many margin calls that came from institutional accounts. So what we lost in assets in April basically were then needed to be made up in May, they were as we ended up the quarter flat. However, it was definitely a tale of two quarters when you look at April compared to May and June. May and June are more confirmation of what we’ve been saying on the institutional side from a rotation into money funds and out of direct securities, whereas April was was more based on what the situation in the you know, what’s happening from an economic and fiscal standpoint.

Conference Operator: Thank you. Our next question is coming from Ken Worthington with JPMorgan. Your line is live.

Ken Worthington, Analyst, JPMorgan: Hi. Good morning. Thanks for taking the question. Debbie, how do you see growth in stablecoins impacting the money market fund industry? Our Treasury Secretary has suggested $2,000,000,000,000 of stablecoin assets in coming years.

If his target is reached, what does this mean for money markets given the supply of Teba Hills that are outstanding today? Does all the math work for money market funds?

Debbie Cunningham, Chief Investment Officer for Money Market, Federated Hermes: Absolutely, Kenneth. Sure, the current size of the stablecoin market is about $250,000,000,000 very concentrated in two coins basically. And then the assets that are backing those two coins, Tether and Circle, are basically in treasury securities. There’s some commercial paper in there, but it’s mostly treasury securities. So that’s all being soft up very easily right now.

What happens with the Genius Act is there’s now more definition as to what needs to be backing a stable coin, and it’s very short treasuries or treasury backed repo, which, you know, ultimately, a trillion, 2,000,000,000,000, it’s put your finger in the air, I’m not sure where the number goes, but it’s somewhere above, drastically above where it is in the $250,000,000,000 market today. What we thankfully have done in addition to the Genius Act is pass the debt ceiling renewal that gives us an extra $5,000,000,000 in treasuries, and ultimately we’ve seen a pretty good, know, coffers had extraordinary measures depleted some coffers which are being replenished at this point, but we also have had an improvement in bill supply, which we do believe will continue. And despite the fact that when Treasury went from Janet Yellen to Besson, there was a pushback on how much short term debt had been available in the market during the Yellen years with the expectation that Besson would start to term that debt out to some degree. That has not been the case, and what they have, you know, provided is a pretty nice increase in the bill supply. So we do think there will be extra supply in that, you know, one to three month sector, basically ninety three day bill market and under.

It’ll probably make it a little bit more expensive, but that’s being offset to some degree by the additional supply that we have, and our expectation would be for the foreseeable future, it is enough to meet the demand of what we’re expecting at least at this point from the stablecoin market.

Chris Donahue, CEO and President, Federated Hermes: I could add, Ken, one of the other features of the Genius Act was to not allow stablecoins to pay interest or return. And so the people who ought to be concerned about the $2,000,000,000,000 going into stablecoins are the ones who have deposit accounts with little or no interest. And how does that dynamic exactly work? And so then you see the next level of things where people offer deals where, oh yes, you own a stable coin and they’ll take a bunch of your money and put it into a money fund, charge you a fee and keep 80% of your money in a money fund so you get at least some return. And you’re seeing those kinds of innovations going on right now.

But it’s important to note that the stablecoin can’t pay a yield.

Ken Worthington, Analyst, JPMorgan: Fair enough. And then just on MDT having wild success here with that franchise. How do we think about capacity in some of the MDT mid and small cap products? I don’t know what sort of separate account assets are sort of there as well. But how do we think about the capacity for those given the inflows you’re seeing?

Chris Donahue, CEO and President, Federated Hermes: Well, at this point, on all of the funds, each of the funds, we don’t expect any capacity issues. The methodologies and the ability to buy shares is robust. And so believe me, we’re looking at that too to see if something is going to poke a hole in our balloon. But at this point, we’re not seeing it.

Ken Worthington, Analyst, JPMorgan: Okay. Great. Thank you.

Conference Operator: Thank you. Our next question is coming from Bill Katz with TD Cowen. Your line is live.

: Thank you. Good morning, everybody. Appreciate you taking the questions.

Tom, question good morning, Tom, maybe to start with you. Just given how you’ve been hedging maybe some of the pound versus the dollar, can you talk a little bit about where you think the exit pace is for expenses and maybe break that down between comp and maybe the non comp line, particularly the other line has been sort of negative last few quarters? Thank you.

Raymond Hanley, Host, Federated Hermes: Okay, Bill. On the FX, that’s why I mentioned in there that we’ve lowered our notional amount on the hedging and basically we’re looking at it on a quarterly basis. We had previously looked at it on a yearly basis and we got the benefit in the first two quarters by looking at it on a yearly basis. And so now we only our exposure is much less on the pound and it worked out quite well for us. In terms of the compensation line and I would say next quarter we expect that to be up a couple million dollars or something like that.

Of course, every time I predict that something happens and we end up paying out more or less. On the distribution line item, with the Chris mentioning our assets month to date in July being up pretty significantly on the money fund side, we would expect a higher distribution payouts. And then in the beginning of the year, I talked on the systems and communication line about having pretty decent amount of more dollars per quarter and it’s taken us a little bit longer time to get moving on those. And I still see that line going up a couple million dollars next quarter. And the rest of the line items, I think they just I don’t see big changes there.

: Okay. I’ll circle back on the other expense line still. So maybe Chris one for you, just been a lot of M and A in the industry. It seems like the opportunity with your old business is percolating a little bit, but still somewhat small in the grand scheme of things. You bought back a lot of stock in the second quarter.

You ramped up the authorization as well. How do we think about maybe capital return priorities from here? And there’s a way to be a bit more strident on the M and A side to maybe accelerate the opportunity and also where I think a lot of the incremental growth seems to sit for the industry? Thank you.

Chris Donahue, CEO and President, Federated Hermes: Bill, we have said this before that the highest and best use of our cash is with doing acquisitions. And we are actively talking about doing various acquisitions, especially in the private markets type space. And until we have something to announce, we don’t announce. But remember, the whole history we had before we bought Hermes that from 2012 to 2018, I agree that was six years, so that’s long. But we were saying all along, we were going to do an international one and we took a lot of calls and consternation on that not happening for a while.

But when we say we’re going to do stuff, we do stuff, it just might not be lickety split. So, we continue to look in the space exactly as you’re saying for acquisitions. But this is not to say that we stop doing look at the roll ups and other things that are attractive. For example, anyone who has a Morabond money fund knows that we are their warm and loving home.

Raymond Hanley, Host, Federated Hermes: So, back on the other, I don’t expect to have a VAT and we don’t forecast what’s going to happen FX. And so, if you take those things both out of there, our other line has lots of items in it. And if you look back 06/30/2024, that line was $5,000,000 and I would say it would be a little higher than that would be our forecast maybe 6,500,000.0 but so many things change in there, that’s why I don’t really like doing what I just did.

Bill Katz, Analyst, TD Cowen: Okay. Thank you. I can

: put my slide ruler back. Thanks so much.

Conference Operator: Thank you. Our next question is coming from Brian Bedell with Deutsche Bank. Your line is live.

Bill Katz, Analyst, TD Cowen: Great. Thanks. Good morning. Advancing to the next century here. I joined late, pardon me if you’ve answered part of this on the tokenization side, but maybe a different angle.

To what extent do you see the tokenization of money market funds expanding the overall size of the money market fund industry? How dramatic could that be if it’s much easier to hold this in a digital format?

Chris Donahue, CEO and President, Federated Hermes: It is very, very difficult to say what that kind of number would be. We haven’t done done any numbers on that. Both Debbie and I believe it’s incremental, to the business. But as with any of these things, especially when you’re dealing with blockchain, you got a lot a lot of people on there first in order to have it grow. It’s a little bit of a chicken egg thing.

And so everybody’s working right now, and there’s a lot of excitement and a lot of articles and all of that. But the the assets are are not yet are not yet there. Now we’re ready for when it goes, but it’s just hard for us to say. And maybe Debbie’s done some research that I’m not aware of on how big that could be, but I don’t know.

Debbie Cunningham, Chief Investment Officer for Money Market, Federated Hermes: No, Chris. Exactly. I mean, we think it is an additional, provision of distribution and an additional collateral management tool, but the actual estimation of the size of the growth is really it’s too early to tell at this point.

Bill Katz, Analyst, TD Cowen: Yes. And maybe just a follow on to that. As you think about this industry evolving and also including the reserve management requirements for stablecoin, expanding the money market fund industry as well. Do you see yourself for that incremental growth in those assets potentially getting in higher market share than your current base? I think that’s in the 7% to 8% range.

So going forward, would you see yourself as a share gainer on this dynamic given your low cost and obviously your long standing reputation in the industry?

Chris Donahue, CEO and President, Federated Hermes: Well, this business due in large part to two things, regulation. Regulation oligopolizes business, and so you only have 10 or 12 players who can actually give clients the idea that they have daily liquidity apart if they have a $100,000,000. And and so new entrants have a very big challenge. Even with the Genius Act where you’re gonna have to create new funds because they shrunk the average or or the maximum maturity of a fund, you’ve have enough of a big enough pool of money in order to make that make the customer believe they’re gonna get daily liquidity at par. So by that, I would we’re always striving to get more market share, but I’m not gonna say, oh, yeah.

This is a definite thing that’s gonna happen. It’s a very tight business. It’s a very competitive business. And we certainly expect to grow in it and get our fair share and try hard to get that number back up to a higher number than the 7.11 I mentioned.

Bill Katz, Analyst, TD Cowen: Great. That’s great color. Thank you.

Conference Operator: Thank you. As we have no further questions on the lines at this time, I would like to hand the call back over to Mr. Hanley for any closing remarks.

Raymond Hanley, Host, Federated Hermes: Okay. Well, thank you for joining us today. That concludes our call.

Conference Operator: Thank you. Ladies and gentlemen, this does conclude today’s call and you may disconnect your lines at this time. Thank you for your participation. Thanks.

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