Federated Hermes ended 2025 with a record $903 billion in assets under management, up from $878 billion at the end of the prior quarter. As of late January, total AUM reached approximately $909 billion, comprised of $684 billion in money market strategies, $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 quarterly increase was driven primarily by $30 billion of net inflows into money markets and a $3.2 billion rise in equity assets.

Money market assets grew by $30 billion over 2025, with fourth-quarter mutual fund inflows of $16 billion lifting balances to a record $508 billion. Separate account inflows added $14 billion, reflecting seasonal patterns, while the firm’s market share stood at roughly 7.0 percent at year-end. Equity strategies posted $9 billion in gross sales during the quarter, contributing to a full-year record of $31 billion. Net equity sales were $1.5 billion in Q4 and $4.6 billion for the year, reversing prior-year net redemptions of $10.7 billion. MDT fundamental quantitative strategies accounted for $4 billion in Q4 gross sales and more than $2 billion in net sales.

Federated Hermes continues to develop tokenization for money market funds, partnering with Archax to offer tokenized U.S. money market shares on a regulated digital securities exchange. The firm also serves as sub-advisor to a private tokenized short-duration government securities fund and participates in a BNY Mellon and Goldman Sachs pilot for mirrored tokenization of fund shares. Client demand remains in early stages, but initiatives aim to support instantaneous settlement, collateral management and on-chain liquidity, with stablecoin protocols under review for compliance with defined-collateral backing rules.

Fourth-quarter revenue rose 3 percent sequentially, adding $13.4 million, of which $8 million was attributed to higher money market assets and $5.5 million to equity growth. Operating expenses increased by $7.3 million, driven by distribution costs and $1.3 million of transaction expenses related to the pending acquisition of real estate specialist FCP. The deal is expected to close in Q2 2026, with additional transaction costs of approximately $9.2 million for consent fees. Cash and investments totaled $724 million at year-end, with the initial FCP purchase price to be funded by $215.8 million in cash and $23.2 million in Class B shares.