Federated Hermes, Inc. has recently released its 10-Q report, providing insights into the company's financial condition and operations. The firm, founded in 1955 and based in Pittsburgh, Pennsylvania, is a global leader in active investing with $845.7 billion in managed assets as of June 30, 2025. It offers investment management services to a diverse client base, including high net worth individuals, institutions, and various investment vehicles. The majority of the firm's revenue is derived from advising Federated Hermes Funds and Separate Accounts in domestic and international public and private markets, as well as providing administrative and other fund-related services.
The report highlights that Federated Hermes' revenue is primarily dependent on factors affecting the value of managed/serviced assets, including market conditions and the ability to attract and retain assets. The firm's revenue is derived from various sources, including investment advisory fees, administrative service fees, and certain fees for other services. These fees are generally calculated as a percentage of the average net assets of managed investment portfolios. Federated Hermes' revenue is also impacted by fee waivers, which are implemented for competitive reasons or to meet regulatory requirements.
The firm's most significant operating expenses are Compensation and Related expense and Distribution expense. Compensation and Related expense includes base salary and wages, incentive compensation, and other employee expenses. The report also discusses Federated Hermes' business developments, including its acquisition of a majority equity interest in a U.K.-based renewable energy project development business. Additionally, it addresses the current regulatory developments impacting the investment management industry and Federated Hermes' business operations.
The regulatory environment in which Federated Hermes operates globally is complex, uncertain, and subject to change. The firm and its investment management business are subject to extensive regulation, both within and outside of the U.S., including various laws, rules, and regulations that impose restrictions, limitations, registration, reporting, and disclosure requirements. The report details key regulatory developments and requirements in the U.S. that can significantly impact or relate to Federated Hermes' business and offerings, including the impact of the new administration, SEC enforcement trends and examination priorities, and other specific regulatory developments involving the SEC, the Department of Labor, and other regulators.
Following these announcements, the company's shares moved -0.69%, and are now trading at a price of $49.23. For more information, read the company's full 10-Q submission here.
