Increased Assets Under Management (AuM) reached a monumental $845.7 billion for Federated Hermes, according to recent reports.

Increased Assets Under Management (AuM) reached a monumental $845.7 billion for Federated Hermes, according to recent reports.

Federated Hermes, a leading global investment firm, has announced its growth strategy for 2025, as detailed in its Q2 2025 financial report. The strategy focuses on several key actions, including expanding assets under management (AUM) through equity and money market fund inflows, pursuing strategic expansions into private markets, and acquiring firms aligned with emerging trends such as renewable energy.

The company has also emphasized disciplined capital allocation by executing a $64.5 million share repurchase program to enhance shareholder value. In addition, Federated Hermes aims to sustain revenue resilience and margin expansion through operational efficiency, as reflected in a 15% reduction in operating expenses.

The Q2 2025 financial report reveals a robust performance. Federated Hermes reported record-high AUM of $845.7 billion, an 8% increase from last year and a slight increase from the $843.2 billion recorded at the end of Q1 2025. Money market fund assets hit a record $468 billion, a 10% rise from Q2 2024 and a slight increase from the $464.9 billion recorded at the end of March.

Equity assets increased to $89 billion, up 14% year-over-year and 10% quarter-over-quarter. Alternative and private market assets rose to $20.7 billion, a 3% increase from Q2 2024 and up 7% from the prior quarter. Money market assets increased to $634.4 billion, up 8% from last year.

Revenue for the second quarter increased by $22.3 million, or 6%, mainly due to higher average money market and equity assets. Net income for the second quarter rose to $91 million, compared to $21 million in the same period last year. Nonoperating income rose by $10.6 million over the same period.

In line with its capital allocation strategy, Federated Hermes repurchased 1,547,182 shares of class B common stock for $64.5 million during Q2. The company has authorised a new share repurchase programme with no expiration date, allowing it to buy back up to 5 million additional shares.

Federated Hermes also announced a dividend of $0.34 per share, payable on August 15 to shareholders of record as of August 8. Despite challenges such as inflation and tariff risks, the firm leverages a diversified revenue base (53% money markets, 46% long-term assets) and a strong balance sheet to drive long-term value creation.

Looking forward, Federated Hermes aims for a modest 3.5% annual revenue growth rate towards 2028, targeting $1.8 billion in revenue and $385.4 million in earnings by then. The firm expects steady growth in institutional mandates, particularly in long-term asset management, while managing risks from fixed-income outflows.

J. Christopher Donahue, president and chief executive officer, stated that the company saw continued interest in their MDT equity and alternative quantitative investment solutions. Federated Hermes' growth strategy for 2025 is set to position the company for continued success in the evolving investment landscape.

1. Federated Hermes' growth strategy for 2025 includes expanding assets under management (AUM) through equity and money market fund inflows, signifying their focus on business growth in the finance sector, specifically in investing.
2. The asset management firm aims to sustain revenue resilience and margin expansion through operational efficiency, as reflected in a 15% reduction in operating expenses, suggesting their commitment to maintaining a strong business position in the finance industry.

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