FEDERATED HERMES, INC. has recently released its 10-Q report, providing a detailed look into the company's financial condition and results of operations. Federated Hermes, Inc. is a publicly owned investment manager that manages separate client-focused equity, fixed income, balanced, and money market mutual funds, as well as separate client-focused equity, fixed income, money market, and balanced portfolios. The firm invests in the public equity and fixed income markets globally, with a focus on growth and value stocks of small-cap, mid-cap, and large-cap companies. As of September 30, 2025, the company managed assets worth $871.2 billion.
The report reveals that the majority of Federated Hermes’ revenue is derived from advising Federated Hermes Funds and Separate Accounts in domestic and international public and private markets. The company also earns revenue from providing administrative and other fund-related services, including distribution and shareholder servicing, as well as stewardship and real estate development services. Investment advisory fees, administrative service fees, and certain fees for other services are generally calculated as a percentage of the average net assets of managed investment portfolios.
Federated Hermes’ 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 company's growth and profitability are dependent upon its ability to attract and retain assets under management (AUM), which is impacted by factors such as fee waivers. Fee rates for Federated Hermes’ services generally vary by asset and service type and can vary based on changes in asset levels.
The report also discusses the business developments, including the acquisition of a majority equity interest in Rivington, a U.K.-based renewable energy project development business, and current regulatory developments. Federated Hermes and its investment management business are subject to extensive regulation, both within and outside of the U.S., including various laws, rules, and regulations globally that impose restrictions, limitations, registration, reporting, and disclosure requirements on its business. The company continues to engage with regulatory authorities and evaluates the impact of regulatory developments on its business and offerings.
The report also highlights key regulatory developments and requirements in the U.S. since June 30, 2025, that can significantly impact or relate to Federated Hermes’ business and offerings. These include the SEC’s Spring 2025 Regulatory Flexibility Agenda, SEC enforcement trends under the new Presidential Administration, extension of compliance dates for certain rule amendments, and the issuance of a concept release on potential changes to its rules governing asset-backed securities.
Following these announcements, the company's shares moved -0.8%, and are now trading at a price of $47.30. For the full picture, make sure to review FEDERATED HERMES, INC.'s 10-Q report.
