Greetings. Welcome to FHI fourth quarter 2020 analyst call and webcast. At this time, all participants are in a listen- only mode. A question-and-answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note this conference is being recorded. I will now turn the conference over to your host, Ray Hanley, President of Federated Investors Management Company. You may begin. Thank you and good morning. Leading today's call will be Chris Donahue, CEO and President of Federated Hermes, and Tom Donahue, Chief Financial Officer. Joining us for the Q&A are Saker Nusseibeh, the CEO of the international business of Federated Hermes, and Debbie Cunningham, the Chief Investment Officer for money markets. During today's call, we may make forward-looking statements, and we want to note that Federated Hermes actual results may be materially different than the results implied by such statements. We invite you to review the risk disclosures in our SEC filings. No assurance can be given as to future results, and Federated Hermes assumes no duty to update any of these forward-looking statements. Chris? Thank you, Ray. Good morning, all. I will review Federated Hermes business performance, and Tom will comment on our financial results. We continue to grow and expand our EOS at Federated Hermes engagement activities. At year-end, our staff of engagers and other specialists reached 67, up from 49 at the beginning of last year. Assets under advice reached over $1.3 trillion, up from $877 billion at the beginning of last year. Saker may have some more interesting news on this subject later in the call. Total long-term assets under management closed the year at a record level of nearly $200 billion. Equity managed assets reached a record high of about $92 billion, up from $80 billion at the end of Q3, driven by market value gains and lower net redemptions and net sales, which were positive at nearly $800 million. Equity gross sales increased 34% from Q3, driving a two-thirds reduction in net redemptions. We saw positive net sales in 19 fund strategies in the fourth quarter, led by Kaufmann Small Cap, Global Emerging Markets, and the SDG Engagement Equity UCITS Fund. Others with positive flows included Global Equity ESG, Impact Opportunities, and the U.S. SMID Fund. Using Morningstar data for the trailing three years at the end of the year, 23% of our funds were in the top quartile and 61% were above median. Turning now to fixed income. Assets reached another record level of $84 billion at the end of the year, up nearly $5 billion or 6% from the third quarter, and up $15 billion or 22% for the entire year. The fourth quarter growth was again driven by strong net sales of $3 billion. Our broad array of solid fixed income strategies was well-positioned to meet market demand. We had 22 fixed income funds with net sales in the fourth quarter. Fourth quarter net sales leaders were Ultra Short Strategies was about $1.3 billion, High Yield with just over $600 million, and the Multi-Sector Total Return Bond and Short-Intermediate Total Return Bond funds, which combined for about $600 million. Corporate, high yield, mortgage-backed, multi-sector, and municipal bond funds all had net sales, as did our fixed income SMA strategies, which grew $136 million to reach $1.4 billion in assets under management. Across sectors, short duration strategies were in demand. Fixed income separate account net sales were led by high yield mandates. At year-end, using Morningstar data for the trailing three years, we had 29% of our funds in the top quartile and 50% were above median. We began 2021 with about $500 million in net institutional mandates yet to fund. Moving to the money markets. The fourth quarter asset decrease reflected lower fund assets of about $24 billion, partially offset by higher separate account assets of about $12 billion. Year-end money fund assets were down about $43 billion from mid-2020 peak and up about $15 billion from the prior year-end. As we have experienced in past cycles, our money market business has reached higher highs and higher lows once again. Our money market mutual fund share, including sub-advised funds at quarter end, was at about 7.8%, down from the prior quarter share of 8.1%. Taking a look now at recent asset totals. Managed assets were approximately $621 billion, including $416 billion in money markets, $95 billion in equities, $87 billion in fixed income, $19 billion in alternative, and $4 billion in multi-asset. Money market mutual fund assets were $290 billion. As of now, we are planning for the staged return of more employees to our offices. While we expect to begin this process in the coming months, the decision about when to return more employees to our offices will be informed by the conditions and not by the calendar. With that, I turn it over to Tom for the financials. Okay, Chris. Thank you. Total revenue for the quarter was about the same as in the prior quarter as growth in revenue related to long-term assets, including equity, fixed income, private markets, and performance fees and carried interest was offset by higher money market fund waivers and the impact of lower money market assets. Again, showing our significant value of our diversified business mix. Q4 revenue included $11.2 million in combined performance fees and carried interest compared to $5.7 million in the third quarter. Over the last five years, including the period preceding the 2018 Hermes acquisition, annual performance fees ranged from about $7 million-$23 million and averaged about $11 million. Annual carried interest ranged from about $3 million-$14 million and averaged about $7 million. We still are unable to project these items for future periods. Looking at operating expenses, the increase in compensation and related from the prior quarter was due mainly to higher incentive comp expense of $5.9 million and expense associated with unused vacation time of $4 million. The decrease in distribution expense compared to the prior quarter was due mainly to the impact of minimum yield waivers and lower money market assets, which reduced distribution expense by about $15 million. This was partially offset by the impact of higher equity assets. Office and occupancy expense for Q4 included a non-recurring lease incentive gain of about $5 million. The impact of money fund minimum yield related fee waivers on operating income in Q4 was $8.7 million. Based on recent assets and expected yields, the impact of these waivers on operating income in Q1 could be about $14 million. The increase reflects primarily lower yields than previously expected. Multiple factors that are difficult to predict will continue to impact the waiver levels. Non-operating income increased from the prior quarter due mainly to the increase in the value of investments and consolidated funds compared to Q3. The $5.2 million increase from the prior quarter in net income attributable to non-controlling interest in subsidiaries was from higher NCI related to Hermes and consolidated funds. The Q4 dividend payment of $1.27 per share, including the $1 special dividend, reduced Q4 EPS by about $0.01 per share due to the exclusion of the dividends paid on unvested restricted shares from net income under the two-class method of computing earnings per share. During Q4, we purchased approximately 516,000 shares for $14 million, with nearly all of this bought in the open market. Shamali, we would like to open the call up for questions now. Sure. At this time, we will be conducting a question-and-answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment please while we poll for questions. Our first question is from Ken Worthington with J.P. Morgan. Please proceed with your question. Hi. Good morning, and thank you. I'm not sure if Debbie is on the call. If she is, Debbie, can you talk about the repo market and what's happening there? We've seen yields really come in. There's been a lot of chatter about the outlook for repo. What is your view on repo? How big a part of the money market fund investments right now are repo, and are there alternatives in the near term if the repo market continues to be, I'll call it uneven? Sure, Ken, this is Debbie. Just with regard to rates and what's driving the repo market to those lower rates, we're currently in somewhere of a 3-7 basis point range. Hit as low as two on a Treasury-backed repo basis earlier this week. In some late afternoon thin markets at various times last week was actually trading negative. Now, we didn't participate in any of that. Again, very thin and small portion of two-way flow, but nonetheless, it was in negative territory. It's driven by a couple things. Number one, mainly just huge amounts of cash that needs to be put to work in the short end. Thankfully, we do have a fairly good supply of Treasury and mortgage-backed securities. However, it hasn't grown much. Stimulus, as you know, did not come, the second round, until the end of the fourth quarter. In addition to that amount of stimulus that was passed and what's been funded so far, has come largely from balances of cash that were already at Treasury. Not new funding. We would expect that to change as the second, or I guess third round of stimulus, the first in the Biden administration, proceeds forward sometime in the middle part of this first quarter. As far as allocations go with our money market and liquidity products to repo, obviously the largest amounts would be in our Treasury and our government agency funds. We attempt to do term repo and other types of non-overnight securities in order to reduce our exposure to that overnight marketplace where going out the curve a little bit with different security types, you can get a little bit more in yield, although not a whole lot. I mean, the whole Treasury yield curve at this point is basically five to nine basis points from one month out to one year. In the quest to do that, we still have repo positions for liquidity purposes in those funds that are anywhere from 40%-55% type percent. When you look at our other types of products, our prime products in particular, that would also be using repo in the taxable liquidity world. The exposure there is actually very small, less than 10%. They use other types of overnight paper that is generally two to three times what repo would be from a rate perspective, overnight commercial paper, overnight CDs, other types along those lines. Hopefully that's helpful. That was great. Maybe Chris, for you, there's been a lot of talk of consolidation. Maybe can you share with us how you're thinking about succession and succession planning and the next generation of leadership at Federated when you and Tom decide to spend more of your time fishing and golfing and doing other things? Well, first of all, the consolidation thing and the succession thing are two completely different items. We get plenty of time to do grandchildren stuff right now anyway, so there are no current plans for that which you are discussing. However, we had our board meeting yesterday, and I spent the better part of an hour with our independent directors of FHI going over the succession plans, not only at the level of me if I get hit by a bus, Tom gets hit by a bus or anybody else, and how that filters through each one of our executive staff and their reports and those discussions. We're not going to give you chapter and verse on all of that, but there are good plans and good options. We have a very strong executive staff, and I am most confident that if I get hit by a bus, the machine would continue to roll the way that it has into the past. In terms of consolidation, there's always consolidation and then new stuff happening at the other end. The way we've looked at it is we've done our big hairy deal, the way I put it, because of our affiliation with Hermes. You've seen the whole thing, we've now changed the name to Federated Hermes, Inc., reflecting what you've heard me call a reverse transformational merger. Now we are busy about making that work. We completed that with the acquisition of the private markets business from Hermes and MEPC, are working this year in order to get that ready for sale into the marketplace. That's what we are about. We will continue to do bolt-on areas of excellence if we see areas where that's possible. We will continue to do roll-ups, not unlike last year's PNC deal, which worked out very well. That's our role in consolidation. Awesome. Thank you very much. Our next question is from William Katz with Citi. Please proceed with your question. Okay, thanks very much. First question centers around the money market business. Chris, I was wondering if you could, or maybe Debbie, you could talk a little bit about where your prime exposure might be today and how the dialogue with the regulators, particularly with the sort of the reformulated FSOC and how that's going and how to think about risks. Underneath that, you mentioned that your market share was down a little bit sequentially. I wonder if you could talk about some of the drivers there. I will cover some of the regulation. I'll let Debbie cover the prime exposure question. On the regulation front, we've all seen the President's Working Group report. That was basically the SEC throwing out everything that they had in their drawer on the subject, many of which had been totally rejected before, all of which we have seen before. The most important one, as I've discussed on this call before, is the elimination of that 30% trigger, which is both unnecessary and unwise, and we pointed that out before, and was really an artificial trigger to what was a government shutdown causing disruptions in the short-term markets. We don't know what will happen under the new regime in Washington, and they're just getting started, so it's hard to predict. We are ready with our friends in Congress and with all of the arguments we've had before because the money market fund, especially on the tax-free side, is especially relevant when there are tremendous efforts to get money to municipalities as part of a stimulus apropos of the pandemic. This is a great financing vehicle, and you could return $500 billion of marketplace-oriented short-term cash into that short-term market by the beauty of those money market funds. To say nothing of what happened on the prime side. I'll let Debbie talk about the prime exposure, and then I'll come back on the market share. Thanks, Chris. Good to hear from you, Bill. As far as our total prime assets go right now, they're about $125 billion, that is more weighted towards the non-money market fund side. $63 billion or so in money market fund assets with the remainder in other types of separate accounts, offshore, LGIP type of assets. As far as our allocation within those products to sectors of the prime market, the largest sectors remain with exposure to the asset-backed commercial paper world, the CD world, other types of financial commercial paper. We also have some exposure in the non-traditional repo market, which, back to Ken's first question, doesn't really have the same issues associated with it as does what would be traditional Treasury and agency repo. ABS exposure, but in the shortest tranches and a very tiny exposure. As far as just to add to what Chris was talking about from a regulatory perspective, we've seen the ICI come out with what we thought was a very comprehensive piece that covered the money market, not just money market funds, and talked about some broader-based solutions, and we'll be focusing on that in particular. IOSCO also came out with some ideas, and then the President's Working Group. Where I think the President's working group will end up focusing is number one on back with what the ICI and what Chris was saying, the broader market, but also some of the things that were changed in the 2014 amendments that went into effect in 2016, having to do with gates and fees and triggers on liquidity for those two items, whether they should be at all, whether they should be de-linked from triggers of liquidity, and whether they should be considered separately entirely from a gates perspective versus a fees perspective. With that, I'll turn it back to you, Chris. Thank you, Debbie. With respect to market share, Bill, there's another aspect of market share that historically we have always looked at, and it's a hard calculation, and that is market share of revenues. Part of the reason for our whole pricing history going back to the '70s on money funds has been as owner-operator looking at the market share of revenues. At year-end, there were some moves in money. Some of it was hot money, some of it was moving because some of the competitors quoted a higher net yield, and some of it is just the ebb and flow of regular business. We've looked at the information on a daily basis, and we see money going in and out at $3, $4, and $5 billion clips just like always. I would also mention that on the market share as we calculate it, if you go back to 2014 when they put those reforms in, our market share has been variously at those year-ends 8.2, 8.02, 7.55, 7.38, 7.89, a high one at 8.78, and 8.12. As long as we over the long term are getting higher highs and higher lows like I mentioned, we are not worried about the quarter-to-quarter market share. All right. Thanks. Just quick follow-up. Normally, you give some flow detail for where we are today. We didn't hear that from you. Maybe I missed it. If I did, I apologize. Then relatedly on the institutional pipeline, any dynamic there in terms of where you're seeing the best demand? Thank you. Hey, Bill, it's Ray. Through the early part of the quarter, obviously with about three weeks of data, the equity, f unds and SMA combined are positive, a couple hundred million dollars. The fixed income continues to be positive, a bit stronger. Actually the alts are slightly positive. Long-term flows continue to be running positive for the first three weeks of the quarter. In total, it's about $1.6 billion. Again, it's fixed income really ahead, but equity is solidly positive. Thank you. Thanks. Our next question is from Robert Lee with KBW. Please proceed with your question. Great. Good morning, everyone. Thanks for taking my questions. Maybe, Tom, question for you. Just want to think through comp as we look to next year. Understanding there's the $4 million-ish kind of one time that goes away. You mentioned the incentive comp, but you've also had this run-up in EOS employees. If we exclude the $4 million one time, is that kind of giving us a good jumping off point for next year? Was part of the incentive some, I guess I'll call it a little bit of a catch-up for the year? You've had good fund performance and whatnot, maybe that drove some of it. Just trying to kind of level set for next year. Sure, Rob. Our dedicated employees at Federated decided to work instead of take their vacation basically in 2020. What normally would expense that would occur in Q1 through Q2, Q3, we had to take all the expense in Q4 because we expect them to take vacation in 2021, I mean. It's a full year bundled up in one quarter and probably the normal run rate number is around $1 million there. We said it was $4 million, a normal run rate is $1 million. That's about how I would look at the vacation days. On the last part of your question, Rob, I'd like Saker to comment on EOS because you phrased it the run-up in people at EOS, but I think you need to hear what's going on there. Saker? Thank you, Chris. There's two things to know about EOS. One is that the run-up was, in fact, part of our long-term plan to bolster our positioning, particularly in North America, and that was part of the acquisition by Federated going back to 2018. That was part of the plan. The second one is that we continue to increase our clients. Since the beginning of this year, we've had two major institutional clients sign up to the EOS services out of Holland with a combined value of about EUR 130 billion. We continue to grow that business, and the more we grow it, obviously the more that we need to put resource in it because one leads to the other. Back to you, Chris. Thank you, Saker. What's going on here, Rob, is an investment in the lifeblood of the future of engagement. It's very important and will basically impact all of investment management here at Federated and around the world. Great. I'm sorry, just to keep on the comp thing. If I exclude the $4 million, obviously maybe $1 million stays. Should I think of $134 million as being the right jumping off point for kind of your revenue, your comp base heading into next year? Yeah, Rob. In the end, I'm not going to be that helpful because I just stopped predicting that. If you remember how wrong we were off by $9 million one quarter, off by $5 million another quarter. It depends on all the things, the sales and how those bonuses happen, the investment management and how that comes about, and then everything that's going on at Hermes, which factors in. You see this quarter the performance fees and the carried interest and how Saker is managing through what he delivers to the enterprise. So, like I said in the beginning, a long or short talk not to really give you all that much guidance on it. Well, can't hurt to try. On another, maybe back to ESG and EOS, can you just update us on where those initiatives are in the U.S.? I know a bunch of the staffing is related to building that out here. On the product side, right now most of the thematic products are UCITS or obviously the Hermes U.K. part of the business. Where are you with kind of getting that up and running and products launched here in the U.S.? Well, I will talk about some of the products. We put our sixth product that's being managed by our friends in the U.K., and all of it is informed by what comes out of EOS. There's no direct p roduct thing coming out of EOS. What EOS at Federated Hermes does is talk to 1,200 companies on separate issues for their clients, create data on the engagement that then is put into the decision-making process across the board at Federated Hermes. I'll allow the Saker to make some more particular comments. Thank you, Chris. You've got to understand EOS in two ways. First off, in representing our clients in the engagements with the companies that we do, we work with these companies on behalf of our clients to ensure and enhance long-term returns and best business practices for the long term. That's a benefit to all. Also because of the way that we engage and the depth of engagement that we have, because of the history of engagement, typically we engage with the same company over a very long period, stretching more than 10 years. Because of the depth of expertise we have, we're the oldest engagement team anywhere in the world. We're the largest engagement team anywhere in the world. We would claim we have the best experienced engagement team anywhere in the world. That gives us particular insights about specific companies, but also about sectors and markets. All of that is available as part of the integrated information that are used across all assets that are actively managed within Federated Hermes. Be they the assets managed out of our Pittsburgh office, our Boston office, our London office, or any other office that we may have. That is the beauty, if you like, of having the stewardship business as part and parcel of what we do. Additionally, with the changes in the market and the move towards a requirement of more stewardship activity for passive investors, particularly out of the European markets, we see an increased demand for our stewardship services. That inevitably over time will lead us to invest more into it. We get two things out of it. If you like, it's a business in its own right. It helps enhance returns to our clients. It helps us in making better-informed decisions as part of information that feeds into our matrix of decision-making trees for our active management. I hope that answers the question on EOS. Back to you, Chris. Okay. Thanks, guys. Our next question is from Mike Carrier with Bank of America. Please proceed with your question. All right. Good morning, and thanks for taking the question. This is probably for Saker. Just in terms of the performance fees and carried interest, the historical levels are always helpful. Given what seems like a challenging year for real estate generally, it seemed like the overall level of performance fees and carried interest was strong. Just curious if the asset base has increased significantly that could shift those levels. From a portfolio standpoint, are we just in a more seasoned portfolio than an average year, and that's what's throwing off some of the higher level of performance fees and carried interest? I'll try to answer that the best that I can. The first thing to say is you cannot extrapolate forward performance fees from back-looking performance fees. Generally speaking, when we say performance fees, we're referring to our real estate, but not exclusively our real estate. That's where most of our performance fees are gathered. If you remember, I have said on previous calls that there are two things that generate performance fees. One is there is performance fees generated for the equivalent of what you would call in the United States a mutual fund, what's called here a unit trust. To some degree, you can see the trend of that over time because it's calculated over three years. You can see the trend of performance. Although you can't predict it, you can see the directionality. The way we generate performance fees in that and indeed in separately managed portfolios is that we tend to enhance the value of the buildings that we buy for our clients and the investments we make for our clients through better management, through integrating ESG, funnily enough, into real estate. We were the pioneers in doing that as well. I remind you all that if you go back in time in the United Kingdom, there's the massive development in King's Cross which is a living example of how integrating ESG factors into development actually increases return over the long term. We do that for the buildings that we manage. We manage them well, and we tend to, over time, go into sectors that we think are growing. That is the average performance fees. In addition to that, we get every now and then additional performance fees when projects are finished or finalized or when we reach a landmark in investment for a major client. These tend to happen not as regularly as the other bit of performance fees, and that's why you occasionally see spikes. Now, if you look back historically, you can average the performance fees for our real estate. Going forward, you cannot predict performance fees, but I have no reason to think that our methodology, which has been alpha creating, is in danger of not being as alpha creating as it's always been. The level of performance fees cannot be predicted, and therefore we do not. I'm sorry I can't give you more than that. Mike, this is Tom. When I mentioned that the performance fees and carried interest was $11.2 million and last quarter was $5.7 million in my remarks. Our team did a little work just to help people think through because there's the NCI and tax and where does it occur, which tax rate. We view performance fees and carried interest as core to us. Somebody says, "What's core earnings?" If you look at Q4 versus Q3 and bring it down to a cents per share difference with those numbers that I just went through, it's basically about a $0.03 difference quarter to quarter. Okay, got it. That's helpful. Then just a follow-up on money markets. Debbie, thanks for the earlier comments, and realize the team only gives waiver guidance for the current quarter. Just curious how you and the team are thinking about rates over the year. You mentioned stimulus, that could be a potential benefit. Any other catalysts that you're watching throughout the year that could either pressure or lift some of the yields? Sure. Obviously short-term rates are anchored to Fed policy. At this point, Chair Powell earlier this week told us we're still in a low rate environment. We're going to be also stimulative, and it's not going to change in the near term. We tend to believe him. What we also know is that when vaccine distribution for the virus becomes more widespread, there's a whole lot of pent-up demand out there. It's necessarily with the consumer, but it's also in the business sector as well. Depending upon the sector of business, it can be extremely high or moderately low. In any case, there's pent-up demand that we think will need to be satisfied. What that will drive is at least pockets of inflation from our expectations at this point. Pockets of inflation are not really what the Fed gets concerned about with their dual mandate of inflation and employment. However, we think that as travel begins to pick up again, business from a more traditional mode begins to pick up again, those things will begin to drive the inflation rate up. I think what that means is the Fed is not in play in 2021. There's just no way that's going to happen. We also think that the guidance that they've given that leads us to a 2023 timeframe might be a little bit too long given some of those scenarios. That what we're probably thinking about for a steeper yield curve with Fed policy is likely to be in the second half of 2022, at least at the rate that we're currently progressing. Where does that put us in the context of this year, this day, these funds? It's essentially kind of a technical market at this point that's going to be driven a lot by supply and demand. A lot of front-end cash is existing. If that front-end cash starts to get more comfortable as the yield curve on the bond side backs up, or as the equity market maybe pulls off a little bit and they reenter those markets, some of the cash will leave the liquidity markets, and that in and of itself, less demand will cause the yield curve to steepen. On the other side of the equation, on the supply side, if we get additional Treasury supply, GSE supply is probably pretty stagnant for the year. Commercial paper should pick up, though, as industry picks up. That's the supply side. You've got more supply, less demand in that situation. Perhaps you get a little bit of a steeper money market yield curve. That doesn't mean you get 15 or 20 basis points. It probably means you get two to five. That's sort of the neighborhood that we're looking at from a steepness standpoint in 2021. Okay. Great color. Thanks a lot. Now our next question is from Kenneth Lee with RBC Capital Markets. Please proceed with your question. Hi. Thanks for taking my question. We've seen very strong net sales for fixed income over the past few quarters. Just wondering if you're able to highlight what you think could be some of the key contributing factors for that. Thanks. Some of the key factors are that the clientele is still anxious to see yield. We see this across the board inside our distribution. There is renewed interest in muni space. We're getting more questions on that because of the obvious implications of potential tax increases. There remains just a strong appetite for short duration at most firms. For anyone who is allocating money, not making a brand-new decision, oh, are we going to go in all bonds, all stocks and all that, our products proved very strong last year. That's why we had, I think it was 19 of them with positive flows. It was an across-the-board enhancement of quality that occurred last year. It was focused on positive flows in the fixed income, which are continuing, as Ray mentioned. What's really going on behind the curtain is that even though the salespeople are not traveling, they are enhancing the relationships they already have, because if you already have the email, the phone number, and you know the golf courses and the places where your clients are going. You can still build up relationships. Yes, it does put a little crimp on new stuff going in or getting into new clients, but you get to enhance the quality of the old ones, as I've mentioned here before, which means a broader look at the Federated array of products, and an in-depth look at the portfolios through portfolio construction. The portfolio construction, when you tear into these portfolios, ends up with a lot of our Short-Intermediate or Total Return Bond fund type products as the answer to the types of bets that are being made by our clients. This move to quality in the marketplace and the still current demand by many people for yield, keeps the fixed income as a positive flow situation. Can I just highlight, as Chris said, short duration has been strong, High Yield has certainly been strong, and then within High Yield, our institutional domestic product. We've also seen last quarter and into the first part of this quarter, the Hermes product menu, the SDG Engagement High Yield Credit Fund has gotten off to a very solid start and had a very solid fourth quarter. We're up to 23 funds in the first part of Q1 on the fixed income side that have positive net sales, and they really are spread through sectors with a concentration in short duration across sectors, High Yield, and as I mentioned, SDG coming on. Great. That's very helpful color. Just one quick follow-up, if I may. I know it's been a while since we talked about this, but wondering if there are any updated thoughts on potential BT Pension Scheme outflows. What's the expectations for this year, and should we expect to see any kind of meaningful impact on net sales from those flows? Thanks. Because they are a big, beautiful client, we don't like to get into the specifics of their redemption or investment profile. As you know, they have substantial assets with us on the long-term nature. As we discussed way back at the beginning, they had announced, and we repeat, that they were going to be taking down the mutual fund or products that they're in over time related to their own circumstances. We have no reason to think that that won't continue. We're just not at liberty to give what their redemption profile may or may not be, and sometimes, we don't even know. Understood. Thank you very much. Our next question is from John Dunn with Evercore ISI. Please proceed with your question. Hi, guys. I was wondering, are there any products that can be sold as a substitute for Kaufmann Small Cap? How much of flows typically come from new versus existing clients? Basically, just the notion of being able to shift clients between strategies. We have a broad array, as you know, of Kaufmann product. Obviously, the mid-cap and obviously the large cap. For those that are focused on the Kaufmann methodology, they are very good alternatives. On the MDT side, we have a couple of small cap funds that have very strong performance and have picked up good assets and good flows over the timeframe. You have the all-cap core, which includes I'm talking about MDT, which includes the small cap as well. In addition, on the international side, we have the international SMID product. Frankly, our friends in Cleveland are basically all over the cap scale in their investments as well. We have some specific Kaufmann, some specific small cap, and some other general funds that include small caps, that enable us to continue to talk to clients very, very successfully about where they could invest for the future. Great. You guys have talked about how money market deals are being idiosyncratic. How should we think about different rate scenarios and people's willingness to throw in the towel? Eventually, when we get higher rates, would sellers think maybe they get a better price and could that spur more activity? In the whole history of money funds going back into the '70s, to me, the way to look at it is people will always need to have their cash managed. There are various things that occur in the marketplace that incent them more. Yes, higher rates would be more helpful. On the other hand, if you go back into a standard issue wealth management sequence, about 20% of that money is always in cash in any event, whether they're long the market, whether they're bets on, bets off. It's just the ebb and flow of life. You couple that with the increase in money supply, the overall increase in markets, and portfolios being a percentage of those increases in value. There is always constant demand for the cash. John, if you're also referring to M&A and money markets. The way we look at that is to work out long-term arrangements with the people that we do deals with, where they continue to earn what is available to earn. In the low-interest environment, of course, there isn't as much to earn. If people throw the towel in and say they want to hook up with us, we are still available, ready, and willing to do that. It's pretty easy to look at what's being earned. We share the risk with anybody who we do transactions with, and it's worked out well, and we're still ready, willing, and able to do them. Thanks very much. Our next question is from Dan Fannon with Jefferies. Please proceed with your question. Thanks. Just to follow up on the fee waivers. The guidance for Q1, I assume that's as of the balances today. We've seen outflows to start the year in recent months. Just can you talk about some of the inputs that could make that number, or variables that could make that number either higher or lower as we think about the current backdrop? Yeah. When we did the forecast, the assets were about where they are today. Basically, not much change. Of course, we used to have a whole paragraph on all the variables, and we stopped giving that, but all the variables are there. Assets go up, changes, assets go down, it changes, and then all debits, rates, discussions. That's our current forecast updated with assets currently. Okay. Just with regards to the sharing with the distribution partners. It seems like this quarter, the relationship between what was, I think, other revenue and the distribution expense was a little bit more disproportionate. Has the economic share with your partners changed as those fee waivers have increased, or how should we think about that going forward? Dan, it's not anything like an active change on our part. It's really just each one of the funds and really each class of shares has a different level of distribution revenue and expense. What comes out at the end is really a blend across all of those funds and classes of shares. Now, of course, as gross yields come down, which they did by a couple of basis points overall during Q4, you have funds that weren't waiving the day before that begin to waive when they cross a threshold. This is why we've always said that this is very difficult to model. It's not linear. You have funds move in and out, and they can have very different fee characteristics, and it's just one of the variables that makes predicting this difficult. Okay. Thank you. Our next question is from Brian Bedell with Deutsche Bank. Please proceed with your question. Great. Thanks. Good morning, folks. Just one follow-up on Dan's money market question, and then a few ESG questions. On that distribution side, is there, I guess, a natural floor that we should be thinking about in terms of the distribution fees that your distribution waivers that you're sharing with your distribution partners? I guess the question would be, how should we think about the magnitude of what that could come to, and then would there be more pressure on your actual asset management fee waivers if that floor is reachable? It would be a similar answer, Brian. Within each individual fund, it would have a level of distribution fees. Typically, distribution fee revenue. When you blend them all in, there wouldn't be a floor level that we could give you that would say beyond this point for the complex waivers change. It's really that would occur at the fund level. Okay. Fair enough. A couple of ESG questions, too. One, just on the traction of your ESG Hermes funds in the U.S. I guess the broader question really here is how you're seeing demand improve in the U.S., and especially on the U.S. side. Sort of a question for Saker. We're getting from that $877 million to $1.3 billion this year. How much of that has come from U.S. clients? Probably more importantly, what do you see as the demand as the U.S. is really sort of catching up to, or beginning to catch up to the trends in Europe? Saker? Sorry. Yeah, of course. The answer is that you've got to think about it in three separate buckets. The demand in Europe for EOS is driven partly by not just market move as a whole, but also regulatory moves. We can see increasing demand for it in the United States, but that will take time to catch up as you'd expect. As a separate product, in time, we will see increasing demand for EOS, and we're already getting some indications of that would catch up with the demand in Europe, but also in Asia, where it's growing. The best indication of that is the big index providers are talking very actively about stewardship as being something that they do. That's because they're reflecting demand. That's one way you should think about it. The other way you should think about ESG in general is how much do we integrate ESG as a firm without necessarily calling our products ESG, because this is another factor that's taken into to enhance the returns and create sustainable wealth over the long term. The answer is that we're well past the 90% mark right across the board in what we do that we consider our actively managed accounts integrate the data that we get from ESG. Why do we need that? Because actually it helps make better decisions to create better wealth over the long term. That's the second part of it. Then the third one is specific products that clients want to buy that are labeled an ESG. In my own mind, I think of those more as thematic products. There is going to be a discrepancy between the U.S. and Europe because it's the same discrepancy that you get in any kind of market. A High Yield SDG might appeal across the board, for example. On the other hand, something that the Europeans call sustainable might be very specific to Europe. We'll see that. In general, if the question is, do we see the trend strengthening? The answer is yes. There is acknowledgment it does enhance returns. There is an acknowledgment that there will be more specific products coming out of it. Obviously the United States is a different market with a different fiduciary law structure. It takes time. Yes. Brian, if I may, I interpret two other questions inside your comment. The first one is, where are we on integration of our teams, both U.S., obviously, Hermes, they are already there. The other is, what is the interest in the ESG offerings inside our client base? On the first, we are well along the way with most, if not all, well along our three-stage integration process of analysis, customization, and full integration. We are very proud of our RIO office, which is Responsible Investment Office, for accomplishing this and making the Federated Hermes enterprise with ESG baked in the cake. On the question of interest, we have done some surveys with our clients. Overwhelmingly, two things are happening. They are getting more, meaning our RIAs are getting more questions from their clients regarding ESG. This will increase with the activities of the new administration. We are discovering that more and more of the advisors are incorporating it into their methodologies. This is not universal, okay? This is not universal, but it is a very strong force. Yeah, I saw the survey. That's very compelling. Are you seeing, I guess just on the funds that you've launched, I know it takes a lot of time to build them for distribution, but what are the asset levels of the ESG funds that are U.S. domiciled as of the end of this year? Brian, the group of products that we started over the last year and a half, they're relatively new. But the asset base is up around $130 million, and that would have been up from just over $100 million at the end of the third quarter. Progress, but as you know with mutual funds, they need to be bigger to open up additional distribution opportunities, and they typically need additional seasoning in terms of track records. That said, because of the topical interest in ESG, these have proceeded along nicely, again, with relatively recent inception dates. Yep. That all makes sense. Thanks so much for all the detail on that. I really appreciate it.