Increased Money Market Assets and Fees Offset Weaker Long-Term AUM Results in Federated Hermes' Q4

While there was little in no-moat Federated Hermes fourth-quarter results to alter our long-term view of the firm, we expect to raise our fair value estimate slightly to account for higher levels of assets under management than we were forecasting for the start of 2023. Federated closed the December quarter with a record $668.9 billion in managed assets, up 7.1% sequentially and basically flat on a year-over-year basis, which was better than our forecast for $642.4 billion. Net long-term outflows of $4.8 billion during the fourth quarter were, however, worse than our expectations for $1.1 billion in outflows, driven primarily by the company's fixed-income operations, which reported $4.0 billion in outflows for the period.