Federated Hermes, Inc. has recently released its 10-Q report, providing an insight into the company's financial performance and operations. Federated Hermes is a publicly owned investment manager that offers its services to a wide range of clients, including high net worth individuals, banking institutions, investment companies, and charitable organizations. The firm manages separate client-focused equity, fixed income, balanced, and money market mutual funds, with a global investment focus on public equity and fixed income markets. As of June 30, 2024, the company had $782.7 billion in managed assets.
The 10-Q report also delves into the company's financial condition and results of operations. Federated Hermes' revenue is primarily derived from advising Federated Hermes Funds and Separate Accounts in domestic and international markets, as well as providing administrative and other fund-related services. The company's revenue is largely dependent on factors affecting the value of managed/serviced assets, such as market conditions and the ability to attract and retain assets. Additionally, the report highlights that Federated Hermes pays a portion of fees earned from sponsored offerings to financial intermediary customers, which represents the majority of Distribution expense on the Consolidated Statements of Income.
One notable aspect mentioned in the report is the $66.3 million non-cash impairment of an indefinite-lived intangible asset associated with the 2018 FHL acquisition recorded in Intangible Asset Related expense as of June 30, 2024. The report also addresses the current regulatory developments impacting Federated Hermes, both domestically and globally. The company operates in a complex and evolving regulatory environment, subject to extensive regulation within and outside the U.S., including federal securities laws and regulations imposed by various regulatory authorities.
The report discusses key regulatory developments and requirements in the U.S. since March 31, 2024, that could significantly impact or relate to Federated Hermes’ business and offerings. These developments include the SEC Spring 2024 Reg Flex Agenda, key court decisions, overturning of the Chevron Doctrine, SEC enforcement actions seeking civil penalties, and the vacating and reinstatement of certain SEC rules. These regulatory developments are expected to have implications for the investment management industry, including Federated Hermes. Following these announcements, the company's shares moved -1.0%, and are now trading at a price of $35.06. If you want to know more, read the company's complete 10-Q report here.
