Federated Hermes, Inc. Files 2023 Annual Report on Form 10-K

TL;DR

<b>Federated Hermes, Inc. has submitted its 2023 10-K annual report detailing financial performance and operations.</b>

AI Summary

FEDERATED HERMES, INC. (FHI) filed a Annual Report (10-K) with the SEC on February 23, 2024. Federated Hermes, Inc. filed its annual report for the fiscal year ending December 31, 2023. The filing is a 10-K report, indicating a comprehensive overview of the company's financial performance and condition. The company's principal business is Investment Advice, with SIC code 6282. The filing includes data for fiscal years 2023, 2022, and 2021. The company was formerly known as Federated Investors Inc /PA/.

Why It Matters

For investors and stakeholders tracking FEDERATED HERMES, INC., this filing contains several important signals. This 10-K filing provides investors with a detailed look at Federated Hermes' financial health, operational strategies, and risk factors for the 2023 fiscal year. Understanding the company's performance and disclosures in this report is crucial for assessing its investment potential and stability in the asset management industry.

Risk Assessment

Risk Level: medium — FEDERATED HERMES, INC. shows moderate risk based on this filing. The filing is a standard 10-K, which inherently contains a broad range of financial and operational information, but lacks specific forward-looking statements or immediate crisis indicators within the provided header data.

Analyst Insight

Review the detailed financial statements and risk factors within the 10-K to assess Federated Hermes' performance and outlook for the upcoming fiscal year.

Key Numbers

• 2023-12-31 — Fiscal Year End (Conformed period of report)
• 2024-02-23 — Filing Date (Filed as of date)
• 6282 — SIC Code (Standard Industrial Classification)
• PA — State of Incorporation (State of incorporation)

Key Players & Entities

• FEDERATED HERMES, INC. (company) — Filer name
• Federated Investors Inc /PA/ (company) — Former company name
• PA (location) — State of incorporation
• 2023-12-31 (date) — Conformed period of report
• 2024-02-23 (date) — Filed as of date
• 1001 LIBERTY AVENUE (address) — Business address street 1
• PITTSBURGH (location) — Business address city
• 15222 (postal_code) — Business address zip

FAQ

Industry Context

Federated Hermes operates in the investment advice industry, providing asset management and related services.

Regulatory Implications

The filing is made under the Securities Exchange Act of 1934, requiring public companies to disclose material information.

What Investors Should Do

1. Analyze the revenue and net income trends from the detailed financial statements.
2. Examine the risk factors section for potential challenges and mitigation strategies.
3. Review management's discussion and analysis (MD&A) for insights into business performance and outlook.

Key Dates

• 2023-12-31: Fiscal Year End — End of the reporting period for the 10-K.
• 2024-02-23: Filing Date — Date the 10-K was officially filed with the SEC.

Year-Over-Year Comparison

This is the initial 10-K filing for the period ending December 31, 2023, following previous filings for earlier periods.

Key Financial Figures

• $757.6 billion — r in active, responsible investing with $757.6 billion in assets under management (AUM or mana
• $406.2 billion — ries managed 24 money market funds with $406.2 billion in AUM, 41 equity funds with $42.5 bill
• $42.5 billion — .2 billion in AUM, 41 equity funds with $42.5 billion in AUM, 56 fixed-income funds with $43.
• $43.9 billion — lion in AUM, 56 fixed-income funds with $43.9 billion in AUM, 54 alternative/private markets
• $12.4 billion — alternative/private markets funds with $12.4 billion in AUM and five multi-asset funds with
• $2.7 billion — in AUM and five multi-asset funds with $2.7 billion in AUM. As of December 31, 2023, Feder
• $249.9 billion — ermes provided investment strategies to $249.9 billion in Separate Account assets. These Separ
• $560.0 billion — . managers of money market assets, with $560.0 billion in AUM at December 31, 2023. Federated
• $352.1 billion — a wide range of categories: government ($352.1 billion); prime ($195.2 billion); and municipal
• $195.2 billion — es: government ($352.1 billion); prime ($195.2 billion); and municipal (or tax-exempt) ($12.7
• $12.7 billion — illion); and municipal (or tax-exempt) ($12.7 billion). Federated Hermes' equity managed ass
• $79.3 billion — d Hermes' equity managed assets totaled $79.3 billion at December 31, 2023 and are managed ac
• $31.9 billion — categories including: value and income ($31.9 billion); international/global ($28.5 billion);
• $28.5 billion — ($31.9 billion); international/global ($28.5 billion); growth ($13.8 billion); and blended (
• $13.8 billion — ational/global ($28.5 billion); growth ($13.8 billion); and blended ($5.1 billion). Federate

Filing Documents

• fhi-20231231.htm (10-K) — 2311KB
• exhibit10150-11thamendment.htm (EX-10.150) — 40KB
• exhibit10151federatedherme.htm (EX-10.151) — 32KB
• exhibit10152-bonusrestrict.htm (EX-10.152) — 39KB
• exhibit10153-ukbonusrestri.htm (EX-10.153) — 64KB
• exhibit1404-codeofethicsfo.htm (EX-14.04) — 29KB
• exhibit21-listofdomestican.htm (EX-21.01) — 43KB
• exhibit2301fy2023.htm (EX-23.01) — 3KB
• exhibit3101fy2023.htm (EX-31.01) — 11KB
• exhibit3102fy2023.htm (EX-31.02) — 11KB
• exhibit3201fy2023.htm (EX-32.01) — 10KB
• fhi-20231231_g1.jpg (GRAPHIC) — 109KB
• 0001056288-24-000006.txt (&nbsp;) — 10914KB
• fhi-20231231.xsd (EX-101.SCH) — 62KB
• fhi-20231231_cal.xml (EX-101.CAL) — 106KB
• fhi-20231231_def.xml (EX-101.DEF) — 380KB
• fhi-20231231_lab.xml (EX-101.LAB) — 876KB
• fhi-20231231_pre.xml (EX-101.PRE) — 600KB
• fhi-20231231_htm.xml (XML) — 1355KB

Risk Factors

Item 1A Risk Factors 25

Unresolved Staff Comments

Item 1B Unresolved Staff Comments 39

Cybersecurity

Item 1C Cybersecurity 40

Properties

Item 2 Properties 41

Legal Proceedings

Item 3 Legal Proceedings 41

Mine Safety Disclosures

Item 4 Mine Safety Disclosures 41 Part II

Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Item 5 Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 42

[Reserved]

Item 6 [Reserved] 43

Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 7 Management's Discussion and Analysis of Financial Condition and Results of Operations 44

Quantitative and Qualitative Disclosures about Market Risk

Item 7A Quantitative and Qualitative Disclosures about Market Risk 59

Financial Statements and Supplementary Data

Item 8 Financial Statements and Supplementary Data 61

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

Item 9 Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 97

Controls and Procedures

Item 9A Controls and Procedures 97

Other Information

Item 9B Other Information 97

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

Item 9C Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 97 Part III

Directors, Executive Officers and Corporate Governance

Item 10 Directors, Executive Officers and Corporate Governance 97

Executive Compensation

Item 11 Executive Compensation 98

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Item 12 Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 98

Certain Relationships and Related Transactions, and Director Independence

Item 13 Certain Relationships and Related Transactions, and Director Independence 98

Principal Accounting Fees and Services

Item 14 Principal Accounting Fees and Services 98 Part IV

Exhibits, Financial Statement Schedules

Item 15 Exhibits, Financial Statement Schedules 99

FORWARD-LOOKING STATEMENTS

FORWARD-LOOKING STATEMENTS Certain statements in this report on Form 10-K constitute forward-looking statements, which involve known and unknown risks, uncertainties, and other factors that can cause the actual results, levels of activity, performance or achievements of Federated Hermes, Inc. and its consolidated subsidiaries (collectively, Federated Hermes), or industry results, to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. Forward-looking statements are typically identified by words or phrases such as "forecast," "project," "predict," "trend," "approximate," "potential," "opportunity," "believe," "expect," "anticipate," "current," "intention," "estimate," "position," "projection," "plan," "assume," "continue," "remain," "maintain," "sustain," "seek," "achieve," and similar expressions, or future or conditional verbs such as "will," "would," "should," "could," "can," "may," and similar expressions. Among other forward-looking statements, such statements include certain statements relating to, or, as applicable, statements concerning management's assessments, beliefs, expectations, assumptions, judgments, projections or estimates regarding: the coronavirus; asset flows, levels, values, and mix, and their impact; the possibility and potential impact of impairments; business mix; the level, timing, degree, and impact of changes in interest rates or gross or net yields; inflation; fee rates and recognition; sources, levels, and recognition of revenues, expenses, gains, losses, income, and earnings; the level and impact of reimbursements, rebates, or assumptions of fund-related expenses and fee waivers for competitive reasons such as to maintain positive or zero net yields (Voluntary Yield-related Fee Waivers), to maintain certain fund expense ratios, to meet regulatory requirements, or to meet contractual requirements (collectively, Fee Waivers); whether, und

– BUSINESS

ITEM 1 – BUSINESS General Federated Hermes, Inc. a Pennsylvania corporation, together with its consolidated subsidiaries (collectively, Federated Hermes) is a global leader in active, responsible investing with $757.6 billion in assets under management (AUM or managed assets) at December 31, 2023. Federated Hermes has been in the investment management business since 1955 and is one of the largest investment managers in the United States (U.S.). Federated Hermes also provides stewardship services to customers seeking a range of solutions for engagement, advocacy, active ownership and impact, as well as real estate development services. In seeking to enhance long-term investment performance for its customers and clients (collectively, including intermediaries, customers), Federated Hermes has taken steps to integrate the proprietary insights from fundamental investment analysis, including environmental, social and governance (ESG) factors and engagement interactions, into many of the products and strategies it manages. Federated Hermes operates in one operating segment, the investment management business. Federated Hermes sponsors, markets and provides investment-related services and strategies (collectively, as applicable, strategies) to various investment products, including sponsored investment companies and other funds (Federated Hermes Funds) and Separate Accounts (which include separately managed accounts (SMAs), institutional accounts, 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 customers. Federated Hermes' principal source of revenue is investment advisory fees earned by various domestic and foreign subsidiaries pursuant to investment advisory contracts and based primarily upon the AUM of its investment products and strategies. Domestic advisory subsidiaries are registered as

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View this 10-K filing on SEC EDGAR