Sentiment Analysis of the earnings transcript to help figure out if there are any bullish or bearish sentiments that could be gathered from it. We're doing ML and AI based analysis on the earnings call to get some more insights.
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| Statement |
|---|
| The cash yields are very attractive |
| The first thing that we'd like to do after the dividend is to pay -- is to buy somebody and more than somebody, because the way we do it, and we look at our returns, and we think that, that's an excellent return for the company |
| We did see Q3 positive net sales in 14 equity strategies, including MDP large cap growth, international leaders and U.S |
| To our mind, integrating ESG is a way of enhancing financial returns in the long-term |
| We had solid asset growth in Q3, ending with record assets under management of $715 billion, driven by record money market assets of $525 billion |
| Fixed income SMAs had Q3 record gross and net sales of $572 million and $320 million, respectively |
| Our position in our mind, is what gives us the strength to continue to roll out our products outside of the United States where demand is continuing to increase in fact, and enhanced -- to ensure the fact that within what we do -- are doing it within the bounds of fiduciary |
| Money market strategies continue to benefit from favorable market conditions for cash as an asset class, higher yields, elevated liquidity levels in the financial system and, of course, favorable yields, compared to bank deposits |
| On the private equity side, on the infrastructure side, on the private debt side, which we have excellent growth prospects over in London, how we could make that grow here, which is an exciting opportunity too |
| Fixed income produced solid growth as well |
| As Chris has said, the new studies come out that actually supports previous studies that have come out that show that our type of engagement does enhance financial returns |
| It's really well positioned |
| I would just add, we're well positioned for people deciding to extend out on the curve with our fixed income product array |
| We reached record highs for the money market assets of $385 billion, and total money market assets of $525 billion |
| Assets increased by $2.3 billion in Q3 to $89.8 billion with fixed income separate accounts reaching a record high of $47.2 billion |
| It seeks a high and rising stream of dividend income from high-quality companies |
| And because in the Hermes business, we see ourselves as a long-term institutional business, it has been our conviction and indeed our internal data shows that on average, it actually adds value over the long-term |
| And the government Ultrashort Fund has just done a pretty good job on flow |
| And we have continued to see demand for and the opportunity for continuing to grow our business over there |
| We had 15 fixed income funds with positive net sales in the third quarter, including the Total Return Bond Fund, the total return bond collective investment fund, the intermediate Corporate Bond Fund and the Sterling Cash Plus |
| Looking at flows in money market funds in the third quarter, we saw good activity from products geared towards the retail customers of financial intermediaries |
| A short-term interest rates peak, we expect market conditions for money market strategies will be favorable compared to both direct market rates and bank deposit rates |
| And the industry assets also grew at a smart clip then |
| The -- and so doing that size transaction works pretty well with us |
| Asia possibly is a little bit less than in Europe, but we see an increasing demand within the big European market for the time being |
| But right now, on the retail side, that's -- we're in a very good position with the rates and when you combine that with the reticence of financial advisers to take positions, their lack of certainty, they're waiting on the Fed and getting paid 5%-plus |
| And you can use the ESG features to analyze risk in order to improve returns |
| But when that trade happens, we have a lot of good strategies that can catch the money going out further |
| All the other line items, I think, look like they're in good order for run rate |
| And we continue to grow with higher rates, of course |
| Statement |
|---|
| Institutional product flows continue to be challenged by direct security yields |
| Total revenue for Q3 decreased $30.6 million from the prior quarter due mainly to the substantial carried interest and performance fees in Q2 related to the transactions we discussed on our last call |
| And given that there's always a concern about whether there's large clients that want to exit sort of know your client kind of discussions, I would guess maybe there's another 10 days to 15 days extension, but not too much more than that |
| Assets were down $5.7 billion to $77.3 billion, due to combined market losses and FX impact totaling $3.3 billion and net redemptions of $2.4 billion |
| It's been a challenging getting people to let loose to sell |
| But even that, with the new daily and weekly liquid asset requirements that will come into being from an SEC rule requirement standpoint in April of 2024, it will be difficult to get up into the mid to high-50s |
| The incidental information we get based on our salesforce, which is robust, is that they are just very, very, very, very unsure about what to do |
| All other revenue decreased by $6.1 million |
| And then Federated stock has underperformed quite a bit since it was announced that it would be excluded from the Russell indices |
| In the alternative private markets category, assets decreased by about $1.3 billion in the third quarter from the prior quarter came to $20.3 billion |
| So unless we get more carried interest in Q4 and into the future, that number, all else being equal, would go down |
| Revenue from money market assets decreased by $9 million, offset by an $8.2 million decrease in related distribution expense |
| It's down, as Tom noted, but also, as you know, to commensurate with the change in revenue |
| The decrease was due to FX impact of about just under $800 million, market value decreases of about $300 million and net redemptions and distributions of about $200 million |
| So if the pound goes down, then we have excess expense |
| We and to lower money market fund distribution fees as discussed |
| We're getting into our budget season, and I'm not too excited about making predictions on '24 |
| And so those costs should come down a little bit |
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