Core Insights - The article discusses the importance of enabling Javascript and cookies in browsers to ensure proper functionality and access to content [1] Group 1 - The article emphasizes that users may face access issues if ad-blockers are enabled, suggesting the need to disable them for a better experience [1]

Transaction Overview - Federated Hermes, Inc (FHI) will acquire 80% of FCP Fund Manager, L.P (FCP) for $239 million upfront, consisting of $215.8 million in cash and $23.2 million in FHI shares [50] - There is a potential earnout consideration of up to $92 million based on achieving certain performance thresholds [50] - FHI will have the option to purchase, and Management Company Sellers will have the option to sell the remaining interest in FCP after five years through a Put/Call agreement [50] Financial Impact - FCP's expected 2025 revenue is approximately $59 million and EBITDA is approximately $30 million [50] - The upfront consideration represents 9.9x 2025 projected EBITDA less 20% minority interest [50] - The transaction is expected to be accretive to EPS, with FY2027E accretion of approximately $0.13 per share [52] - The transaction is expected to close in the first half of 2026 [50] Strategic Rationale - The acquisition significantly expands FHI's U S based private markets investment presence [10] - FCP has $3.8 billion in AUM as of June 30, 2025, which will anchor FHI's private markets growth initiative [10, 15] - FCP has invested in or financed more than $14.6 billion of residential and commercial real estate in gross asset value since inception [20, 36]

Core Viewpoint - Federated Hermes, Inc. has signed a definitive agreement to acquire 80% of FCP Fund Manager, L.P., a U.S. real estate investment manager, for a total purchase price of up to $331 million, enhancing its private markets and real estate capabilities in the U.S. [1][4][5] Company Overview - Federated Hermes is a global leader in active investment management with $845.7 billion in assets under management as of June 30, 2025 [13]. - FCP has invested in over $14.6 billion in gross asset value since its inception, focusing on the U.S. multifamily asset class [2][14]. Transaction Details - The acquisition includes $215.8 million in cash and $23.2 million in Federated Hermes Class B common stock, with potential contingent consideration of up to $92 million [4]. - The transaction is expected to close in the first half of 2026, pending certain conditions [9]. Strategic Implications - This acquisition will enhance Federated Hermes' Private Markets/Alternatives offerings, which already total $19 billion as of September 30, 2025 [5][6]. - The deal will expand Federated Hermes' real estate capabilities into major U.S. markets, complementing its existing operations in the U.K. [6][9]. Leadership Insights - J. Christopher Donahue, CEO of Federated Hermes, emphasized the strong fundamentals and growth opportunities in the multifamily sector, highlighting FCP's long-term investment performance [7]. - Esko Korhonen, FCP's Founding Managing Partner, noted the alignment of values and commitment to building a private markets business with Federated Hermes [8].

Core Insights - The Russell 2000 has outperformed the S&P 500, rising 41% in the last six months compared to the S&P's 35% increase, indicating a significant shift in market dynamics for small caps [2][3] - Small caps have historically underperformed large caps over the past decade, but current valuations are at their lowest, presenting a potential buying opportunity [3][4] - Earnings growth is identified as the primary driver for small cap stock performance, with expectations for positive earnings growth following a period of earnings recession [4][5] Small Cap Market Dynamics - The small cap sector has experienced a long period of underperformance relative to large caps, but recent trends suggest a turnaround since "Liberation Day" [2][3] - There has been a notable increase in IPO activity, with September marking one of the largest IPO markets on record, reflecting renewed investor interest in small caps [5][6] - The Federated Kaufman Small Cap Fund has seen nine takeouts this year, indicating robust activity and interest in small cap investments [5][6] Economic Outlook - The market outlook is bullish, with projections suggesting the market could reach approximately 8,700 by 2027, supported by anticipated interest rate cuts from the Fed [7] - The current economic environment is characterized as a "low inflation Goldilocks growth environment," which is favorable for small caps and longer-duration assets [7][8] - The demand for electricity is expected to grow significantly due to the rise of data centers and technology, positioning companies like Centuri (CTRI) favorably in the market [8][9]

Core Viewpoint - Federated Hermes has launched an active ETF aimed at providing income through equity holdings and call spread writing [1] Group 1 - The new product is named Federated Hermes Enhanced Income ETF (PAYR) [1] - The ETF is designed to deliver distributions from underlying equity holdings [1] - The ETF also generates income from net premiums received from call spread writing [1]

Core Viewpoint - Federated Hermes, Inc. has launched the Federated Hermes Enhanced Income ETF, aiming to provide investors with distributions from equity holdings and net premiums from call spread writing [1][2]. Company Overview - Federated Hermes is a global leader in active investment management, managing $845.7 billion in assets as of June 30, 2025, and offering a range of investment solutions to over 10,000 institutions and intermediaries worldwide [5]. - The company is headquartered in Pittsburgh and employs more than 2,000 staff across various global offices [5]. ETF Details - The Federated Hermes Enhanced Income ETF is designed for investors seeking consistent monthly cash flow and a disciplined risk management approach, particularly appealing to those in or near retirement [2]. - The ETF aims to deliver high current income with a secondary goal of capital appreciation, primarily investing in high-dividend-paying common stocks and employing an options overlay strategy [2][3]. - The ETF combines a high-quality dividend portfolio with an actively managed options overlay, allowing it to serve multiple roles in an investment portfolio [3]. Management Team - The ETF is managed by experienced investment teams, including Dana Meissner, CFA, FRM, CAIA, and Damian McIntyre, CFA, FRM, CAIA from the Multi-Asset Investment Team, along with Daniel Peris, Ph.D., CFA, and others from the Strategic Value Dividend Team [3]. Market Position - As of September 30, 2025, Federated Hermes manages over $1.2 billion in ETF assets, indicating a strong presence in the ETF market [4]. - The company is committed to expanding its ETF lineup to meet investor demand and preferences across various market conditions [7].

Core Insights - Federated Hermes, Inc. will report its financial and operating results for the quarter ended September 30, 2025, after market close on October 30, 2025 [1] - A conference call for investors and analysts will take place on October 31, 2025, at 9 a.m. Eastern, hosted by President and CEO J. Christopher Donahue and CFO Thomas R. Donahue [1] Company Overview - Federated Hermes is a global leader in active investment management, managing $845.7 billion in assets as of June 30, 2025 [4] - The company provides a range of investment solutions, including equity, fixed-income, alternative/private markets, multi-asset, and liquidity management strategies to over 10,000 institutions and intermediaries globally [4] - Clients include corporations, government entities, insurance companies, foundations, endowments, banks, and broker/dealers [4] - The company is headquartered in Pittsburgh and employs more than 2,000 staff across offices in London, New York, Boston, and other locations worldwide [4]

Core Viewpoint - Momentum investing focuses on following a stock's recent price trends, aiming to buy high and sell higher, with the expectation that established trends will continue [1] Group 1: Momentum Style Score - Federated Hermes (FHI) currently holds a Momentum Style Score of A, indicating strong momentum characteristics [2] - The Zacks Rank for Federated Hermes is 1 (Strong Buy), suggesting a high potential for outperformance in the market [3] Group 2: Performance Metrics - FHI shares have increased by 4.84% over the past week, outperforming the Zacks Financial - Investment Management industry, which rose by 0.8% [5] - Over the last quarter, FHI shares have risen by 26.85%, and by 56.75% over the past year, significantly outperforming the S&P 500's gains of 11.03% and 17.4% respectively [6] Group 3: Trading Volume - The average 20-day trading volume for FHI is 783,346 shares, which serves as a bullish indicator when combined with rising stock prices [7] Group 4: Earnings Outlook - In the past two months, five earnings estimates for FHI have been revised upwards, increasing the consensus estimate from $4.28 to $4.46 [9] - For the next fiscal year, five estimates have also moved upwards with no downward revisions, indicating positive earnings momentum [9] Group 5: Conclusion - Given the strong performance metrics and positive earnings outlook, FHI is positioned as a 1 (Strong Buy) stock with a Momentum Score of A, making it a compelling investment option [11]

Industry Overview - The Zacks Investment Management industry is experiencing growth driven by asset growth, digital transformation, evolving investment vehicles, deeper personalization, and strategic scale [1] - The industry consists of companies managing securities and funds for clients, earning revenue through service fees or commissions [3] Investment Trends - Asset inflows are expected to continue driving growth in assets under management (AUM), with institutional interest increasing from pension funds, endowments, and insurers [4] - There is a notable rise in inflows into alternative investments, including index funds, private credit funds, and ETFs, alongside growing interest in tokenized assets [5] - The industry is witnessing ongoing mergers and partnerships to enhance scale, reduce costs, and improve resilience [6][7] Financial Performance - The Zacks Investment Management industry has outperformed the S&P 500 Index and the broader finance sector, with a collective stock increase of 58.5% over the past two years [13] - The industry's current trailing 12-month price-to-tangible book ratio (P/TB) is 4.64X, indicating a significant discount compared to the S&P 500's 12.98X [17] Company Highlights - **T. Rowe Price Group, Inc. (TROW)**: As of June 30, 2025, TROW had $1.68 trillion in AUM, with a CAGR of 2.3% over the past four years. The company is focusing on expanding its business through partnerships and acquisitions [24][27][28] - **SEI Investments Company (SEIC)**: SEIC reported $517.5 billion in AUM as of June 30, 2025, with a CAGR of 8.2% over the past five years. The company is enhancing its technology and expanding its global presence through strategic acquisitions [32][33][36] - **Federated Hermes, Inc. (FHI)**: FHI had $845.7 billion in AUM as of June 30, 2025, with a CAGR of 7.4% over the past four years. The company is actively seeking alliances and acquisitions to drive AUM growth [40][42]

Core Insights - Federated Hermes (FHI) is currently rated as a Strong Buy with a Zacks Rank of 1, while Cohen & Steers Inc (CNS) holds a Zacks Rank of 3, indicating a Hold status [3] - FHI demonstrates stronger earnings estimate revision activity compared to CNS, suggesting a more favorable analyst outlook for FHI [3][7] Valuation Metrics - FHI has a forward P/E ratio of 12.12, significantly lower than CNS's forward P/E of 25.21, indicating that FHI may be undervalued [5] - The PEG ratio for FHI is 0.74, while CNS has a PEG ratio of 2.47, further supporting the notion that FHI is a better value investment [5] - FHI's P/B ratio stands at 3.76, compared to CNS's P/B ratio of 7.22, reinforcing the attractiveness of FHI's valuation metrics [6] Value Grades - Based on various valuation metrics, FHI holds a Value grade of B, whereas CNS has a Value grade of F, indicating that FHI is perceived as a more attractive investment opportunity [6]