Federated Hermes has reported record-high assets under management (AuM) of $845.7 billion for the second quarter of 2025, alongside a rise in earnings and the announcement of a new share repurchase programme.
The Pittsburgh-headquartered investment manager posted earnings per diluted share of $1.16 for the second quarter, up from $0.20 in Q2 2024. Net income rose to $91 million, compared to $21 million in the same period last year. The firm’s Q2 2024 results included a $66.3 million non-cash expense, or $0.76 per diluted share, tied to the impairment of an indefinite-lived intangible asset.
Total AuM stood at $845.7 billion as of June 30, 2025— up by 8% from last year, and 1% at the end of Q1 2025. Total average managed assets for the quarter were $837.3 billion, up 7% from Q2 2024, but slightly lower than $843.2 billion in the previous quarter.
MDT strategies (MDT Advisers is the active quantitative equity arm of Federated Hermes) saw strong growth, reaching $23.2 billion in assets—up $6.4 billion from Q1 2025 and $8.9 billion year-to-date. Equity assets increased to $89 billion, up 14% year-over-year and 10% quarter-over-quarter, driven by net inflows into funds, including the MDT Mid Cap Growth Fund, MDT All Cap Core Fund, and Asia ex-Japan Equity Fund.
Fixed income assets stood at $98.7 billion, up $3.4 billion from the previous year but down from $99.5 billion at the end of Q1. Alternative and private market assets rose to $20.7 billion, a 3% increase from Q2 2024 and up 7% from the prior quarter.
Reimagining asset management for 2025
Money market assets reached $634.4 billion, up 8% from last year. Money market fund assets hit a record $468 billion, a 10% rise from Q2 2024 and up slightly from the $464.9 billion recorded at the end of March.
The board of directors declared a dividend of $0.34 per share, payable on August 15 to shareholders of record as of August 8. During Q2, the firm repurchased 1,547,182 shares of class B common stock for $64.5 million. A new share repurchase programme was authorised, allowing the company to buy back up to 5 million additional shares, with no expiration date. The shares may be used for compensation plans, acquisitions or other corporate activities. The existing programme from October 2024 still has roughly 1.1 million shares remaining.
Revenue for the second quarter increased by $22.3 million, or 6%, mainly due to higher average money market and equity assets. Operating expenses fell by $54.1 million, or 15%, primarily due to the prior year’s impairment charge and lower other expenses related to foreign currency fluctuations. These were partly offset by a $14.1 million rise in compensation costs and a $5.9 million increase in distribution expenses.
Compared to Q1 2025, revenue rose slightly due to one additional day in the quarter, though performance fees dropped. Operating expenses rose 5%, mainly due to a $12.3 million increase in other expenses, including the absence of a VAT refund that was received in Q1. Non-operating income also increased by $9.5 million as a result of higher market values for investments.
For the year to date, Federated Hermes said revenue was up $49.4 million, or 6%, with operating expenses down $60.1 million. Nonoperating income rose by $10.6 million over the same period.
“In the second quarter, we saw continued interest in our broad suite of MDT equity and alternative quantitative investment solutions, which deploy a disciplined, repeatable process that is based on fundamental and technical factors and offers the opportunity for outperformance,” said J. Christopher Donahue, president and chief executive officer. “Investors with interest in capital preservation and liquidity helped drive demand for our microshort and ultrashort funds, which are a step further out the yield curve and pursue higher yields than money market strategies. Also, ETF and collective investment trust offerings were among our quarterly leaders in net sales. We will continue to strategically introduce complementary offerings of our most popular investment strategies.”
