Federated Hermes, Inc. reports record assets under management with first quarter 2026 earnings
PITTSBURGH, April 30, 2026 /PRNewswire/ -- Federated Hermes, Inc. (NYSE: FHI), a global leader in active investing, today reported earnings per diluted share (EPS) of $1.27 for Q1 2026, compared to $1.25 for the same quarter last year, on net income of $96.4 million for Q1 2026, compared to $101.1 million for Q1 2025. Federated Hermes' Q1 2025 results included a $12.9 million decrease in other operating expense, or $0.15 per diluted share, resulting from a value-added tax (VAT) refund received as part of amended VAT filings in the U.K.
Federated Hermes' total managed assets were a record $907.1 billion at March 31, 2026, up $67.3 billion or 8% from $839.8 billion at March 31, 2025 and up $4.5 billion from $902.6 billion at Dec. 31, 2025. Total average managed assets for Q1 2026 were $915.6 billion, up $72.4 billion or 9% from $843.2 billion for Q1 2025 and up $41.9 billion or 5% from $873.7 billion for Q4 2025.
"In the first quarter, we saw record gross sales and positive net flows in our equity offerings as we continued momentum from the previous year, with investor interest in a range of our offering types," said J. Christopher Donahue, president and chief executive officer. "Separate accounts reached new record assets on overall demand for our MDT suite of quantitative investment solutions, led by our MDT All Cap Core and MDT Mid Cap Growth offerings. Investors with interest in capital preservation and liquidity continued to rely on our money market offerings and—for those interested in moving further out the yield curve in the pursuit of higher yields than money market products—our ultrashort funds."
Federated Hermes' board of directors declared a dividend of $0.38 per share, which was an increase of $0.04 or 11.8% from the previous quarter. The dividend is payable on May 15, 2026 to shareholders of record as of May 8, 2026. During Q1 2026, Federated Hermes purchased 1,191,300 shares of Federated Hermes class B common stock for $66.0 million.
Equity assets were a record $100.8 billion at March 31, 2026, up $19.9 billion or 25% from $80.9 billion at March 31, 2025 and up $2.9 billion or 3% from $97.9 billion at Dec. 31, 2025. Top-selling equity funds during Q1 2026 on a net basis were Federated Hermes MDT Mid Cap Growth Fund, Federated Hermes MDT Large Cap Growth Fund, Federated Hermes MDT All Cap Core Fund, Federated Hermes MDT US Equity Fund and Federated Hermes MDT Small Cap Core Fund.
Fixed-income assets were $99.8 billion at March 31, 2026, up $0.3 billion from $99.5 billion at March 31, 2025 and down $0.3 billion from $100.1 billion at Dec. 31, 2025. Top-selling fixed-income funds during Q1 2026 on a net basis were Federated Hermes Ultrashort Bond Fund, Federated Hermes Total Return Bond ETF, Federated Hermes Municipal Ultrashort Fund, Federated Hermes Government Ultrashort Fund and Federated Hermes Short-Term Income Fund.
Alternative/private markets assets were $19.0 billion at March 31, 2026, down $0.4 billion or 2% from $19.4 billion at March 31, 2025 and down $0.1 billion or 1% from $19.1 billion at Dec. 31, 2025.
Money market assets were a record $684.7 billion at March 31, 2026, up $47.6 billion or 7% from $637.1 billion at March 31, 2025 and up $2.1 billion from $682.6 billion at Dec. 31, 2025. Money market fund assets were $502.8 billion at March 31, 2026, up $37.9 billion or 8% from $464.9 billion at March 31, 2025 and down $5.6 billion or 1% from $508.4 billion at Dec. 31, 2025.
Financial Summary
Q1 2026 vs. Q1 2025
Revenue increased $55.4 million or 13% primarily due to an increase in revenue due to higher average money market and equity assets. This increase was partially offset by a decrease in performance fees and carried interest of $5.6 million, which includes a decrease of $1.0 million in carried interest from consolidated carried interest vehicles, which is largely offset in compensation expense.
During Q1 2026, Federated Hermes derived 54% of its revenue from money market assets, 45% from long-term assets (30% from equity, 10% from fixed-income, and 5% from alternative/private markets and multi-asset) and 1% from sources other than managed assets.
Operating expenses increased $60.9 million or 21% primarily due to a $26.7 million increase in distribution expenses resulting primarily from higher average money market fund assets, an $18.2 million increase in other expense primarily due to a value added tax (VAT) refund received in Q1 2025 related to amended VAT filings in the U.K. and fluctuations in foreign currency exchange rates, and a $10.8 million increase in compensation and related expense primarily due to higher incentive compensation.
Nonoperating income (expenses), net for Q1 2026 decreased $0.8 million due primarily to lower net gains on securities.
Q1 2026 vs. Q4 2025
Revenue decreased $3.9 million or 1% primarily due to a $10.5 million decrease in revenue resulting from two fewer days in Q1 2026 and a decrease in development fees of $8.6 million. These decreases were partially offset by an increase in revenue due to higher average money market and equity assets.
Operating expenses increased $5.4 million or 2% primarily due to a $9.1 million increase in compensation and related expense primarily from higher stock-based compensation expense, partially offset by a $3.4 million decrease in Other expense primarily due to lower charitable contributions.
Nonoperating income (expenses), net decreased $1.3 million due primarily to lower net gains on securities .
Earnings call information
Federated Hermes will host an earnings conference call at 9 a.m. Eastern on Friday, May 1, 2026. Investors are invited to listen to the earnings teleconference by calling 888-506-0062 (domestic) or 973-528-0011 (international) prior to the 9 a.m. start time. To listen online, go to the About section of FederatedHermes.com/us to register and join the call. A replay will be available at approximately 12:30 p.m. Eastern on May 1, 2026. To access the telephone replay, dial 877-481-4010 (domestic) or 919-882-2331 (international) and enter access code 53870. The online replay will be available via FederatedHermes.com/us for one year.
About Federated Hermes
Federated Hermes, Inc. is a global leader in active investment management, with $907.1 billion in assets under management 1. We deliver investment solutions that help investors target a broad range of outcomes and provide equity, fixed-income, alternative/private markets, multi-asset and liquidity management strategies to more than 11,000 institutions and intermediaries worldwide. Our clients include corporations, government entities, insurance companies, foundations and endowments, banks and broker/dealers. Headquartered in Pittsburgh, Federated Hermes has more than 2,000 employees in London, New York, Boston and offices worldwide.
Federated Hermes ranks in the top 5% of equity fund managers, the top 8% of money market fund managers and the top 11% of fixed-income fund managers 2 in the industry. Federated Hermes also ranks as the 10th-largest manager of model-delivered separately managed accounts 3. For more information, including an analyst presentation, which is updated periodically, visit FederatedHermes.com/us.
###
1) As of March 31, 2026.
2) Morningstar, March 31, 2026. Based on U.S. fund flows rankings.
3) Money Management Institute/Cerulli,Q4 2025.
Federated Securities Corp. is distributor of the Federated Hermes funds.
Separately managed accounts are made available through Federated Global Investment Management Corp., Federated Investment Counseling, Federated MDTA LLC, Hermes Fund Managers Ireland Limited, Hermes Investment Management Limited, and Hermes GPE LLP, each a registered investment advisor in one or more of the U.S., U.K. or Ireland.
Cautionary statements
Certain statements in this press release, such as those related to performance, investment strategies, opportunities to meet client needs, investor preferences and demand, asset flows and asset mix constitute or may constitute forward-looking statements, which involve known and unknown risks, uncertainties and other factors that may cause the actual results, levels of activity, performance or achievements of the company, or industry results, to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. Forward-looking statements can include statements that do not relate strictly to historical or current facts and are typically identified by words or phrases such as "trend," "forecast," "project," "predict," "potential," "approximate," "opportunity," "believe," "expect," "anticipate," "current," "intention," "estimate," "position," "projection," "plan," "assume," "continue," "remain," "maintain," "sustain," "seek," "achieve," and similar expressions, or future or conditional verbs such as "will," "would," "should," "could," "can," "may," and similar expressions. Any forward-looking statement, and Federated Hermes' level of business activity and financial results, are inherently subject to significant business, market, economic, competitive, regulatory and other risks and uncertainties, many of which are difficult to predict and beyond Federated Hermes' control. Other risks and uncertainties include the ability of the company to predict the level of fee waivers and expenses in future quarters, predict whether performance fees or carried interest will be earned and retained, the ability of the company to sustain product demand, the timing and level of product sales and redemptions, market appreciation or depreciation, revenues, and asset levels, flows and mix, which could vary significantly depending on various factors, such as market conditions, investment performance and investor behavior. Other risks and uncertainties include the risk factors discussed in the company's annual and quarterly reports as filed with the Securities and Exchange Commission. As a result, no assurance can be given as to future results, levels of activity, performance or achievements, and neither the company nor any other person assumes responsibility for the accuracy and completeness, or updating, of such statements in the future.
Unaudited Condensed Consolidated Statements of Income
(in thousands, except per share data)
Quarter Ended
%
Change
Q1 2025
to Q1
2026
Quarter Ended
%
Change
Q4 2025
to Q1
2026
March 31, 2026
March 31, 2025
Dec. 31, 2025
Revenue
Investment advisory fees, net
$ 319,408
$ 287,460
11 %
$ 313,975
2 %
Administrative service fees, net—affiliates
110,285
101,109
9
109,759
0
Other service fees, net
49,264
34,971
41
59,099
(17)
Total Revenue
478,957
423,540
13
482,833
(1)
Operating Expenses
Compensation and related
154,119
143,270
8
144,981
6
Distribution
125,745
99,085
27
122,339
3
Systems and communications
26,463
24,226
9
24,719
7
Professional service fees
21,336
18,548
15
23,399
(9)
Office and occupancy
10,062
9,952
1
9,704
4
Advertising and promotional
4,098
4,576
(10)
7,001
(41)
Travel and related
3,850
3,553
8
4,677
(18)
Intangible asset related
3,422
3,196
7
3,475
(2)
Other
3,531
(14,638)
(124)
6,964
(49)
Total Operating Expenses
352,626
291,768
21
347,259
2
Operating Income
126,331
131,772
(4)
135,574
(7)
Nonoperating Income (Expenses)
Investment income (loss), net
6,653
7,475
(11)
7,886
(16)
Debt expense
(3,185)
(3,179)
0
(3,201)
0
Other, net
(30)
(27)
(11)
73
(141)
Total Nonoperating Income (Expenses), net
3,438
4,269
(19)
4,758
(28)
Income before income taxes
129,769
136,041
(5)
140,332
(8)
Income tax provision
33,823
32,165
5
32,899
3
Net income including the noncontrolling interests in subsidiaries
95,946
103,876
(8)
107,433
(11)
Less: Net income (loss) attributable to the noncontrolling interests in subsidiaries
(432)
2,742
(116)
394
(210)
Net Income
$ 96,378
$ 101,134
(5) %
$ 107,039
(10) %
Amounts Attributable to Federated Hermes, Inc.
Earnings Per Share 1
Basic and diluted
$ 1.27
$ 1.25
2 %
$ 1.39
(9) %
Weighted-Average Shares Outstanding
Basic
72,648
77,541
73,795
Diluted
72,650
77,542
73,795
Dividends Declared Per Share
$ 0.34
$ 0.31
$ 0.34
1)
Unvested share-based awards that receive non-forfeitable dividend rights are deemed participating securities and are required to be considered in the computation of earnings per share under the "two-class method." As such, total net income of $4.4 million, $4.5 million and $4.8 million available to unvested restricted Federated Hermes shareholders for the quarterly periods ended March 31, 2026, March 31, 2025 and Dec. 31, 2025, respectively, was excluded from the computation of earnings per share.
Unaudited Condensed Consolidated Balance Sheets
(in thousands)
March 31, 2026
Dec. 31, 2025
Assets
Cash and other investments
$ 645,417
$ 724,297
Other current assets
143,153
139,495
Intangible assets, net, including goodwill
1,173,986
1,183,612
Other long-term assets
181,251
181,933
Total Assets
$ 2,143,807
$ 2,229,337
Liabilities, Redeemable Noncontrolling Interests and Equity
Current liabilities
$ 240,680
$ 314,141
Long-term debt
348,434
348,369
Other long-term liabilities
291,853
303,350
Redeemable noncontrolling interests
58,520
66,529
Equity excluding treasury stock
2,133,825
2,070,162
Treasury stock
(929,505)
(873,214)
Total Liabilities, Redeemable Noncontrolling Interests and Equity
$ 2,143,807
$ 2,229,337
Unaudited Changes in Long-Term Assets - By Asset Class
(in millions)
Quarter Ended
March 31, 2026
Dec. 31, 2025
March 31, 2025
Equity
Beginning assets
$ 97,898
$ 94,656
$ 79,423
Sales 1
9,091
8,949
7,412
Redemptions 1
(6,878)
(7,431)
(5,993)
Net sales (redemptions) 1
2,213
1,518
1,419
Net exchanges
(139)
139
(114)
Impact of foreign exchange 2
(287)
107
754
Market gains and (losses) 3
1,147
1,478
(569)
Ending assets
$ 100,832
$ 97,898
$ 80,913
Fixed Income
Beginning assets
$ 100,127
$ 101,813
$ 98,059
Sales 1
5,927
5,891
5,944
Redemptions 1
(6,349)
(8,687)
(6,288)
Net sales (redemptions) 1
(422)
(2,796)
(344)
Net exchanges
148
15
101
Impact of foreign exchange 2
(40)
6
85
Market gains and (losses) 3
(15)
1,089
1,585
Ending assets
$ 99,798
$ 100,127
$ 99,486
Alternative/Private Markets
Beginning assets
$ 19,101
$ 19,024
$ 18,864
Sales 1
629
724
1,085
Redemptions 1
(547)
(592)
(1,024)
Net sales (redemptions) 1
82
132
61
Net exchanges
0
0
1
Impact of foreign exchange 2
(275)
35
532
Market gains and (losses) 3
83
(90)
(32)
Ending assets
$ 18,991
$ 19,101
$ 19,426
Multi-asset
Beginning assets
$ 2,854
$ 2,940
$ 2,883
Sales 1
58
59
63
Redemptions 1
(94)
(92)
(105)
Net sales (redemptions) 1
(36)
(33)
(42)
Net exchanges
1
(121)
2
Market gains and (losses) 3
(41)
68
(17)
Ending assets
$ 2,778
$ 2,854
$ 2,826
Total Long-term Assets
Beginning assets
$ 219,980
$ 218,433
$ 199,229
Sales 1
15,705
15,623
14,504
Redemptions 1
(13,868)
(16,802)
(13,410)
Net sales (redemptions) 1
1,837
(1,179)
1,094
Net exchanges
10
33
(10)
Impact of foreign exchange 2
(602)
148
1,371
Market gains and (losses) 3
1,174
2,545
967
Ending assets
$ 222,399
$ 219,980
$ 202,651
1)
For certain accounts, including separately managed accounts, institutional accounts, certain sub-advised funds and other managed offerings, Sales and Redemptions are calculated as the remaining difference between beginning and ending assets after the calculation of total investment return.
2)
Reflects the impact of translating non-U.S. dollar denominated assets under management (AUM) into U.S. dollars for reporting purposes.
3)
Reflects the approximate changes in the fair value of the securities held by the portfolios and, to a lesser extent, reinvested dividends, distributions and net investment income.
Unaudited Changes in Long-Term Assets - By Asset Class and Offering Type
(in millions)
Quarter Ended
March 31, 2026
Equity
Fixed Income
Alternative / Private
Markets
Multi-asset
Total
Funds
Separate
Accounts 1
Funds
Separate
Accounts 1
Funds
Separate
Accounts 1
Funds
Separate
Accounts 1
Funds .
Separate
Accounts 1
Beginning assets
$ 54,988
$ 42,910
$ 45,973
$ 54,154
$ 12,085
$ 7,016
$ 2,850
$ 4
$ 115,896
$ 104,084
Sales
5,855
3,236
3,985
1,942
609
20
58
0
10,507
5,198
Redemptions
(4,561)
(2,317)
(3,993)
(2,356)
(318)
(229)
(94)
0
(8,966)
(4,902)
Net sales (redemptions)
1,294
919
(8)
(414)
291
(209)
(36)
0
1,541
296
Net exchanges
(169)
30
148
0
0
0
1
0
(20)
30
Impact of foreign exchange 2
(158)
(129)
(26)
(14)
(159)
(116)
0
0
(343)
(259)
Market gains and (losses) 3
(767)
1,914
(166)
151
122
(39)
(41)
0
(852)
2,026
Ending assets
$ 55,188
$ 45,644
$ 45,921
$ 53,877
$ 12,339
$ 6,652
$ 2,774
$ 4
$ 116,222
$ 106,177
1)
Includes separately managed accounts, institutional accounts, certain sub-advised funds and other managed offerings. For certain accounts, Sales and Redemptions are calculated as the remaining difference between beginning and ending assets after the calculation of total investment return.
2)
Reflects the impact of translating non-U.S. dollar denominated AUM into U.S. dollars for reporting purposes.
3)
Reflects the approximate changes in the fair value of the securities held by the portfolios and, to a lesser extent, reinvested dividends, distributions and net investment income.
Unaudited Changes in Long-Term Assets - By Offering Type
(in millions)
Quarter Ended
March 31, 2026
Dec. 31, 2025
March 31, 2025
Total Fund Assets
Beginning assets
$ 115,896
$ 115,215
$ 103,567
Sales
10,507
10,419
9,279
Redemptions
(8,966)
(10,835)
(8,763)
Net sales (redemptions)
1,541
(416)
516
Net exchanges
(20)
33
0
Impact of foreign exchange 1
(343)
34
685
Market gains and (losses) 2
(852)
1,030
(479)
Ending assets
$ 116,222
$ 115,896
$ 104,289
Total Separate Account Assets 3
Beginning assets
$ 104,084
$ 103,218
$ 95,662
Sales 4
5,198
5,204
5,225
Redemptions 4
(4,902)
(5,967)
(4,647)
Net sales (redemptions) 4
296
(763)
578
Net exchanges
30
0
(10)
Impact of foreign exchange 1
(259)
114
686
Market gains and (losses) 2
2,026
1,515
1,446
Ending assets
$ 106,177
$ 104,084
$ 98,362
Total Long-term Assets 3
Beginning assets
$ 219,980
$ 218,433
$ 199,229
Sales 4
15,705
15,623
14,504
Redemptions 4
(13,868)
(16,802)
(13,410)
Net sales (redemptions) 4
1,837
(1,179)
1,094
Net exchanges
10
33
(10)
Impact of foreign exchange 1
(602)
148
1,371
Market gains and (losses) 2
1,174
2,545
967
Ending assets
$ 222,399
$ 219,980
$ 202,651
1)
Reflects the impact of translating non-U.S. dollar denominated AUM into U.S. dollars for reporting purposes.
2)
Reflects the approximate changes in the fair value of the securities held by the portfolios and, to a lesser extent, reinvested dividends, distributions and net investment income.
3)
Includes separately managed accounts, institutional accounts, certain sub-advised funds and other managed offerings.
4)
For certain accounts, Sales and Redemptions are calculated as the remaining difference between beginning and ending assets after the calculation of total investment return.
Unaudited Managed Assets
(in millions)
March 31, 2026
Dec. 31, 2025
Sept. 30, 2025
June 30, 2025
March 31, 2025
By Asset Class
Equity
$ 100,832
$ 97,898
$ 94,656
$ 88,994
$ 80,913
Fixed-Income
99,798
100,127
101,813
98,687
99,486
Alternative / Private Markets
18,991
19,101
19,024
20,738
19,426
Multi-Asset
2,778
2,854
2,940
2,856
2,826
Total Long-Term Assets
222,399
219,980
218,433
211,275
202,651
Money Market
684,748
682,604
652,767
634,400
637,122
Total Managed Assets
$ 907,147
$ 902,584
$ 871,200
$ 845,675
$ 839,773
By Offering Type
Funds:
Equity
$ 55,188
$ 54,988
$ 54,110
$ 49,359
$ 43,910
Fixed-Income
45,921
45,973
46,478
45,415
45,800
Alternative / Private Markets
12,339
12,085
11,814
12,905
11,879
Multi-Asset
2,774
2,850
2,813
2,730
2,700
Total Long-Term Assets
116,222
115,896
115,215
110,409
104,289
Money Market
502,775
508,403
492,701
468,044
464,912
Total Fund Assets
$ 618,997
$ 624,299
$ 607,916
$ 578,453
$ 569,201
Separate Accounts:
Equity
$ 45,644
$ 42,910
$ 40,546
$ 39,635
$ 37,003
Fixed-Income
53,877
54,154
55,335
53,272
53,686
Alternative / Private Markets
6,652
7,016
7,210
7,833
7,547
Multi-Asset
4
4
127
126
126
Total Long-Term Assets
106,177
104,084
103,218
100,866
98,362
Money Market
181,973
174,201
160,066
166,356
172,210
Total Separate Account Assets
$ 288,150
$ 278,285
$ 263,284
$ 267,222
$ 270,572
Total Managed Assets
$ 907,147
$ 902,584
$ 871,200
$ 845,675
$ 839,773
Unaudited Average Managed Assets
Quarter Ended
(in millions)
March 31, 2026
Dec. 31, 2025
Sept. 30, 2025
June 30, 2025
March 31, 2025
By Asset Class
Equity
$ 102,037
$ 96,404
$ 92,436
$ 83,564
$ 82,105
Fixed-Income
100,996
100,855
99,206
98,365
99,360
Alternative / Private Markets
19,232
18,971
19,862
20,053
19,012
Multi-Asset
2,859
2,836
2,895
2,779
2,900
Total Long-Term Assets
225,124
219,066
214,399
204,761
203,377
Money Market
690,450
654,635
645,092
632,543
639,827
Total Avg. Managed Assets
$ 915,574
$ 873,701
$ 859,491
$ 837,304
$ 843,204
By Offering Type
Funds:
Equity
$ 56,987
$ 55,101
$ 51,828
$ 45,965
$ 45,260
Fixed-Income
46,096
46,116
45,743
44,972
45,715
Alternative / Private Markets
12,254
11,871
12,347
12,370
11,610
Multi-Asset
2,855
2,833
2,770
2,654
2,774
Total Long-Term Assets
118,192
115,921
112,688
105,961
105,359
Money Market
507,752
493,355
482,237
462,683
463,727
Total Avg. Fund Assets
$ 625,944
$ 609,276
$ 594,925
$ 568,644
$ 569,086
Separate Accounts:
Equity 1
$ 45,050
$ 41,303
$ 40,608
$ 37,599
$ 36,845
Fixed-Income
54,900
54,739
53,463
53,393
53,645
Alternative / Private Markets
6,978
7,100
7,515
7,683
7,402
Multi-Asset 1
4
3
125
125
126
Total Long-Term Assets
106,932
103,145
101,711
98,800
98,018
Money Market
182,698
161,280
162,855
169,860
176,100
Total Avg. Separate Account Assets
$ 289,630
$ 264,425
$ 264,566
$ 268,660
$ 274,118
Total Avg. Managed Assets
$ 915,574
$ 873,701
$ 859,491
$ 837,304
$ 843,204
1) A Separate Account was reclassified from Multi-Asset to Equity effective October 1, 2025.
SOURCE Federated Hermes, Inc.