Federated Investors, Inc. Reports Third Quarter 2019 Earnings
- Q3 2019 EPS of $0.72 compared to $0.59 for Q3 2018
- Managed assets reach a record $527.2 billion
- Board declares $0.27 per share quarterly dividend
PITTSBURGH, Oct. 24, 2019 /PRNewswire/ -- Federated Investors, Inc. (NYSE: FII), a leading global investment manager, today reported earnings per diluted share (EPS) of $0.72 for Q3 2019, compared to $0.59 for the same quarter last year, on net income of $73.0 million for Q3 2019, compared to $59.6 million for Q3 2018. Federated reported YTD 2019 EPS of $1.88, compared to $1.57 for the same period in 2018, on YTD 2019 net income of $190.2 million, compared to $158.8 million for the same period in 2018. Federated's YTD 2018 results included a $27.2 million pre-tax net expense, representing $0.21 per diluted share net of tax, primarily related to two foreign currency forward derivative instruments (FX Forward Loss) entered into in connection with Federated's Q3 2018 acquisition of a majority interest in Hermes Fund Managers Limited (Hermes).
Federated's total managed assets were a record $527.2 billion at Sept. 30, 2019, up $90.0 billion or 21% from $437.2 billion at Sept. 30, 2018 and up $25.0 billion or 5% from $502.2 billion at June 30, 2019. Total average managed assets for Q3 2019 were $518.0 billion, up $84.1 billion or 19% from $433.9 billion reported for Q3 2018 and up $24.7 billion or 5% from $493.3 billion reported for Q2 2019.
"As the Federal Reserve cut rates twice in the quarter, investors sought Federated's range of ultrashort products and other fixed-income strategies, and our liquidity management solutions approached record highs," said J. Christopher Donahue, president and chief executive officer. "Federated also continued to see interest in the growth-focused Federated Kaufmann Small Cap Fund, as well as a range of Hermes equity strategies."
Federated's board of directors declared a quarterly dividend of $0.27 per share. The dividend is payable on Nov. 15, 2019 to shareholders of record as of Nov. 8, 2019. During Q3 2019, Federated purchased 79,592 shares of Federated class B common stock for $1.9 million.
Federated's equity assets were $80.8 billion at Sept. 30, 2019, down $3.3 billion or 4% from $84.1 billion at Sept. 30, 2018 and down $1.2 billion or 1% from $82.0 billion at June 30, 2019. Top-selling equity funds during Q3 2019 on a net basis were Federated Kaufmann Small Cap Fund; Hermes Global Emerging Markets Fund; Hermes SDG Engagement Equity Fund; Hermes Global Equity ESG Fund; and Federated MDT Small Cap Growth Fund.
Federated's fixed-income assets were a record $65.8 billion at Sept. 30, 2019, up $0.4 billion or 1% from $65.4 billion at Sept. 30, 2018 and up $0.7 billion or 1% from $65.1 billion at June 30, 2019. Top-selling fixed-income funds during Q3 2019 on a net basis were Federated Bond Fund; Federated Municipal Ultrashort Fund; Federated Institutional High Yield Bond Fund; Hermes Global High Yield Credit Fund; and Federated Government Ultrashort Duration Fund.
Money market assets were $359.3 billion at Sept. 30, 2019, up $95.1 billion or 36% from $264.2 billion at Sept. 30, 2018 and up $26.2 billion or 8% from $333.1 billion at June 30, 2019. Money market fund assets were $261.2 billion at Sept. 30, 2019, up $78.2 billion or 43% from $183.0 billion at Sept. 30, 2018 and up $29.9 billion or 13% from $231.3 billion at June 30, 2019.
Federated's money market separate account assets were $98.1 billion at Sept. 30, 2019, up $16.8 billion or 21% from $81.3 billion at Sept. 30, 2018 and down $3.6 billion or 4% from $101.7 billion at June 30, 2019.
Financial Summary
Q3 2019 vs. Q3 2018
Revenue increased $31.7 million or 10% primarily due to higher average money market assets. This increase in revenue was partially offset by a decrease in revenue from lower average equity assets.
During Q3 2019, Federated derived 58% of its revenue from long-term assets (40% from equity assets, 13% from fixed-income assets and 5% from alternative/private markets and multi-asset), 41% from money market assets, and 1% from sources other than managed assets.
Operating expenses increased $24.3 million or 11% primarily due to an increase in distribution expenses associated with higher average money market fund assets and an increase in compensation and related expenses.
Nonoperating income (expenses), net increased $5.6 million primarily due to an increase in private equity carried interest income on assets managed by a nonconsolidated entity.
Q3 2019 vs. Q2 2019
Revenue increased $18.9 million or 6% primarily due to higher average money market assets and an extra day of revenue in Q3 2019.
Operating expenses increased $14.5 million or 6% primarily due to an increase in distribution expenses associated with higher average money market fund assets and an increase in compensation and related expenses.
Nonoperating income (expenses), net increased $8.1 million primarily due to an increase in private equity carried interest income on assets managed by a nonconsolidated entity.
YTD 2019 vs. YTD 2018
Revenue increased $140.4 million or 17% primarily due to the consolidation of Hermes' revenue (which included performance fees of $4.2 million in 2019) for three quarters in 2019 as compared to one quarter in 2018 and higher average money market assets. These increases were partially offset by a decrease in revenue from lower average equity and multi-asset assets and a change in the mix of average domestic fixed-income assets.
For the first nine months of 2019, Federated derived 60% of its revenue from long-term assets (41% from equity assets, 14% from fixed-income assets and 5% from alternative/private markets and multi-asset), 39% from money market assets, and 1% from sources other than managed assets.
Operating expenses increased $137.6 million or 23% primarily due to the consolidation of Hermes' expenses for three quarters in 2019 as compared to one quarter in 2018 and an increase in distribution expenses associated with higher average money market fund assets.
Nonoperating income (expenses), net increased $36.4 million primarily due to the FX Forward Loss recorded in Q2 2018.
Federated's level of business activity and financial results are dependent upon many factors, including market conditions, investment performance and investor behavior. These factors and others, including asset levels and mix, product sales and redemptions, market appreciation or depreciation, revenues, fee waivers, expenses and regulatory changes, can significantly impact Federated's business activity levels and financial results. Risk factors and uncertainties that can influence Federated's financial results are discussed in the company's annual and quarterly reports as filed with the Securities and Exchange Commission (SEC).
Federated will host an earnings conference call at 9 a.m. Eastern on Oct. 25, 2019. Investors are invited to listen to Federated's earnings teleconference by calling 844-602-0380 (domestic) or 862-298-0970 (international) prior to the 9 a.m. start time. The call may also be accessed online in real time via the About section of FederatedInvestors.com. A replay will be available from approximately 12:30 p.m. Eastern on Oct. 25, 2019 until Nov. 1, 2019 by calling 877-481-4010 (domestic) or 919-882-2331 (international) and entering access code 54018. An online replay will be available via FederatedInvestors.com for one year.
Federated Investors, Inc. is a leading global investment manager with $527.2 billion in assets under management as of Sept. 30, 2019. Our investment solutions span 131 equity, fixed-income, alternative/private markets, multi-asset and liquidity management strategies, and a range of separately managed account strategies. Providing comprehensive investment management to more than 11,000 institutions and intermediaries, our clients include corporations, government entities, insurance companies, foundations and endowments, banks and broker/dealers. Headquartered in Pittsburgh, Federated's nearly 1,900 employees include those in New York, Boston, London and several other offices worldwide. In 2018, Federated acquired a majority interest in Hermes Investment Management, which provides world-class active management and stewardship services.
Federated ranks in the top 6% of equity fund managers in the industry, the top 7% of money market fund managers and the top 11% of fixed-income fund managers1. Federated also ranks as the 10th-largest SMA manager2. Information regarding Hermes is available at Hermes-Investment.com. An analyst presentation that includes information about Hermes also is available. For more information, visit FederatedInvestors.com.
###
1) Strategic Insight, Sept. 30, 2019. Based on assets under management in open-end funds.
2) Money Management Institute/Cerulli, Q2 2019.
Federated Securities Corp. is distributor of the Federated funds.
Separately managed accounts are made available through Federated Global Investment Management Corp., Federated Investment Counseling, Federated MDTA LLC, Hermes Investment Management Limited and Hermes European Equities Limited, each a registered investment adviser.
Certain statements in this press release, such as those related to performance, investor preferences and demand, and asset flows and 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. 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, sustain product demand, and asset 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 SEC. 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 of such statements in the future.
Unaudited Condensed Consolidated Statements of Income |
||||||||||||||
(in thousands, except per share data) |
||||||||||||||
Quarter Ended |
% Change |
Quarter Ended |
% Change |
|||||||||||
Sept. 30, 2019 |
Sept. 30, 2018 |
June 30, 2019 |
||||||||||||
Revenue |
||||||||||||||
Investment advisory fees, net |
$ |
232,106 |
$ |
217,036 |
7 |
% |
$ |
220,669 |
5 |
% |
||||
Administrative service fees, net—affiliates |
64,216 |
49,855 |
29 |
57,968 |
11 |
|||||||||
Other service fees, net |
44,018 |
41,725 |
5 |
42,842 |
3 |
|||||||||
Total Revenue |
340,340 |
308,616 |
10 |
321,479 |
6 |
|||||||||
Operating Expenses |
||||||||||||||
Compensation and related |
112,247 |
103,092 |
9 |
107,248 |
5 |
|||||||||
Distribution |
88,082 |
72,153 |
22 |
82,000 |
7 |
|||||||||
Systems and communications |
13,353 |
12,213 |
9 |
12,111 |
10 |
|||||||||
Office and occupancy |
10,855 |
9,332 |
16 |
11,066 |
(2) |
|||||||||
Professional service fees |
10,678 |
13,535 |
(21) |
10,281 |
4 |
|||||||||
Advertising and promotional |
4,102 |
4,502 |
(9) |
4,697 |
(13) |
|||||||||
Travel and related |
4,158 |
4,622 |
(10) |
4,459 |
(7) |
|||||||||
Other |
7,558 |
7,269 |
4 |
4,677 |
62 |
|||||||||
Total Operating Expenses |
251,033 |
226,718 |
11 |
236,539 |
6 |
|||||||||
Operating Income |
89,307 |
81,898 |
9 |
84,940 |
5 |
|||||||||
Nonoperating Income (Expenses) |
||||||||||||||
Investment income (loss), net |
444 |
1,199 |
(63) |
1,526 |
(71) |
|||||||||
Debt expense |
(1,239) |
(1,602) |
(23) |
(1,332) |
(7) |
|||||||||
Other, net |
8,264 |
2,240 |
269 |
(832) |
NM |
|||||||||
Total Nonoperating Income (Expenses), net |
7,469 |
1,837 |
307 |
(638) |
NM |
|||||||||
Income before income taxes |
96,776 |
83,735 |
16 |
84,302 |
15 |
|||||||||
Income tax provision |
23,191 |
21,741 |
7 |
20,462 |
13 |
|||||||||
Net income including the noncontrolling interests in subsidiaries |
73,585 |
61,994 |
19 |
63,840 |
15 |
|||||||||
Less: Net income (loss) attributable to the noncontrolling interests in |
623 |
2,386 |
(74) |
1,116 |
(44) |
|||||||||
Net Income |
$ |
72,962 |
$ |
59,608 |
22 |
% |
$ |
62,724 |
16 |
% |
||||
Amounts Attributable to Federated Investors, Inc. |
||||||||||||||
Earnings Per Share1 |
||||||||||||||
Basic and diluted |
$ |
0.72 |
$ |
0.59 |
22 |
% |
$ |
0.62 |
16 |
% |
||||
Weighted-Average Shares Outstanding |
||||||||||||||
Basic and diluted |
97,306 |
96,664 |
97,330 |
|||||||||||
Dividends Declared Per Share |
$ |
0.27 |
$ |
0.27 |
$ |
0.27 |
||||||||
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 basic earnings per share under the "two-class method." As such, total net income of $2.8 million, $2.4 million and $2.4 million available to unvested restricted Federated shareholders for the quarterly periods ended Sept. 30, 2019, Sept. 30, 2018 and June 30, 2019, respectively, was excluded from the computation of basic earnings per share. In addition to the amounts excluded from the basic earnings per share calculation, the computation of diluted earnings per share excludes net income available to unvested shareholders of a nonpublic consolidated subsidiary. |
Unaudited Condensed Consolidated Statements of Income |
||||||||
(in thousands, except per share data) |
||||||||
Nine Months Ended |
||||||||
Sept. 30, 2019 |
Sept. 30, 2018 |
% Change |
||||||
Revenue |
||||||||
Investment advisory fees, net |
$ |
663,974 |
$ |
559,429 |
19 |
% |
||
Administrative service fees, net—affiliates |
176,319 |
147,248 |
20 |
|||||
Other service fees, net |
128,576 |
121,784 |
6 |
|||||
Total Revenue |
968,869 |
828,461 |
17 |
|||||
Operating Expenses |
||||||||
Compensation and related |
330,712 |
255,613 |
29 |
|||||
Distribution |
247,713 |
214,098 |
16 |
|||||
Systems and communications |
38,258 |
28,397 |
35 |
|||||
Office and occupancy |
33,283 |
24,238 |
37 |
|||||
Professional service fees |
31,445 |
32,443 |
(3) |
|||||
Advertising and promotional |
12,989 |
10,967 |
18 |
|||||
Travel and related |
12,465 |
10,967 |
14 |
|||||
Other |
16,868 |
9,412 |
79 |
|||||
Total Operating Expenses |
723,733 |
586,135 |
23 |
|||||
Operating Income |
245,136 |
242,326 |
1 |
|||||
Nonoperating Income (Expenses) |
||||||||
Investment income (loss), net |
4,679 |
3,294 |
42 |
|||||
Debt expense |
(3,971) |
(4,363) |
(9) |
|||||
Other, net |
7,756 |
(26,877) |
129 |
|||||
Total Nonoperating Income (Expenses), net |
8,464 |
(27,946) |
130 |
|||||
Income before income taxes |
253,600 |
214,380 |
18 |
|||||
Income tax provision |
61,564 |
53,713 |
15 |
|||||
Net income including the noncontrolling interests in subsidiaries |
192,036 |
160,667 |
20 |
|||||
Less: Net income (loss) attributable to the noncontrolling interests in |
1,804 |
1,906 |
(5) |
|||||
Net Income |
$ |
190,232 |
$ |
158,761 |
20 |
% |
||
Amounts Attributable to Federated Investors, Inc. |
||||||||
Earnings Per Share1 |
||||||||
Basic and diluted |
$ |
1.88 |
$ |
1.57 |
20 |
% |
||
Weighted-Average Shares Outstanding |
||||||||
Basic |
97,211 |
97,013 |
||||||
Diluted |
97,211 |
97,014 |
||||||
Dividends Declared Per Share |
$ |
0.81 |
$ |
0.79 |
||||
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 basic earnings per share under the "two-class method." As such, total net income of $7.3 million and $6.3 million available to unvested restricted Federated shareholders for the nine months ended Sept. 30, 2019 and Sept. 30, 2018, respectively, was excluded from the computation of basic earnings per share. In addition to the amounts excluded from the basic earnings per share calculation, the computation of diluted earnings per share excludes net income available to unvested shareholders of a nonpublic consolidated subsidiary. |
Unaudited Condensed Consolidated Balance Sheets |
||||||
(in thousands) |
Sept. 30, 2019 |
Dec. 31, 2018 |
||||
Assets |
||||||
Cash and other investments |
$ |
309,005 |
$ |
190,490 |
||
Other current assets |
111,867 |
113,611 |
||||
Intangible assets, net, including goodwill |
1,133,370 |
1,149,247 |
||||
Other long-term assets |
199,729 |
90,335 |
||||
Total Assets |
$ |
1,753,971 |
$ |
1,543,683 |
||
Liabilities, Redeemable Noncontrolling Interests and Equity |
||||||
Current liabilities |
$ |
194,375 |
$ |
181,180 |
||
Long-term debt |
120,000 |
135,000 |
||||
Other long-term liabilities |
289,607 |
187,869 |
||||
Redeemable noncontrolling interests |
199,492 |
182,513 |
||||
Equity excluding treasury stock |
1,229,969 |
1,144,458 |
||||
Treasury stock |
(279,472) |
(287,337) |
||||
Total Liabilities, Redeemable Noncontrolling Interests and Equity |
$ |
1,753,971 |
$ |
1,543,683 |
||
Unaudited Changes in Long-Term Assets - By Asset Class |
||||||||||||||||
(in millions) |
Quarter Ended |
Nine Months Ended |
||||||||||||||
Sept. 30, 2019 |
June 30, 2019 |
Sept. 30, 2018 |
Sept. 30, 2019 |
Sept. 30, 2018 |
||||||||||||
Equity |
||||||||||||||||
Beginning assets |
$ |
81,999 |
$ |
80,245 |
$ |
57,973 |
$ |
72,497 |
$ |
62,816 |
||||||
Sales1 |
5,182 |
4,812 |
3,757 |
15,130 |
9,681 |
|||||||||||
Redemptions1 |
(6,384) |
(4,404) |
(5,288) |
(16,714) |
(15,624) |
|||||||||||
Net sales (redemptions)1 |
(1,202) |
408 |
(1,531) |
(1,584) |
(5,943) |
|||||||||||
Net exchanges |
(11) |
191 |
(11) |
193 |
64 |
|||||||||||
Acquisition-related |
0 |
0 |
24,700 |
0 |
24,700 |
|||||||||||
Impact of foreign exchange2 |
(577) |
4 |
0 |
(695) |
0 |
|||||||||||
Market gains and (losses)3 |
541 |
1,151 |
3,012 |
10,339 |
2,506 |
|||||||||||
Ending assets |
$ |
80,750 |
$ |
81,999 |
$ |
84,143 |
$ |
80,750 |
$ |
84,143 |
||||||
Fixed Income |
||||||||||||||||
Beginning assets |
$ |
65,052 |
$ |
64,107 |
$ |
61,435 |
$ |
63,158 |
$ |
64,160 |
||||||
Sales1 |
4,805 |
5,193 |
5,163 |
15,414 |
14,826 |
|||||||||||
Redemptions1 |
(5,418) |
(5,181) |
(4,418) |
(16,940) |
(15,946) |
|||||||||||
Net sales (redemptions)1 |
(613) |
12 |
745 |
(1,526) |
(1,120) |
|||||||||||
Net exchanges |
10 |
(191) |
2 |
(214) |
(78) |
|||||||||||
Acquisition-related |
0 |
0 |
2,732 |
0 |
2,732 |
|||||||||||
Impact of foreign exchange2 |
(107) |
(25) |
0 |
(124) |
0 |
|||||||||||
Market gains and (losses)3 |
1,482 |
1,149 |
455 |
4,530 |
(325) |
|||||||||||
Ending assets |
$ |
65,824 |
$ |
65,052 |
$ |
65,369 |
$ |
65,824 |
$ |
65,369 |
||||||
Alternative/Private Markets4 |
||||||||||||||||
Beginning assets |
$ |
17,917 |
$ |
17,854 |
$ |
292 |
$ |
18,318 |
$ |
366 |
||||||
Sales1 |
384 |
320 |
757 |
1,017 |
813 |
|||||||||||
Redemptions1 |
(813) |
(302) |
(674) |
(1,973) |
(785) |
|||||||||||
Net sales (redemptions)1 |
(429) |
18 |
83 |
(956) |
28 |
|||||||||||
Net exchanges |
(61) |
(1) |
(2) |
(64) |
(3) |
|||||||||||
Acquisition-related |
0 |
0 |
18,509 |
0 |
18,509 |
|||||||||||
Impact of foreign exchange2 |
(560) |
(435) |
0 |
(608) |
0 |
|||||||||||
Market gains and (losses)3 |
289 |
481 |
(261) |
466 |
(279) |
|||||||||||
Ending assets |
$ |
17,156 |
$ |
17,917 |
$ |
18,621 |
$ |
17,156 |
$ |
18,621 |
||||||
Multi-asset |
||||||||||||||||
Beginning assets |
$ |
4,213 |
$ |
4,259 |
$ |
4,730 |
$ |
4,093 |
$ |
5,014 |
||||||
Sales1 |
65 |
78 |
120 |
247 |
374 |
|||||||||||
Redemptions1 |
(218) |
(228) |
(211) |
(687) |
(675) |
|||||||||||
Net sales (redemptions)1 |
(153) |
(150) |
(91) |
(440) |
(301) |
|||||||||||
Net exchanges |
57 |
0 |
4 |
59 |
2 |
|||||||||||
Acquisition-related |
0 |
0 |
45 |
0 |
45 |
|||||||||||
Market gains and (losses)3 |
23 |
104 |
102 |
428 |
30 |
|||||||||||
Ending assets |
$ |
4,140 |
$ |
4,213 |
$ |
4,790 |
$ |
4,140 |
$ |
4,790 |
||||||
Total Long-term Assets4 |
||||||||||||||||
Beginning assets |
$ |
169,181 |
$ |
166,465 |
$ |
124,430 |
$ |
158,066 |
$ |
132,356 |
||||||
Sales1 |
10,436 |
10,403 |
9,797 |
31,808 |
25,694 |
|||||||||||
Redemptions1 |
(12,833) |
(10,115) |
(10,591) |
(36,314) |
(33,030) |
|||||||||||
Net sales (redemptions)1 |
(2,397) |
288 |
(794) |
(4,506) |
(7,336) |
|||||||||||
Net exchanges |
(5) |
(1) |
(7) |
(26) |
(15) |
|||||||||||
Acquisition-related |
0 |
0 |
45,986 |
0 |
45,986 |
|||||||||||
Impact of foreign exchange2 |
(1,244) |
(456) |
0 |
(1,427) |
0 |
|||||||||||
Market gains and (losses)3 |
2,335 |
2,885 |
3,308 |
15,763 |
1,932 |
|||||||||||
Ending assets |
$ |
167,870 |
$ |
169,181 |
$ |
172,923 |
$ |
167,870 |
$ |
172,923 |
||||||
1) |
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. Reporting only contains foreign exchange separately beginning with Q1 2019, previously included in Market gains and (losses). |
3) |
Reflects the approximate changes in the fair value of the securities held by the portfolios and, to a lesser extent, reinvested dividends, distributions, net investment income and the impact of changes in foreign exchange rates for periods prior to Q1 2019. |
4) |
Ending assets includes $8.0 billion, $8.4 billion, and $8.4 billion at Sept. 30, 2019, June 30, 2019, and Sept. 30, 2018, respectively, of assets managed by a nonconsolidated entity, Hermes GPE LLP, in which Hermes holds an equity method investment. |
Unaudited Changes in Long-Term Assets - By Asset Class and Product Type |
||||||||||||||||||||||||||||||
(in millions) |
||||||||||||||||||||||||||||||
Quarter Ended |
||||||||||||||||||||||||||||||
Sept. 30, 2019 |
||||||||||||||||||||||||||||||
Equity |
Fixed Income |
Alternative / Private |
Multi-asset |
Total |
||||||||||||||||||||||||||
Funds |
Separate Accounts1 |
Funds |
Separate Accounts1 |
Funds2 |
Separate Accounts1 |
Funds |
Separate Accounts1 |
Funds2 |
Separate Accounts1 |
|||||||||||||||||||||
Beginning assets |
$ |
43,443 |
$ |
38,556 |
$ |
42,084 |
$ |
22,968 |
$ |
11,400 |
$ |
6,517 |
$ |
4,019 |
$ |
194 |
$ |
100,946 |
$ |
68,235 |
||||||||||
Sales |
2,669 |
2,513 |
3,971 |
834 |
200 |
184 |
60 |
5 |
6,900 |
3,536 |
||||||||||||||||||||
Redemptions |
(2,991) |
(3,393) |
(4,136) |
(1,282) |
(651) |
(162) |
(208) |
(10) |
(7,986) |
(4,847) |
||||||||||||||||||||
Net sales (redemptions) |
(322) |
(880) |
(165) |
(448) |
(451) |
22 |
(148) |
(5) |
(1,086) |
(1,311) |
||||||||||||||||||||
Net exchanges |
(11) |
0 |
15 |
(5) |
(61) |
0 |
57 |
0 |
0 |
(5) |
||||||||||||||||||||
Impact of foreign exchange3 |
(291) |
(286) |
(81) |
(26) |
(353) |
(207) |
0 |
0 |
(725) |
(519) |
||||||||||||||||||||
Market gains and (losses)4 |
(244) |
785 |
476 |
1,006 |
291 |
(2) |
24 |
(1) |
547 |
1,788 |
||||||||||||||||||||
Ending assets |
$ |
42,575 |
$ |
38,175 |
$ |
42,329 |
$ |
23,495 |
$ |
10,826 |
$ |
6,330 |
$ |
3,952 |
$ |
188 |
$ |
99,682 |
$ |
68,188 |
||||||||||
Nine Months Ended |
||||||||||||||||||||||||||||||
Sept. 30, 2019 |
||||||||||||||||||||||||||||||
Equity |
Fixed Income |
Alternative / Private |
Multi-asset |
Total |
||||||||||||||||||||||||||
Funds |
Separate Accounts1 |
Funds |
Separate Accounts1 |
Funds2 |
Separate Accounts1 |
Funds |
Separate Accounts1 |
Funds2 |
Separate Accounts1 |
|||||||||||||||||||||
Beginning assets |
$ |
36,584 |
$ |
35,913 |
$ |
40,490 |
$ |
22,668 |
$ |
11,365 |
$ |
6,953 |
$ |
3,920 |
$ |
173 |
$ |
92,359 |
$ |
65,707 |
||||||||||
Sales |
9,128 |
6,002 |
12,266 |
3,148 |
695 |
322 |
235 |
12 |
22,324 |
9,484 |
||||||||||||||||||||
Redemptions |
(8,734) |
(7,980) |
(12,707) |
(4,233) |
(1,251) |
(722) |
(665) |
(22) |
(23,357) |
(12,957) |
||||||||||||||||||||
Net sales (redemptions) |
394 |
(1,978) |
(441) |
(1,085) |
(556) |
(400) |
(430) |
(10) |
(1,033) |
(3,473) |
||||||||||||||||||||
Net exchanges |
193 |
0 |
(184) |
(30) |
(64) |
0 |
59 |
0 |
4 |
(30) |
||||||||||||||||||||
Impact of foreign exchange3 |
(333) |
(362) |
(95) |
(29) |
(380) |
(228) |
0 |
0 |
(808) |
(619) |
||||||||||||||||||||
Market gains and (losses)4 |
5,737 |
4,602 |
2,559 |
1,971 |
461 |
5 |
403 |
25 |
9,160 |
6,603 |
||||||||||||||||||||
Ending assets |
$ |
42,575 |
$ |
38,175 |
$ |
42,329 |
$ |
23,495 |
$ |
10,826 |
$ |
6,330 |
$ |
3,952 |
$ |
188 |
$ |
99,682 |
$ |
68,188 |
||||||||||
1) |
Includes separately managed accounts, institutional accounts, sub-advised funds and other managed products. 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) |
Ending assets includes $8.0 billion of assets managed by a nonconsolidated entity, Hermes GPE LLP, in which Hermes holds an equity method investment. |
3) |
Reflects the impact of translating non-U.S. dollar denominated AUM into U.S. dollars for reporting purposes. |
4) |
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 Product Type |
||||||||||||||||
(in millions) |
Quarter Ended |
Nine Months Ended |
||||||||||||||
Sept. 30, 2019 |
June 30, 2019 |
Sept. 30, 2018 |
Sept. 30, 2019 |
Sept. 30, 2018 |
||||||||||||
Total Fund Assets1 |
||||||||||||||||
Beginning assets |
$ |
100,946 |
$ |
98,482 |
$ |
76,389 |
$ |
92,359 |
$ |
79,301 |
||||||
Sales |
6,900 |
7,502 |
7,168 |
22,324 |
18,733 |
|||||||||||
Redemptions |
(7,986) |
(7,020) |
(7,405) |
(23,357) |
(21,986) |
|||||||||||
Net sales (redemptions) |
(1,086) |
482 |
(237) |
(1,033) |
(3,253) |
|||||||||||
Net exchanges |
0 |
(1) |
(4) |
4 |
(13) |
|||||||||||
Acquisition-related |
0 |
0 |
23,564 |
0 |
23,564 |
|||||||||||
Impact of foreign exchange2 |
(725) |
(331) |
0 |
(808) |
0 |
|||||||||||
Market gains and (losses)3 |
547 |
2,314 |
1,725 |
9,160 |
1,838 |
|||||||||||
Ending assets |
$ |
99,682 |
$ |
100,946 |
$ |
101,437 |
$ |
99,682 |
$ |
101,437 |
||||||
Total Separate Account Assets4 |
||||||||||||||||
Beginning assets |
$ |
68,235 |
$ |
67,983 |
$ |
48,041 |
$ |
65,707 |
$ |
53,055 |
||||||
Sales5 |
3,536 |
2,901 |
2,629 |
9,484 |
6,961 |
|||||||||||
Redemptions5 |
(4,847) |
(3,095) |
(3,186) |
(12,957) |
(11,044) |
|||||||||||
Net sales (redemptions)5 |
(1,311) |
(194) |
(557) |
(3,473) |
(4,083) |
|||||||||||
Net exchanges |
(5) |
0 |
(3) |
(30) |
(2) |
|||||||||||
Acquisition-related |
0 |
0 |
22,422 |
0 |
22,422 |
|||||||||||
Impact of foreign exchange2 |
(519) |
(125) |
0 |
(619) |
0 |
|||||||||||
Market gains and (losses)3 |
1,788 |
571 |
1,583 |
6,603 |
94 |
|||||||||||
Ending assets |
$ |
68,188 |
$ |
68,235 |
$ |
71,486 |
$ |
68,188 |
$ |
71,486 |
||||||
Total Long-term Assets1,4 |
||||||||||||||||
Beginning assets |
$ |
169,181 |
$ |
166,465 |
$ |
124,430 |
$ |
158,066 |
$ |
132,356 |
||||||
Sales5 |
10,436 |
10,403 |
9,797 |
31,808 |
25,694 |
|||||||||||
Redemptions5 |
(12,833) |
(10,115) |
(10,591) |
(36,314) |
(33,030) |
|||||||||||
Net sales (redemptions)5 |
(2,397) |
288 |
(794) |
(4,506) |
(7,336) |
|||||||||||
Net exchanges |
(5) |
(1) |
(7) |
(26) |
(15) |
|||||||||||
Acquisition-related |
0 |
0 |
45,986 |
0 |
45,986 |
|||||||||||
Impact of foreign exchange2 |
(1,244) |
(456) |
0 |
(1,427) |
0 |
|||||||||||
Market gains and (losses)3 |
2,335 |
2,885 |
3,308 |
15,763 |
1,932 |
|||||||||||
Ending assets |
$ |
167,870 |
$ |
169,181 |
$ |
172,923 |
$ |
167,870 |
$ |
172,923 |
||||||
1) |
Includes $8.0 billion, $8.4 billion, and $8.4 billion at Sept. 30, 2019, June 30, 2019, and Sept. 30, 2018, respectively, of assets managed by a nonconsolidated entity, Hermes GPE LLP, in which Hermes holds an equity method investment. |
2) |
Reflects the impact of translating non-U.S. dollar denominated AUM into U.S. dollars for reporting purposes. Reporting only contains foreign exchange separately beginning with Q1 2019, previously included in Market gains and (losses). |
3) |
Reflects the approximate changes in the fair value of the securities held by the portfolios and, to a lesser extent, reinvested dividends, distributions, net investment income and the impact of changes in foreign exchange rates for periods prior to Q1 2019. |
4) |
Includes separately managed accounts, institutional accounts, sub-advised funds and other managed products. |
5) |
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) |
Sept. 30, 2019 |
June 30, 2019 |
March 31, 2019 |
Dec. 31, 2018 |
Sept. 30, 2018 |
||||||||||
By Asset Class |
|||||||||||||||
Equity |
$ |
80,750 |
$ |
81,999 |
$ |
80,245 |
$ |
72,497 |
$ |
84,143 |
|||||
Fixed-income |
65,824 |
65,052 |
64,107 |
63,158 |
65,369 |
||||||||||
Alternative / private markets1 |
17,156 |
17,917 |
17,854 |
18,318 |
18,621 |
||||||||||
Multi-asset |
4,140 |
4,213 |
4,259 |
4,093 |
4,790 |
||||||||||
Total long-term assets |
167,870 |
169,181 |
166,465 |
158,066 |
172,923 |
||||||||||
Money market |
359,292 |
333,066 |
318,413 |
301,794 |
264,233 |
||||||||||
Total Managed Assets |
$ |
527,162 |
$ |
502,247 |
$ |
484,878 |
$ |
459,860 |
$ |
437,156 |
|||||
By Product Type |
|||||||||||||||
Funds: |
|||||||||||||||
Equity |
$ |
42,575 |
$ |
43,443 |
$ |
42,057 |
$ |
36,584 |
$ |
43,578 |
|||||
Fixed-income |
42,329 |
42,084 |
41,189 |
40,490 |
41,817 |
||||||||||
Alternative / private markets1 |
10,826 |
11,400 |
11,164 |
11,365 |
11,457 |
||||||||||
Multi-asset |
3,952 |
4,019 |
4,072 |
3,920 |
4,585 |
||||||||||
Total long-term assets |
99,682 |
100,946 |
98,482 |
92,359 |
101,437 |
||||||||||
Money market |
261,215 |
231,321 |
214,764 |
208,480 |
182,966 |
||||||||||
Total Fund Assets |
$ |
360,897 |
$ |
332,267 |
$ |
313,246 |
$ |
300,839 |
$ |
284,403 |
|||||
Separate Accounts: |
|||||||||||||||
Equity |
$ |
38,175 |
$ |
38,556 |
$ |
38,188 |
$ |
35,913 |
$ |
40,565 |
|||||
Fixed-income |
23,495 |
22,968 |
22,918 |
22,668 |
23,552 |
||||||||||
Alternative / private markets |
6,330 |
6,517 |
6,690 |
6,953 |
7,164 |
||||||||||
Multi-asset |
188 |
194 |
187 |
173 |
205 |
||||||||||
Total long-term assets |
68,188 |
68,235 |
67,983 |
65,707 |
71,486 |
||||||||||
Money market |
98,077 |
101,745 |
103,649 |
93,314 |
81,267 |
||||||||||
Total Separate Account Assets |
$ |
166,265 |
$ |
169,980 |
$ |
171,632 |
$ |
159,021 |
$ |
152,753 |
|||||
Total Managed Assets |
$ |
527,162 |
$ |
502,247 |
$ |
484,878 |
$ |
459,860 |
$ |
437,156 |
|||||
1) |
Includes $8.0 billion, $8.4 billion, $8.1 billion, $8.3 billion and $8.4 billion at Sept. 30, 2019, June 30, 2019, March 31, 2019, Dec. 31, 2018 and Sept. 30, 2018, respectively, of assets managed by a nonconsolidated entity, Hermes GPE LLP, in which Hermes holds an equity method investment. |
Unaudited Average Managed Assets |
Quarter Ended |
||||||||||||||
(in millions) |
Sept. 30, 2019 |
June 30, 2019 |
March 31, 2019 |
Dec. 31, 2018 |
Sept. 30, 2018 |
||||||||||
By Asset Class |
|||||||||||||||
Equity |
$ |
82,027 |
$ |
80,819 |
$ |
77,554 |
$ |
78,084 |
$ |
84,262 |
|||||
Fixed-income |
65,074 |
64,913 |
64,167 |
63,881 |
64,750 |
||||||||||
Alternative / private markets1 |
17,407 |
17,772 |
18,311 |
18,410 |
18,504 |
||||||||||
Multi-asset |
4,167 |
4,225 |
4,225 |
4,449 |
4,805 |
||||||||||
Total long-term assets |
168,675 |
167,729 |
164,257 |
164,824 |
172,321 |
||||||||||
Money market |
349,313 |
325,527 |
311,150 |
278,885 |
261,571 |
||||||||||
Total Avg. Managed Assets |
$ |
517,988 |
$ |
493,256 |
$ |
475,407 |
$ |
443,709 |
$ |
433,892 |
|||||
By Product Type |
|||||||||||||||
Funds: |
|||||||||||||||
Equity |
$ |
43,077 |
$ |
42,571 |
$ |
40,217 |
$ |
39,871 |
$ |
43,473 |
|||||
Fixed-income |
41,958 |
41,652 |
41,095 |
41,088 |
41,501 |
||||||||||
Alternative / private markets1 |
11,035 |
11,146 |
11,545 |
11,351 |
11,109 |
||||||||||
Multi-asset |
3,978 |
4,034 |
4,042 |
4,268 |
4,598 |
||||||||||
Total long-term assets |
100,048 |
99,403 |
96,899 |
96,578 |
100,681 |
||||||||||
Money market |
249,846 |
222,282 |
209,260 |
194,009 |
179,562 |
||||||||||
Total Avg. Fund Assets |
$ |
349,894 |
$ |
321,685 |
$ |
306,159 |
$ |
290,587 |
$ |
280,243 |
|||||
Separate Accounts: |
|||||||||||||||
Equity |
$ |
38,950 |
$ |
38,248 |
$ |
37,337 |
$ |
38,213 |
$ |
40,789 |
|||||
Fixed-income |
23,116 |
23,261 |
23,072 |
22,793 |
23,249 |
||||||||||
Alternative / private markets |
6,372 |
6,626 |
6,766 |
7,059 |
7,395 |
||||||||||
Multi-asset |
189 |
191 |
183 |
181 |
207 |
||||||||||
Total long-term assets |
68,627 |
68,326 |
67,358 |
68,246 |
71,640 |
||||||||||
Money market |
99,467 |
103,245 |
101,890 |
84,876 |
82,009 |
||||||||||
Total Avg. Separate Account Assets |
$ |
168,094 |
$ |
171,571 |
$ |
169,248 |
$ |
153,122 |
$ |
153,649 |
|||||
Total Avg. Managed Assets |
$ |
517,988 |
$ |
493,256 |
$ |
475,407 |
$ |
443,709 |
$ |
433,892 |
|||||
1) |
The average balance includes $8.1 billion, $8.1 billion, $8.4 billion, $8.3 billion and $8.2 billion for the quarters ended Sept. 30, 2019, June 30, 2019, March 31, 2019, Dec. 31, 2018 and Sept. 30, 2018 respectively, of assets managed by a nonconsolidated entity, Hermes GPE LLP, in which Hermes holds an equity method investment. |
Unaudited Average Managed Assets |
Nine Months Ended |
|||||||
(in millions) |
Sept. 30, 2019 |
Sept. 30, 2018 |
||||||
By Asset Class |
||||||||
Equity |
$ |
80,133 |
$ |
68,212 |
||||
Fixed-income |
64,718 |
63,312 |
||||||
Alternative / private markets1 |
17,830 |
6,393 |
||||||
Multi-asset |
4,206 |
4,869 |
||||||
Total long-term assets |
166,887 |
142,786 |
||||||
Money market |
328,664 |
263,162 |
||||||
Total Avg. Managed Assets |
$ |
495,551 |
$ |
405,948 |
||||
By Product Type |
||||||||
Funds: |
||||||||
Equity |
$ |
41,955 |
$ |
36,022 |
||||
Fixed-income |
41,568 |
40,907 |
||||||
Alternative / private markets1 |
11,243 |
3,928 |
||||||
Multi-asset |
4,018 |
4,650 |
||||||
Total long-term assets |
98,784 |
85,507 |
||||||
Money market |
227,130 |
179,100 |
||||||
Total Avg. Fund Assets |
$ |
325,914 |
$ |
264,607 |
||||
Separate Accounts: |
||||||||
Equity |
$ |
38,178 |
$ |
32,190 |
||||
Fixed-income |
23,150 |
22,405 |
||||||
Alternative / private markets |
6,587 |
2,465 |
||||||
Multi-asset |
188 |
219 |
||||||
Total long-term assets |
68,103 |
57,279 |
||||||
Money market |
101,534 |
84,062 |
||||||
Total Avg. Separate Account Assets |
$ |
169,637 |
$ |
141,341 |
||||
Total Avg. Managed Assets |
$ |
495,551 |
$ |
405,948 |
||||
1) |
The average balance includes $8.2 billion and $2.7 billion for the nine months ended Sept. 30, 2019 and 2018, respectively, of assets managed by a nonconsolidated entity, Hermes GPE LLP, in which Hermes holds an equity method investment. |
SOURCE Federated Investors, Inc.
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