Cover
Cover - shares | 3 Months Ended | |
Mar. 31, 2022 | Apr. 22, 2022 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2022 | |
Current Fiscal Year End Date | --12-31 | |
Document Transition Report | false | |
Entity File Number | 001-14818 | |
Entity Registrant Name | Federated Hermes, Inc. | |
Entity Incorporation, State or Country Code | PA | |
Entity Tax Identification Number | 25-1111467 | |
Entity Address, Address Line One | 1001 Liberty Avenue | |
Entity Address, City or Town | Pittsburgh, | |
Entity Address, State or Province | PA | |
Entity Address, Postal Zip Code | 15222-3779 | |
City Area Code | 412 | |
Local Phone Number | 288-1900 | |
Title of 12(b) Security | Class B common stock, no par value | |
Trading Symbol | FHI | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Central Index Key | 0001056288 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Class A | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 9,000 | |
Class B | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 91,665,902 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Current Assets | ||
Cash and Cash Equivalents | $ 262,043 | $ 233,327 |
Investments—Consolidated Investment Companies | 104,370 | 105,542 |
Investments—Affiliates and Other | 91,067 | 87,805 |
Receivables, net of reserve of $21 and $21, respectively | 55,510 | 65,317 |
Receivables—Affiliates | 29,315 | 30,956 |
Prepaid Expenses | 32,283 | 29,322 |
Other Current Assets | 7,257 | 7,178 |
Total Current Assets | 581,845 | 559,447 |
Long-Term Assets | ||
Goodwill | 794,788 | 798,871 |
Intangible Assets, net of accumulated amortization of $41,717 and $39,618, respectively | 458,663 | 471,209 |
Property and Equipment, net of accumulated depreciation of $116,888 and $113,624, respectively | 44,579 | 46,965 |
Right-of-Use Assets, net | 105,583 | 108,306 |
Other Long-Term Assets | 33,064 | 33,389 |
Total Long-Term Assets | 1,436,677 | 1,458,740 |
Total Assets | 2,018,522 | 2,018,187 |
Current Liabilities | ||
Accounts Payable and Accrued Expenses | 65,135 | 64,019 |
Accrued Compensation and Benefits | 73,435 | 162,203 |
Lease Liabilities | 17,883 | 17,447 |
Income Taxes Payable | 11,448 | 501 |
Other Current Liabilities | 13,072 | 26,537 |
Total Current Liabilities | 180,973 | 270,707 |
Long-Term Liabilities | ||
Long-Term Debt | 397,383 | 223,350 |
Long-Term Deferred Tax Liability, net | 204,745 | 205,206 |
Long-Term Lease Liabilities | 101,439 | 105,270 |
Other Long-Term Liabilities | 27,492 | 36,435 |
Total Long-Term Liabilities | 731,059 | 570,261 |
Total Liabilities | 912,032 | 840,968 |
Commitments and Contingencies (Note (17)) | ||
TEMPORARY EQUITY | ||
Redeemable Noncontrolling Interests in Subsidiaries | 48,569 | 63,202 |
Federated Hermes, Inc. Shareholders' Equity | ||
Additional Paid-In Capital from Treasury Stock Transactions | 3,518 | 0 |
Retained Earnings | 1,191,575 | 1,187,001 |
Treasury Stock, at Cost, 17,441,863 and 16,094,488 Shares Class B Common Stock, respectively | (594,806) | (538,464) |
Accumulated Other Comprehensive Income (Loss), net of tax | (772) | 16,362 |
Total Permanent Equity | 1,057,921 | 1,114,017 |
Total Liabilities, Temporary Equity and Permanent Equity | 2,018,522 | 2,018,187 |
Class A | ||
Federated Hermes, Inc. Shareholders' Equity | ||
Common Stock | 189 | 189 |
Class B | ||
Federated Hermes, Inc. Shareholders' Equity | ||
Common Stock | $ 458,217 | $ 448,929 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Statement of Financial Position [Abstract] | ||
Receivables, reserve | $ 21 | $ 21 |
Intangible assets, accumulated amortization | 41,717 | 39,618 |
Property and equipment, accumulated depreciation | $ 116,888 | $ 113,624 |
Treasury stock, shares (in shares) | 17,441,863 | 16,094,488 |
Class A | ||
Common stock, no par value (usd per share) | $ 0 | $ 0 |
Common stock, shares authorized (in shares) | 20,000 | 20,000 |
Common stock, shares issued (in shares) | 9,000 | 9,000 |
Common stock, shares outstanding (in shares) | 9,000 | 9,000 |
Class B | ||
Common stock, no par value (usd per share) | $ 0 | $ 0 |
Common stock, shares authorized (in shares) | 900,000,000 | 900,000,000 |
Common stock, shares issued (in shares) | 109,505,456 | 109,505,456 |
Common stock, shares outstanding (in shares) | 92,063,593 | 93,410,968 |
Consolidated Statements of Inco
Consolidated Statements of Income - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Revenue | ||
Total Revenue | $ 324,764 | $ 341,173 |
Operating Expenses | ||
Compensation and Related | 133,965 | 143,620 |
Distribution | 48,562 | 44,389 |
Systems and Communications | 19,494 | 18,594 |
Professional Service Fees | 13,468 | 14,636 |
Office and Occupancy | 11,322 | 11,240 |
Advertising and Promotional | 2,732 | 2,824 |
Travel and Related | 1,795 | 296 |
Other | 9,477 | 8,096 |
Total Operating Expenses | 240,815 | 243,695 |
Operating Income | 83,949 | 97,478 |
Nonoperating Income (Expenses) | ||
Investment Income, net | 1,093 | 632 |
Gain (Loss) on Securities, net | (11,695) | 1,379 |
Debt Expense | (1,222) | (491) |
Other, net | 83 | 345 |
Total Nonoperating Income (Expenses), net | (11,741) | 1,865 |
Income Before Income Taxes | 72,208 | 99,343 |
Income Tax Provision | 17,611 | 24,997 |
Net Income Including the Noncontrolling Interests in Subsidiaries | 54,597 | 74,346 |
Less: Net Income (Loss) Attributable to the Noncontrolling Interests in Subsidiaries | (1,266) | (138) |
Net Income | $ 55,863 | $ 74,484 |
Amounts Attributable to Federated Hermes, Inc. | ||
Earnings Per Common Share—Basic (usd per share) | $ 0.61 | $ 0.75 |
Earnings Per Common Share—Diluted (usd per share) | 0.61 | 0.75 |
Cash Dividends Per Share (usd per share) | $ 0.27 | $ 0.27 |
Investment Advisory Fees, net—Affiliates | ||
Revenue | ||
Total Revenue | $ 170,221 | $ 183,833 |
Investment Advisory Fees, net—Other | ||
Revenue | ||
Total Revenue | 62,773 | 63,856 |
Administrative Service Fees, net—Affiliates | ||
Revenue | ||
Total Revenue | 73,507 | 74,302 |
Other Service Fees, net—Affiliates | ||
Revenue | ||
Total Revenue | 13,607 | 15,869 |
Other Service Fees, net—Other | ||
Revenue | ||
Total Revenue | $ 4,656 | $ 3,313 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Statement of Comprehensive Income [Abstract] | ||
Net Income Including the Noncontrolling Interests in Subsidiaries | $ 54,597 | $ 74,346 |
Permanent Equity | ||
Foreign Currency Translation Gain (Loss) | (17,134) | 3,558 |
Temporary Equity | ||
Foreign Currency Translation Gain (Loss) | (457) | 1,430 |
Other Comprehensive Income (Loss), net of tax | (17,591) | 4,988 |
Comprehensive Income Including the Noncontrolling Interests in Subsidiaries | 37,006 | 79,334 |
Less: Comprehensive Income (Loss) Attributable to Redeemable Noncontrolling Interests in Subsidiaries | (1,723) | 1,292 |
Comprehensive Income Attributable to Federated Hermes, Inc. | $ 38,729 | $ 78,042 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Equity - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in Capital from Treasury Stock Transactions | Retained Earnings | Treasury Stock | Accumulated Other Comprehensive Income (Loss), net of tax | Redeemable Noncontrolling Interest in Subsidiaries/ Temporary Equity |
Balance, beginning of period at Dec. 31, 2020 | $ 1,136,997 | $ 418,858 | $ 0 | $ 1,027,699 | $ (324,731) | $ 15,171 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net Income (Loss) | 74,484 | 74,484 | |||||
Other Comprehensive Income (Loss), net of tax | 3,558 | 3,558 | |||||
Stock Award Activity | 9,231 | 9,216 | (15,234) | 15,249 | |||
Dividends Declared | (26,788) | (26,788) | |||||
Change in Estimated Redemption Value of Redeemable Noncontrolling Interests | 2,670 | 2,670 | |||||
Purchase of Treasury Stock | (45,030) | (45,030) | |||||
Balance, end of period at Mar. 31, 2021 | 1,155,122 | 428,074 | 0 | 1,062,831 | (354,512) | 18,729 | |
Temporary equity, beginning balance at Dec. 31, 2020 | 236,987 | $ 236,987 | |||||
Increase (Decrease) in Temporary Equity [Roll Forward] | |||||||
Net Income (Loss) | (138) | (138) | |||||
Other Comprehensive Income (Loss), net of tax | 1,430 | 1,430 | |||||
Subscriptions—Redeemable Noncontrolling Interest Holders | 25,762 | 25,762 | |||||
Consolidation (Deconsolidation) | (16,237) | (16,237) | |||||
Stock Award Activity | 2,481 | 2,481 | |||||
Distributions to Noncontrolling Interests in Subsidiaries | (1,898) | (1,898) | |||||
Change in Estimated Redemption Value of Redeemable Noncontrolling Interests in HFML | (2,670) | (2,670) | |||||
Temporary equity, ending balance at Mar. 31, 2021 | 245,717 | 245,717 | |||||
Balance, beginning of period at Dec. 31, 2021 | 1,114,017 | 449,118 | 0 | 1,187,001 | (538,464) | 16,362 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net Income (Loss) | 55,863 | 55,863 | |||||
Other Comprehensive Income (Loss), net of tax | (17,134) | (17,134) | |||||
Stock Award Activity | 9,319 | 9,288 | (12,116) | 12,147 | |||
Dividends Declared | (24,952) | (24,952) | |||||
Change in Estimated Redemption Value of Redeemable Noncontrolling Interests | (14,221) | (14,221) | |||||
Acquisition of Additional Equity of HFML | 37,566 | 3,518 | 34,048 | ||||
Purchase of Treasury Stock | (102,537) | (102,537) | |||||
Balance, end of period at Mar. 31, 2022 | 1,057,921 | $ 458,406 | $ 3,518 | $ 1,191,575 | $ (594,806) | $ (772) | |
Temporary equity, beginning balance at Dec. 31, 2021 | 63,202 | 63,202 | |||||
Increase (Decrease) in Temporary Equity [Roll Forward] | |||||||
Net Income (Loss) | (1,266) | (1,266) | |||||
Other Comprehensive Income (Loss), net of tax | (457) | (457) | |||||
Subscriptions—Redeemable Noncontrolling Interest Holders | 30,340 | 30,340 | |||||
Consolidation (Deconsolidation) | (16,034) | (16,034) | |||||
Stock Award Activity | 707 | 707 | |||||
Distributions to Noncontrolling Interests in Subsidiaries | (4,339) | (4,339) | |||||
Change in Estimated Redemption Value of Redeemable Noncontrolling Interests in HFML | 14,221 | 14,221 | |||||
Acquisition of Additional Equity of HFML | (37,805) | (37,805) | |||||
Temporary equity, ending balance at Mar. 31, 2022 | $ 48,569 | $ 48,569 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Operating Activities | ||
Net Income Including the Noncontrolling Interests in Subsidiaries | $ 54,597 | $ 74,346 |
Adjustments to Reconcile Net Income to Net Cash Provided (Used) by Operating Activities | ||
Depreciation and Amortization | 7,462 | 7,473 |
Share-Based Compensation Expense | 9,288 | 9,216 |
Subsidiary Share-Based Compensation Expense | 707 | 2,482 |
(Gain) Loss on Disposal of Assets | (150) | (1,684) |
Provision (Benefit) for Deferred Income Taxes | 2,342 | 3,597 |
Consolidation/(Deconsolidation) of Other Entities | (20) | 11,789 |
Net Unrealized (Gain) Loss on Investments | 11,847 | 322 |
Net Sales (Purchases) of Investments—Consolidated Investment Companies | (30,937) | (51,127) |
Other Changes in Assets and Liabilities: | ||
(Increase) Decrease in Receivables, net | 9,843 | 6,742 |
(Increase) Decrease in Prepaid Expenses and Other Assets | (2,892) | (3,342) |
Increase (Decrease) in Accounts Payable and Accrued Expenses | (88,206) | (101,616) |
Increase (Decrease) in Other Liabilities | 6,872 | 11,789 |
Net Cash Provided (Used) by Operating Activities | (19,247) | (30,013) |
Investing Activities | ||
Purchases of Investments—Affiliates and Other | (2,008) | (1,811) |
Proceeds from Redemptions of Investments—Affiliates and Other | 1,321 | 2,466 |
Cash Paid for Property and Equipment | (1,853) | (2,159) |
Net Cash Provided (Used) by Investing Activities | (2,540) | (1,504) |
Financing Activities | ||
Dividends Paid | (24,953) | (26,788) |
Purchases of Treasury Stock | (113,338) | (39,073) |
Distributions to Noncontrolling Interests in Subsidiaries | (4,339) | (1,898) |
Contributions from Noncontrolling Interests in Subsidiaries | 30,340 | 25,762 |
Proceeds from New Borrowings | 488,300 | 0 |
Payments on Debt | (311,650) | (5,000) |
Other Financing Activities | (9,499) | (1,993) |
Net Cash Provided (Used) by Financing Activities | 54,861 | (48,990) |
Effect of Exchange Rates on Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents | (4,505) | 1,270 |
Net Increase (Decrease) in Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents | 28,569 | (79,237) |
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents, Beginning of Period | 238,052 | 308,635 |
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents, End of Period | 266,621 | 229,398 |
Less: Restricted Cash Recorded in Other Current Assets | 4,289 | 6,507 |
Less: Restricted Cash and Restricted Cash Equivalents Recorded in Other Long-Term Assets | 289 | 286 |
Cash and Cash Equivalents | $ 262,043 | $ 222,605 |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Mar. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation Federated Hermes, Inc. and its consolidated subsidiaries (collectively, Federated Hermes) provide investment advisory, administrative, distribution and other services to various investment products, including sponsored investment companies, collective funds and other funds (Federated Hermes Funds) and Separate Accounts (which include separately managed accounts, institutional accounts, certain sub-advised funds and other managed products) in both domestic and international markets. In addition, Federated Hermes markets and provides stewardship and real estate development services to various domestic and international companies. The interim Consolidated Financial Statements of Federated Hermes included herein have been prepared in accordance with United States (U.S.) generally accepted accounting principles (GAAP). In the opinion of management, the financial statements reflect all adjustments that are of a normal recurring nature and necessary for a fair presentation of the results for the interim periods presented. In preparing the financial statements, management is required to make estimates and assumptions that affect the amounts reported in the Consolidated Financial Statements and accompanying notes. Actual results may differ from those estimates, and such differences may be material to the Consolidated Financial Statements. |
Significant Accounting Policies
Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2022 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | Significant Accounting Policies For a listing of Federated Hermes' significant accounting policies, please refer to Federated Hermes' Annual Report on Form 10-K for the year ended December 31, 2021. |
Equity Acquisition
Equity Acquisition | 3 Months Ended |
Mar. 31, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Equity Acquisition | Equity Acquisition On March 14, 2022, Federated Hermes completed a tender offer resulting in the acquisition of the remaining approximate 10% noncontrolling interests in Federated Hermes Limited (formerly known as Hermes Fund Managers Limited, HFML) from a non-U.S. domiciled trustee of an employee benefit trust established for the benefit of certain members of HFML's management, a non-U.S. resident former HFML employee and other non-U.S. resident key employees under a long-term incentive plan established in connection with the 2018 acquisition of HFML (2022 Acquisition of HFML Noncontrolling Interests). Pursuant to the 2022 Acquisition of HFML Noncontrolling Interests, HFML became a 100% indirect, wholly-owned subsidiary of Federated Hermes. The 2022 Acquisition of HFML Noncontrolling Interests was transacted in shares exchanged whereby Federated Hermes issued awards of restricted Class B common stock under Federated Hermes Stock Incentive Plan and Federated Hermes UK Sub-Plan, as amended, and treasury Class B common stock, in exchange for the beneficial interests in shares of HFML. The HFML shares were exchanged at fair value for Federated Hermes shares valued at £36.4 million or $47.5 million, which was based on a third-party valuation of HFML. See Note (12) for additional information regarding the share exchange. |
Revenue from Contracts with Cus
Revenue from Contracts with Customers | 3 Months Ended |
Mar. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Revenue from Contracts with Customers | Revenue from Contracts with Customers The following table presents Federated Hermes' revenue disaggregated by asset class: Three Months Ended March 31, (in thousands) 2022 2021 Equity $ 146,856 $ 166,357 Money market 86,290 80,692 Fixed-income 57,874 56,777 Other 1 33,744 37,347 Total Revenue $ 324,764 $ 341,173 1 Primarily includes Alternative / Private Markets (including but not limited to private equity, real estate and infrastructure), multi-asset and stewardship services revenue. The following table presents Federated Hermes' revenue disaggregated by performance obligation: Three Months Ended March 31, (in thousands) 2022 2021 Asset Management 1 $ 232,994 $ 247,689 Administrative Services 73,507 74,302 Distribution 2 11,077 13,028 Other 3 7,186 6,154 Total Revenue $ 324,764 $ 341,173 1 The performance obligation may include administrative, distribution and other services recorded as a single asset management fee under Topic 606, as it is part of a unitary fee arrangement with a single performance obligation. 2 The performance obligation is satisfied at a point in time. A portion of this revenue relates to a performance obligation that has been satisfied in a prior period. 3 Primarily includes shareholder service fees and stewardship services revenue. The following table presents Federated Hermes' revenue disaggregated by geographical market: Three Months Ended March 31, (in thousands) 2022 2021 Domestic $ 246,809 $ 256,491 Foreign 1 77,955 84,682 Total Revenue $ 324,764 $ 341,173 1 This represents revenue earned by non-U.S. domiciled subsidiaries. The following table presents Federated Hermes' revenue disaggregated by product type: Three Months Ended March 31, (in thousands) 2022 2021 Federated Hermes Funds $ 257,335 $ 274,005 Separate Accounts 62,773 63,855 Other 1 4,656 3,313 Total Revenue $ 324,764 $ 341,173 1 Primarily includes stewardship services revenue. For nearly all revenue, Federated Hermes is not required to disclose certain estimates of revenue expected to be recorded in future periods as a result of applying the following exemptions: (1) contract terms are short-term in nature (i.e., expected duration of one year or less due to termination provisions) and (2) the expected variable consideration would be allocated entirely to future service periods. Federated Hermes expects to recognize revenue in the future related to the unsatisfied portion of the stewardship services and real estate development performance obligations at March 31, 2022. Generally, contracts are billed in arrears on a quarterly basis and have a three-year duration, after which the customer can terminate the agreement with notice, generally from three (in thousands) Remainder of 2022 $ 9,544 2023 5,714 2024 3,092 2025 and Thereafter 969 Total Remaining Unsatisfied Performance Obligations $ 19,319 |
Concentration Risk
Concentration Risk | 3 Months Ended |
Mar. 31, 2022 | |
Risks and Uncertainties [Abstract] | |
Concentration Risk | Concentration Risk (a) Revenue Concentration by Asset Class The following table presents Federated Hermes' significant revenue concentration by asset class: Three Months Ended March 31, 2022 2021 Equity Assets 45 % 49 % Money Market Assets 27 % 24 % Fixed-Income Assets 18 % 16 % The change in the relative proportion of Federated Hermes' revenue attributable to money market assets for the three months ended March 31, 2022, as compared to the same period in 2021, was primarily the result of a decrease in Voluntary Yield-related Fee Waivers. See section below entitled Low Short-Term Interest Rates. The change in the relative proportion of Federated Hermes' revenue attributable to equity and fixed-income assets for the three months ended March 31, 2022 as compared to the same period in 2021, was primarily the result of lower average equity assets, higher average fixed-income assets and increased money market revenue in 2022. Low Short-Term Interest Rates In March 2020, in response to disrupted economic activity as a result of the outbreak of a novel coronavirus (the Pandemic), the Federal Open Market Committee of the Federal Reserve Board (FOMC) decreased the federal funds target rate range to 0% - 0.25%. The federal funds target rate drives short-term interest rates. As a result of the near-zero interest-rate environment, the gross yield earned by certain money market funds is not sufficient to cover all of the fund's operating expenses. Beginning in the first quarter 2020, Federated Hermes began to implement Voluntary Yield-related Fee Waivers in order for certain money market funds to maintain positive or zero net yields (Voluntary Yield-related Fee Waivers). These Voluntary Yield-related Fee Waivers have been partially offset by related reductions in distribution expense as a result of Federated Hermes' mutual understanding and agreement with third-party intermediaries to share the impact of the Voluntary Yield-related Fee Waivers. In response to the recovering U.S. economy and elevated inflation levels, during its March 2022 meeting, the FMOC raised the federal funds target rate range 25 bps to 0.25% - 0.50%. During the three months ended March 31, 2022, Voluntary Yield-related Fee Waivers totaled $75.8 million. These fee waivers were partially offset by related reductions in distribution expenses of $57.5 million such that the net negative pre-tax impact to Federated Hermes was $18.3 million for the three months ended March 31, 2022. During the three months ended March 31, 2021, Voluntary Yield-related Fee Waivers totaled $83.1 million. These fee waivers were partially offset by related reductions in distribution expenses of $61.4 million such that the net negative pre-tax impact to Federated Hermes was $21.7 million for the three months ended March 31, 2021. See Management's Discussion and Analysis - Business Developments - Low Short-Term Interest Rates for additional information on management's expectations regarding Voluntary Yield-related Fee Waivers. (b) Revenue Concentration by Investment Fund Strategy The following table presents Federated Hermes' revenue concentration by investment fund strategy: Three Months Ended March 31, 2022 2021 Federated Hermes Strategic Value Dividend strategy 1 10 % 8 % Federated Hermes Kaufmann Fund and Federated Hermes Kaufmann Fund II 9 % 11 % 1 Strategy includes Federated Hermes Funds and Separate Accounts A significant and prolonged decline in the AUM in these funds could have a material adverse effect on Federated Hermes' future revenues and, to a lesser extent, net income, due to a related reduction in distribution expenses associated with these funds. |
Consolidation
Consolidation | 3 Months Ended |
Mar. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Consolidation | Consolidation The Consolidated Financial Statements include the accounts of Federated Hermes, certain Federated Hermes Funds and other entities in which Federated Hermes holds a controlling financial interest. Federated Hermes is involved with various entities in the normal course of business that may be deemed to be voting rights entities (VREs) or variable interest entities (VIEs). From time to time, Federated Hermes invests in Federated Hermes Funds for general corporate investment purposes or, in the case of newly launched products, in order to provide investable cash to establish a performance history. Federated Hermes' investment in, and/or receivables from, these Federated Hermes Funds represents its maximum exposure to loss. The assets of each consolidated Federated Hermes Fund are restricted for use by that Federated Hermes Fund. Generally, neither creditors of, nor equity investors in, the Federated Hermes Funds have any recourse to Federated Hermes' general credit. Given that the entities consolidated by Federated Hermes generally follow investment company accounting, which prescribes fair-value accounting, a deconsolidation generally does not result in the recognition of gains or losses for Federated Hermes. In the ordinary course of business, Federated Hermes may implement fee waivers, rebates or expense reimbursements for various Federated Hermes Funds for competitive reasons (such as Voluntary Yield-related Fee Waivers or to maintain certain fund expense ratios/yields), to meet regulatory requirements or to meet contractual requirements (collectively, Fee Waivers). For the three months ended March 31, 2022 and 2021, Fee Waivers totaled $198.5 million and $201.1 million, respectively, of which $164.8 million and $168.0 million, respectively, related to money market funds which meet the scope exception of the consolidation guidance. Like other sponsors of investment companies, Federated Hermes in the ordinary course of business may make capital contributions to certain affiliated money market Federated Hermes Funds in connection with the reorganization of such funds into certain other affiliated money market Federated Hermes Funds or in connection with the liquidation of a money market Federated Hermes Fund. In these instances, such capital contributions typically are intended to either offset realized losses or other permanent impairments to a fund's net asset value (NAV), increase the market-based NAV per share of the fund's portfolio that is being reorganized to equal the market-based NAV per share of the acquiring fund or to bear a portion of expenses relating to a fund liquidation. Under current money market fund regulations and Securities and Exchange Commission (SEC) guidance, Federated Hermes is required to report these types of capital contributions to U.S. money market mutual funds to the SEC as financial support to the investment company that is being reorganized or liquidated. There were no contributions for the three months ended March 31, 2022 and no material contributions for the three months ended March 31, 2021. In accordance with Federated Hermes' consolidation accounting policy, Federated Hermes first determines whether the entity being evaluated is a VRE or a VIE. Once this determination is made, Federated Hermes proceeds with its evaluation of whether to consolidate the entity. The disclosures below represent the results of such evaluations as of March 31, 2022 and December 31, 2021. (a) Consolidated Voting Rights Entities Although most of the Federated Hermes Funds meet the definition of a VRE, Federated Hermes consolidates VREs only when it is deemed to have control. Consolidated VREs are reported on Federated Hermes' Consolidated Balance Sheets primarily in Investments—Consolidated Investment Companies and Redeemable Noncontrolling Interests in Subsidiaries. (b) Consolidated Variable Interest Entities As of the periods ended March 31, 2022 and December 31, 2021, Federated Hermes was deemed to be the primary beneficiary of, and therefore consolidated, certain entities as a result of its controlling financial interest. The following table presents the balances related to the consolidated VIEs that were included on the Consolidated Balance Sheets as well as Federated Hermes' net interest in the consolidated VIEs for each period presented. (in millions) March 31, 2022 December 31, 2021 Cash and Cash Equivalents $ 3.7 $ 3.0 Investments—Consolidated Investment Companies 43.2 35.9 Other Assets 0.2 0.1 Long-Term Investments 14.4 13.8 Less: Liabilities 1.4 1.4 Less: Redeemable Noncontrolling Interests in Subsidiaries 42.4 33.3 Federated Hermes' Net Interest in VIEs $ 17.7 $ 18.1 Federated Hermes' net interest in the consolidated VIEs represents the value of Federated Hermes' economic ownership interest in that VIE. There were no new material consolidations or deconsolidations of VIEs during the three months ended March 31, 2022. (c) Non-Consolidated Variable Interest Entities Federated Hermes' involvement with certain Federated Hermes Funds that are deemed to be VIEs includes serving as investment manager, or at times, holding a minority interest or both. Federated Hermes' variable interest is not deemed to absorb losses or receive benefits that could potentially be significant to the VIE. Therefore, Federated Hermes is not the primary beneficiary of these VIEs and has not consolidated these entities. At March 31, 2022 and December 31, 2021, Federated Hermes' maximum risk of loss related to investments in variable interests in non-consolidated VIEs was $94.1 million and $170.6 million, respectively, (primarily recorded in Cash and Cash Equivalents on the Consolidated Balance Sheets) and was entirely related to Federated Hermes Funds. AUM for these non-consolidated Federated Hermes Funds totaled $6.0 billion and $8.0 billion at March 31, 2022 and December 31, 2021, respectively. Of the Receivables—Affiliates at March 31, 2022 and December 31, 2021, $1.0 million and $0.7 million, respectively, related to non-consolidated VIEs and represented Federated Hermes' maximum risk of loss from non-consolidated VIE receivables. |
Investments
Investments | 3 Months Ended |
Mar. 31, 2022 | |
Investments, Debt and Equity Securities [Abstract] | |
Investments | Investments At March 31, 2022 and December 31, 2021, Federated Hermes held investments in non-consolidated fluctuating-value Federated Hermes Funds of $80.9 million and $77.6 million, respectively, primarily in mutual funds which predominantly invest in equity securities, and held investments in Separate Accounts of $10.2 million at both March 31, 2022 and December 31, 2021, that were included in Investments—Affiliates and Other on the Consolidated Balance Sheets. Federated Hermes' investments held in Separate Accounts as of March 31, 2022 and December 31, 2021, were primarily composed of domestic debt securities ($4.8 million and $5.2 million, respectively) and stocks of large domestic and foreign companies ($3.8 million and $3.4 million, respectively). Federated Hermes consolidates certain Federated Hermes Funds into its Consolidated Financial Statements as a result of its controlling financial interest in these Federated Hermes Funds (see Note (6)). All investments held by these consolidated Federated Hermes Funds were included in Investments—Consolidated Investment Companies on Federated Hermes' Consolidated Balance Sheets. The investments held by consolidated Federated Hermes Funds as of March 31, 2022 and December 31, 2021 were primarily composed of domestic and foreign debt securities ($56.9 million and $65.2 million, respectively), stocks of large domestic and foreign companies ($36.1 million and $28.5 million, respectively) and stocks of small and mid-sized domestic and foreign companies ($6.8 million and $7.4 million, respectively). The following table presents gains and losses recognized in Gain (Loss) on Securities, net on the Consolidated Statements of Income in connection with Federated Hermes' investments: Three Months Ended March 31, (in thousands) 2022 2021 Investments—Consolidated Investment Companies Net Unrealized Gains (Losses) $ (5,188) $ (1,903) Net Realized Gains (Losses) 1 (462) 1,261 Net Gains (Losses) on Investments—Consolidated Investment Companies (5,650) (642) Investments—Affiliates and Other Net Unrealized Gains (Losses) (6,659) 1,581 Net Realized Gains (Losses) 1 614 440 Net Gains (Losses) on Investments—Affiliates and Other (6,045) 2,021 Gain (Loss) on Securities, net $ (11,695) $ 1,379 1 Realized gains and losses are computed on a specific-identification basis. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements Fair value is the price that would be received to sell an asset or the price that would be paid to transfer a liability as of the measurement date. A fair-value reporting hierarchy exists for disclosure of fair value measurements based on the observability of the inputs to the valuation of financial assets and liabilities. The levels are: Level 1 – Quoted prices for identical instruments in active markets. Level 1 assets may include equity and debt securities that are traded in an active exchange market, including shares of mutual funds. Level 2 – Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets. Level 2 assets and liabilities may include debt and equity securities, purchased loans and over-the-counter derivative contracts whose fair value is determined using a pricing model without significant unobservable market data inputs. Level 3 – Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable in active markets. NAV Practical Expedient – Investments that calculate NAV per share (or its equivalent) as a practical expedient. These investments have been excluded from the fair value hierarchy. (a) Fair Value Measurements on a Recurring Basis The following table presents fair value measurements for classes of Federated Hermes' financial assets and liabilities measured at fair value on a recurring basis: (in thousands) Level 1 Level 2 Level 3 Total March 31, 2022 Financial Assets Cash and Cash Equivalents $ 262,043 $ 0 $ 0 $ 262,043 Investments—Consolidated Investment Companies 46,190 58,180 0 104,370 Investments—Affiliates and Other 85,713 5,306 48 91,067 Other 1 7,007 0 0 7,007 Total Financial Assets $ 400,953 $ 63,486 $ 48 $ 464,487 Total Financial Liabilities 2 $ 0 $ 4,082 $ 4,708 $ 8,790 December 31, 2021 Financial Assets Cash and Cash Equivalents $ 233,327 $ 0 $ 0 $ 233,327 Investments—Consolidated Investment Companies 38,799 66,743 0 105,542 Investments—Affiliates and Other 82,594 5,165 46 87,805 Other 1 7,105 0 0 7,105 Total Financial Assets $ 361,825 $ 71,908 $ 46 $ 433,779 Total Financial Liabilities 2 $ 0 $ 1,644 $ 11,652 $ 13,296 1 Amounts primarily consist of restricted cash and security deposits as of March 31, 2022 and December 31, 2021. 2 Amounts primarily consist of acquisition-related future contingent consideration liabilities and a derivative liability as of March 31, 2022 and December 31, 2021 . The following is a description of the valuation methodologies used for financial assets and liabilities measured at fair value on a recurring basis. Federated Hermes did not hold any nonfinancial assets or liabilities measured at fair value on a recurring basis at March 31, 2022 or December 31, 2021. Cash and Cash Equivalents Cash and Cash Equivalents include deposits with banks and investments in money market funds. Investments in money market funds totaled $221.3 million and $183.4 million at March 31, 2022 and December 31, 2021, respectively. Cash investments in publicly available money market funds are valued under the market approach through the use of quoted market prices in an active market, which is the NAV of the funds, and are classified within Level 1 of the valuation hierarchy. Investments—Consolidated Investment Companies Investments—Consolidated Investment Companies represent securities held by consolidated Federated Hermes Funds. For publicly traded securities available in an active market, the fair value of these securities is classified as Level 1 when the fair value is based on quoted market prices. The fair value of certain securities held by consolidated Federated Hermes Funds are determined by third-party pricing services which utilize observable market inputs of comparable investments (Level 2). Investments—Affiliates and Other Investments—Affiliates and Other primarily represent investments in fluctuating-value Federated Hermes Funds, as well as investments held in Separate Accounts. For investments in fluctuating-value Federated Hermes Funds that are publicly available, the securities are valued under the market approach through the use of quoted market prices available in an active market, which is the NAV of the funds, and are classified within Level 1 of the valuation hierarchy. For publicly traded securities available in an active market, the fair value of these securities is classified as Level 1 when the fair value is based on quoted market prices. The fair value of certain securities are determined by third-party pricing services which utilize observable market inputs of comparable investments (Level 2). Acquisition-related future contingent consideration liabilities From time to time, pursuant to agreements entered into in connection with certain business combinations and asset acquisitions, Federated Hermes may be required to make future consideration payments if certain contingencies are met. In connection with certain business combinations, Federated Hermes records a liability representing the estimated fair value of future consideration payments as of the acquisition date. The liability is subsequently re-measured at fair value on a recurring basis with changes in fair value recorded in earnings. As of March 31, 2022, acquisition-related future consideration liabilities of $4.7 million were primarily related to business combinations made in the first quarter 2020 and were recorded in Other Current Liabilities ($0.4 million) and Other Long-Term Liabilities ($4.3 million) on the Consolidated Balance Sheets. Management estimated the fair value of future consideration payments based primarily upon expected future cash flows using an income approach valuation methodology with unobservable market data inputs (Level 3). The following table presents a reconciliation of the beginning and ending balances for Federated Hermes' liability for future consideration payments related to these business combinations/asset acquisitions: (in thousands) Balance at December 31, 2021 $ 11,652 Changes in Fair Value (31) Contingent Consideration Payments (6,913) Balance at March 31, 2022 $ 4,708 Investments using Practical Expedients For investments in mutual funds that are not publicly available but for which the NAV is calculated monthly and for which there are redemption restrictions, the investments are valued using NAV as a practical expedient and are excluded from the fair value hierarchy. As of March 31, 2022 and December 31, 2021, these investments totaled $18.4 million and $17.5 million, respectively, and were recorded in Other Long-Term Assets. (b) Fair Value Measurements on a Nonrecurring Basis Federated Hermes did not hold any assets or liabilities measured at fair value on a nonrecurring basis at March 31, 2022. (c) Fair Value Measurements of Other Financial Instruments The fair value of Federated Hermes' debt is estimated by management using observable market data (Level 2). Based on this fair value estimate, the carrying value of debt appearing on the Consolidated Balance Sheets approximates fair value. |
Derivatives
Derivatives | 3 Months Ended |
Mar. 31, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivatives | Derivatives HFML, a British Pound Sterling-denominated subsidiary of Federated Hermes, enters into foreign currency forward transactions in order to hedge against foreign exchange rate fluctuations in the U.S. Dollar. None of the forwards have been designated as hedging instruments for accounting purposes. As of March 31, 2022, this subsidiary held foreign currency forward derivative instruments with a combined notional amount of £70.7 million and expiration dates ranging from June 2022 through December 2022. Federated Hermes recorded $4.1 million in Other Current Liabilities on the Consolidated Balance Sheets, which represented the fair value of these derivative instruments as of March 31, 2022. As of December 31, 2021, HFML held foreign currency forward derivative instruments with a combined notional amount of £69.6 million and expiration dates ranging from March 2022 through September 2022. Federated Hermes recorded $1.6 million in Other Current Liabilities on the Consolidated Balance Sheets, which represented the fair value of these derivative instruments as of December 31, 2021. |
Intangible Assets, including Go
Intangible Assets, including Goodwill | 3 Months Ended |
Mar. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets, including Goodwill | Intangible Assets, including Goodwill Intangible Assets, net at March 31, 2022 decreased $12.5 million from December 31, 2021 primarily due to a $9.5 million decrease in the value of intangible assets denominated in a foreign currency as a result of foreign exchange rate fluctuations and $3.3 million of amortization expense. Goodwill at March 31, 2022 decreased $4.1 million from December 31, 2021 primarily as a result of foreign exchange rate fluctuations on goodwill denominated in a foreign currency. |
Debt
Debt | 3 Months Ended |
Mar. 31, 2022 | |
Debt Disclosure [Abstract] | |
Debt | Debt Unsecured Senior Notes On March 17, 2022, Federated Hermes entered into a Note Purchase Agreement (Note Purchase Agreement) by and among Federated Hermes and the purchasers of certain unsecured senior notes in the aggregate amount of $350.0 million (Notes), at a fixed interest rate of 3.29% per annum, payable semiannually in arrears on the 17th day of March and September in each year of the agreement. Citigroup Global Markets Inc. and PNC Capital Markets LLC acted as lead placement agents in relation to the Notes and certain subsidiaries of Federated Hermes are guarantors of the obligations owed under the Note Purchase Agreement. As of March 31, 2022, $347.4 million, net of issuance cost in the amount of $2.6 million, was recorded in Long-Term Debt on the Consolidated Balance Sheets. T he entire principal amount of the Notes will become due March 17, 2032, subject to certain prepayment requirements under certain limited conditions. Federated Hermes may elect to prepay the Notes under certain limited circumstances including with a make-whole amount if mandatorily prepaid without the consent of the holders of the Notes. The Note Purchase Agreement does not feature a facility for the further i ssuance of additional Notes or borrowing of any other amounts and there is no commitment fee payable in connection with the Notes. The Note Purchase Agreement includes an interest coverage ratio covenant and a leverage ratio covenant as well as other customary terms and conditions. Federated Hermes was in compliance with all of its covenants at and during the period ended March 31, 2022. See the Liquidity and Capital Resources section of Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations for additional information. The Note Purchase Agreement includes certain stated events of default and cross default provisions which would permit the lenders/counterparties to accelerate the repayment of the Notes if not cured within the applicable grace periods. The events of default generally include breaches of contract, failure to make required payments, insolvency, certain material misrepresentations and other proceedings, whether voluntary or involuntary, that would require the repayment of Notes prior to their stated date of maturity. Any such accelerated amounts would accrue interest at a default rate and could include an additional make-whole amount upon repayment. The Notes rank without preference or priority, with other unsecured and senior indebtedness of Federated Hermes. Revolving Credit Facility On July 30, 2021, Federated Hermes entered into an unsecured Fourth Amended and Restated Credit Agreement by and among Federated Hermes, certain of its subsidiaries as guarantors party thereto, a syndicate of eleven banks as Lenders party thereto, PNC Bank, National Association as administrative agent, PNC Capital Markets LLC, as sole bookrunner and joint lead arranger, Citigroup Global Markets, Inc., as joint lead arranger, Citibank, N.A. as syndication agent, and Toronto-Dominion Bank, New York Branch as documentation agent (Credit Agreement). The Credit Agreement consists of a $350.0 million revolving credit facility with an additional $200.0 million available via an optional increase (or accordion) feature. The interest on the borrowings from the revolving credit facility is calculated at the monthly London Interbank Offering Rate (LIBOR) plus a spread unless a base rate option is elected. The borrowings under the revolving credit facility may include up to $50 million for which interest is calculated at the daily LIBOR plus a spread unless a base rate option is elected (Swing Line). The Credit Agreement provides for a replacement reference interest rate index upon the eventual discontinuation of LIBOR, which can be either the term Secured Overnight Financing Rate (SOFR) plus a spread, daily simple SOFR plus a spread, each having a benchmark adjustment applied based on its historical relationship to LIBOR, or another alternative interest rate index (selected by the administrative agent and Federated Hermes) plus a spread. The Credit Agreement, which expires on July 30, 2026, has no principal payment schedule, but instead requires that any outstanding principal be repaid by the expiration date. Federated Hermes, however, may elect to make discretionary principal payments. During the first quarter 2022, Federated Hermes borrowed $138.3 million and repaid $311.7 million of the revolving credit facility under the Credit Agreement. As of March 31, 2022 and December 31, 2021, the amounts outstanding under the revolving credit facility were $50.0 million and $223.4 million, respectively, and were recorded as Long-Term Debt on the Consolidated Balance Sheets. The interest rate was 1.354% and 1.161% as of March 31, 2022 and December 31, 2021, respectively, which was calculated at LIBOR plus a spread. The commitment fee under the Credit Agreement is 0.10% per annum on the daily unused portion of each Lender's commitment. As of March 31, 2022, Federated Hermes has $300.0 million available for borrowings under the revolving credit facility and an additional $200.0 million available via its optional accordion feature. The Credit Agreement includes representations and warranties, affirmative and negative financial covenants, including an interest coverage ratio covenant and a leverage ratio covenant, reporting requirements and other non-financial covenants. Federated Hermes was in compliance with all covenants at and during the three months ended March 31, 2022. See the Liquidity and Capital Resources section of Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations for additional information. |
Share-Based Compensation Plans
Share-Based Compensation Plans | 3 Months Ended |
Mar. 31, 2022 | |
Share-based Payment Arrangement [Abstract] | |
Share-Based Compensation Plans | Share-Based Compensation Plans In connection with the 2022 Acquisition of HFML Noncontrolling Interests, Federated Hermes granted 1,183,066 shares of restricted Federated Hermes Class B common stock pursuant to award agreements to certain HFML employees in exchange for their beneficial interests in awards of restricted HFML shares held on March 14, 2022. These shares of Federated Hermes Class B common stock were reserved for issuance under the Federated Hermes Stock Incentive Plan. Federated Hermes also issued a combined 318,807 shares of treasury Federated Hermes Class B common stock to a non-U.S. resident former HFML employee, and to the trustee of a non-U.S. domiciled employee benefit trust, in exchange for beneficial interests in the HFML shares held by them on March 14, 2022. The shares being held by the employee benefit trust are to be used for future restricted stock awards for HFML management and key employees. See Note (3) for additional information. During the three months ended March 31, 2022, Federated Hermes awarded 504,043 shares of restricted Federated Hermes Class B common stock, nearly all of which was granted in connection with a bonus program in which certain key employees received a portion of their bonus in the form of restricted stock under Federated Hermes' Stock Incentive Plan. This restricted stock, which was granted on the bonus payment date and issued out of treasury, generally vests over a three-year period. During 2021, Federated Hermes awarded 1,218,613 shares of restricted Federated Hermes Class B common stock under its Stock Incentive Plan. Of this amount, 726,613 shares were awarded in connection with the aforementioned bonus program. The remaining shares were awarded to certain key employees and generally vest over a 10-year period. |
Equity
Equity | 3 Months Ended |
Mar. 31, 2022 | |
Equity [Abstract] | |
Stockholders' Equity | Equity In December 2021, the board of directors authorized a share repurchase program with no stated expiration date that allows the repurchase of up to 7.5 million shares of Class B common stock. No other program existed as of March 31, 2022. The program authorizes executive management to determine the timing and the amount of shares for each purchase. The repurchased stock is to be held in treasury for employee share-based compensation plans, potential acquisitions and other corporate activities, unless Federated Hermes' board of directors subsequently determines to retire the repurchased stock and restore the shares to authorized but unissued status (rather than holding the shares in treasury). During the first quarter 2022, Federated Hermes repurchased approximately 3.0 million shares of its Class B common stock for $102.5 million ($1.7 million of which was accrued in Other Current Liabilities as of March 31, 2022), nearly all of which were repurchased in the open market. At March 31, 2022, approximately 3.0 million shares remained available to be repurchased under this share repurchase program. The following table presents the activity for the Class B common stock and Treasury stock for the three months ended March 31, 2022 and 2021. Class A shares have been excluded as there was no activity during these same periods. Three Months Ended March 31, 2022 2021 Class B Shares Beginning Balance 93,410,968 99,331,443 Stock Award Activity 1,692,542 712,924 Purchase of Treasury Stock (3,039,917) (1,505,000) Ending Balance 92,063,593 98,539,367 Treasury Shares Beginning Balance 16,094,488 10,174,013 Stock Award Activity (1,692,542) (712,924) Purchase of Treasury Stock 3,039,917 1,505,000 Ending Balance 17,441,863 10,966,089 Redeemable Noncontrolling Interests in Subsidiaries The following table presents the changes in Redeemable Noncontrolling Interests in Subsidiaries: (in thousands) Consolidated Investment Companies HFML and other entities Total Balance at December 31, 2021 $ 24,659 $ 38,543 $ 63,202 Net Income (Loss) (1,744) 478 (1,266) Other Comprehensive Income (Loss), net of tax 0 (457) (457) Subscriptions—Redeemable Noncontrolling Interest Holders 29,577 763 30,340 Consolidation/(Deconsolidation) (16,034) 0 (16,034) Stock Award Activity 0 707 707 Distributions to Noncontrolling Interests in Subsidiaries (771) (3,568) (4,339) Change in Estimated Redemption Value of Redeemable Noncontrolling Interests in HFML 0 14,221 14,221 Acquisition of Additional Equity of HFML 0 (37,805) (37,805) Balance at March 31, 2022 $ 35,687 $ 12,882 $ 48,569 Balance at December 31, 2020 $ 24,246 $ 212,741 $ 236,987 Net Income (Loss) (1,091) 953 (138) Other Comprehensive Income (Loss), net of tax 0 1,430 1,430 Subscriptions—Redeemable Noncontrolling Interest Holders 25,762 0 25,762 Consolidation/(Deconsolidation) (25,419) 9,182 (16,237) Stock Award Activity 0 2,481 2,481 Distributions to Noncontrolling Interests in Subsidiaries (1,320) (578) (1,898) Change in Estimated Redemption Value of Redeemable Noncontrolling Interests in HFML 0 (2,670) (2,670) Balance at March 31, 2021 $ 22,178 $ 223,539 $ 245,717 |
Earnings Per Share Attributable
Earnings Per Share Attributable to Federated Hermes, Inc. Shareholders | 3 Months Ended |
Mar. 31, 2022 | |
Earnings Per Share [Abstract] | |
Earnings Per Share Attributable to Federated Hermes, Inc. Shareholders | Earnings Per Share Attributable to Federated Hermes, Inc. Shareholders The following table sets forth the computation of basic and diluted earnings per share using the two-class method for amounts attributable to Federated Hermes: Three Months Ended March 31, (in thousands, except per share data) 2022 2021 Numerator Net Income Attributable to Federated Hermes, Inc. $ 55,863 $ 74,484 Less: Total Net Income Available to Participating Unvested Restricted Shareholders 1 (2,579) (3,008) Total Net Income Attributable to Federated Hermes Common Stock - Basic $ 53,284 $ 71,476 Less: Total Net Income Available to Unvested Restricted Shareholders of a Nonpublic Consolidated Subsidiary 0 (259) Total Net Income Attributable to Federated Hermes Common Stock - Diluted $ 53,284 $ 71,217 Denominator Basic and Diluted Weighted-Average Federated Hermes Common Stock 2 88,050 95,218 Earnings Per Share Net Income Attributable to Federated Hermes Common Stock - Basic and Diluted 2 $ 0.61 $ 0.75 1 Includes dividends paid on unvested restricted Federated Hermes Class B common stock and their proportionate share of undistributed earnings attributable to Federated Hermes shareholders. 2 |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) Attributable to Federated Hermes, Inc. Shareholders | 3 Months Ended |
Mar. 31, 2022 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Income (Loss) Attributable to Federated Hermes, Inc. Shareholders | Accumulated Other Comprehensive Income (Loss) Attributable to Federated Hermes, Inc. Shareholders Accumulated Other Comprehensive Income (Loss), net of tax attributable to Federated Hermes' shareholders resulted from foreign currency translation gain (loss): (in thousands) Balance at December 31, 2021 $ 16,362 Other Comprehensive Income (Loss) (17,134) Balance at March 31, 2022 $ (772) Balance at December 31, 2020 $ 15,171 Other Comprehensive Income (Loss) 3,558 Balance at March 31, 2021 $ 18,729 |
Redeemable Noncontrolling Inter
Redeemable Noncontrolling Interest in Subsidiaries | 3 Months Ended |
Mar. 31, 2022 | |
Noncontrolling Interest [Abstract] | |
Redeemable Noncontrolling Interest in Subsidiaries | Equity In December 2021, the board of directors authorized a share repurchase program with no stated expiration date that allows the repurchase of up to 7.5 million shares of Class B common stock. No other program existed as of March 31, 2022. The program authorizes executive management to determine the timing and the amount of shares for each purchase. The repurchased stock is to be held in treasury for employee share-based compensation plans, potential acquisitions and other corporate activities, unless Federated Hermes' board of directors subsequently determines to retire the repurchased stock and restore the shares to authorized but unissued status (rather than holding the shares in treasury). During the first quarter 2022, Federated Hermes repurchased approximately 3.0 million shares of its Class B common stock for $102.5 million ($1.7 million of which was accrued in Other Current Liabilities as of March 31, 2022), nearly all of which were repurchased in the open market. At March 31, 2022, approximately 3.0 million shares remained available to be repurchased under this share repurchase program. The following table presents the activity for the Class B common stock and Treasury stock for the three months ended March 31, 2022 and 2021. Class A shares have been excluded as there was no activity during these same periods. Three Months Ended March 31, 2022 2021 Class B Shares Beginning Balance 93,410,968 99,331,443 Stock Award Activity 1,692,542 712,924 Purchase of Treasury Stock (3,039,917) (1,505,000) Ending Balance 92,063,593 98,539,367 Treasury Shares Beginning Balance 16,094,488 10,174,013 Stock Award Activity (1,692,542) (712,924) Purchase of Treasury Stock 3,039,917 1,505,000 Ending Balance 17,441,863 10,966,089 Redeemable Noncontrolling Interests in Subsidiaries The following table presents the changes in Redeemable Noncontrolling Interests in Subsidiaries: (in thousands) Consolidated Investment Companies HFML and other entities Total Balance at December 31, 2021 $ 24,659 $ 38,543 $ 63,202 Net Income (Loss) (1,744) 478 (1,266) Other Comprehensive Income (Loss), net of tax 0 (457) (457) Subscriptions—Redeemable Noncontrolling Interest Holders 29,577 763 30,340 Consolidation/(Deconsolidation) (16,034) 0 (16,034) Stock Award Activity 0 707 707 Distributions to Noncontrolling Interests in Subsidiaries (771) (3,568) (4,339) Change in Estimated Redemption Value of Redeemable Noncontrolling Interests in HFML 0 14,221 14,221 Acquisition of Additional Equity of HFML 0 (37,805) (37,805) Balance at March 31, 2022 $ 35,687 $ 12,882 $ 48,569 Balance at December 31, 2020 $ 24,246 $ 212,741 $ 236,987 Net Income (Loss) (1,091) 953 (138) Other Comprehensive Income (Loss), net of tax 0 1,430 1,430 Subscriptions—Redeemable Noncontrolling Interest Holders 25,762 0 25,762 Consolidation/(Deconsolidation) (25,419) 9,182 (16,237) Stock Award Activity 0 2,481 2,481 Distributions to Noncontrolling Interests in Subsidiaries (1,320) (578) (1,898) Change in Estimated Redemption Value of Redeemable Noncontrolling Interests in HFML 0 (2,670) (2,670) Balance at March 31, 2021 $ 22,178 $ 223,539 $ 245,717 |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies (a) Contractual From time to time, pursuant to agreements entered into in connection with certain business combinations and asset acquisitions, Federated Hermes is obligated to make future payments under various agreements to which it is a party. See Note (8) for additional information regarding these payments. (b) Guarantees and Indemnifications On an intercompany basis, various subsidiaries of Federated Hermes guarantee certain financial obligations of Federated Hermes, Inc., and of other consolidated subsidiaries, and Federated Hermes, Inc. guarantees certain financial and performance-related obligations of various wholly-owned subsidiaries. In addition, in the normal course of business, Federated Hermes has entered into contracts that provide a variety of indemnifications. Typically, obligations to indemnify third parties arise in the context of contracts entered into by Federated Hermes, under which Federated Hermes agrees to hold the other party harmless against losses arising out of the contract, provided the other party's actions are not deemed to have breached an agreed-upon standard of care. In each of these circumstances, payment by Federated Hermes is contingent on the other party making a claim for indemnity, subject to Federated Hermes' right to challenge the claim. Further, Federated Hermes' obligations under these agreements may be limited in terms of time and/or amount. It is not possible to predict the maximum potential amount of future payments under these or similar agreements due to the conditional nature of Federated Hermes' obligations and the unique facts and circumstances involved in each particular agreement. As of March 31, 2022, management does not believe that a material loss related to any of these matters is reasonably possible. (c) Legal Proceedings Like other companies, Federated Hermes has claims asserted and threatened against it in the ordinary course of business. As of March 31, 2022, Federated Hermes does not believe that a material loss related to these claims is reasonably possible. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2022 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events On April 28, 2022, the board of directors declared a $0.27 per share dividend to shareholders of record as of May 6, 2022 to be paid on May 13, 2022. |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 3 Months Ended |
Mar. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Federated Hermes, Inc. and its consolidated subsidiaries (collectively, Federated Hermes) provide investment advisory, administrative, distribution and other services to various investment products, including sponsored investment companies, collective funds and other funds (Federated Hermes Funds) and Separate Accounts (which include separately managed accounts, institutional accounts, certain sub-advised funds and other managed products) in both domestic and international markets. In addition, Federated Hermes markets and provides stewardship and real estate development services to various domestic and international companies. The interim Consolidated Financial Statements of Federated Hermes included herein have been prepared in accordance with United States (U.S.) generally accepted accounting principles (GAAP). In the opinion of management, the financial statements reflect all adjustments that are of a normal recurring nature and necessary for a fair presentation of the results for the interim periods presented. |
Use of Estimates | In preparing the financial statements, management is required to make estimates and assumptions that affect the amounts reported in the Consolidated Financial Statements and accompanying notes. Actual results may differ from those estimates, and such differences may be material to the Consolidated Financial Statements. |
Fair Value Measurements | Fair value is the price that would be received to sell an asset or the price that would be paid to transfer a liability as of the measurement date. A fair-value reporting hierarchy exists for disclosure of fair value measurements based on the observability of the inputs to the valuation of financial assets and liabilities. The levels are: Level 1 – Quoted prices for identical instruments in active markets. Level 1 assets may include equity and debt securities that are traded in an active exchange market, including shares of mutual funds. Level 2 – Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets. Level 2 assets and liabilities may include debt and equity securities, purchased loans and over-the-counter derivative contracts whose fair value is determined using a pricing model without significant unobservable market data inputs. Level 3 – Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable in active markets. |
Revenue from Contracts with C_2
Revenue from Contracts with Customers (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Disaggregation of Revenue | The following table presents Federated Hermes' revenue disaggregated by asset class: Three Months Ended March 31, (in thousands) 2022 2021 Equity $ 146,856 $ 166,357 Money market 86,290 80,692 Fixed-income 57,874 56,777 Other 1 33,744 37,347 Total Revenue $ 324,764 $ 341,173 1 Primarily includes Alternative / Private Markets (including but not limited to private equity, real estate and infrastructure), multi-asset and stewardship services revenue. The following table presents Federated Hermes' revenue disaggregated by performance obligation: Three Months Ended March 31, (in thousands) 2022 2021 Asset Management 1 $ 232,994 $ 247,689 Administrative Services 73,507 74,302 Distribution 2 11,077 13,028 Other 3 7,186 6,154 Total Revenue $ 324,764 $ 341,173 1 The performance obligation may include administrative, distribution and other services recorded as a single asset management fee under Topic 606, as it is part of a unitary fee arrangement with a single performance obligation. 2 The performance obligation is satisfied at a point in time. A portion of this revenue relates to a performance obligation that has been satisfied in a prior period. 3 Primarily includes shareholder service fees and stewardship services revenue. The following table presents Federated Hermes' revenue disaggregated by geographical market: Three Months Ended March 31, (in thousands) 2022 2021 Domestic $ 246,809 $ 256,491 Foreign 1 77,955 84,682 Total Revenue $ 324,764 $ 341,173 1 This represents revenue earned by non-U.S. domiciled subsidiaries. The following table presents Federated Hermes' revenue disaggregated by product type: Three Months Ended March 31, (in thousands) 2022 2021 Federated Hermes Funds $ 257,335 $ 274,005 Separate Accounts 62,773 63,855 Other 1 4,656 3,313 Total Revenue $ 324,764 $ 341,173 1 Primarily includes stewardship services revenue. |
Schedule of Remaining Unsatisfied Performance Obligations | Based on existing contracts and the applicable foreign exchange rates as of March 31, 2022, Federated Hermes may recognize future fixed revenue from these services as presented in the following table: (in thousands) Remainder of 2022 $ 9,544 2023 5,714 2024 3,092 2025 and Thereafter 969 Total Remaining Unsatisfied Performance Obligations $ 19,319 |
Concentration Risk (Tables)
Concentration Risk (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Risks and Uncertainties [Abstract] | |
Schedule of Revenue Concentration | The following table presents Federated Hermes' significant revenue concentration by asset class: Three Months Ended March 31, 2022 2021 Equity Assets 45 % 49 % Money Market Assets 27 % 24 % Fixed-Income Assets 18 % 16 % The following table presents Federated Hermes' revenue concentration by investment fund strategy: Three Months Ended March 31, 2022 2021 Federated Hermes Strategic Value Dividend strategy 1 10 % 8 % Federated Hermes Kaufmann Fund and Federated Hermes Kaufmann Fund II 9 % 11 % 1 Strategy includes Federated Hermes Funds and Separate Accounts |
Consolidation (Tables)
Consolidation (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Consolidated Federated Funds VIE | The following table presents the balances related to the consolidated VIEs that were included on the Consolidated Balance Sheets as well as Federated Hermes' net interest in the consolidated VIEs for each period presented. (in millions) March 31, 2022 December 31, 2021 Cash and Cash Equivalents $ 3.7 $ 3.0 Investments—Consolidated Investment Companies 43.2 35.9 Other Assets 0.2 0.1 Long-Term Investments 14.4 13.8 Less: Liabilities 1.4 1.4 Less: Redeemable Noncontrolling Interests in Subsidiaries 42.4 33.3 Federated Hermes' Net Interest in VIEs $ 17.7 $ 18.1 |
Investments (Tables)
Investments (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of Gains and Losses Recognized in Gain (Loss) on Securities, Net | The following table presents gains and losses recognized in Gain (Loss) on Securities, net on the Consolidated Statements of Income in connection with Federated Hermes' investments: Three Months Ended March 31, (in thousands) 2022 2021 Investments—Consolidated Investment Companies Net Unrealized Gains (Losses) $ (5,188) $ (1,903) Net Realized Gains (Losses) 1 (462) 1,261 Net Gains (Losses) on Investments—Consolidated Investment Companies (5,650) (642) Investments—Affiliates and Other Net Unrealized Gains (Losses) (6,659) 1,581 Net Realized Gains (Losses) 1 614 440 Net Gains (Losses) on Investments—Affiliates and Other (6,045) 2,021 Gain (Loss) on Securities, net $ (11,695) $ 1,379 1 Realized gains and losses are computed on a specific-identification basis. |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Schedule of Classes of Financial Assets and Liabilities Measured at Fair Value on Recurring Basis | The following table presents fair value measurements for classes of Federated Hermes' financial assets and liabilities measured at fair value on a recurring basis: (in thousands) Level 1 Level 2 Level 3 Total March 31, 2022 Financial Assets Cash and Cash Equivalents $ 262,043 $ 0 $ 0 $ 262,043 Investments—Consolidated Investment Companies 46,190 58,180 0 104,370 Investments—Affiliates and Other 85,713 5,306 48 91,067 Other 1 7,007 0 0 7,007 Total Financial Assets $ 400,953 $ 63,486 $ 48 $ 464,487 Total Financial Liabilities 2 $ 0 $ 4,082 $ 4,708 $ 8,790 December 31, 2021 Financial Assets Cash and Cash Equivalents $ 233,327 $ 0 $ 0 $ 233,327 Investments—Consolidated Investment Companies 38,799 66,743 0 105,542 Investments—Affiliates and Other 82,594 5,165 46 87,805 Other 1 7,105 0 0 7,105 Total Financial Assets $ 361,825 $ 71,908 $ 46 $ 433,779 Total Financial Liabilities 2 $ 0 $ 1,644 $ 11,652 $ 13,296 1 Amounts primarily consist of restricted cash and security deposits as of March 31, 2022 and December 31, 2021. 2 Amounts primarily consist of acquisition-related future contingent consideration liabilities and a derivative liability as of March 31, 2022 and December 31, 2021 |
Schedule of Reconciliation of Liability for Future Consideration Payments | The following table presents a reconciliation of the beginning and ending balances for Federated Hermes' liability for future consideration payments related to these business combinations/asset acquisitions: (in thousands) Balance at December 31, 2021 $ 11,652 Changes in Fair Value (31) Contingent Consideration Payments (6,913) Balance at March 31, 2022 $ 4,708 |
Equity (Tables)
Equity (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Equity [Abstract] | |
Schedule of Activity for Class B Common Stock and Treasury Stock | The following table presents the activity for the Class B common stock and Treasury stock for the three months ended March 31, 2022 and 2021. Class A shares have been excluded as there was no activity during these same periods. Three Months Ended March 31, 2022 2021 Class B Shares Beginning Balance 93,410,968 99,331,443 Stock Award Activity 1,692,542 712,924 Purchase of Treasury Stock (3,039,917) (1,505,000) Ending Balance 92,063,593 98,539,367 Treasury Shares Beginning Balance 16,094,488 10,174,013 Stock Award Activity (1,692,542) (712,924) Purchase of Treasury Stock 3,039,917 1,505,000 Ending Balance 17,441,863 10,966,089 |
Earnings Per Share Attributab_2
Earnings Per Share Attributable to Federated Hermes, Inc. Shareholders (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Earnings Per Share [Abstract] | |
Schedule of Computation of Basic and Diluted Earnings Per Share | The following table sets forth the computation of basic and diluted earnings per share using the two-class method for amounts attributable to Federated Hermes: Three Months Ended March 31, (in thousands, except per share data) 2022 2021 Numerator Net Income Attributable to Federated Hermes, Inc. $ 55,863 $ 74,484 Less: Total Net Income Available to Participating Unvested Restricted Shareholders 1 (2,579) (3,008) Total Net Income Attributable to Federated Hermes Common Stock - Basic $ 53,284 $ 71,476 Less: Total Net Income Available to Unvested Restricted Shareholders of a Nonpublic Consolidated Subsidiary 0 (259) Total Net Income Attributable to Federated Hermes Common Stock - Diluted $ 53,284 $ 71,217 Denominator Basic and Diluted Weighted-Average Federated Hermes Common Stock 2 88,050 95,218 Earnings Per Share Net Income Attributable to Federated Hermes Common Stock - Basic and Diluted 2 $ 0.61 $ 0.75 1 Includes dividends paid on unvested restricted Federated Hermes Class B common stock and their proportionate share of undistributed earnings attributable to Federated Hermes shareholders. 2 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income (Loss) Attributable to Federated Hermes, Inc. Shareholders (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Equity [Abstract] | |
Schedule of Accumulated Other Comprehensive Income (Loss) | Accumulated Other Comprehensive Income (Loss), net of tax attributable to Federated Hermes' shareholders resulted from foreign currency translation gain (loss): (in thousands) Balance at December 31, 2021 $ 16,362 Other Comprehensive Income (Loss) (17,134) Balance at March 31, 2022 $ (772) Balance at December 31, 2020 $ 15,171 Other Comprehensive Income (Loss) 3,558 Balance at March 31, 2021 $ 18,729 |
Redeemable Noncontrolling Int_2
Redeemable Noncontrolling Interest in Subsidiaries (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Noncontrolling Interest [Abstract] | |
Schedule of Changes in Redeemable Noncontrolling Interest in Subsidiaries | The following table presents the changes in Redeemable Noncontrolling Interests in Subsidiaries: (in thousands) Consolidated Investment Companies HFML and other entities Total Balance at December 31, 2021 $ 24,659 $ 38,543 $ 63,202 Net Income (Loss) (1,744) 478 (1,266) Other Comprehensive Income (Loss), net of tax 0 (457) (457) Subscriptions—Redeemable Noncontrolling Interest Holders 29,577 763 30,340 Consolidation/(Deconsolidation) (16,034) 0 (16,034) Stock Award Activity 0 707 707 Distributions to Noncontrolling Interests in Subsidiaries (771) (3,568) (4,339) Change in Estimated Redemption Value of Redeemable Noncontrolling Interests in HFML 0 14,221 14,221 Acquisition of Additional Equity of HFML 0 (37,805) (37,805) Balance at March 31, 2022 $ 35,687 $ 12,882 $ 48,569 Balance at December 31, 2020 $ 24,246 $ 212,741 $ 236,987 Net Income (Loss) (1,091) 953 (138) Other Comprehensive Income (Loss), net of tax 0 1,430 1,430 Subscriptions—Redeemable Noncontrolling Interest Holders 25,762 0 25,762 Consolidation/(Deconsolidation) (25,419) 9,182 (16,237) Stock Award Activity 0 2,481 2,481 Distributions to Noncontrolling Interests in Subsidiaries (1,320) (578) (1,898) Change in Estimated Redemption Value of Redeemable Noncontrolling Interests in HFML 0 (2,670) (2,670) Balance at March 31, 2021 $ 22,178 $ 223,539 $ 245,717 |
Equity Acquisition - Narrative
Equity Acquisition - Narrative (Details) £ in Millions, $ in Millions | Mar. 14, 2022GBP (£) | Mar. 14, 2022USD ($) |
HFML | ||
Business Acquisition [Line Items] | ||
Ownership percentage | 100.00% | 100.00% |
HFML | ||
Business Acquisition [Line Items] | ||
Additional equity interests acquired | 10.00% | 10.00% |
Class B Shares | HFML | ||
Business Acquisition [Line Items] | ||
Conversion of stock, amount converted | £ 36.4 | $ 47.5 |
Revenue from Contracts with C_3
Revenue from Contracts with Customers - Disaggregation of Revenue by Asset Class (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Disaggregation of Revenue [Line Items] | ||
Total Revenue | $ 324,764 | $ 341,173 |
Equity | ||
Disaggregation of Revenue [Line Items] | ||
Total Revenue | 146,856 | 166,357 |
Money market | ||
Disaggregation of Revenue [Line Items] | ||
Total Revenue | 86,290 | 80,692 |
Fixed-income | ||
Disaggregation of Revenue [Line Items] | ||
Total Revenue | 57,874 | 56,777 |
Other | ||
Disaggregation of Revenue [Line Items] | ||
Total Revenue | $ 33,744 | $ 37,347 |
Revenue from Contracts with C_4
Revenue from Contracts with Customers - Disaggregation of Revenue by Performance Obligation (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Disaggregation of Revenue [Line Items] | ||
Total Revenue | $ 324,764 | $ 341,173 |
Asset Management | ||
Disaggregation of Revenue [Line Items] | ||
Total Revenue | 232,994 | 247,689 |
Administrative Services | ||
Disaggregation of Revenue [Line Items] | ||
Total Revenue | 73,507 | 74,302 |
Distribution | ||
Disaggregation of Revenue [Line Items] | ||
Total Revenue | 11,077 | 13,028 |
Other | ||
Disaggregation of Revenue [Line Items] | ||
Total Revenue | $ 7,186 | $ 6,154 |
Revenue from Contracts with C_5
Revenue from Contracts with Customers - Disaggregation of Revenue by Geographic Market (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Disaggregation of Revenue [Line Items] | ||
Total Revenue | $ 324,764 | $ 341,173 |
Domestic | ||
Disaggregation of Revenue [Line Items] | ||
Total Revenue | 246,809 | 256,491 |
Foreign | ||
Disaggregation of Revenue [Line Items] | ||
Total Revenue | $ 77,955 | $ 84,682 |
Revenue from Contracts with C_6
Revenue from Contracts with Customers - Disaggregation of Revenue by Product Type (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Disaggregation of Revenue [Line Items] | ||
Total Revenue | $ 324,764 | $ 341,173 |
Federated Hermes Funds | ||
Disaggregation of Revenue [Line Items] | ||
Total Revenue | 257,335 | 274,005 |
Separate Accounts | ||
Disaggregation of Revenue [Line Items] | ||
Total Revenue | 62,773 | 63,855 |
Other | ||
Disaggregation of Revenue [Line Items] | ||
Total Revenue | $ 4,656 | $ 3,313 |
Revenue from Contracts with C_7
Revenue from Contracts with Customers - Narrative (Details) | 3 Months Ended |
Mar. 31, 2022 | |
Disaggregation of Revenue [Line Items] | |
Contract terms | Generally, contracts are billed in arrears on a quarterly basis and have a three-year duration, after which the customer can terminate the agreement with notice, generally from three to 12 months. |
Minimum | |
Disaggregation of Revenue [Line Items] | |
Termination period | 3 months |
Maximum | |
Disaggregation of Revenue [Line Items] | |
Termination period | 12 months |
Revenue from Contracts with C_8
Revenue from Contracts with Customers - Future Fixed Revenue from Stewardship and Real Estate Development Services (Details) $ in Thousands | Mar. 31, 2022USD ($) |
Revenue from Contract with Customer [Abstract] | |
Total Remaining Unsatisfied Performance Obligations | $ 19,319 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-04-01 | |
Revenue from Contract with Customer [Abstract] | |
Total Remaining Unsatisfied Performance Obligations | $ 9,544 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Expected timing of satisfaction, period | 9 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01 | |
Revenue from Contract with Customer [Abstract] | |
Total Remaining Unsatisfied Performance Obligations | $ 5,714 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Expected timing of satisfaction, period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01 | |
Revenue from Contract with Customer [Abstract] | |
Total Remaining Unsatisfied Performance Obligations | $ 3,092 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Expected timing of satisfaction, period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-01-01 | |
Revenue from Contract with Customer [Abstract] | |
Total Remaining Unsatisfied Performance Obligations | $ 969 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Expected timing of satisfaction, period |
Concentration Risk - Schedule o
Concentration Risk - Schedule of Revenue Concentration (Details) - Product Concentration Risk - Revenue Benchmark | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Equity Assets | ||
Concentration Risk [Line Items] | ||
Concentration risk | 45.00% | 49.00% |
Money Market Assets | ||
Concentration Risk [Line Items] | ||
Concentration risk | 27.00% | 24.00% |
Fixed-Income Assets | ||
Concentration Risk [Line Items] | ||
Concentration risk | 18.00% | 16.00% |
Concentration Risk - Narrative
Concentration Risk - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Concentration Risk [Line Items] | ||
Voluntary yield-related fee waivers | $ 75.8 | $ 83.1 |
Decrease in distribution expenses | 57.5 | 61.4 |
Net negative pre-tax impact | $ 18.3 | $ 21.7 |
Concentration Risk - Schedule_2
Concentration Risk - Schedule of Revenue Concentration by Investment Strategy/Fund (Details) - Product Concentration Risk - Revenue benchmark | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Federated Hermes Strategic Value Dividend strategy | ||
Concentration Risk [Line Items] | ||
Concentration risk | 10.00% | 8.00% |
Federated Hermes Kaufmann Fund and Federated Hermes Kaufmann Fund II | ||
Concentration Risk [Line Items] | ||
Concentration risk | 9.00% | 11.00% |
Consolidation - Narrative (Deta
Consolidation - Narrative (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | |
Variable Interest Entities [Line Items] | |||
Fee waivers | $ 198,500,000 | $ 201,100,000 | |
Variable Interest Entity Not Primary Beneficiary | |||
Variable Interest Entities [Line Items] | |||
Assets under managed investments | 6,000,000,000 | $ 8,000,000,000 | |
Cash and Cash Equivalents | Variable Interest Entity Not Primary Beneficiary | |||
Variable Interest Entities [Line Items] | |||
Federated Hermes' maximum risk of loss in non-consolidated investment companies | 94,100,000 | 170,600,000 | |
Receivables - Affiliates | Variable Interest Entity Not Primary Beneficiary | |||
Variable Interest Entities [Line Items] | |||
Federated Hermes' maximum risk of loss in non-consolidated investment companies | 1,000,000 | $ 700,000 | |
Financial Support, Fee Waivers | |||
Variable Interest Entities [Line Items] | |||
Money market funds which meet the scope exception of the consolidation guidance | 164,800,000 | 168,000,000 | |
Financial Support, Capital Contributions | |||
Variable Interest Entities [Line Items] | |||
Money market funds which meet the scope exception of the consolidation guidance | $ 0 | $ 0 |
Consolidation - Consolidated Fe
Consolidation - Consolidated Federated Fund VIEs (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Variable Interest Entities [Line Items] | ||
Consolidated VIE assets | $ 2,018,522 | $ 2,018,187 |
Less: Liabilities | 912,032 | 840,968 |
Variable Interest Entity, Primary Beneficiary | ||
Variable Interest Entities [Line Items] | ||
Less: Liabilities | 1,400 | 1,400 |
Less: Redeemable Noncontrolling Interests in Subsidiaries | 42,400 | 33,300 |
Federated Hermes' Net Interest in VIEs | 17,700 | 18,100 |
Cash and Cash Equivalents | Variable Interest Entity, Primary Beneficiary | ||
Variable Interest Entities [Line Items] | ||
Consolidated VIE assets | 3,700 | 3,000 |
Investments—Consolidated Investment Companies | Variable Interest Entity, Primary Beneficiary | ||
Variable Interest Entities [Line Items] | ||
Consolidated VIE assets | 43,200 | 35,900 |
Other Assets | Variable Interest Entity, Primary Beneficiary | ||
Variable Interest Entities [Line Items] | ||
Consolidated VIE assets | 200 | 100 |
Long-Term Investments | Variable Interest Entity, Primary Beneficiary | ||
Variable Interest Entities [Line Items] | ||
Consolidated VIE assets | $ 14,400 | $ 13,800 |
Investments - Narrative (Detail
Investments - Narrative (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Schedule of Investments [Line Items] | ||
Investments—Affiliates and Other | $ 91,067 | $ 87,805 |
Investments - consolidated investment companies | 104,370 | 105,542 |
Debt Securities | ||
Schedule of Investments [Line Items] | ||
Investments - consolidated investment companies | 56,900 | 65,200 |
Stocks of Large Companies | ||
Schedule of Investments [Line Items] | ||
Investments - consolidated investment companies | 36,100 | 28,500 |
Stocks of Small and Mid Sized Companies | ||
Schedule of Investments [Line Items] | ||
Investments - consolidated investment companies | 6,800 | 7,400 |
Federated Hermes Funds | ||
Schedule of Investments [Line Items] | ||
Investments—Affiliates and Other | 80,900 | 77,600 |
Separate Accounts | ||
Schedule of Investments [Line Items] | ||
Investments—Affiliates and Other | 10,200 | 10,200 |
Separate Accounts | Debt Securities | ||
Schedule of Investments [Line Items] | ||
Investments—Affiliates and Other | 4,800 | 5,200 |
Separate Accounts | Stocks of Large Companies | ||
Schedule of Investments [Line Items] | ||
Investments—Affiliates and Other | $ 3,800 | $ 3,400 |
Investments - Gains and Losses
Investments - Gains and Losses Recognized in Gain (Loss) on Securities, Net (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
(Loss) Gain on Securities [Line Items] | ||
Gain (Loss) on Securities, net | $ (11,695) | $ 1,379 |
Investments—Consolidated Investment Companies | ||
(Loss) Gain on Securities [Line Items] | ||
Net Unrealized Gains (Losses) | (5,188) | (1,903) |
Net Realized Gains (Losses) | (462) | 1,261 |
Gain (Loss) on Securities, net | (5,650) | (642) |
Investments—Affiliates and Other | ||
(Loss) Gain on Securities [Line Items] | ||
Net Unrealized Gains (Losses) | (6,659) | 1,581 |
Net Realized Gains (Losses) | 614 | 440 |
Gain (Loss) on Securities, net | $ (6,045) | $ 2,021 |
Fair Value Measurements - Class
Fair Value Measurements - Classes of Financial Assets and Liabilities Measured at Fair Value on Recurring Basis (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Financial Assets | ||
Investments—Consolidated Investment Companies | $ 104,370 | $ 105,542 |
Investments—Affiliates and Other | 91,067 | 87,805 |
Fair Value, Measurements, Recurring | ||
Financial Assets | ||
Cash and Cash Equivalents | 262,043 | 233,327 |
Investments—Consolidated Investment Companies | 104,370 | 105,542 |
Investments—Affiliates and Other | 91,067 | 87,805 |
Other | 7,007 | 7,105 |
Total Financial Assets | 464,487 | 433,779 |
Financial Liabilities | ||
Total Financial Liabilities | 8,790 | 13,296 |
Fair Value, Measurements, Recurring | Level 1 | ||
Financial Assets | ||
Cash and Cash Equivalents | 262,043 | 233,327 |
Investments—Consolidated Investment Companies | 46,190 | 38,799 |
Investments—Affiliates and Other | 85,713 | 82,594 |
Other | 7,007 | 7,105 |
Total Financial Assets | 400,953 | 361,825 |
Financial Liabilities | ||
Total Financial Liabilities | 0 | 0 |
Fair Value, Measurements, Recurring | Level 2 | ||
Financial Assets | ||
Cash and Cash Equivalents | 0 | 0 |
Investments—Consolidated Investment Companies | 58,180 | 66,743 |
Investments—Affiliates and Other | 5,306 | 5,165 |
Other | 0 | 0 |
Total Financial Assets | 63,486 | 71,908 |
Financial Liabilities | ||
Total Financial Liabilities | 4,082 | 1,644 |
Fair Value, Measurements, Recurring | Level 3 | ||
Financial Assets | ||
Cash and Cash Equivalents | 0 | 0 |
Investments—Consolidated Investment Companies | 0 | 0 |
Investments—Affiliates and Other | 48 | 46 |
Other | 0 | 0 |
Total Financial Assets | 48 | 46 |
Financial Liabilities | ||
Total Financial Liabilities | $ 4,708 | $ 11,652 |
Fair Value Measurements - Narra
Fair Value Measurements - Narrative (Details) - USD ($) $ in Millions | Mar. 31, 2022 | Dec. 31, 2021 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Acquisition-related future consideration liabilities | $ 4.7 | |
Acquisition-related future consideration liabilities recorded in other current liabilities | 0.4 | |
Acquisition-related future consideration liabilities recorded in other long-term liabilities | 4.3 | |
Money market | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents | 221.3 | $ 183.4 |
Mutual Fund | NAV | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Other financial assets | $ 18.4 | $ 17.5 |
Fair Value Measurements - Recon
Fair Value Measurements - Reconciliation of Liability for Future Consideration Payments (Details) - Contingent Consideration $ in Thousands | 3 Months Ended |
Mar. 31, 2022USD ($) | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
Balance at December 31, 2021 | $ 11,652 |
Changes in Fair Value | (31) |
Contingent Consideration Payments | (6,913) |
Balance at March 31, 2022 | $ 4,708 |
Derivatives (Details)
Derivatives (Details) - Foreign Currency Forward £ in Millions, $ in Millions | Mar. 31, 2022GBP (£) | Mar. 31, 2022USD ($) | Dec. 31, 2021GBP (£) | Dec. 31, 2021USD ($) |
Derivative [Line Items] | ||||
Derivative liability, notional amount | £ | £ 70.7 | £ 69.6 | ||
Other Current Liabilities | ||||
Derivative [Line Items] | ||||
Derivative liability | $ | $ 4.1 | $ 1.6 |
Intangible Assets, including _2
Intangible Assets, including Goodwill (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2022USD ($) | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Increase (decrease) in intangible assets | $ (12.5) |
Decrease in value of intangible assets denominated in a foreign currency as a result of foreign exchange rate fluctuations | 9.5 |
Amortization expense for finite-lived intangible assets | 3.3 |
Goodwill, period increase (decrease) | $ (4.1) |
Debt (Details)
Debt (Details) | 3 Months Ended | ||||
Mar. 31, 2022USD ($) | Mar. 31, 2021USD ($) | Mar. 17, 2022USD ($) | Dec. 31, 2021USD ($) | Jul. 30, 2021USD ($)bank | |
Debt Instrument [Line Items] | |||||
Long-term debt, net of issuance costs | $ 397,383,000 | $ 223,350,000 | |||
Number of banks as lenders | bank | 11 | ||||
Line of credit facility, maximum borrowing capacity | $ 350,000,000 | ||||
Proceeds from revolving credit facility | 138,300,000 | ||||
Amount of revolving credit facility repaid | 311,650,000 | $ 5,000,000 | |||
Amounts outstanding under the revolving credit facility | $ 50,000,000 | $ 223,400,000 | |||
Interest rate at period end | 1.354% | 1.161% | |||
Commitment fee | 0.10% | ||||
Available for borrowings | $ 300,000,000 | ||||
Optional increase (or an accordion feature) | 200,000,000 | 200,000,000 | |||
Senior Notes | Unsecured Senior Notes | |||||
Debt Instrument [Line Items] | |||||
Aggregate amount | $ 350,000,000 | ||||
Fixed rate | 3.29% | ||||
Long-term debt, net of issuance costs | 347,400,000 | ||||
Issuance costs, net | $ 2,600,000 | ||||
Swing Line | |||||
Debt Instrument [Line Items] | |||||
Line of credit facility, maximum borrowing capacity | $ 50,000,000 |
Share-Based Compensation Plans
Share-Based Compensation Plans (Details) - shares | Mar. 14, 2022 | Mar. 31, 2022 | Dec. 31, 2021 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Restricted stock awarded in period (in shares) | 504,043 | 1,218,613 | |
Class B Common Stock Bonus | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Restricted stock awarded in period (in shares) | 726,613 | ||
Restricted stock requisite service period | 3 years | ||
Class B Common Stock Key Employees | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Restricted stock requisite service period | 10 years | ||
Class B Shares | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Restricted stock awarded in period (in shares) | 1,183,066 | ||
Shares issued in period (in shares) | 318,807 |
Equity - Narrative (Details)
Equity - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | |
Equity, Class of Treasury Stock [Line Items] | |||
Purchase of treasury stock (in shares) | 3,039,917 | 1,505,000 | |
Purchase of treasury stock | $ 102,537 | $ 45,030 | |
Other Current Liabilities | |||
Equity, Class of Treasury Stock [Line Items] | |||
Purchase of treasury stock | $ 1,700 | ||
Class B Shares | |||
Equity, Class of Treasury Stock [Line Items] | |||
Number of shares authorized under share repurchase program (in shares) | 7,500,000 | ||
Purchase of treasury stock (in shares) | 3,000,000 | ||
Remaining number of shares authorized to be repurchased (in shares) | 3,000,000 |
Equity - Activity for Class B C
Equity - Activity for Class B Common Stock and Treasury Stock (Details) - shares | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Beginning Balance (in shares) | 16,094,488 | 10,174,013 |
Stock Award Activity (in shares) | (1,692,542) | (712,924) |
Purchase of Treasury Stock (in shares) | 3,039,917 | 1,505,000 |
Ending Balance (in shares) | 17,441,863 | 10,966,089 |
Class B Shares | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||
Beginning Balance (in shares) | 93,410,968 | 99,331,443 |
Stock Award Activity (in shares) | 1,692,542 | 712,924 |
Purchase of Treasury Stock (in shares) | (3,039,917) | (1,505,000) |
Ending Balance (in shares) | 92,063,593 | 98,539,367 |
Purchase of Treasury Stock (in shares) | 3,000,000 |
Earnings Per Share Attributab_3
Earnings Per Share Attributable to Federated Hermes, Inc. Shareholders (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Numerator | ||
Net Income Attributable to Federated Hermes, Inc. | $ 55,863 | $ 74,484 |
Less: Total Net Income Available to Participating Unvested Restricted Shareholders | (2,579) | (3,008) |
Total Net Income Attributable to Federated Hermes Common Stock - Basic | 53,284 | 71,476 |
Less: Total Net Income Available to Unvested Restricted Shareholders of a Nonpublic Consolidated Subsidiary | 0 | (259) |
Total Net Income Attributable to Federated Hermes Common Stock - Diluted | $ 53,284 | $ 71,217 |
Denominator | ||
Basic Weighted-Average Federated Hermes Common Stock (in shares) | 88,050 | 95,218 |
Diluted Weighted-Average Federated Hermes Common Stock (in shares) | 88,050 | 95,218 |
Earnings Per Share | ||
Net Income Attributable to Federated Hermes Common Stock – Basic (usd per share) | $ 0.61 | $ 0.75 |
Net Income Attributable to Federated Hermes Common Share—Diluted (usd per share) | $ 0.61 | $ 0.75 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Income (Loss) Attributable to Federated Hermes, Inc. Shareholders (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Accumulated Other Comprehensive Income (Loss), net of tax [Rollforward] | ||
Balance, beginning of period | $ 1,114,017 | $ 1,136,997 |
Balance, end of period | 1,057,921 | 1,155,122 |
Foreign Currency Translation Gain (Loss) | ||
Accumulated Other Comprehensive Income (Loss), net of tax [Rollforward] | ||
Balance, beginning of period | 16,362 | 15,171 |
Other Comprehensive Income (Loss) | (17,134) | 3,558 |
Balance, end of period | $ (772) | $ 18,729 |
Redeemable Noncontrolling Int_3
Redeemable Noncontrolling Interest in Subsidiaries (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Increase (Decrease) in Temporary Equity [Roll Forward] | ||
Temporary equity, beginning balance | $ 63,202 | $ 236,987 |
Net Income (Loss) | (1,266) | (138) |
Other Comprehensive Income (Loss), net of tax | (457) | 1,430 |
Subscriptions—Redeemable Noncontrolling Interest Holders | 30,340 | 25,762 |
Consolidation/(Deconsolidation) | (16,034) | (16,237) |
Stock Award Activity | 707 | 2,481 |
Distributions to Noncontrolling Interests in Subsidiaries | (4,339) | (1,898) |
Change in Estimated Redemption Value of Redeemable Noncontrolling Interests in HFML | 14,221 | (2,670) |
Acquisition of Additional Equity of HFML | (37,805) | |
Temporary equity, ending balance | 48,569 | 245,717 |
Consolidated Investment Companies | ||
Increase (Decrease) in Temporary Equity [Roll Forward] | ||
Temporary equity, beginning balance | 24,659 | 24,246 |
Net Income (Loss) | (1,744) | (1,091) |
Subscriptions—Redeemable Noncontrolling Interest Holders | 29,577 | 25,762 |
Consolidation/(Deconsolidation) | (16,034) | (25,419) |
Distributions to Noncontrolling Interests in Subsidiaries | (771) | (1,320) |
Temporary equity, ending balance | 35,687 | 22,178 |
HFML and other entities | ||
Increase (Decrease) in Temporary Equity [Roll Forward] | ||
Temporary equity, beginning balance | 38,543 | 212,741 |
Net Income (Loss) | 478 | 953 |
Other Comprehensive Income (Loss), net of tax | (457) | 1,430 |
Subscriptions—Redeemable Noncontrolling Interest Holders | 763 | |
Consolidation/(Deconsolidation) | 9,182 | |
Stock Award Activity | 707 | 2,481 |
Distributions to Noncontrolling Interests in Subsidiaries | (3,568) | (578) |
Change in Estimated Redemption Value of Redeemable Noncontrolling Interests in HFML | 14,221 | (2,670) |
Acquisition of Additional Equity of HFML | (37,805) | |
Temporary equity, ending balance | $ 12,882 | $ 223,539 |
Subsequent Events (Details)
Subsequent Events (Details) | Apr. 28, 2022$ / shares |
Subsequent Event | |
Subsequent Event [Line Items] | |
Dividends declared (usd per share) | $ 0.27 |