FHI - Earnings call transcript Q1 2021

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Operator

Greetings and welcome to the Federated Hermes, Inc’s First Quarter 2021 Analyst Call and Webcast Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions].

As a reminder this conference is being recorded. to conference like host to now Mr. would turn over this your I of Company. Investors Hanley, Federated Ray President Management Thank you sir, you may begin.

Raymond J. Hanley

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

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

J. Christopher Donahue

can results. and and of business over comment a including Thank We results year rates and short-term on we review Federated We Hermes pandemic executed Federated of you solid Hermes challenging financial rates was morning. will with backdrop Ray, the produced Tom will I performance markets for during much QX have global successfully of against performance fluid time. another good rising the as variables corona that to we extreme sales the falling long-term lows. our influence. solid quarter last

organic XXX assets. In long-term high quarter period quarter, X.X mark of for XX%, a billion Federated Xth sales net sales long-term noted XX billion A XXX industry finishing first X.X just net of In had mutual Ignite QX the the of billion. growth for We of billion. XX.X and in flows billion over net ended fund long-term fact, of recent sales Hermes’ crossed rate ranks assets we record long-term achieved under the February over billion the in total the our XX-month fund growth of X.X with strategies and equity XXXX. that and record fund high growth Study

differentiated engagement from Federated assets end the Hermes also to trillion reached We up of trillion, at first our three grow We XXXX. clients continue the added EOS in X.X quarter X.X and under new at advice function.

other sales staff of the of the the Equity up million, over and Equity Core. million, Engagement quarter to first with XX ESG net the reached net net sales XX, sales level UK funds in ex-Japan of net Our impact MDT fund record by year. X.X by assets engagers gross included the SDG over a high and first XXX equity offset XXX sales and of in separate XXX increased about XX Equity Other XX% partially fund drove We and fourth redemptions led sales of specialists strategies billion from reached global saw fund of in in positive account Equity teams the strategies and XX equity were Sustainable over our from managed quarter. last emerging Asia global a managed markets quarter XXXX. first opportunities Cap million. Small net XX% million, of quarter by had XXX sales million. in over strong over quarter billion million. XXX first XXX

be the in XXth. will continue have to to close able Global strategy invest to fund. Existing Our informed the will Fund investors Emerging shareholders shareholders Markets that June new been effective

quarter this investor April Xst $XX small XX the factors as a five redemptions in cap the to million effective near-term. As in had guarantee fund redemptions of star close The first can indications announced will no here. during net in soft first in December, Using fund about top redemptions, were had April. billion applications close. support change in data these Kaufmann closed that use model to strategy XX% currently view. other lumpy the and in at equity years we and the quarter, portfolio to believe further soft Certain of part Early first believe redemptions the Morningstar had XX% were continue the appear March dissipate in funds the And our quartile of quarter, and unable for three due resulting were in the March above while that the end the we median. trailing preference there's to

net equity funds first the of the For million. weeks of had sales XX about and three quarter second SMAs

Turning by XX first from strong quarter record XX growth was billion up high just XX% of of driven net year. quarter, of of more again billion. and at first to fixed than another or reached up The sales last billion income, under year-end X the X assets billion the the end since QX

short nearly Within UK ultra-short yield million, led million. the and of billion, in net by positioned had sales broad array in sustainable the return Yield strategy, high income total bond SDG strategies solid funds Credit We fixed was funds with combined sales meet to bond million. was XXX Our strong about was first income high fund multi-sector return net XXX for yield were demand. intermediate XXX fixed well X.X results XX another Fund, quarter. QX fund market leaders total net continued with nearly Engagement the on were High and sales

up quarters. nearly and municipal bond high fund due redemption million five million net the sales, here of nearly the yield net of a and asset yield, our change client based allocation new credit gross couple strategies. to SMA in a of net demand. million income duration as UK for from XX net bond well. in the in Fixed last had strategy, separate three accounts has redemptions corporate our sectors data international, XX% multi-sector quarter unconstrained of did institutional tactical net another their The who million quarter were about end We fund Corporate QX had quarter, quartile net sales income of flagship fund categories had in strategy. top solid about years, Across net using sales were the solid multi-sector XXX funds returned we from the trailing and with high one XX star funds fixed XX all fourth $XXX to first of the and April as sales median. above fund At a half short institutional the by were has the Morningstar wins sales produced strategies these funds just XX% made sales of While led the sales domestic XXX and saw of for of in mandate.

SMA's We begin the the accounts, fixed about million quarter wins. of about million. mandates had in trade three first the and quarter, funds with fund second separate million including institutional XXX unconstrained sales finance in weeks to For of into net XXX from new and X.X second yet both XXX credit billion funds about three income and net

assets in moving money billion Now from were about X markets, down QX to year-end.

including from market at the market fund market quarter-end, year-end funds money X.X%. Our sub share X.X%, down share advised slightly of was about

While the interest short-term yields on remain interest rates recently, over increased to of historic securities couple low longer-term we've rates single-digits months. money the dropping last seen at market lows, with

separate of yield minimum the the in accounts first similar quarter release. noted yield the greater the second waivers waivers result, market as and a expected in money way. our a certain quarter, increase As before in be declining rest than year, again are Minimum over impacted to have we anticipated begun press to in were

overall trillion in As the interest It's X.X since environment, the and lead competitive will that not interest from investors, and massive to Fed's assets, usual, lower as and we current stimulus yield stance. most financial issuers, will ITI to not purposes statistics of increases. are fund rate well. show the being X.X money continue hard challenging to up resilience experienced year-end trillion Against trillion believe market conclude despite rate recent The at waivers value the XXXX. for the show pandemic and funds unleashed and that end challenge pass money rate their the interest to recovery X.X the system. We

of March play regulators. another disruptions funds. funds truth midst be will XXXX plus of market essential caused global believe fund in the by role market way the capital We no market the we of And money the our regulatory in recognized round were as that enter the markets in XX the by also pandemic money that discussions, years of money market

the not false to facts, based regulatory follow market and narratives, funds. process changes should expect the on and preserve We be data. investors issuers Any utilize should regulatory money to ability

were follows markets, Horizon XX XXX Now in in these XXX taking about transition from to mutual expected with week alternative, happen assets and similar XXX customary a is multi-asset. billion billion equities, agreement income and Hancock announced fund transaction a including were XX fixed are other September. in Hancock Bank’s billion and million Subject income, in it billion. transitions that in billion look this totals. We and This assets Whitney transitioned that recent money expected the conditions, fixed XX billion, in with Advisors fund in market Money XXX billion Managed regulatory asset shareholder Horizon XXX approvals million to in Hancock equity in in at to Funds. earlier assets assets. XXXX X approximately

many XXX and today gratifying the over and the I'd as in like It's last worst demonstrated my places nor moving clients In the figures. that thank resilience year. our recall Now AUM is see for it and the pandemic. not in of progress employees closing pipeline million to numbers, is these to remarks adaptability in past the the

adults, and to As now available offices of with the return summer. U.S. towards for U.S. to we're our we Tom? all staged the head vaccines more during mid-year employees planning

Thomas R. Donahue

carried revenue due from money performance costing performance costing compared revenue and waivers QX of million, assets and million of X.X from million XX.X Total in in million, QX. fees. XX.X negative down long-term to X.X days fewer yield Thanks, for by was offset the about million, quarter lower in was quarter the higher impact interest minimum assets of increased revenue market combined million. Chris. partially X.X XX lower included the This fees prior to

former therefore interest from quarter. about the acquisition Now March the paid interest current Xst, interest the and acquisition transaction. variable This QX recorded to compensation acquisition as beginning the as million we first entities expense is former since for HGPE also and certain employees of with employees solely that accounting in current amount beginning of This and carried HGPE the date is interest are finalize XXXX in represents consolidated QX. associated includes carry carried X being

and operating from more of at are distributors the points. waivers and of range This minimum noted will and waivers expenses QX. a QX. based to money for yields the accounts. to driven including on range we on forecast impact capacity on QX impact the waivers, flows. amount yield began The press in interest technical to negative by than during gross through was of to and factors, of rates amount minimum were higher As among We separate funds the income way. in XX are yield yield million a absorb believe number distribution impact and can low we reduce government responsible forecasted market certain being operating quarter. in able portfolios expect changes is levels, on and on market of waivers waivers, to peak second release, the the million This minimum to range waivers historically including from mutual in may on factors increase the likely curve. these yields of funds on higher impact for XX The money material yield certain XX asset short-term and accounts separate Any yield rates, the March, not X as of minimum based basis largely front-end vary QX factors waivers income of the taking In others the rates low the we further QX that in from

not at to the indicated any information is duty Ray Hermes this quarter. update As throughout undertaking beginning, the Federated

already expenses quarter higher entities of at lower I operating partially $X added mainly interest and days, minimum occupancy the vacation incentive fewer distribution accruals that market catch-up partially higher to lower $X of fees higher I gain pay value quarter Looking in items expense $X assets, impact related and of lower due in quarter mainly The the a to waivers, the expense. by Non-controlling consolidated funds non-recurring in was from the earned consolidation X the the by the in Office of long-term million offset to prior of offset by performance which carried quarter compared mainly resulting X and in income lease of the due impact comp earlier, the million was about that due incentive mentioned of the expenses, yield about about less included investments combined which was the comp and interest assets. decrease and to decreased money expense decrease million lower from in of and mentioned. seasonally from held increase million. interest variable to prior million prior by and QX, Hermes

During complete repurchase a shares share QX, X.X Board million The it's million new we X program yesterday, approximately year. program $XX million approved substantially public. XXth since program for authorized purchased million went X.X share the to our we last

the and pursuant purchased As has agreement option upon which Hermes majority call the at the deed We interim call working this whether determined option call been made Fund in agreed the up be interest we actually or questions. the for contemplated Managers updates occur. publicly executed we'd at in prepared remarks in will to on filed concludes Limited the put be request July BTPS. call by with in -- providing time, not whether the currently BTPS valuation Laura, and a for it the We're when to like time, that we procedures will deed XXXX, a open our exercised to cannot put put option transaction anticipate a do process.

Operator

Instructions]. [Operator

first from question Dan line Fannon with the Jeffries. Our of comes

You question. may with proceed your

Daniel Fannon

is fee that is morning. to or using in or good view about thereafter. calculate and My just dissipating and can question you latter the about the the will that up XQ then come part year? the the just the are fee or future with view of that -- inputs peak and outlook decline you for the waivers declining rates so Thanks talked you of on waiver in view being it talk And

Thomas R. Donahue

with future that then Yeah will of driving Dan, and talk is view what's I'll a sharing because second talk it's intermediaries. for the Debbie and rates our

Deborah Cunningham

this Debbie. is Dan,

is factors the basis to overnight rates of are Some point, range. one specific which more currently outlook where one have to maybe trading, basis our about do with the in two

and XXXX of to go overnight eight throughout year most basis since back you been If early the in have somewhere XXXX rates neighborhood began, five points. the in the to pandemic of

by potential counterparties believe a processes trading of through is increasing some which couple they from the that of the XX overnight their Fed from expansion zero, would RRP. we technical by of will of months with rate repo already expectation be that per that that that points. basis basis interest more what one And it basis five points. Commensurate post level like basis be crisis market point three the an but likely by points was now, the that what was part upon [ph] basis an up upwards from raises by a yield right the the that's to looking overnight only to of of at. with more it raises money that financial allow because do counterparty Our will billion large adjustments a see from RRP various does to billion. the of floor them it to during XX also IOER counterparty a amount five has points, degree their gone limits zero We through perspective reverse environment, curve like perspective would what driving which probably did to of a rate, not ago curve repo taking floor rate you're announcing this They the that depending

directly a plays through daily yields those invest basis and we thus the on the as in that the So fund to waivers. of markets

Daniel Fannon

then Okay, a helpful. follow-up and that's just expenses comp. on And

the that the the plus in quarter comp interest that's you X seasonal. so of X non-recurring I have and through, million for flow think another we carried mentioned So

on that we could think that high those off about we based funds? one else is So forward, reported ratio you and or is the in just this it nature saw of in be think some if there expenses the be about quarter as to legacy we going also as non-recurring, as then payout more interest that going anything carried what

Thomas R. Donahue

of through first because more question in second much one call a why your But was more there flow will call interest, so bigger get and decent first question can't of of again. carried it it the as catch-up we obviously. there, was time. X since number that's was it I the interest it we million carried part So a March there amount this Dan,

to allowed time, it things not do but one I'm call it I So, Other catch-up. the expenses. call in

I waivers is that able travel at the we is even that going rise with was see if with of it comp traveling more to. up decreasing. advertising same we're do up to hope the whole and than fees kind a related what other So and of higher pandemic. distribution because three And they probably forecasted wouldn't expect or as to items and the while show going we're that QX because expecting, we're thing promotional the the compared year It it don't like the I number to rates does increasing over of creep and period, quarters. look to rest faster

don't anything or and going think add anything at it calculating Forecasting, the your HGPE out Saker, be out going of forecasting, trying versus don't going second percentage to carry anything what's say, if help Saker I what's there that with add going to question, to you and some that know able be in be to to and hey, you is not. anything, in we're to percentage able I that to figure of happen can just all. carry, you to to not

Saker Nusseibeh

No, nothing.

about correct You it. are

predict can we time. that through we they numbers here and over come the both see you in best fees, historically As but that find them, and do cannot we can say. numbers the know and because declare them consistently declared I always say, I we we've you have That's in both for a them also and performance where historically profile London that carry the

Daniel Fannon

million But same clarify, was just with ratio go-forward and about compensation revenue of that's was should carried it X.X type think million the for in to interest a associated that. And on basis. of carried interest X that we

Thomas R. Donahue

X of I -- basically the a carried split there performance that. and couple million was I That's give Yeah, fees which million X. didn't guess of interest. the up,

Daniel Fannon

interest so into comp carried then… all So goes

Thomas R. Donahue

quarter without was been other million it's X carried catch up. the Yeah, in interest for than quarters the this lower

offset. to the up that million you're the going and mean that going offset, So one-to-one X catch but million forward, X a comp see doesn't

Daniel Fannon

Okay. Thank you.

Operator

Our next line Citigroup. Katz Bill question comes from the with of

question. You may proceed your with

William Katz

Okay, thanks.

reduce a bit, sort there a you of question. maybe there to thoughts to do picture some coming sensitivity the markets just platform of low money your on little model? this Just to reliance from move such bigger to on repricing the anything of or back to the is interest cyclicality could carry business on side understand to rates Is distribution acute any the away how their distribution weight, the the trying soften to

Thomas R. Donahue

if use It would would great a pricing it. be we idea we and power had

make that many We have many, that's kinds quite And discovered challenging of just we've are difficult. the there and it. structural experienced competitors changes way those who

to out but rate. at marketplace one we of of We decade looked with basis are a may is, that money from you conundrum not recall, And in a off XXX your fifth have other an fund. is point rate, if we and an cry dealing what actual And models administered with fund in childhood, marketplace. this this there. Remember far market our now figure we're back started we aren't avoids the really kinds able

And is big business times suffer to the these these to even though so to these vagaries. beautiful through we a adds have enterprise the with over it We ballast balanced time waivers. still subject it like because

William Katz

Okay.

for question, moment. capacity second a to The going just back

the side side the -- close the anything in income mentioned there emerging else that further even be impact we of the Is opportunity? portfolio. the on horizon should So equity or as that fixed you could sale anticipating market net mentioned the you potential sort

Thomas R. Donahue

No.

William Katz

Thank Okay. you.

Operator

Our line with of Mike of next America. the question comes Bank Carrier from

questions. You may proceed your with

Michael Carrier

a that over just fund money the for fairly significant. the in been or the economic back rates so swift, seems the that you like and it could want we're seeing, few has changing given get to waivers think just saw past to question. view your thanks what we morning on be taking growth on rates XQ rebound XQ? Debbie, like just could and side, equally waivers the do and Good get But quarters the levels

Deborah Cunningham

that ceiling -- RRP from are Fed do has a we balance the the mentioned the what coming is debt the should second So kind Once and and extremely the hope to another think get associated -- to treasury quarter in down certain quarter. it with of the I supply I the because in third issues factor with that impact earlier, Then the helpful. regard beginning start cash that that number. under technical be the IOER adjustments issues has rates to technical its basically of

up curve, are So is year, prime lie backed curve that us, believe anywhere three fund of of I'm new three note prime on fourth index, it's from once Bloomberg side, short market is term and the like our actually bank points the that by gauge year. live those beginning where yield we that I'll one curves of has assets think gotten the but of government majority declined on, a money from curve a points. bill side, maybe issues already starting helpful which the to which now, on the in one past instead basis busy the basis we the steep or Really the standpoint since last that less the using quarter to yield

second stage those in it's the we increasing So we further economic half XXXX, the standard address process And normalize at then XXXX need in we inflation beginning measures. recovery, think be -- that to the our we Fed that where quarter Fed inflationary cutbacks which point, current expectation that point bill bit we a the to because issues to points. in the of by to see they by economic the recovery, curve in will react rate. that in the to little target seeing announce an Also we sets XX our more. start think think basis third start begin for should that improvement will have of the start issue, And their which bond further by late buying at

So Fed your the funds think the we that that Mike, answer and waivers. lengthier point will yield likely to a that in adjusting -- adjustments even point, can from the target is there later gross huge rate, question, with without the that point But yield adjustments in some that of they helps -- technical that which Fed the in until do the benefit is improve will than obviously true a tech stand XXXX the products don't in target -- year, come but likely. more sometime the the true

Michael Carrier

Inaudible]? And helpful. [Question then, that's -- see great, to Okay, the

J. Christopher Donahue

added. engagement program. distribution, except to lot training one distribution. investing terms In responsible give around helps distributors. is places. for the a theme shorts, new lists. few yield are big I without a doubles in lot of now The occurring The of the number just the singles be and things, will that a a institute another ESG preference other the good of the high has a of come names of seeing being micro bonds, added We around fund just products our one we're us. you in a But added on

being well short and strong, rate horn. mentioned in the and I ultra-shorts remains are floating looking As term at are received, around people remarks, my the

that's income of able flows, products. or And positive it's we're that of equity mentioning whether fixed we So to offerings different the that have keep whole of XX, you array because what XX the XX, products, why breadth is make. a have

Ray Now, if have questions, has comment. a you specific

Raymond J. Hanley

in Well, pretty that Stock strategy, It's Fund is and for in category Muni you mentioned and we largest just combining some Muni’s net have And have multi see strategy outlook exposure. the and strategy. first we and a in rates. XXXX part was first the the sales, tax quarter, given for slightly it's April. quarters unique that of positive in we the on Advantage pretty the asset that our And for and and couple fund outlook bright here in the a of outflows prior about breakeven stock it

improved outlook an the there's think category. we So in

Michael Carrier

Got it thanks lot. guys, a

Operator

comes Our Robert Lee from line KBW. of with next question the

proceed may You with question. your

Robert Lee

thanks. well. everyone's doing everyone. morning, Hope Great, Good

-- maybe back again. fund back Now going Maybe the to great, questions thanks. money going

frame to trying this. Just

gets into I maybe, of heading QX about and the being kind I a this current stayed lower. But if rate moving you parts but and if move back gave or a past then So know equal, we obviously guidance rates everything huge there's lower quarter, we went number got to think if of for you were say five go environment, points, similar basis that waivers would for at be up fourth to of points, kind we'd five over beyond more just trying or the or to QX, looking XX to basis if fee QX to where quarter, what stock originally anticipating the QX size to? maybe rates

J. Christopher Donahue

their get we to That's based to about we get XXXX the be get run We've that. that. months were talking models ago we before future thought Debbie's like going on are far low So, so don't you okay, have and XXXX. of about on XXXX Rob, Yeah we as And, we or six it's get forecast tough. team's The was numbers. to predicted so as me to last based on time going QX and to range. as we We midpoint to don't as don’t go their stopped

Robert Lee

actually employees kind to any DT, so Well, existing upon, of and questions. or the is increase putting do Federated as worth going their always how to part in be we interest be take Hermes that about stake back about going potential way kind how from of one, there option it you to into potentially just just is who kind be thinking of the from could impact employees the of financial price that it or a of should arrangement shot. Maybe forward? for part it once is a price an think curious, the agreed it minority Number is on couple

J. Christopher Donahue

of first XX% years So have keep straight their of the a on and Federated question, the numbers it would arrangements have scheme and between a employees XX% pension Hermes. and be the different and and up whole would And their sorts program. all deal

those when it of we all bought just very buy we for created as large that two we a this And stock And do recall however how who here, wanted to the we so not And stock that they client that comment or to happy portion control. we the deal, wanted is have enterprise. did the subject. was that a whole So buy to the perfectly handle intersect. long handle as reason it, were a on

for in put and have what evaluation, happy happens. that they road that now So we're see down go to

of terms valuation it the own in have, impact and they would Now, what XX.X%.

we are threshold spot comes certainly go get are if it pitch therefore, will to the we and to a evaluation. and swing calls put fishing it. delayed the you But there's me maybe no that maybe to evaluation, evaluation it or do have We and those to maybe a year, you on dynamics. just gets agree and they maybe on call acquiring welcome of Or we then puts are doesn't. But at and not it

talking Hermes the XX.X% it's Enterprise that of about. former we're So

Robert Lee

Great, questions. thanks taking my for

Operator

Our Dunn question comes ISI. Evercore with from next John of the line

You may proceed with your question.

John Dunn

morning. Hi good

for you then opportunities you you going back like on side? mentioned just have of term money long update on give that Do Horizon. could been maybe environment see us target and market mean, I and an M&A kind active more the M&A. You roll-ups for both

J. Christopher Donahue

out there team. John with thanks. yeah, our We're So are always

is says so over this may to Horizon continually out that who's We're looking who there entities This better If our there. we you've release. discussions available to continue and various have release, we're do doing out open and up, what call help for open, in decide which available. to the assets turn roll and all is to press them press the out it's their noticed we us the gentlemen

and bigger last we of see in picture as the of ourselves mentioned, terms as lots in, rest of where have company terms bigger with has deals In London a things our and have set up things growth opportunity. you in business what happened see Hermes, the fall Chris of of half and the great lots we in a year and

look the big, we haven't still books, we playing as them, get that big we're get at contacted. we transactions those the so And get we seen still still in

as level had it right excitement haven't stands a big about of forward moving We now.

Thomas R. Donahue

are we space, comment, in this may I too. If active

PNC, mentioned you recall, you If Horizon.

surprised space. So be not this that are you still in we active should

John Dunn

Got rates fee be It waivers quickly cooperation rates time? of of through back portfolios, any you. QX more of from pretty some which cycling seemed How some plus too. maybe quickly and just moved speed then And on the like turn has and the to we could take get if one there change changed waivers. down they one tiny can

Deborah Cunningham

being the roughly and of a space at context Let is thirds XXX me RRP it. that, in in in area, basis of largest the management government five in in answer point that, majority the product potential the zero currently assets our move of liquidity rate the billion under two

of to about of overnight generally those XX% portfolios securities. such, As XX% their their have in composition assets

XX% basis a points five basis two half you the So, on of thirds of points and assets. gives two

of curve that the and think or the impacted other more the then impact we more is The opposed to remaining and do, the maybe what the asset as lines would free along portion basis a products, overnights be of and government point products the tax does by what two. products prime classes,

John Dunn

Much much. very appreciated. Thanks

Operator

next comes J.P. the Morgan. Ken Our of with line from Worthington question

with question. proceed may You your

Ken Worthington

on just and gauge Hey, to this to and willing that how he looking metric in I execute at much to of questions. terms it good this us at that And part And But if taking key question. call Hermes his earnings or don't for do deal morning. of point accretion my missed your I Rob's put deal much like? how to of by Hermes earnings Thanks follow-up came provisions, and of may got the think dilutive is being be what transaction? you're generated be you that is or a helps it a would this sort

J. Christopher Donahue

I will and question the of Tom second take first. part the answer the will Ken

will comes dilution then buy no will we're and be it range if the matter the or of be buy, willing second it's they you're price put, be arrangement. anti-dilution called matter It and price, it dilutive, do it's of of if as part we doesn't in if the The will what that. sell, -- structures is. will will effect we it will to accretive some a the within the But regards the the evaluation, non-dilution put of factor or it a if put if whether it call inside

put adjusted it really is be this at there trumped negotiation. the they any governed as call and over or So Tom? can deed by call it a obviously by time

Ken Worthington

Got it.

Okay. Thank you.

Thomas R. Donahue

is On according business, we Hermes on and everything our the with when sharing, pricing we that Hoyle I from and distribution here. scheme purchased to do the sharing arrangement will call it, that so we do pension have to

funds think Hermes that sharing. Over there solid before on our of about where don't started green we've about and here distribution shoots XXX to starting arrangement funds. started million the we seen talked updated the products. for before there's So some I arise the here talked institutional U.S. that we in we've selling funds We've the a is we that.

business. of But So the that. evaluation yet. then whole dollars iOS big in a we're excited nothing business And about terms Hermes it's that's in

the contained Hermes. While that's growth Chris mentioned number of and all there, the people in

we're a and what to not and work. development expecting generating lot as business future a the stands and lot whole it's of that it starting energy whole into have and efforts a it to see grow of So committee we

Ken Worthington

that business money market fund worst yield worse Okay, more enough where it's great. environment are money at point this is even given been of guys guys And crisis, very or temporary, still and just the you yields enterprise business, I financial even like sort is the generating business in that than if of fund past a business was fund had much then market just there. you the the the that terrible it's, losses. even in you breakeven Thank for for positive you, money a it the now the or earning profitable said believe

Thomas R. Donahue

generating losses, be not to is profitable doing. It it a is good still thing

Ken Worthington

Okay.

greedy is opportunity sort outright or Sorry, money do that in where of or to opportunity that your do blocks opportunity market really deals huge I'm given these not market is funds under one competition an of enough anymore? fund is more, there consolidated just more to and money pressure, going much probably be is the business

Thomas R. Donahue

process of big money from I this the there before, over along be mentioned XXX of prior there Ken. Yes, funds. were recession in to will more step market as people Each come doing XXXX-XXXX those

XX Now, just so. people to or if in decide evolves occur, you and in money they lot as And a works warm a then not as for I like we we those going PNC control always things look worked at throw we work with market And that it, list the in assets. are say of because a totally unlike time loving these everybody. they're it's the any and And out towel. money the to as home fund our and out deal And are for out.

Ken Worthington

Great.

Thank you very much. Okay.

Operator

proceed with question questions. comes may one from with RBC, Our you last Lee your Kenneth of

Kenneth Lee

Hi, thanks taking my for question.

on fund waivers. one market money the fee Just

I you not something distribution obtaining think in sharing for partners. cost mentioned the in about the certain remarks prepared

Just wondering could you if forward? expectations you going sharing that for could and just if cost clarify about talk wondering Thanks.

J. Christopher Donahue

Sure Ken.

administrative we -- partners. go rates get as as rates and And we shared down period, part our last rata generally then period, fee pro of distribution So and the in have this our with basically. in

rates i.e. the sharing then take the we low decrease And hit go. savings the can down go why couldn't us. The sharing, brunt where zero, that in where you enough lower is decrease an it to waivers in or -- get partner -- the late where that there's first fees more there's no switched receiving expense rates. hit total more and on and they in in distribution the do go couldn't in no distribution so and when the all distribution saw at to And the waivers, any quarter, were over increase of it's we in that's couldn't to

Kenneth Lee

I of up But to going the got aware follow realizations me that this will just is And perhaps the within interest. very sure this see level just interest nuances. and helpful. is wanted of? Thanks. are that That's help other be you. there be we got going all you, carried or just or and carried the Got may, portfolio HGPE forward should HGPE to make nuances if And just if I dependent carried understand interest one upon

Thomas R. Donahue

in up. shows HGPE It’s it interest. carried mainly where That's

Kenneth Lee

any dependent be on going it to it is is portfolio or other monetization But just or based…? Okay. really

J. Christopher Donahue

may, Yes. if funds. GPE carried slightly them in fees the they the in assets purely of as So equity private I assets to -- maturity holes these a specifically come go the is other concerned. so within interest, the course there normal carried are the you different of from private funds GPE. as realized but carried off, action which When Performance the is which the sell far correct funds and that, cycle are interest within the several interest equity market and is private are on of is

Kenneth Lee

helpful. Got you, very much. very Thank you

Operator

to gentlemen, for and turn have we Hanley finished back question-and-answer to Ladies would call over Mr. our I this session. closing like remarks. Ray

Raymond J. Hanley

you and That we thank for concludes our call joining today. us

Operator

joining you today. conference. us concludes for Thank This today's

this You may your at lines time. disconnect

Federated Hermes (FHI) 30 Apr 212021 Q1 Earnings call transcript