Federated Hermes Reports $1.63 Billion Revenue for Fiscal Year 2024, AUM Increases to $829.6 Billion

Federated Hermes, Inc. reported a total revenue of $1.63 billion for the fiscal year ending December 31, 2024, reflecting a 1% increase from $1.61 billion in 2023. The growth was primarily driven by a rise in investment advisory fees, which totaled $1.10 billion, although this represented a slight decline of 2% compared to the previous year. Administrative service fees increased by 13% to $387.5 million, while other service fees decreased by 3% to $146.7 million. The company's net income attributable to shareholders decreased to $268.3 million, down from $299 million in 2023, resulting in diluted earnings per share of $3.23, compared to $3.40 in the prior year.

Federated Hermes experienced a 9% increase in total assets under management (AUM), reaching $829.6 billion as of December 31, 2024, up from $757.6 billion in 2023. This growth was largely attributed to a 13% increase in money market assets, which totaled $630.3 billion, and a 3% increase in fixed-income assets, amounting to $98.1 billion. However, equity assets remained relatively flat at $79.4 billion, and alternative/private markets assets decreased by 8% to $18.9 billion. The company’s average managed assets also rose by 12% year-over-year, indicating a positive trend in asset retention and growth.

Strategically, Federated Hermes has focused on enhancing its investment offerings and expanding its market presence. The company continues to integrate environmental, social, and governance (ESG) factors into its investment strategies, which has become increasingly important to its clients. As of December 31, 2024, Federated Hermes managed 176 funds, including 22 money market funds, 45 equity funds, and 54 fixed-income funds. The firm has also been active in share repurchase programs, repurchasing 4 million shares of its Class B common stock for $133.6 million during the year, with 5.7 million shares remaining available for future repurchases.

In terms of operational metrics, Federated Hermes employed 2,072 individuals as of December 31, 2024, with a significant presence in Pittsburgh, London, and New York. The company reported a flat distribution expense ratio of 28% of total revenue, indicating stable operational efficiency. The firm’s liquidity position remained strong, with liquid assets totaling $694.1 million, up from $656.4 million in 2023. Federated Hermes also maintained compliance with its debt covenants, with an interest coverage ratio of 42 to 1 and a leverage ratio of 0.68 to 1 as of year-end.

Looking ahead, Federated Hermes anticipates continued growth in AUM and revenue, driven by its strategic focus on active investment management and ESG integration. However, the company acknowledges potential risks, including market volatility, regulatory changes, and competition within the investment management industry. Management remains committed to monitoring these factors closely to ensure sustained financial performance and shareholder value.