Federated Hermes closed the fourth quarter of 2025 with a record $903 billion in assets under management, driven primarily by money market and equity strategies. As of January 23, total AUM reached approximately $909 billion, allocated across $684 billion in money markets, $101 billion in equities, $101 billion in fixed income, $19.5 billion in alternatives and private markets, and $3 billion in multi-asset solutions. The $30 billion increase in money markets during 2025 included $16 billion in mutual funds and $14 billion in separate accounts, resulting in an estimated 7.0% market share in U.S. money market funds by year-end.

Equity assets rose by $3.2 billion, or 3%, in the fourth quarter, with net equity sales of $1.5 billion contributing to full-year net sales of $4.6 billion—reversing prior-year redemptions. Core growth was led by MDT fundamental quantitative strategies, which posted a record $31 billion in gross equity sales during 2025 and $19.1 billion in MDT gross sales, generating $13 billion in net inflows. By December 31, six of nine MDT strategies ranked in the top performance quartile of their Morningstar categories over three years, and product expansion included the launch of the MDT U.S. Equity UCITS Fund, which garnered over $500 million in net sales since June.

Fixed income AUM finished the quarter at $100 billion, down $1.7 billion, reflecting $2.8 billion in net redemptions, including a $1 billion high-yield withdrawal. Despite outflows, 28 fixed income funds and SMAs saw net inflows, led by ultrashort funds ($624 million), Total Return Bond strategies ($200 million) and Short-Term Income offerings ($100 million). Alternatives and private markets recorded modest AUM growth with positive net sales in direct lending, private equity and project finance funds. The firm closed European Direct Lending Fund III at $780 million and raised approximately $300 million for its sixth Global Private Equity Co-Invest vintage.

Federated Hermes continued development of tokenized money market solutions, partnering with Archax to enable regulated digital securities trading and participating in a mirrored tokenization initiative with BNY Mellon and Goldman Sachs. Executives noted that end-client demand remains nascent, with work focused on operational benefits such as instantaneous settlement and collateral management. Financially, fourth-quarter revenue grew 3% sequentially to add $13.4 million, driven by higher money market and equity assets. Operating expenses rose 2%, including $8.8 million in distribution costs and $1.3 million of transaction fees related to the pending FCP real estate acquisition. The effective tax rate was 24.4%, and year-end cash and investments stood at $724 million.