Federated Investors, Inc. : Reports Third Quarter 2019 Earnings

PITTSBURGH, Oct. 24, 2019 /PRNewswire/ -- Federated Investors, Inc. (NYSE: FII), a leading global investment manager, today reported earnings per diluted share (EPS) of $0.72 for Q3 2019, compared to $0.59 for the same quarter last year, on net income of $73.0 million for Q3 2019, compared to $59.6 million for Q3 2018. Federated reported YTD 2019 EPS of $1.88, compared to $1.57 for the same period in 2018, on YTD 2019 net income of $190.2 million, compared to $158.8 million for the same period in 2018. Federated's YTD 2018 results included a $27.2 million pre-tax net expense, representing $0.21 per diluted share net of tax, primarily related to two foreign currency forward derivative instruments (FX Forward Loss) entered into in connection with Federated's Q3 2018 acquisition of a majority interest in Hermes Fund Managers Limited (Hermes).

Federated's total managed assets were a record $527.2 billion at Sept. 30, 2019, up $90.0 billion or 21% from $437.2 billion at  Sept. 30, 2018 and up $25.0 billion or 5% from $502.2 billion at June 30, 2019. Total average managed assets for Q3 2019 were $518.0 billion, up $84.1 billion or 19% from $433.9 billion reported for Q3 2018 and up $24.7 billion or 5% from $493.3 billion reported for Q2 2019.

"As the Federal Reserve cut rates twice in the quarter, investors sought Federated's range of ultrashort products and other fixed-income strategies, and our liquidity management solutions approached record highs," said J. Christopher Donahue, president and chief executive officer. "Federated also continued to see interest in the growth-focused Federated Kaufmann Small Cap Fund, as well as a range of Hermes equity strategies."

Federated's board of directors declared a quarterly dividend of $0.27 per share. The dividend is payable on Nov. 15, 2019 to shareholders of record as of Nov. 8, 2019. During Q3 2019, Federated purchased 79,592 shares of Federated class B common stock for $1.9 million.

Federated's equity assets were $80.8 billion at Sept. 30, 2019, down $3.3 billion or 4% from $84.1 billion at Sept. 30, 2018 and down $1.2 billion or 1% from $82.0 billion at June 30, 2019. Top-selling equity funds during Q3 2019 on a net basis were Federated Kaufmann Small Cap Fund; Hermes Global Emerging Markets Fund; Hermes SDG Engagement Equity Fund;  Hermes Global Equity ESG Fund; and Federated MDT Small Cap Growth Fund.

Federated's fixed-income assets were a record $65.8 billion at Sept. 30, 2019, up $0.4 billion or 1% from $65.4 billion at Sept. 30, 2018 and up $0.7 billion or 1% from $65.1 billion at June 30, 2019. Top-selling fixed-income funds during Q3 2019 on a net basis were Federated Bond Fund; Federated Municipal Ultrashort Fund; Federated Institutional High Yield Bond Fund; Hermes Global High Yield Credit Fund; and Federated Government Ultrashort Duration Fund.

Money market assets were $359.3 billion at Sept. 30, 2019, up $95.1 billion or 36% from $264.2 billion at Sept. 30, 2018 and up $26.2 billion or 8% from $333.1 billion at June 30, 2019. Money market fund assets were $261.2 billion at Sept. 30, 2019, up $78.2 billion or 43% from $183.0 billion at Sept. 30, 2018 and up $29.9 billion or 13% from $231.3 billion at June 30, 2019.

Federated's money market separate account assets were $98.1 billion at Sept. 30, 2019, up $16.8 billion or 21% from $81.3 billion at Sept. 30, 2018 and down $3.6 billion or 4% from $101.7 billion at June 30, 2019.

Financial Summary

Q3 2019 vs. Q3 2018

Revenue increased $31.7 million or 10% primarily due to higher average money market assets. This increase in revenue was partially offset by a decrease in revenue from lower average equity assets.

During Q3 2019, Federated derived 58% of its revenue from long-term assets (40% from equity assets, 13% from fixed-income assets and 5% from alternative/private markets and multi-asset), 41% from money market assets, and 1% from sources other than managed assets.

Operating expenses increased $24.3 million or 11% primarily due to an increase in distribution expenses associated with higher average money market fund assets and an increase in compensation and related expenses.

Nonoperating income (expenses), net increased $5.6 million primarily due to an increase in private equity carried interest income on assets managed by a nonconsolidated entity.

Q3 2019 vs. Q2 2019

Revenue increased $18.9 million or 6% primarily due to higher average money market assets and an extra day of revenue in Q3 2019.

Operating expenses increased $14.5 million or 6% primarily due to an increase in distribution expenses associated with higher average money market fund assets and an increase in compensation and related expenses.

Nonoperating income (expenses), net increased $8.1 million primarily due to an increase in private equity carried interest income on assets managed by a nonconsolidated entity.

YTD 2019 vs. YTD 2018

Revenue increased $140.4 million or 17% primarily due to the consolidation of Hermes' revenue (which included performance fees of $4.2 million in 2019) for three quarters in 2019 as compared to one quarter in 2018 and higher average money market assets. These increases were partially offset by a decrease in revenue from lower average equity and multi-asset assets and a change in the mix of average domestic fixed-income assets.

For the first nine months of 2019, Federated derived 60% of its revenue from long-term assets (41% from equity assets, 14% from fixed-income assets and 5% from alternative/private markets and multi-asset), 39% from money market assets, and 1% from sources other than managed assets.

Operating expenses increased $137.6 million or 23% primarily due to the consolidation of Hermes' expenses for three quarters in 2019 as compared to one quarter in 2018 and an increase in distribution expenses associated with higher average money market fund assets.

Nonoperating income (expenses), net increased $36.4 million primarily due to the FX Forward Loss recorded in Q2 2018.

Federated's level of business activity and financial results are dependent upon many factors, including market conditions, investment performance and investor behavior. These factors and others, including asset levels and mix, product sales and redemptions, market appreciation or depreciation, revenues, fee waivers, expenses and regulatory changes, can significantly impact Federated's business activity levels and financial results. Risk factors and uncertainties that can influence Federated's financial results are discussed in the company's annual and quarterly reports as filed with the Securities and Exchange Commission (SEC).

Federated will host an earnings conference call at 9 a.m. Eastern on Oct. 25, 2019. Investors are invited to listen to Federated's earnings teleconference by calling 844-602-0380 (domestic) or 862-298-0970 (international) prior to the 9 a.m. start time. The call may also be accessed online in real time via the About section of FederatedInvestors.com. A replay will be available from approximately 12:30 p.m. Eastern on Oct. 25, 2019 until Nov. 1, 2019 by calling 877-481-4010 (domestic) or 919-882-2331 (international) and entering access code 54018. An online replay will be available via FederatedInvestors.com for one year.

Federated Investors, Inc. is a leading global investment manager with $527.2 billion in assets under management as of Sept. 30, 2019. Our investment solutions span 131 equity, fixed-income, alternative/private markets, multi-asset and liquidity management strategies, and a range of separately managed account strategies. Providing comprehensive investment management to more than 11,000 institutions and intermediaries, our clients include corporations, government entities, insurance companies, foundations and endowments, banks and broker/dealers. Headquartered in Pittsburgh, Federated's nearly 1,900 employees include those in New York, Boston, London and several other offices worldwide. In 2018, Federated acquired a majority interest in Hermes Investment Management, which provides world-class active management and stewardship services.

Federated ranks in the top 6% of equity fund managers in the industry, the top 7% of money market fund managers and the top 11% of fixed-income fund managers¹. Federated also ranks as the 10th-largest SMA manager². Information regarding Hermes is available at Hermes-Investment.com. An analyst presentation that includes information about Hermes also is available. For more information, visit FederatedInvestors.com.

###

1) Strategic Insight, Sept. 30, 2019. Based on assets under management in open-end funds.
2) Money Management Institute/Cerulli, Q2 2019.
Federated Securities Corp. is distributor of the Federated funds.
Separately managed accounts are made available through Federated Global Investment Management Corp., Federated Investment Counseling, Federated MDTA LLC, Hermes Investment Management Limited and Hermes European Equities Limited, each a registered investment adviser.

Certain statements in this press release, such as those related to performance, investor preferences and demand, and asset flows and mix, constitute or may constitute forward-looking statements, which involve known and unknown risks, uncertainties and other factors that may cause the actual results, levels of activity, performance or achievements of the company, 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. Other risks and uncertainties include the ability of the company to predict the level of fee waivers and expenses in future quarters, predict whether performance fees or carried interest will be earned and retained, sustain product demand, and asset flows and mix, which could vary significantly depending on various factors, such as market conditions, investment performance and investor behavior. Other risks and uncertainties include the risk factors discussed in the company's annual and quarterly reports as filed with the SEC. As a result, no assurance can be given as to future results, levels of activity, performance or achievements, and neither the company nor any other person assumes responsibility for the accuracy and completeness of such statements in the future.

Unaudited Condensed Consolidated Statements of Income
(in thousands, except per share data)
	Quarter Ended						% Change Q3 2018 to Q3 2019			Quarter Ended			% Change Q2 2019 to Q3 2019
	Sept. 30, 2019			Sept. 30, 2018						June 30, 2019
Revenue
Investment advisory fees, net	$	232,106		$	217,036		7	%		$	220,669		5	%
Administrative service fees, net—affiliates	64,216			49,855			29			57,968			11
Other service fees, net	44,018			41,725			5			42,842			3
Total Revenue	340,340			308,616			10			321,479			6
Operating Expenses
Compensation and related	112,247			103,092			9			107,248			5
Distribution	88,082			72,153			22			82,000			7
Systems and communications	13,353			12,213			9			12,111			10
Office and occupancy	10,855			9,332			16			11,066			(2)
Professional service fees	10,678			13,535			(21)			10,281			4
Advertising and promotional	4,102			4,502			(9)			4,697			(13)
Travel and related	4,158			4,622			(10)			4,459			(7)
Other	7,558			7,269			4			4,677			62
Total Operating Expenses	251,033			226,718			11			236,539			6
Operating Income	89,307			81,898			9			84,940			5
Nonoperating Income (Expenses)
Investment income (loss), net	444			1,199			(63)			1,526			(71)
Debt expense	(1,239)			(1,602)			(23)			(1,332)			(7)
Other, net	8,264			2,240			269			(832)			NM
Total Nonoperating Income (Expenses), net	7,469			1,837			307			(638)			NM
Income before income taxes	96,776			83,735			16			84,302			15
Income tax provision	23,191			21,741			7			20,462			13
Net income including the noncontrolling interests in subsidiaries	73,585			61,994			19			63,840			15
Less: Net income (loss) attributable to the noncontrolling interests in subsidiaries	623			2,386			(74)			1,116			(44)
Net Income	$	72,962		$	59,608		22	%		$	62,724		16	%
Amounts Attributable to Federated Investors, Inc.
Earnings Per Share1
Basic and diluted	$	0.72		$	0.59		22	%		$	0.62		16	%
Weighted-Average Shares Outstanding
Basic and diluted	97,306			96,664						97,330
Dividends Declared Per Share	$	0.27		$	0.27					$	0.27

1)

Unvested share-based awards that receive non-forfeitable dividend rights are deemed participating securities and are required to be considered in the computation of basic earnings per share under the "two-class method." As such, total net income of $2.8 million, $2.4 million and $2.4 million available to unvested restricted Federated shareholders for the quarterly periods ended Sept. 30, 2019, Sept. 30, 2018 and June 30, 2019, respectively, was excluded from the computation of basic earnings per share. In addition to the amounts excluded from the basic earnings per share calculation, the computation of diluted earnings per share excludes net income available to unvested shareholders of a nonpublic consolidated subsidiary.

 

Unaudited Condensed Consolidated Statements of Income
(in thousands, except per share data)
	Nine Months Ended
	Sept. 30, 2019			Sept. 30, 2018			% Change
Revenue
Investment advisory fees, net	$	663,974		$	559,429		19	%
Administrative service fees, net—affiliates	176,319			147,248			20
Other service fees, net	128,576			121,784			6
Total Revenue	968,869			828,461			17
Operating Expenses
Compensation and related	330,712			255,613			29
Distribution	247,713			214,098			16
Systems and communications	38,258			28,397			35
Office and occupancy	33,283			24,238			37
Professional service fees	31,445			32,443			(3)
Advertising and promotional	12,989			10,967			18
Travel and related	12,465			10,967			14
Other	16,868			9,412			79
Total Operating Expenses	723,733			586,135			23
Operating Income	245,136			242,326			1
Nonoperating Income (Expenses)
Investment income (loss), net	4,679			3,294			42
Debt expense	(3,971)			(4,363)			(9)
Other, net	7,756			(26,877)			129
Total Nonoperating Income (Expenses), net	8,464			(27,946)			130
Income before income taxes	253,600			214,380			18
Income tax provision	61,564			53,713			15
Net income including the noncontrolling interests in subsidiaries	192,036			160,667			20
Less: Net income (loss) attributable to the noncontrolling interests in subsidiaries	1,804			1,906			(5)
Net Income	$	190,232		$	158,761		20	%
Amounts Attributable to Federated Investors, Inc.
Earnings Per Share1
Basic and diluted	$	1.88		$	1.57		20	%
Weighted-Average Shares Outstanding
Basic	97,211			97,013
Diluted	97,211			97,014
Dividends Declared Per Share	$	0.81		$	0.79

1)

Unvested share-based awards that receive non-forfeitable dividend rights are deemed participating securities and are required to be considered in the computation of basic earnings per share under the "two-class method." As such, total net income of $7.3 million and $6.3 million available to unvested restricted Federated shareholders for the nine months ended Sept. 30, 2019 and Sept. 30, 2018, respectively, was excluded from the computation of basic earnings per share. In addition to the amounts excluded from the basic earnings per share calculation, the computation of diluted earnings per share excludes net income available to unvested shareholders of a nonpublic consolidated subsidiary.

 

Unaudited Condensed Consolidated Balance Sheets
(in thousands)	Sept. 30, 2019			Dec. 31, 2018
Assets
Cash and other investments	$	309,005		$	190,490
Other current assets	111,867			113,611
Intangible assets, net, including goodwill	1,133,370			1,149,247
Other long-term assets	199,729			90,335
Total Assets	$	1,753,971		$	1,543,683
Liabilities, Redeemable Noncontrolling Interests and Equity
Current liabilities	$	194,375		$	181,180
Long-term debt	120,000			135,000
Other long-term liabilities	289,607			187,869
Redeemable noncontrolling interests	199,492			182,513
Equity excluding treasury stock	1,229,969			1,144,458
Treasury stock	(279,472)			(287,337)
Total Liabilities, Redeemable Noncontrolling Interests and Equity	$	1,753,971		$	1,543,683

 

Unaudited Changes in Long-Term Assets - By Asset Class
(in millions)	Quarter Ended										Nine Months Ended
	Sept. 30, 2019			June 30, 2019			Sept. 30, 2018				Sept. 30, 2019			Sept. 30, 2018
Equity
Beginning assets	$	81,999		$	80,245		$	57,973			$	72,497		$	62,816
Sales1	5,182			4,812			3,757				15,130			9,681
Redemptions1	(6,384)			(4,404)			(5,288)				(16,714)			(15,624)
Net sales (redemptions)1	(1,202)			408			(1,531)				(1,584)			(5,943)
Net exchanges	(11)			191			(11)				193			64
Acquisition-related	0			0			24,700				0			24,700
Impact of foreign exchange2	(577)			4			0				(695)			0
Market gains and (losses)3	541			1,151			3,012				10,339			2,506
Ending assets	$	80,750		$	81,999		$	84,143			$	80,750		$	84,143
Fixed Income
Beginning assets	$	65,052		$	64,107		$	61,435			$	63,158		$	64,160
Sales1	4,805			5,193			5,163				15,414			14,826
Redemptions1	(5,418)			(5,181)			(4,418)				(16,940)			(15,946)
Net sales (redemptions)1	(613)			12			745				(1,526)			(1,120)
Net exchanges	10			(191)			2				(214)			(78)
Acquisition-related	0			0			2,732				0			2,732
Impact of foreign exchange2	(107)			(25)			0				(124)			0
Market gains and (losses)3	1,482			1,149			455				4,530			(325)
Ending assets	$	65,824		$	65,052		$	65,369			$	65,824		$	65,369
Alternative/Private Markets4
Beginning assets	$	17,917		$	17,854		$	292			$	18,318		$	366
Sales1	384			320			757				1,017			813
Redemptions1	(813)			(302)			(674)				(1,973)			(785)
Net sales (redemptions)1	(429)			18			83				(956)			28
Net exchanges	(61)			(1)			(2)				(64)			(3)
Acquisition-related	0			0			18,509				0			18,509
Impact of foreign exchange2	(560)			(435)			0				(608)			0
Market gains and (losses)3	289			481			(261)				466			(279)
Ending assets	$	17,156		$	17,917		$	18,621			$	17,156		$	18,621
Multi-asset
Beginning assets	$	4,213		$	4,259		$	4,730			$	4,093		$	5,014
Sales1	65			78			120				247			374
Redemptions1	(218)			(228)			(211)				(687)			(675)
Net sales (redemptions)1	(153)			(150)			(91)				(440)			(301)
Net exchanges	57			0			4				59			2
Acquisition-related	0			0			45				0			45
Market gains and (losses)3	23			104			102				428			30
Ending assets	$	4,140		$	4,213		$	4,790			$	4,140		$	4,790
Total Long-term Assets4
Beginning assets	$	169,181		$	166,465		$	124,430			$	158,066		$	132,356
Sales1	10,436			10,403			9,797				31,808			25,694
Redemptions1	(12,833)			(10,115)			(10,591)				(36,314)			(33,030)
Net sales (redemptions)1	(2,397)			288			(794)				(4,506)			(7,336)
Net exchanges	(5)			(1)			(7)				(26)			(15)
Acquisition-related	0			0			45,986				0			45,986
Impact of foreign exchange2	(1,244)			(456)			0				(1,427)			0
Market gains and (losses)3	2,335			2,885			3,308				15,763			1,932
Ending assets	$	167,870		$	169,181		$	172,923			$	167,870		$	172,923

1)	For certain accounts, Sales and Redemptions are calculated as the remaining difference between beginning and ending assets after the calculation of total investment return.
2)	Reflects the impact of translating non-U.S. dollar denominated AUM into U.S. dollars for reporting purposes.  Reporting only contains foreign exchange separately beginning with Q1 2019, previously included in Market gains and (losses).
3)	Reflects the approximate changes in the fair value of the securities held by the portfolios and, to a lesser extent, reinvested dividends, distributions, net investment income and the impact of changes in foreign exchange rates for periods prior to Q1 2019.
4)	Ending assets includes $8.0 billion, $8.4 billion, and $8.4 billion at Sept. 30, 2019, June 30, 2019, and Sept. 30, 2018, respectively, of assets managed by a nonconsolidated entity, Hermes GPE LLP, in which Hermes holds an equity method investment.

 

Unaudited Changes in Long-Term Assets - By Asset Class and Product Type
(in millions)
	Quarter Ended
	Sept. 30, 2019
	Equity						Fixed Income						Alternative / Private Markets						Multi-asset						Total
	Funds			Separate Accounts1			Funds			Separate Accounts1			Funds2			Separate Accounts1			Funds			Separate Accounts1			Funds2			Separate Accounts1
Beginning assets	$	43,443		$	38,556		$	42,084		$	22,968		$	11,400		$	6,517		$	4,019		$	194		$	100,946		$	68,235
Sales	2,669			2,513			3,971			834			200			184			60			5			6,900			3,536
Redemptions	(2,991)			(3,393)			(4,136)			(1,282)			(651)			(162)			(208)			(10)			(7,986)			(4,847)
Net sales (redemptions)	(322)			(880)			(165)			(448)			(451)			22			(148)			(5)			(1,086)			(1,311)
Net exchanges	(11)			0			15			(5)			(61)			0			57			0			0			(5)
Impact of foreign exchange3	(291)			(286)			(81)			(26)			(353)			(207)			0			0			(725)			(519)
Market gains and (losses)4	(244)			785			476			1,006			291			(2)			24			(1)			547			1,788
Ending assets	$	42,575		$	38,175		$	42,329		$	23,495		$	10,826		$	6,330		$	3,952		$	188		$	99,682		$	68,188
	Nine Months Ended
	Sept. 30, 2019
	Equity						Fixed Income						Alternative / Private Markets						Multi-asset						Total
	Funds			Separate Accounts1			Funds			Separate Accounts1			Funds2			Separate Accounts1			Funds			Separate Accounts1			Funds2			Separate Accounts1
Beginning assets	$	36,584		$	35,913		$	40,490		$	22,668		$	11,365		$	6,953		$	3,920		$	173		$	92,359		$	65,707
Sales	9,128			6,002			12,266			3,148			695			322			235			12			22,324			9,484
Redemptions	(8,734)			(7,980)			(12,707)			(4,233)			(1,251)			(722)			(665)			(22)			(23,357)			(12,957)
Net sales (redemptions)	394			(1,978)			(441)			(1,085)			(556)			(400)			(430)			(10)			(1,033)			(3,473)
Net exchanges	193			0			(184)			(30)			(64)			0			59			0			4			(30)
Impact of foreign exchange3	(333)			(362)			(95)			(29)			(380)			(228)			0			0			(808)			(619)
Market gains and (losses)4	5,737			4,602			2,559			1,971			461			5			403			25			9,160			6,603
Ending assets	$	42,575		$	38,175		$	42,329		$	23,495		$	10,826		$	6,330		$	3,952		$	188		$	99,682		$	68,188

1)	Includes separately managed accounts, institutional accounts, sub-advised funds and other managed products.  For certain accounts, Sales and Redemptions are calculated as the remaining difference between beginning and ending assets after the calculation of total investment return.
2)	Ending assets includes $8.0 billion of assets managed by a nonconsolidated entity, Hermes GPE LLP, in which Hermes holds an equity method investment.
3)	Reflects the impact of translating non-U.S. dollar denominated AUM into U.S. dollars for reporting purposes.
4)	Reflects the approximate changes in the fair value of the securities held by the portfolios and, to a lesser extent, reinvested dividends, distributions and net investment income.

 

Unaudited Changes in Long-Term Assets - By Product Type
(in millions)	Quarter Ended										Nine Months Ended
	Sept. 30, 2019			June 30, 2019			Sept. 30, 2018				Sept. 30, 2019			Sept. 30, 2018
Total Fund Assets1
Beginning assets	$	100,946		$	98,482		$	76,389			$	92,359		$	79,301
Sales	6,900			7,502			7,168				22,324			18,733
Redemptions	(7,986)			(7,020)			(7,405)				(23,357)			(21,986)
Net sales (redemptions)	(1,086)			482			(237)				(1,033)			(3,253)
Net exchanges	0			(1)			(4)				4			(13)
Acquisition-related	0			0			23,564				0			23,564
Impact of foreign exchange2	(725)			(331)			0				(808)			0
Market gains and (losses)3	547			2,314			1,725				9,160			1,838
Ending assets	$	99,682		$	100,946		$	101,437			$	99,682		$	101,437
Total Separate Account Assets4
Beginning assets	$	68,235		$	67,983		$	48,041			$	65,707		$	53,055
Sales5	3,536			2,901			2,629				9,484			6,961
Redemptions5	(4,847)			(3,095)			(3,186)				(12,957)			(11,044)
Net sales (redemptions)5	(1,311)			(194)			(557)				(3,473)			(4,083)
Net exchanges	(5)			0			(3)				(30)			(2)
Acquisition-related	0			0			22,422				0			22,422
Impact of foreign exchange2	(519)			(125)			0				(619)			0
Market gains and (losses)3	1,788			571			1,583				6,603			94
Ending assets	$	68,188		$	68,235		$	71,486			$	68,188		$	71,486
Total Long-term Assets1,4
Beginning assets	$	169,181		$	166,465		$	124,430			$	158,066		$	132,356
Sales5	10,436			10,403			9,797				31,808			25,694
Redemptions5	(12,833)			(10,115)			(10,591)				(36,314)			(33,030)
Net sales (redemptions)5	(2,397)			288			(794)				(4,506)			(7,336)
Net exchanges	(5)			(1)			(7)				(26)			(15)
Acquisition-related	0			0			45,986				0			45,986
Impact of foreign exchange2	(1,244)			(456)			0				(1,427)			0
Market gains and (losses)3	2,335			2,885			3,308				15,763			1,932
Ending assets	$	167,870		$	169,181		$	172,923			$	167,870		$	172,923

1)	Includes $8.0 billion, $8.4 billion, and $8.4 billion at Sept. 30, 2019,  June 30, 2019, and Sept. 30, 2018, respectively, of assets managed by a nonconsolidated entity, Hermes GPE LLP, in which Hermes holds an equity method investment.
2)	Reflects the impact of translating non-U.S. dollar denominated AUM into U.S. dollars for reporting purposes.  Reporting only contains foreign exchange separately beginning with Q1 2019, previously included in Market gains and (losses).
3)	Reflects the approximate changes in the fair value of the securities held by the portfolios and, to a lesser extent, reinvested dividends, distributions, net investment income and the impact of changes in foreign exchange rates for periods prior to Q1 2019.
4)	Includes separately managed accounts, institutional accounts, sub-advised funds and other managed products.
5)	For certain accounts, Sales and Redemptions are calculated as the remaining difference between beginning and ending assets after the calculation of total investment return.

 

Unaudited Managed Assets (in millions)	Sept. 30, 2019			June 30, 2019			March 31, 2019			Dec. 31, 2018			Sept. 30, 2018
By Asset Class
Equity	$	80,750		$	81,999		$	80,245		$	72,497		$	84,143
Fixed-income	65,824			65,052			64,107			63,158			65,369
Alternative / private markets1	17,156			17,917			17,854			18,318			18,621
Multi-asset	4,140			4,213			4,259			4,093			4,790
Total long-term assets	167,870			169,181			166,465			158,066			172,923
Money market	359,292			333,066			318,413			301,794			264,233
Total Managed Assets	$	527,162		$	502,247		$	484,878		$	459,860		$	437,156
By Product Type
Funds:
Equity	$	42,575		$	43,443		$	42,057		$	36,584		$	43,578
Fixed-income	42,329			42,084			41,189			40,490			41,817
Alternative / private markets1	10,826			11,400			11,164			11,365			11,457
Multi-asset	3,952			4,019			4,072			3,920			4,585
Total long-term assets	99,682			100,946			98,482			92,359			101,437
Money market	261,215			231,321			214,764			208,480			182,966
Total Fund Assets	$	360,897		$	332,267		$	313,246		$	300,839		$	284,403
Separate Accounts:
Equity	$	38,175		$	38,556		$	38,188		$	35,913		$	40,565
Fixed-income	23,495			22,968			22,918			22,668			23,552
Alternative / private markets	6,330			6,517			6,690			6,953			7,164
Multi-asset	188			194			187			173			205
Total long-term assets	68,188			68,235			67,983			65,707			71,486
Money market	98,077			101,745			103,649			93,314			81,267
Total Separate Account Assets	$	166,265		$	169,980		$	171,632		$	159,021		$	152,753
Total Managed Assets	$	527,162		$	502,247		$	484,878		$	459,860		$	437,156

1)	Includes $8.0 billion, $8.4 billion, $8.1 billion, $8.3 billion and $8.4 billion at Sept. 30, 2019, June 30, 2019, March 31, 2019,  Dec. 31, 2018 and Sept. 30, 2018, respectively, of assets managed by a nonconsolidated entity, Hermes GPE LLP, in which Hermes holds an equity method investment.

 

Unaudited Average Managed Assets	Quarter Ended
(in millions)	Sept. 30, 2019			June 30, 2019			March 31, 2019			Dec. 31, 2018			Sept. 30, 2018
By Asset Class
Equity	$	82,027		$	80,819		$	77,554		$	78,084		$	84,262
Fixed-income	65,074			64,913			64,167			63,881			64,750
Alternative / private markets1	17,407			17,772			18,311			18,410			18,504
Multi-asset	4,167			4,225			4,225			4,449			4,805
Total long-term assets	168,675			167,729			164,257			164,824			172,321
Money market	349,313			325,527			311,150			278,885			261,571
Total Avg. Managed Assets	$	517,988		$	493,256		$	475,407		$	443,709		$	433,892
By Product Type
Funds:
Equity	$	43,077		$	42,571		$	40,217		$	39,871		$	43,473
Fixed-income	41,958			41,652			41,095			41,088			41,501
Alternative / private markets1	11,035			11,146			11,545			11,351			11,109
Multi-asset	3,978			4,034			4,042			4,268			4,598
Total long-term assets	100,048			99,403			96,899			96,578			100,681
Money market	249,846			222,282			209,260			194,009			179,562
Total Avg. Fund Assets	$	349,894		$	321,685		$	306,159		$	290,587		$	280,243
Separate Accounts:
Equity	$	38,950		$	38,248		$	37,337		$	38,213		$	40,789
Fixed-income	23,116			23,261			23,072			22,793			23,249
Alternative / private markets	6,372			6,626			6,766			7,059			7,395
Multi-asset	189			191			183			181			207
Total long-term assets	68,627			68,326			67,358			68,246			71,640
Money market	99,467			103,245			101,890			84,876			82,009
Total Avg. Separate Account Assets	$	168,094		$	171,571		$	169,248		$	153,122		$	153,649
Total Avg. Managed Assets	$	517,988		$	493,256		$	475,407		$	443,709		$	433,892

1)

The average balance includes $8.1 billion, $8.1 billion, $8.4 billion, $8.3 billion and $8.2 billion for the quarters ended Sept. 30, 2019, June 30, 2019, March 31, 2019, Dec. 31, 2018 and Sept. 30, 2018 respectively, of assets managed by a nonconsolidated entity, Hermes GPE LLP, in which Hermes holds an equity method investment.

 

Unaudited Average Managed Assets		Nine Months Ended
(in millions)		Sept. 30, 2019				Sept. 30, 2018
By Asset Class
Equity		$	80,133			$	68,212
Fixed-income		64,718				63,312
Alternative / private markets1		17,830				6,393
Multi-asset		4,206				4,869
Total long-term assets		166,887				142,786
Money market		328,664				263,162
Total Avg. Managed Assets		$	495,551			$	405,948
By Product Type
Funds:
Equity		$	41,955			$	36,022
Fixed-income		41,568				40,907
Alternative / private markets1		11,243				3,928
Multi-asset		4,018				4,650
Total long-term assets		98,784				85,507
Money market		227,130				179,100
Total Avg. Fund Assets		$	325,914			$	264,607
Separate Accounts:
Equity		$	38,178			$	32,190
Fixed-income		23,150				22,405
Alternative / private markets		6,587				2,465
Multi-asset		188				219
Total long-term assets		68,103				57,279
Money market		101,534				84,062
Total Avg. Separate Account Assets		$	169,637			$	141,341
Total Avg. Managed Assets		$	495,551			$	405,948

1)	The average balance includes $8.2 billion and $2.7 billion for the nine months ended Sept. 30, 2019 and 2018, respectively, of assets managed by a nonconsolidated entity, Hermes GPE LLP, in which Hermes holds an equity method investment.

 

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SOURCE Federated Investors, Inc.