Federated Hermes, Inc. · NYSE:FHI
Federated Hermes — Investor Presentation (March 2023)
29 slides from Federated Hermes's investor presentation, Mar 31, 2023
Slide 1: Federated Hermes, Inc. Analyst Update
Federated Hermes, Inc. Analyst Update Data as of March 31, 2023 1 23-10023
Slide 2: Forward-looking information
Forward-looking information Analyst Update, March 31, 2023 This presentation is provided as of the date on the cover. Certain statements in this presentation, including those related to the potential for growth and stability constitute forward-looking statements, which involve known and unknown risk
Slide 3: Investment considerations
Federated Hermes Investment considerations Analyst Update, March 31, 2023 Federated Hermes offers world-class active management and engagement services that target financial outperformance across a wide range of asset classes for investors around the world Business mix offers potential for growth, s
Slide 4: Overview of Federated Hermes
Overview of Federated Hermes Global, active, responsible investment management and stewardship Analyst Update, March 31, 2023 Assets under management $701 billion Total revenue (Q1 ’23) $382.2 million Founded 1955 Top-tier liquidity management business with $505.8 billion in assets under management
Slide 5: Q1 2023 Highlights
Q1 2023 Highlights Analyst Update, March 31, 2023 $0.78 Earnings per share* $701 B Managed assets at Q1 period end $0.28 Declared dividend of $0.28 payable on May 15, 2023 to shareholders of record as of May 8, 2023. $$0.27 83.6 B Equity assets up $2.1 billion or 3% from $81.5 billion at 12/31/22 $8
Slide 6: Diversified mix of revenue from managed assets
Diversified mix of revenue from managed assets Analyst Update, March 31, 2023 Percentage of revenue less distribution expense by asset type* Money Market 100% Average 34% 22% High 61% 26% 35% 27% 29% 30% 29% 31% 21% Low 13% 39% 36% 37% 75% 19% Fixed Income 16% 24% 21% 15% 20% 17% Average 19% 23% 20%
Slide 7: Diversified multi-channel distribution
Diversified multi-channel distribution Total assets under management: $701 billion as of March 31, 2023 ($ in billions) Analyst Update, March 31, 2023 International 9% U.S. U.S. Financial Institutional Intermediaries 28% 62% U.S. Financial Intermediaries – Domestic Broker Dealers, Bank Trust, Privat
Slide 8: Equity strategies
Equity strategies Total equity AUM: $83.6 billion Analyst Update, March 31, 2023 Global/International $30.0 Quantitative Equity/MDT $6.2 Global Emerging Markets Strategies $6.9 MDT All Cap Core $1.7 Asia ex-Japan Fund $3.2 MDT Small Cap Core $1.1 Global Equity ESG $2.2 MDT Large Cap Value $1.1 Globa
Slide 9: Fixed-income strategies
Fixed-income strategies Total fixed-income $87.5B and liquidity $505.8B AUM: $593.3 billion Analyst Update, March 31, 2023 Liquidity $505.8 Multi-Sector and Corporate $60.9 Municipal $7.2 Government $338.8 Multi-Sector Fixed Income Accounts $27.8 CWH Intermediate $3.5 Prime $158.1 Total Return $12.0
Slide 10: Alternative/private markets and multi-asset strategies
Alternative/private markets and multi-asset strategies Total alternative/private markets $21.2B and multi-asset $3.0B AUM: $24.2 billion Analyst Update, March 31, 2023 Private Equity And Infrastructure $8.0 Multi-asset $3.0 HGPE – Private Equity Advisory $4.6 Muni and Stock Advantage $1.4 HGPE – Inf
Slide 11: 19 years of Stewardship Services Leadership
19 years of Stewardship Services Leadership EOS at Federated Hermes Analyst Update, March 31, 2023 Assets under advisement (AUA) as of 3/31/23. Past performance is no guarantee of future results. INSTITUTIONAL Sales Material. Not for Distribution to the Public 11
Slide 12: Monthly average mutual fund & SMA gross sales
Monthly average mutual fund & SMA gross sales Equity and multi-asset, fixed income and ultrashort ($ in millions) Analyst Update, March 31, 2023 12 *CAGR – Compound annual growth rate Alternative/Private Markets products are not illustrated
Slide 13: Equity and fixed-income sales
Equity* and fixed-income sales Fund and separate accounts ($ in millions) Analyst Update, March 31, 2023 Fixed Income Equity Q1 2023 Q1 2023 Fixed Income 2020 2021 2022 Total Equity 2020 2021 2022 Total YTD YTD Gross sales $37,283 $42,626 $28,016 $6,047 $113,972 Gross sales $20,704 $22,130 $24,228 $
Slide 14: Liquidity management
Liquidity management Money market funds & separate accounts Analyst Update, March 31, 2023 MMF & Separate Accounts Assets ($B) Total Period End AUM Average MMF AUM Average Separate Acct AUM Total Average AUM Broad product line Value-added services Strength in large banks MMF & Separate Accounts Asse
Slide 15: Money market fund assets
Money market fund* assets Analyst Update, March 31, 2023 Indexed Growth** vs. Money Stock, S&P 500, and Industry MMF CAGR (3/93 – 3/23) FHI MMF 9% Industry MMF 8% S&P 500 7% Money Stock 7% *Beginning in Q1 ‘17 – Includes money market fund subadvised accounts Industry MMF Source: Investment Company I
Slide 16: Separate accounts
Separate accounts Total assets under management: $239 billion as of March 31, 2023 ($ in billions) Analyst Update, March 31, 2023 Product Type Asset Type Total may not equal the sum of the parts due to rounding 16
Slide 17: Acquisitions and alliances
Acquisitions and alliances Timeline of key historical transactions Analyst Update, March 31, 2023 Centers of Excellence Acquired app. Acquired the $13.9B of $3.5 billion Acquired MEPC, Transformed advisory $3.2B growth equity assets at assets from PNC a leading U.K. partial into business of C.W. clo
Slide 18: Global footprint
Global footprint Assets by region ($ in billions) Analyst Update, March 31, 2023 North America: $643.9 billion COPENHAGEN Europe: $52.1 billion TORONTO FRANKFURT • U.K. & Ireland: $32.2 DUBLIN billion CLEVELAND CHICAGO BOSTON • Germany: $1.7 billion PITTSBURGH NEW YORK LONDON • Other: $16.5 billion
Slide 19: Value delivered to shareholders
Value delivered to shareholders Historical uses of cash ($ in billions) Analyst Update, March 31, 2023 Uses of cash Uses of cash over time ($m) Acquisitions Share 22% Repurchases 31% Dividends 47% Total Share Repurchase/Acquisition/Dividend since IPO 1998: $5.8 billion Cumulative Net Income Since 19
Slide 20: Dividend history and weighted average shares outstanding
Dividend history and weighted average shares outstanding Since IPO in 1998 Analyst Update, March 31, 2023 CAGR: 11%* Total Regular Dividends: $18.67 Total Special Dividends: $7.53 $1.08 Data as of 3/31/23 *CAGR ‘98 – ’22, special dividends not included 20
Slide 21: Investment considerations
Federated Hermes Investment considerations Analyst Update, March 31, 2023 Federated Hermes offers world-class active management and engagement services that target financial outperformance across a wide range of asset classes for investors around the world Business mix offers potential for growth, s
Slide 22: Appendix
Appendix a
Slide 23: Appendix
Appendix Analyst Update, March 31, 2023 Managed assets by asset class Managed assets by product type Equity & Fixed Income fund sales Equity, Fixed Income Separate Account sales Revenue & distribution expense by asset type Financial highlights 23
Slide 24: Managed assets by asset class
Managed assets by asset class $ in billions Analyst Update, March 31, 2023 CAGR* Q1 ‘23 1998** Q1 ‘23 Q1 ’22 YoY % Chg. `98 -`23 Money market $ 505.8 $ 77.1 8% $ 505.8 $ 420.6 20% Equity 83.6 16.4 7% 83.6 91.7 -9% Fixed income 87.5 18.1 7% 87.5 92.1 -5% Alternative/private market 21.2 NA NA 21.2 23.
Slide 25: Managed assets by product type
Managed assets by product type $ in billions Analyst Update, March 31, 2023 CAGR* Q1 ‘23 1998** Q1 ‘23 Q1 ’22 % Chg. `98 -`23 Funds Money market $ 357.3 $ 77.1 7% $ 357.3 $ 279.5 28% Equity 44.7 15.5 4% 44.7 51.9 -14% Fixed income 43.6 16.4 4% 43.6 54.8 -20% Alternative/private markets 13.0 NA NA 13
Slide 26: Equity and fixed-income fund sales
Equity* and fixed-income fund sales $ in millions Analyst Update, March 31, 2023 Fixed Income Equity Q1 2023 Q1 2023 Fixed Income 2020 2021 2022 Total Equity 2020 2021 2022 Total YTD YTD Gross sales $29,453 $30,862 $18,403 $4,255 $82,973 Gross sales $14,671 $14,564 $13,037 $3,218 $45,490 Net sales $
Slide 27: Equity and fixed-income separate account sales
Equity* and fixed-income separate account sales $ in millions Analyst Update, March 31, 2023 Fixed Income Equity Q1 2023 Q1 2023 Fixed Income 2020 2021 2022 Total Equity 2020 2021 2022 Total YTD YTD Gross sales $7,830 $11,764 $9,613 $1,792 $30,999 Gross sales $6,033 $7,566 $11,191 $2,460 $27,250 Net
Slide 28: Revenue and distribution expense by asset type
Revenue and distribution expense by asset type Reconciliation of non-GAAP measure ($ in millions) Analyst Update, March 31, 2023 Q1 2008 Q1 2009 Q1 2010 Q1 2011 Q1 2012 Q1 2013 Q1 2014 Q1 2015 Q1 2016 Q1 2017 Q1 2018 Q1 2019 Q1 2020 Q1 2021 Q1 2022 Q1 2023 Revenue By Asset Type Money Markets $172.4
Slide 29: Financial highlights
Financial highlights $ in millions Analyst Update, March 31, 2023 BALANCE SHEET 3/31/23 12/31/22 12/31/21 12/31/20 12/31/19 12/31/18 12/31/17 12/31/16 12/31/15 12/31/14 12/31/13 HIGHLIGHTS $488 $522 $427 $439 $341 $190 $370 $301 $347 $297 $292 Cash & Investments (a) 348 348 223 75 100 135 170 191 21
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