FHI - Earnings call transcript Q3 2020

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Operator

Greetings and welcome to the Federated Hermes' Third Quarter 2020 Analyst Call and Webcast. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] Please note this conference is being recorded. I'll now turn the conference over to your host Raymond Hanley, President of Federated Investors Management Company. you. Thank

begin. may You

Ray Hanley

are welcome. our President call Tom of and Market. Hermes, the Financial and International of Donahue, of Investment Business Donahue, be Officer CEO Officer Federated Q&A for us and Federated Debbie joining Nusseibeh Leading morning CEO will the Cunningham, today's and Chris Chief Saker Chief Good Hermes; Money and for

these different to than make our statements. note we can results risk today's will forward-looking may no results statements forward-looking future be we the results call, Federated given be such materially Federated that Chris? SEC by duty Hermes want the Hermes' implied of assurance review statements. assumes actual During update and to for and filings. Please No in disclosure any

Chris Donahue

you Good I Tom will Ray. morning listening. Federated business results. thank financial our and all performance, for Hermes you, comment and review will Thank on

expand activities. at We EOS Federated grow to engagement and Hermes continue our

During XX other QX, assets reached our staff from XX, $X.X and the quarter. trillion, the $X.X under of at up our advice second up and QX, reach specialists in end trillion level of engagers from

of continued from offset business, looking $XX as up Now the the net redemptions $XX by QX, partially to values end quarter billion billion. equities close market recover, billion, adding at billion, at at assets our $X.X $X.X of

were mid equity trailing We fund. number third in the cap by Using separate the strategies. funds sales engagement global top median. user and at end overall three a equity search quarter Morningstar were of led funds negative, ESG data to quartile XX accounts in the small company global and with small While the above of saw cap include equity. XX% equity of equity Kauffman Other were years, the our for quarter impact opportunities, we funds international net sales and of it and third in net positive sales equity SDG the combined small net had funds,

its high The Looking at was high objective percentile funds companies. quality XX growing had value fund in is outflows the quarter, the in billion mutual at dividend the in the and domestic which strategy X.X%, stream of dividend categories Morningstar months second down third end from yield strategic dividend the combined provide strategy, $X.X its The quarter. to domestic SMH quarter. the assigned strategic value billion of a from ranked of and income third second distribution $X.X

business than have show quality dividend rate assets $XXX million. will goal characteristics While market not core fund believe volatility continued we that resonate with of recent providing low in market through low strategy, higher our especially investors the term, combined yield October our dividend results from QX XX redemptions high net focus on at over SMA high the and long favored about environment. a

another assets Now over turning up X% of high QX, record of at nearly from reached income; $X or to $XX end QX. billion fixed the billion

sales The growth billion. strong third by $X was net of quarter about driven

high fund of net Ultra $X.X government of million sales. sales billion sales. $XXX strategies high Our meet yield, QX We short in billion funds bond fund over sector, of XX total funds return sales had return the well just about had income to for short strategies multi added arrays $X.X fixed net demand. quarter. billion market solid sector fixed combined net income yield with total of net fund broad about bond multi Corporates, in We third The were trailing the intermediate positioned funds top mostly were and median. and quarter and mandates net data SMA. about our did quartile to institutional using in began the had fixed and short above income our municipal fixed end strategies fixed in bond as net net XX% the accounts $X.X sales. income yet sales, income were three income. sectors, had duration we drove years, Morningstar in QX, all demand XX% and Across for fund funds At also of fixed separate with

market decrease market record the high was Moving in funds, $XX mostly QX from to the a other seasonal from QX's separate to money assets. fund entities their asset attributed decreased of factors. of Money asset which and extent, billion lesser pay down to use clients account government money decreases markets; use declines to spend were to using among or by businesses corporate on cash debt and cash end-to-end

are to of home, successfully working communicated employees delaying to and technology XX% our now money totals; be from at mutual look share of February. return culture. employees offices market function of including the a end our years from were leveraging sub money our to in $XX $X $XX $XX we fund in continue strong was Taking We Money recent of prior when for and decisions were funds mid will office fund informed nearly quarter asset. X.X%. assets market $XXX recently asset managed through at the Overall, well billion conditions by billion advised about calendar. significant not billion. progress billion multi to in that quarter Our in in $XXX including our investments at COVID. challenges until a return from are income, alternative the US mutual $XXX billion we unchanged and billion equities; billion, market And employees more markets, Upwards approximately fixed assets

We my come opinion. to have proper to lean facilitates when culture. the it's to office promotes community would collaboration, people camaraderie and the back our collaboration is and do and so. Tom? cooperation office together best conversations to in and creativity. working Federated interactions on And that wanting means vital emphasized that We personal it it's build Culture in office accomplished Hermes impromptu allows in

Tom Donahue

from the by income higher quarter combined net Total Chris. fixed mainly revenue prior offset million. Recall and $XX partially money assets. and you, and yield was lower minimum X that which add from million to up lower reduce which we quarter QX, Thank about higher money $XX equity in revenue from revenue. due partially of This money offset combined revenue million growth revenue was other to market waivers saw by about assets for equity assets, the to by about assets, market market

business impacting to Other a in Our us of challenging revenues, varying which times. compared and carried to million fees additional grow QX added and factors backdrop conditions mix prior in $X.X included the revenues positioned day, performance $X.X interest. market against million diversified an decrease of the quarter

other in value expense unrelated prior decrease impact income distribution purchase million. money from into recent And by about assets. expected we off. from first Hermes in increased This yield, the at is the offset additional lower and related from factors expense in quarter minimum a operating is and the Non-operating Looking including the the income compared on and about price waiver of on pounds. mainly by to impacting The which based the was prior fixed think in decrease and impact income stimulus expense of to due where to expenses quarter the of rates, and and expenses quarter. third operating market was waivers investments QX comp yield higher from the due MEPC additional lower income which line impact will quarter their in million dollars FX yield these distribution QX Multiple our an money million in level hedging package, the increase fund prior $X.X it benefit other could impact mainly that's $X.X the $X partially $XX included the was expenses $X.X levels, million. and costs. about day in waivers derivatives. forecast. due decreased higher potential higher assets, the quarter quarter liability be of and reduced of to acquisition. other seed Other from the assets, include headcount Also The contingent of a waivers equity This million was a revaluation $X.X from on million operating item

a per in declared about share, dividend. in a noted for including XX press $X last billion dividend or dividends a special release, total $X.XX Board share XX As per approved $X $X.XX of years. special the We've five the the

it dividend due purposes. for of restricted We pay earnings paid $X.XXX under on to on reduce about QX will dividend net considered cash ordinary per the will exclusion the share. unvested QX expected method by shares largely hand tax to per share, class income and is dividend share be the payment dividends The computing per from from two earnings an of the

to the purchased $XX investments questions available open were the At this purchased to nearly $XXX end $XX cash now. quarter million of open of like market. $XXX us. about the and million, the shares would million in third of was We million. of all we QX which the was at up quarter the During XXX,XXX call for Debt with for end

Operator

Worthington first Our [Operator JPMorgan. Instructions] Ken from with question is

Ken Worthington

funds? money funds? good Again either Hi, likely are that money rules regulatory altering it to prime to it panels continue to outlook Regulators market COVID. of most programs money of and that And morning. post for could damaged outlook this What is fund the for the about? round for support Or idea prime around are Fed need regulations. in being actually the fixes talked the funds market kick response market the more helps

Chris Donahue

made XX% requirement talked Chris. requiring acted the fine. of to SEC that the ways then it is trigger. if trigger Namely, SEC XX% keep weekly fees liquidity but around it This most that board was the problems lot Ken. being not there by the caused gates that consideration the only a exactly thing that's on of of more are the and than believe comments about the that is Thanks were notice of I the predicted. restriction there way wants solved. The public to And and then the that level, the

situation XX% and a colleges all issuers, include stakeholders, great on post some to doesn't funds is their number if make front thing financing look before, for though is help, point, short You COVID, need include an mechanisms you do and red non the in get restricting whom much marketplace. users, impact end take eliminate time. during the sense a markets term in the their short view, did market you of discussed. and trading of being COVID the At municipalities, think times, at a the lot the this prime honest this And ability our this which and the spear other of like that that lot reason makes there a SIFI that at that's group, And the in the we came it flag have wave sense. to which the have need and the to shareholders. of And status. And same through who then you include just of point again, the them stakeholders of is things are use even further that money resilience, to diminish just funds, of lot don't ameliorating have as to this with no preserve order therefore they one there don't

I So efficacy what will predict, there happen can money be that regulation, will cannot assure defending with I of market funds. we prime the beauty and in you

Ken Worthington

retain you the quarter, in them management pretty fixed And and coming sales question kind had into money income? income that's pointed you can fixed cross substantial strong funds, pretty what of you. then is going get out really business? And really thank this of what coming to federated outflows cash dollars net To is the funds sort to extent and the market and quarter. market money intermediaries income of Great, out of clients cross-sell heart funds to of market into or cash those this money extent the fixed

Chris Donahue

account, from you're we to been to income because have But cash concept the can cash to that lovely money in talk the made clients exactly decades truly and is we do. money that on I what many never would; could, them fixed discovered cash calculate about But A can't be follow options the by you to and of money determinations if that are cash. into other happens fund there basis able And beautiful of you business, I defend. the have doesn't over being work the the many, moving I able just have. and fund with

had separate fixed offerings in have We coordinate organizations our quality clients And see. large to to quarter, of very were think part breadth I of were and a the sales related able the that that we income who this the closely. sales

market very be sure just on the door and people can the you difficult trace fund side so sales income opener. the And to money fixed equity a that the as use money. It's

Operator

Dan question Fannon Next is with from Jefferies.

Dan Fannon

Thanks.

you that So follow waiver stimulus to are million. kind stimulus on embedded wanted talk there the the isn't that? and highlighted in Can assumptions in that $X for up of fee the other about potential assumption if outlook; the for you sensitivities

Tom Donahue

the Sure, And of pretty which and there's with $X couple then client guess and track many package, we've was package an matter. the of the if run the wavers. as run many raise that Basically, so would There's and up mentioned you through assumptions Dan. forecasts, mix, stimulus you a size we asset mentioned, because a just thinks stimulus we I get timing so accurate. happen came going surprisingly million. our which doesn't factors factors, in if we lot that Thanks. And we whole the stimulus actions. estimate team be a and our million to more numbers been

Dan Fannon

overall at the which offset? gross profitability? the where the becomes net between the distribution you distribution is with negative out point cap there And more expense, the and relationship to a on it expense the then and Okay,

Ray Hanley

Hey, Dan. It's Ray.

that numbers question and multiples have total a they're roll built all XX-ish And because the funds is higher classes. into of in and that revenue they that in up expense. the of group distribution, have And imbedded at see you your and is answer revenue distribution the In fee fund. they of distribution, when different share related the So ratios fund yes. expense higher levels, and additional to

at waivers, resulting and predict. you but history if pretty a of funds items mix to waivers. if makes again, share rates mix that and classes. you in period, impact to line and lower of and begin those look base the the that And funds And the when you it's XXXX hard assets, impacted of than the revenue expense lower have so distribution, really back you to a and that on function that get 'XX of model it and across see wide as changes, have And as by can know, go and

Operator

Patrick Our question next from is Autonomous Research. with Davitt

Patrick Davitt

the Hey, the give as that can the us transform ESG of through the helping progress on that good term of specific of kind morning, equity of specific of ESG update flow for us they business, to from Thanks. side? you on kind any everyone. Could move long you kind the of ESG, application strategies non lens, actually, transformation picture anecdotes particularly

Chris Donahue

theme Well, are investment people for Patrick, able authentic. of is once full in-depth Chris, integration RSD, is in movement to be is And again, or cosmetic it legitimately is through to not And the looking this mandates, operation. we and this convince operation. full the that are a

fund initial group And so we group. how have three doing from each these we've Debbie that charts that fact, and we as liquidity on look much in this yield, with at yield graphs strategic customization, to process, runs this the the value integration of before, and different well. in the go on very as the The part bar through the also is and show is and of integrated engaging is that very, mentioned are in stage, the we're high proceeding in are and group that the to the quite testing each as the high you along process lead on group, each others some analysis And in GSE's as then levels, with has of effort. now complete

So a this remains commitment.

even the of though of integrated, a the of already ESG, got at groups at the on look or ways. ESG, different ESG that look risk, Now, some at and And I've they well these that you question they're when high really that's phrase grades way lot it non you about whether just weren't because mentioned, risk. looking you ESG, fact

So this enhances it.

asked when the integrate ones that you about to can well I've ones ESG. you you give the don't where positive of flows money in part those around into say, you the with think entire is areas other Debbie are I sales I But that where the funds franchise market in that question these very, that. the allow because or observations incidental I of the do hard But you terms of discern, the in see will very is track the type oh, some to we on Now second mentioned same the and globe. UK our from that to operation the it difficult from it's very mentioned. got

And way be it, looking that Debbie. so would another at of

Debbie Cunningham

group three think required the minimal issuers rule risk, reason fact Thanks to to the market the only that risk. mutual I XAX. money for our we Chris. minimal different From by sectors probably most with funds And are Federated that are the represent within for credit quality high Hermes credit and their our deal has funds fully with integrated at we that do

largest in dealing the from in for the direction. matter fact we're issues issues sectors, there in with on the issues the So some for social and positive is, a may a the that global even industry move such, fans, as using. companies that with with the they perspective, industry, to most move world, may the pharmaceutical to the regard basis, governance those an be from we're the forward them engaging part, them issues so are may world, some they're the or of basis. in of from be of entities there The the And services companies, the we largest financial a BPs though be Exxon's and can there environmental leaders

do noted the of if kind will, to a modus our that's perspective COVID the So incidental the with within observations sector, have operandi, adaptability. firms you that we've some from of lot

lines, manufacturing have use March COVID their with they turn yet soft PPE in we actually April, issues very and a large, of bottling took their lines, of One manufacturer. been them plastic, their several during plastic of into and back has engaged times the that drink manufacturer

around being making that the workers face world. shields So were the they used by they healthcare were were

retailers country. in the about some say begun their And with from a they not those issues an we'd And so individuals any their repurpose Walmart off; and from good. in front. working GSE of other who by are five other incidental ESG with been opportunity on this social and not Federated stories standpoint, similar investor necessarily lay conversations start on have to engage basis types from GSEs have a the did to they excited any observations top and been asked on our individuals perspective database, So

Chris Donahue

you, Debbie. Thank

the the like we on UK Before from comment works and I'd question, Nusseibeh perspective. Saker on integration how to his to leave this ask this equities,

Saker Nusseibeh

Thank you, Chris.

goes a previous we in is ESG, have funds, funds. something you also when authenticity now get recall see specialist you -- you as talk us London. being the They And So to as just talks one increased in across into step this the Europe see launch have seen it allows to ESG beyond. market, flows true thematic But business Asia. the might we into we in from do. we we which whole mean, I that else. increasingly because do the which this and leads, By to do in about everything be as markets integrated

this to and just standard example, strengths in beyond, has SDG something have SDG tries for would step would I been high others very flows. some And play strong one fact, to the going that we that's the that the So be impact of not launching. asset like fund highlight, is ESG, yield raised fund, which

into and that in into both to in I funds, integrate as specialist ESG do should and ESG step ESG to thematically funds authentic So it leader seen one and between fund decide the become go addition. integrating further mainstream see connectivity flows being add we which

the of see we market close as this through year we'll along are We next. will the bring and to and others beginning of go to which think strong we we which thinking

Patrick Davitt

earlier, flow pipeline? you it. a to did I real Got bond the quarter-to-date in as follow up number give again missed that. quick the And

Chris Donahue

pipeline numbers the question billion. part the the about income number So is fixed the was? what mostly $X.X that of quarter-to-date for a And that's and assets, first

Patrick Davitt

right. No, an number, well, you gave equity

missed think bond I I the number. So

Chris Donahue

of is north quarter-to-date million about $XXX number positive. bond The

Operator

America. Our next Bank of Mike Carrier question is with from

Mike Carrier

amount. and the Thanks morning. a the the thinking into with Good we're How that lot from I quarter, term the assets just broad parts heading just realize in the other next Hi. taking healthy the Any waivers up couple within XX% long Tom, or to operating a you were are years? key questions. and moving as drivers? XX% about outlook margin range, not integrated for of

Tom Donahue

when a that very That to number the each number, an close expense we revenue lose might be up market goes are other. and

revenue, close it looks works and that's lose did smart and it actually like it. just go that way really when it the And So expense we're we lose margin it's manage up. we But we managers. like well, look to then we expense

the guess little back we we'll margin supposed if bit the And down, back which So we're be way be to take earning for I happy other goes credit will go that. a more. it will because

Mike Carrier

M&A, to little you feel the Got been the wanted it, your I've a everywhere, guys and have it on but bit Chris, time. get okay. ups done thoughts. And, in the just like, areas there's strategic your get skill that if several in just need just wanted sector. thoughts roll it, And to firm seen you But has enough you more activity

Chris Donahue

them we are so a a are like have always And of warm those looking to Mike, And say that at. home ups. as for loving we're we always roll we looking few and inclined. I for

the a question who where to That's or can we have a don't question people fit in isn't a a and want whether enough proper that deal of and So size do of enough robot. have it job the with better we do make of size.

you grow with there, said on In pretty of bigger we're less, think ETF focus estate, collaboration what the at it. I you aspects side, get And as associates working equity a where to did growing acquisition year, our look saw the idea UK, and and to are in in on the infrastructure private the of beginning create the in or this a then good and inclined more And order ones; terms Hermes the you our the complete franchise of in the of when business headed. we we before of calls, I integrating which was on investments made on the and real the business. these we've

in Now, it. when start don't looking be products lot we making obviously, filing more have we're size that'll we're because ETFs, at building this out. a a there. and not about XXXX any But And announcements we

Operator

is Katz question Citigroup. next with William from Our

William Katz

much Okay, question. taking the for thanks very

back coming flows moment, opportunity? for will Can And the where back sort to Just and to next carry the talk about the XX about little step altpocket see a the maybe bit. like sort a should you best little think XX the fees a of get bit roll you back bounce looks of then how P&L, over we months. performance -

Chris Donahue

Saker, I'll let you handle that on.

Saker Nusseibeh

for telling you Thank Chris.

Sorry that. about

as straightforward shows invested you'd overtime some about on assets There's me equity and roll you comes that we've carry our regular to equity And by underlying sale a but do how fund before. depending the anyone fees are carry start in two of performance have with businesses basis generate part carry private that history of is familiar let So fee, end was familiar of be fees. London the as business. on sets that the come lumps fees. of would We that cycle any one years up with got and Hermes the which Federated talking for expect private the when of we and strong a there these

one been stage consistent time. the and lumpy. of end this at to the some for The of less come these development look tend which through fees they've And on that working year. other property, that fees seen is towards stronger if we you've you bit projects fees have And that is performance time, again, reasonably we've been for

continue expect to private generate numbers because would within not this categories time. as which our the that in expect for be would part within property out. we continuing strong mean, numbers investments particularly notice equity. you I property of over year, were performance say this performance you'll But to the returns, is a the giving and I way time, the fees Now, can't we do up, some What get fee I'm we from

ratio, In equity are bigger terms and private of the being, time ratios, fees a of up business question? we until Does performance ratio to continue more. bigger be obviously, the property answer for the a grow that kind will

William Katz

Sure, you or can the to so? opportunity you -- you buckets when flagship is year categories look where or follow up just any now, see incrementally, over for when grow are next you there of

Saker Nusseibeh

tells that's question. property that, a the again, really of about So business. beauty you And good our

way the talking about is between or very long We're to And clients in $XXX large stakeholder who with a, b, in size. we they that tends think form investment the by be, be million So business is tend property long to grown, the nature. key because key fairly finding relationships somewhere $XXX I and million. very

some constant that investment. XX the about clients we years discussions you're talking wants and which get in So of typically the you have commitment in the are both fees and revenues. with we And

the So right want we can us invest return that finding the them that you with on, that to of them. expected matter so projects we it's generate

clients, the terms in about is So for to they of emerge, predict do the But I'd as these to the clients we this these continue that have, large projects found to we imagine for future. trying anything without is property. looking to at say to them said

already Now private property couple offerings is have funds the we different years. equity, launch And attractive of be our And these in these that equity. raise next indications equity, from will would will private to base. more client we to funds look

Tom Donahue

the there fund in that and two the pickup that well in quarter. Bill, fund about strategies the sales, step From as was you credit this fund. in unconstrained absolute London flows a standpoint, had the and credit area and in terms third were up return asked of net

make any, you strategies? fund any if Saker, particular have on Now comment those

Saker Nusseibeh

yes, So absolutely.

for mean, as up pick not concentrated fixed seen for it and UK linked So as income, we've of in two performance is an fixed very counter wide multi okay, which there in that but are our income trend And I are strongly. credit has yes, been an of which that our What that increase seen asset example private I are markets, well. return alternatives, is market, assets is we've very -- what the funds, on. fee successful. the demand And they're to raised the these

part And marketing the built income of very the effectively over we track parcel fixed way with is months. last very last six this eight strong So a taking we've in a market team, started strong major to years of and a over our the just record. team

something see we is more as of go this So that forward. you'll

William Katz

just trajectory out mentioned it this questions. thanks like I you to for How maybe for depressed level just for from you and doesn't we of a follow home talk February. year the work you taking mentioned the you quarter outlook maybe next It and some perhaps? expenses? Chris, in one we Okay about think out should up little about can it stick offs. guess into non-comp the normalization it of for your Tom, Tom Can look was as that of particularly call look sort the

Tom Donahue

how outsized you first that and continue, throttle, maybe on see but slow, the covered of people's that that's rest the flow, that we're to half up half and the things, us The let Well, is the salesforce our things that. they we're showing press TNE shouldn't travel things process see office technology which still one going just But to most occupancy, I virus, budgeting think is interesting at that kind I lot And the level. they're to low in talking whether release any, circumstances a of much are basically running and and second people's normally full pick and now. back be as and don't be and our of much. year I expectation on expenses, it their hey, that's And as that's think the as the half up investing will saying, the a Distribution, with the willingness to be. of going in change and don't to would willingness see in. financial, totally dependent we've will will

lot the back or creep and and change, going with doing things in in on mentioned wants terms we that few a on, money way Saker going early do. then we make sure promotion, with state but to to and there. number products And new doing in on which So ATS, the does the intentions got that the EOS hiring terms we're EOS of a what that a the think we of more the that'll of Chris had we along things and also Saker in of EOS. up. people but that Chris I mentioned Federated that flow that then Hermes and the out XXXX, that, a to going will are Advertising here engage And mentioned few and markets doing things COVID. will are come name Hermes our go to related and and waivers And curtail growth was of doing in of new

quick rundown. a that's So

Operator

RBC is Lee question with Our from next Kenneth Capital Markets.

Kenneth Lee

as corporate with for for could wondering you money impact. thanks when if and just what combine in of flows near well question. you the seasonality Hi, clients, taking activity share you're fund us side, government around I'm especially your my the expectations as on markets term terms fund seeing

is typically quarter fourth the a Thanks. quarter. think strong I

Chris Donahue

your Debbie, turn.

Debbie Cunningham

Sure, of lower products a by some in see be year the the was our to what third second rates beginning quarter. part part do speaking, that mitigated and interest of generally the degree inflows the the may already inflow of and liquidity end huge at by

and cash do now for a perspective, to was term lot being that's our different purpose, depending stimulus don't already, quality think, cash short was its upon markets election utilized that that included what of change for sort So lighter original in an happens types cash products, maybe cash, of like I from matter. of

there's issues election, associated time lower in bit lower period; go you'll that repo any up on flows probably a it little with because rate go questionable if of coming You'll the see bit a light in. little or contested interim treasuries kind see basis a of quality, with

demand in get marketplace. we stimulus do So that until supply exceeding the at point some

widening the side is one flows. it's and speaking, a the fourth than would of and fact spread if outflows other the see markets a from quarter strong that the credit market a you'll that generally But little of the in case. usually prime some On be immunity more bit standpoint, for with likely positive

Operator

Our next with Evercore John is ISI. from question Dunn

John Dunn

the to be is equity to income to limitation, interesting more the would funding has time what's in mostly at income; -- piece also the talked comprise what all, Thanks maybe and there's about Little the hear you then fixed now, of? and change fixed hi. similar that inflowing and pipeline,

Tom Donahue

Sure.

So to short on other in be the yield, duration. terms of high is And up pipeline. spectrum a of Strong makes the that similar then end it would side; the now. fixed of income happening what's in particular, good at bit that

in what's similar we're a to so seeing mix now. place And

And net have it's the won we give there; of the to a side couple Hermes that mandates equation, On offsets they've are a that expected in. come institutional we of always some the equity number. actually

a hundred the it's known going know this out. get of in want expect a of of equity a pick hundred these timing to we next million go funding, to necessarily into and end wins. we So The are And a range And range. lot to These predict, to QX we some stress is tend always are will couple we flow, couple on year. them times about the funding, just we million I of to not in fund that vary. know that that low will on hard number can

John Dunn

the environment, but inheriting disruption. Got how money also more little this and then potentially we're from push to putting a between with you. MEPC, work maybe the in benefiting just impacts And pull --

Tom Donahue

Did you say MEPC?

John Dunn

Yes, that's right.

Chris Donahue

to Yes, talk timing the you there. well, Saker, want about

Saker Nusseibeh

cities there's national inner to towns, can been to generate policy are Kingdom, the out some there's the And the along and tell technology continued and in of away MEPC our to the the specialization is and NETCO So in Kingdom, you very other income. of with continued developed you reason United a engaged timing is Kingdom. to to regenerating at London the And United trying And our because with for of in towards southeast easier. of handed involved the move city hard that because smaller is What London I from be partly you those client was is United push, a project move been predict. and makes the businesses new that look particularly go government and and is it expensive that partly as a coast. of a if the particularly

question continued years projects, development The projects, the in of it are us to we're that you clients. if open multi continuing lend to, look METC these does year is work of but large door to many of a these It that one terms pace. does So to how projects have at takes attracting clients?

the tend predict about I they for this XX cannot we when talks to are there beginning, average. do, witness they But So they happen. on like said when ongoing, years

Operator

And Robert our final Lee question from is with KBW.

Robert Lee

the XXXX. little Thanks Good to have questions. maybe a others benefited hard couple clearly, your times strategy, for in I the and you seen time talked ETF kind and have taking maybe patience talk morning, ETF strategies. some everyone. from bit that's couple, and of a since guess I BlackRock, maybe jumping you've for And But of ESG demand gun. businesses their back

that given be that's to expertise way. your would the initiatives of differentiate focus to your assume yourself kind So try reasonable going to of be to

Chris Donahue

that total in the The filings entire less overall in certainly on me market picture, active, of active the the is there maybe though, only into the lot is And included. the going but assets the than was X% that are third. inning a Well are going of business. ETF second ETF

companies, for activity geared next got strategies those in And the distribution, if year, integrated before to support another the income But have be that old days, that, ESG these they we've such would this behind is that you from say with competitive a which doing honest will you most and the And interested, on and with authentic think us second now, the is has ESG. Federated of a Hermes, get Saker and order change all have would not when following Hermes, But index, coming same machinery. based the for gang couple couple up the the passive, what when part people of was the to whole for the evaluating equity. handful integration, that you said buying the the been you're technology, part all less engage of data buying right that to around not By so the does said we're level. can of underlying And you're in puts you and of index. reward so a you're name in of Federated transformational happens, have much And a reverse good than reason just you integrated, our the fixed some companies. because the strategy fully that the information as merger ESG on next of yes, develop mandates engagement. probably so time the this if say you're because, very we'd situation in of the of And we then offerings risk I suspect profile the you tranche. whole calls those all curtain,

Robert Lee

opportunity are under lows need but feel to major it's Do just other accounts market you been there's your kind kind your fixed have Back $XX institutional institutional some players is talk to your you there, long much of for look think ESG and But number, compared best a -- that kind of or XX-ish, of business capability, ETS, that income, if it's marketing income been or aren't in some Generally, of a flows out for performance. income, smaller. you have fixed good good in the things pipeline, certainly it's fixed the and been certainly revisit share? separate I nice some priority can going like at institutional year they maybe an Chris, while. got your of more meet billion follow And about up what well. US you Great. that much your

Chris Donahue

that I at individuals Federated several you priority. is Well, Hermes top for assure their there are that pitch

another look mandates, during large is the across part talking and And about that that was helping on us seeing that funds integration we we high activity. applies from clients especially like short you focused Federated governmental board that think for to have ESG where integrated, of the the thing large and at, this the yield, numbers rigorously and Ray so are cash very with that's, to RFP working on it. on pension a But in all course, we're And That's that us And confidence, And during been built, able year. the that's why these understand these it's clients offerings the to billion relationships let times. those even the kinds diversification to of we've we're to available. that lot have clients. number, of so a is an and And high. a but present time had gross enabled the of are of times, that have that things this gives that sales of $XX that us quality COVID far things

point to do and Now, respond your And and be will head traveling, mechanics fixed you're with appreciate that trying I should works. bigger new sales get the ones our income, but of when institutional than I in it's a money But the on RFP for still computers that our little billion. to old next that not to pass ability $XX more message ones difficult, hour.

Robert Lee

sense just business Fair the And if we this But curious, I enough. flows patience. I way. your don't And just one I last quarter, appreciate question. was a or the looked you know present permeates know this of thinking maybe as dream, we Hermes it's UK one from trying some of of sense versus route business contribution that kind that but the just business one team the and of were Federated, if get the thinking they . -- to year-to-date, at

Ray Hanley

Ray. Rob, Yes, it's

two, would sales three, flows legacy that we've the for Federated this came both seen of weighted Federated net side term well, basis on equation, particular have Hermes quarter, that of quarter, the long of meaning but it a know. positive the and this history as particular a in legacy although the we work For from more ways, years been side couple to net

Chris Donahue

Federated. the the ask and a that's voice covered I Rob, and the for UK this on cannot our would data ethos the I to of importance here, part operations, branding you And Hermes of when contribution have just understand And, picked I as underestimate we've of up at use grandchildren call I been Hermes' contribution, challenge. two and the you the methodologies EOS add term associated to that meaning which the would length

Operator

for remarks. have question-and-answer of the like management I session. to conference would turn We the over end back reached closing to the

Chris Donahue

Thank you, Sherry. our today. including joining for participants youngest all you We That us thank today. concludes our remarks for

Operator

conference. today's concludes This you. Thank

lines time. day. have And You at great your may disconnect a this

Federated Hermes (FHI) 30 Oct 202020 Q3 Earnings call transcript