Greetings, welcome to the Federated Hermes, Inc's first quarter 2021 analyst call and webcast conference call. 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. As a reminder, this conference is being recorded. I would now like to turn this conference over to your host, Mr. Ray Hanley, President of Federated Investors Management Company. Thank you, sir. You may begin. Thank you. Good morning and welcome. Leading today's call will be Chris Donahue, President and CEO of Federated Hermes, and Tom Donahue, Chief Financial Officer. Joining us for the Q&A are Saker Nusseibeh and Debbie Cunningham. Saker is the CEO of our international business, and Debbie is the Chief Investment Officer for Money Market. 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. Please 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. I will review Federated Hermes' business performance, and Tom will comment on our financial results. Q1 was another quarter of solid performance for Federated Hermes. With the challenging backdrop of the global pandemic and fluid markets, including rising long-term rates and short-term rates falling to extreme lows, we executed successfully against the variables that we can influence. We produced solid sales results, as we have over much of the last year during corona time. In fact, we achieved record-high gross, $5.6 billion, and net, $1.2 billion, equity fund sales, and total fund sales of gross of $15.3 billion. A recent Ignites study noted Federated Hermes' long-term mutual fund organic growth rate of 15%, that ranks seventh in the industry for net flows over the 11-month period ended February 28th, 2021. In Q1, our long-term strategies had net sales of $3.2 billion. We crossed over the $200 billion mark for long-term assets in the first quarter, finishing the quarter with a record high just under $206 billion of long-term assets. We also continue to grow our differentiated EOS at Federated Hermes engagement function. We added three new clients in the first quarter, and assets under advice reached $1.5 trillion, up from $1.3 trillion at the end of 2020. Our staff level of engagers and other specialists reached 68 employees, up from 49 employees in the first quarter of 2020. Equity managed assets reached a record high of $96 billion and had net sales of about $600 million. Equity fund net sales of $1.2 billion were partially offset by net redemptions in a separate account of $600 million. Equity gross sales increased 38% from the fourth quarter and 28% over the first quarter of last year. We saw positive net sales in 19 fund strategies in first quarter. Sustainable strategies managed by our U.K. teams drove the strong equity fund sales, led by Global Emerging Markets over $400 million, Global Equity ESG over $400 million, SDG Engagement Equity over $400 million, and Asia Ex-Japan over $300 million. Other funds with net sales in the first quarter included Impact Opportunities and MDT Small Cap Core. Our Global Emerging Markets Fund shareholders have been informed that the strategy will close to new investors effective June 15th. Existing shareholders will continue to be able to invest in the fund. As announced in December, the Kaufmann Small Cap Fund had a soft close effective March 1st during the first quarter here. The five-star $10 billion fund had net redemptions of about $30 million in the first quarter, due in part, we believe, to the soft close. Certain model portfolio applications that were unable to continue to use the closed strategy had lumpy redemptions in March and April. While there's no guarantee, as investor preference and other factors can change, resulting in further redemptions, we currently believe that these redemptions will dissipate in the near term. Early indications in April appear to support this view. Using Morningstar data for the trailing three years at the end of the first quarter, 20% of our equity funds were in the top quartile, and 53% were above median. For the first three weeks of the second quarter, equity funds and SMAs had net sales of about $30 million. Turning to fixed income. Assets reached another record high of $86 billion at the end of the first quarter, up more than $2 billion from year-end and up $22 billion or 34% since the first quarter of last year. The Q1 growth was again driven by strong net sales of just under $3 billion. Our broad array of solid fixed income strategies was well-positioned to meet market demand. We had 21 fixed income funds with net sales in the first quarter. Q1 net fund sales leaders were Ultrashort Bond Fund with about $1.6 billion, the Multi-Sector Total Return Bond, and Short-Intermediate Total Return Bond funds combined for nearly $600 million, and continued strong results in high yield with nearly $400 million. Within high yield, net sales were led by another U.K. sustainable strategy, the SDG Engagement High Yield Credit Fund, with $686 million. While our domestic flagship five-star Institutional High Yield Bond Fund Q1 gross sales were up 20% from the fourth quarter, the fund had net redemptions of about $300 million due to a $600 million redemption from one client who made a tactical change in their asset allocation strategy. The fund has returned to solid net sales of nearly $150 million here in April and has produced net sales in 22 quarters of the last 25 quarters. Corporate high yield, international, multi-sector, municipal bond fund categories all had net sales, as did our fixed income SMA strategies. Across sectors, short duration strategies were in demand. We saw another solid quarter of net sales for the U.K.-based unconstrained credit strategy, with net fund sales of nearly $80 million and a couple of new institutional wins as well. Fixed income separate account net sales were led by multi-sector and corporate mandates. At the end of the first quarter, using Morningstar data for the trailing three years, we had 26% of these funds in the top quartile and just about half of the funds above median. For the first three weeks of the second quarter, fixed income funds and SMAs had net sales of about $160 million. We begin the second quarter with about $1.6 billion in net institutional mandates yet to fund into both funds and separate accounts, including about $700 million in unconstrained credit and $500 million from three new trade finance wins. Moving to money markets. Assets were down about $1 billion in Q1 from year-end. Our money market fund market share, including sub-advised funds, at quarter end was about 7.4%, down slightly from the year-end market share of 7.8%. While we've seen longer-term interest rates increase recently, short-term interest rates remain at historic lows, with yields on money market securities dropping to the low single digits over the last couple of months. As a result, minimum yield waivers were greater than anticipated in the first quarter, and certain money market separate accounts have begun to be impacted in a similar way. Minimum yield waivers are expected to increase again in the second quarter before declining over the rest of the year, as we noted in our press release. As usual, we are experienced waivers for competitive purposes as well. Against the challenging interest rate and yield environment, money market funds continue to show their resilience and value to investors, issuers, and the overall financial system. The most recent ICI statistics show $4.5 trillion in money fund assets, up from $4.3 trillion since year-end and $3.6 trillion at the end of 2019. We believe that the lower interest rate challenge will pass despite the Fed's current stance. It's hard not to conclude that the pandemic recovery and the massive stimulus being unleashed will not lead to interest rate increases. We also believe that as we enter another round of the 40+ years of money market fund regulatory discussions, the truth that the March 2020 market disruptions in the midst of the global pandemic were in no way caused by money market funds. The essential role of money market funds play in our capital markets will be recognized by regulators. We expect the regulatory process to follow the data. Any regulatory changes should be based on facts, not false narratives, and should preserve issuers' and investors' ability to utilize money market funds. Taking a look at recent asset totals. Managed assets were approximately $640 billion, including $430 billion in money markets, $99 billion in equities, $88 billion in fixed income, $19 billion in alternative, and $4 billion in multi-asset. Money market mutual fund assets were $306 billion. We announced earlier this week an agreement with Hancock Whitney Bank's Horizon Advisers that is expected to transition about $568 million in equity and fixed income assets from the Hancock Horizon funds. This follows a similar transaction with Hancock in 2017 that transitioned $435 million in assets. Subject to regulatory and fund shareholder approvals and other customary conditions, these transitions are expected to happen in September. Recall that these numbers, the $568 million, is not in the AUM today, nor is it in the pipeline figures. In closing my remarks, I'd like to thank our employees and clients for resilience and adaptability as demonstrated over the last year. It's gratifying to see progress in many places in moving past the worst of the pandemic. As we head towards mid-year, and with vaccines now available to all U.S. adults, we're planning for the staged return of more employees to our U.S. offices during the summer. Tom? Thanks, Chris. Total revenue for the quarter was down from the prior quarter due to the increased negative impact of minimum yield waivers of $27 million, fewer days costing $9.3 million, and lower money market assets costing $6.4 million, and lower performance fees. This is partially offset by higher revenue from long-term assets of about $21.5 million. Q1 revenue included $9.4 million in combined carried interest and performance fees compared to $11.2 million in Q4. Q1 includes carried interest of about $7 million from variable interest entities associated with the HGPE acquisition that are being consolidated beginning in Q1. This carried interest is paid solely to certain current and former employees of HGPE, and therefore is also recorded as compensation expense beginning in the first quarter. This amount represents the current and former employees' carried interest since March 1st, 2020 acquisition date, as we finalize the acquisition accounting for the transaction. As noted in the press release, negative impact from operating income from minimum yield waivers on money market mutual funds and certain separate accounts may range from $35 million-$45 million during the second quarter. This range is based on gross yields on government money market portfolios of 3 basis points-10 basis points. The historically low yields are being driven by technical factors at the front end of the yield curve. In March, we began taking on more of the impact of the low rates through waivers, as we were not able to further reduce distribution expenses on certain funds and separate accounts. This was largely responsible for the higher than forecasted Q1 waivers and the higher forecast range for Q2. We believe that minimum yield waivers are likely to peak in Q2, and we expect short-term rates to increase in Q3 and Q4. The amount of minimum yield waivers and the impact on operating income will vary based on a number of factors, including, among others, interest rates, the capacity of distributors to absorb waivers, asset levels, and flows. Any changes in these factors can impact the amount of minimum yield waivers, including in a material way. As Ray indicated at the beginning, Federated Hermes is not undertaking any duty to update this information throughout the quarter. Looking at operating expenses. The increase in comp and related from the prior quarter of about $5 million was due mainly to the consolidation of the variable interest entities that I mentioned earlier, which added $7 million of catch-up expenses and about $4 million in seasonally higher items, partially offset by $8 million of combined lower vacation pay accruals and lower incentive comp expense. The decrease in distribution expense compared to the prior quarter was mainly due to the impact of minimum yield waivers, fewer days, and lower money market assets, partially offset by the impact of higher long-term assets. Office and occupancy expense was higher in Q4, which included a non-recurring lease incentive gain of about $5 million. Non-controlling interest decreased from the prior quarter, due mainly to the decrease in the value of investments held by consolidated funds and to lower income earned by Hermes, resulting from less performance fees and carried interest in the quarter that I already mentioned. During Q1, we purchased approximately 1.5 million shares for $45 million to substantially complete the 3.5 million share program approved last year. The Board authorized a new 4 million share repurchase program yesterday. It's our 13th program since we went public. As contemplated in the Put Call Option Deed executed when we purchased the majority interest in Hermes Fund Managers Ltd in July 2018, which we publicly filed at the time, a request for valuation has been made by BTPS. We're working with BTPS pursuant to the agreement to the agreed-upon procedures in the option deed. It cannot be determined at this time whether a put call option will actually be exercised or whether a transaction will occur. We do not currently anticipate providing interim updates on the put call process. Laura, that concludes our prepared remarks, and we'd like to open up the call for questions. At this time, we'll 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 to remove your question from the queue. For participants using speaker equipment, it may be necessary for you to pick up your handset before pressing the star keys. One moment while we poll for questions. Our first question comes to the line of Dan Fannon with Jefferies. You may proceed with your question. Thanks. Good morning. My question is just on the outlook for fee waivers. You talked about the peak being in 2Q and then dissipating or declining thereafter. Is it just your view of future rates, or can you talk about the inputs that you are using to calculate or come up with that view that the fee waivers will decline in the latter part of the year? Yeah, Dan, I'll talk for a second and then Debbie will talk because it's the view of future rates is what's driving that and our sharing with intermediaries. Dan, this is Debbie. Some of the more specific factors about our outlook have to do with currently where overnight rates are trading, which is in the 1 basis point, maybe 1 basis point-2 basis points range. If you go back to early in the 2021 year and throughout most of 2020 since the pandemic began, overnight rates have been somewhere in the neighborhood of 5 basis points-8 basis points. Our expectation would be because of various processes that the Fed has already gone through by increasing their RRP counterparty limits per counterparty from $30 billion to $80 billion. They did that a couple of months ago by announcing their expansion of the potential counterparties that they will allow from a trading perspective with them through the RRP. We do believe that we will see some technical adjustments to that reverse repo rate, taking it from a floor of zero, which is to a large degree driving that overnight repo rate of 1 basis point right now, up to a level that's more like what it was post the financial crisis during the zero interest rate environment, which was 5 basis points. Commensurate with that would be likely an IOER adjustment of 5 basis points. What this does not only raises the floor from an overnight perspective by that amount of basis points, but it also raises the money market yield curve by upwards of probably 3 basis points-5 basis points, depending upon what part of the curve you're looking at. That plays directly through as we invest in those markets on a daily basis to the yields of the fund and thus the waivers. Okay. That's helpful. Then just a follow-up on expenses and comps. I think in the quarter you mentioned the carried interest and the flow through. We have $7 million of comp that's non-recurring, plus another $4 million for seasonal. Anything else just in the expenses that we think about that you reported that could be one-off in nature or non-recurring? Then also, if there is more carried interest as we think about it going forward, is the payout ratio going to be as high as what we saw this quarter based on some of those legacy funds? The first question, Dan. The $7 million, we can't call it one time. I call it more of a catch-up because as we get more carried interest, part of your second question, it will flow through there again. This was a since March 1st number, so that's why it was much bigger and there was decent amount of carried interest in there, obviously. I'm not allowed to call it one time, but I do call it catch-up. Other things in the expenses. With waivers, if they show up as forecasted and rates don't rise faster than we're expecting, I wouldn't see comp increasing. It might even decrease. The same thing with distribution fees. The other items, travel unrelated, is that going to creep up higher because we're able to travel more because of the pandemic? I hope it does, and expect it to. Advertising and promotional, while we kind of look at that over a whole year period, the Q1 number was probably light compared to what we're going to do the rest of the three quarters. The second question, forecasting carry and what's going to happen, and calculating, trying to figure out some percentage of that versus anything, we're just not going to be able to help you out with that at all. I don't think Saker is going to be able to add anything in there to say, "Hey, the HGPE carry, what's it going to be and percentage of anything?" Saker, I don't know if you can add anything to that or not. No, nothing to add to that. As I always say, we have a profile for both carry and performance fees. You can see them historically because we've declared them historically, both in the numbers that we declare here and also in the numbers we file in London. You cannot predict them, but we do know that they consistently come through over time. That's the best that I can say. Just to clarify, it was $9.4 million in carried interest revenue and $7 million of compensation that was associated with that, and that's the same type of ratio we should think about for carried interest on a go-forward basis. Yeah. There was a couple million basically of performance fees and $7 million of carried interest. The split up, which I guess I didn't give that. All carried interest goes into comp? No, the carried interest for this quarter was lower than it's been in other quarters without the $7 million catch up. The $7 million catch up and the $7 million comp offset, but that doesn't mean that going forward you're going to see a one-to-one offset. Okay. Thank you. Our next question comes from the line of Bill Katz with Citigroup. You may proceed with your question. Okay, thanks. Just coming back to the money markets a little bit. Maybe a bigger picture question. Is there any thoughts of repricing your platform to move away from the sensitivity to such low interest rates? Is there anything you can do on the distribution side to reduce the reliance on the distribution to carry their weight? Just trying to understand how to sort of soften some of this acute cyclicality on the business model. Bill, it would be a great idea, and if we had pricing power, we would use it. We have discovered that there are many competitors who make those kinds of structural changes quite challenging and difficult. That's just the way we have experienced it. We are now in our fifth decade of dealing with this conundrum. If you may recall, we started off with, back in your childhood, 100 basis point money market fund. We're a far cry from there. We have looked at other kinds of models, but we really aren't able to figure out one that avoids the marketplace. Remember, what this fund is an actual marketplace rate, not an administered rate, and so it is subject to these vagaries. We still like the business because over time, it adds a beautiful balance, ballast to the enterprise, even though we have to suffer through these times with these big waivers. Okay. The second question, just coming back to capacity for a moment. You mentioned comp, you mentioned the sort of the emerging market portfolio. Is there anything else on the horizon in the equity side or even the fixed income side that we should be anticipating as potential close that could further impact the net sale opportunity? No. Okay. Thank you. Our next question comes from the line of Mike Carrier with Bank of America. You may proceed with your question. Good morning, and thanks for taking the question. Debbie, just on the money fund side, the change in rates and waivers over the past few quarters has been fairly significant. Given the economic growth that we're seeing, it seems like the rebound could be equally as swift. Just want to get your view on what do you think could get rates and waivers back to levels say that we just saw in 3Q or 4Q? Sure. I do think what I mentioned earlier, the technical adjustments that we hope were coming in the second quarter from the Fed with regard to the RRP and IOER rates should be extremely helpful. Basically another kind of technical factor is the debt ceiling issues that start to impact in the beginning of the third quarter. That has supply issues associated with it because the Treasury has to get its cash balance down under a certain number. Once those issues are past us, we believe that the money market yield curves, which on the Prime side, like the BSBY curve, which I'll note I'm using that instead of LIBOR now. It's the Bloomberg Short-Term Bank Yield Index, a new gauge that we think is helpful on the Prime side. That curve's already backed up maybe 1 basis point to 3 basis points since the beginning of the year, really starting in the fourth quarter of last year. The bill curve, where the majority of our assets lie on from a government fund standpoint, has actually declined and gotten less steep by anywhere from 1 basis point-3 basis points. We think we start in the third quarter to have the bill curve start to normalize a little bit more. Also at that point, it's our expectation that because of the economic recovery, we should be seeing an improvement in where we see our current standard inflation measures, and the Fed will need to begin to address that issue, the target rate. We think that they start that process by beginning to announce cutbacks in their bond buying late in the second half of 2021. Sets the stage for further economic recovery, further inflationary issues in 2022, at which point we think the Fed will react by increasing by 25 basis points. The point in that lengthier answer to your question, Mike, is that even without the Fed adjusting the target Fed funds rate, we think that there is a huge benefit with some of the technical adjustments that they can and will likely do that will improve the products from a gross yield standpoint, which obviously helps waivers, but that the true target adjustments don't come until sometime in 2022, later in the year, more than likely. Okay, great. That's helpful. Just as a follow-up, still on the long-term side, fixed income flows continue to be robust. Just any color on distribution channels or where you're seeing the strong demand? We saw some modest outflows in multi-asset and all, anything there that you could think that could turn those to be positive going forward? Thanks. In terms of the distribution, we're seeing a lot of good things, singles and doubles occurring around the distribution. I'll just give you a few without the names of the distributors, but we had one just added a preference for high-yield bonds. That helps us. We had another one accept our Responsible Investing Institute training program. The micro shorts new products are being added. The engagement fund is now on a number of other lists. ESG has come in to be a big theme in a lot of places. As I mentioned in my remarks, the short term remains strong. Ultra shorts are being well-received, and people are looking at floating rate and around the horn. What you have is a whole array of products. That's why we keep mentioning 19 products, 20 products, 21 different products, whether it's equity or fixed income, that have positive flows, because of the breadth of the offerings that we're able to make. If you have specific questions, Ray has a comment. You mentioned the multi-asset. The largest fund we have in that category is our Muni and Stock Advantage Fund. We see a pretty bright outlook for that strategy given the outlook for tax rates. It's a pretty unique strategy in combining Muni's and stock exposure. In the first quarter, it was just about break even on net sales and is slightly positive here in the first part of April. For the prior couple of quarters in 2020, we had some outflows in that strategy. We think there's an improved outlook in the category. Got it. Okay. Thanks a lot. Our next question comes from the line of Robert Lee with KBW. You may proceed with your question. Great. Thanks. Good morning, everyone. Hope everyone's doing well. Thank you. Great, thanks. Maybe going back to the money fund questions again, just trying to frame this. Maybe if we move past Q2 and everything being equal, I know there's a huge number of moving parts, but if I think about the guidance you gave for heading into this current quarter, and then rates obviously stayed lower or went lower. If we got back to kind of a rate environment, let's say over that 5 basis points, 5 basis points- 10 basis points, would we be looking at fee waivers Q3, Q4 or beyond, kind of more similar to what we originally were anticipating for Q1 or maybe the fourth quarter? Just trying to size if rates go up, kind of what that gets us back to. Yeah, Rob. It's tough. The last time we predicted, six months ago or so, said, Oh, we thought 2021 was going to be 9999. We stopped talking about the future like that. We've run models based on Debbie's team's forecast, we don't get to as low as we were before based on the midpoint of their range. We don't get to Q1, and we don't get to 2020 numbers. That's about as far as you're going to get me to go on that. Well, it's always worth a shot. Maybe going back to the minority interest from BTPS, just kind of curious, a couple of questions. Number one, is there an option as part of that arrangement for the existing Hermes employees to increase their stake? Once the price is agreed upon, it could actually be Hermes employees who take part of it, or is it just going to be potentially Federated? I know the price hasn't been any kind of way for us to think about potential financial impact from it or how we should be thinking about going forward. On the first question, it would be a straight-up deal between the pension scheme and Federated Hermes. The employees have their 10% and would keep their 10% and have arrangements and numbers of years and all sorts of a whole different program. Those two do not intersect. Just as a comment here, recall that when we did the deal, we were perfectly happy to buy all the stock or buy a portion of the stock so long as we bought control. The reason for that was that we have a very large client who created this whole enterprise. However they wanted to handle it is how we wanted to handle it on that subject. Now that they have put in for a valuation, we're happy to go down that road and see what happens. In terms of the valuation and what impact it would have, they own 29.5%. We are on the threshold of acquiring a valuation. You will not get me to go sport fishing on the valuation. You are certainly welcome to have a swing at that pitch. If it comes to a valuation we agree to, there's no puts and calls, we just do it. Maybe they put, maybe we call, maybe it gets delayed a year, maybe it doesn't. Those are the dynamics. It's 29.5% of the former Hermes enterprise that we're talking about. Great. Thanks for taking my question. Our next question comes from the line of John Dunn with Evercore ISI. You may proceed with your question. Hi, good morning. You guys have been active going back on tuck at M&A. You just mentioned Horizon. Do you see more opportunities like that? Could you maybe give us an update on the M&A environment for both money market roll-ups and then for the long-term side? John, yeah, thanks. We are always out there with our team. If you've noticed in the press release, our gentleman who's out there doing this says we're open, available. This is the Horizon press release. We're open, available, and continually looking to help out all the various entities who may decide that it's better for them to do what we call a roll-up, which is turn their assets over to us. We continue to have discussions out there. In terms of bigger picture, and you see lots of things have happened in the last year and a half in terms of bigger deals and where things fall. As Chris has mentioned, we see ourselves set up with our Hermes London business and what we have in the rest of the company as a great growth opportunity. We haven't seen that we're playing in those big transactions. We still get a look at them. We still get the books. We still get contacted. We haven't had a big level of excitement about moving forward as it stands right now. If I may comment, we are active in this space, too. If you recall, PNC, you mentioned Horizon. You should not be surprised that we are still active in this space. Got you. Maybe just one more tiny one on the speed of change of fee waivers. It seemed like rates moved in Q1 and waivers changed pretty quickly, too. How quickly can they turn back down if we get some cooperation from rates? Does there have to be any cycling through of the portfolios which could take some time? Let me answer that. In the context of the RRP rate currently being at zero and a potential 5- basis point move in that, the largest majority of our $430 billion in assets under management in the liquidity space is in the government product area, roughly 2/3 of it. As such, those portfolios generally have about 40%-60% of their composition of their assets in overnight securities. 50% of 5 basis points gives you 2.5 basis points on 2/3 of the assets. The other asset classes, the prime products and the tax-free products, and then the remaining portion of the government products would be more impacted by what the curve does as opposed to what overnights do. We think that impact is more along the lines of maybe a basis point or 2 basis points. Much appreciated. Thanks very much. Our next question comes from the line of Ken Worthington with JPMorgan. You may proceed with your question. Hey, good morning. Thank you for taking my questions. To follow up on Rob's, I don't think he got this, and I sort of missed part of his question, but in terms of Hermes and the put call provisions, how much earnings or how much of your earnings is being generated by Hermes at this point? It just helps us gauge what this deal may be like. Would you be willing to do a dilutive deal if it came to that? Or is accretion a key metric that you're looking at to execute that transaction? I will answer the second part of the question, Ken. Tom will take the first. The second part, as regards whether we're willing to do accretive or dilutive, it doesn't matter if you're inside the structures of the put call arrangement. It will be a price, it will be valuation. If it's put, we will buy. If it's call, they will sell. The dilution, anti-dilution or non-dilution will be a factor in some of that. If the price comes within the range of the put, then we will buy it no matter what the effect of it is. This is really governed by the put call deed as they call it over there. It obviously can be adjusted or trumped at any time by a negotiation. Tom? Got it. Okay. Thank you. Yeah. On sharing, I'll call it. We have to do everything according to Hoyle from our arrangement with the pension scheme when we purchased the Hermes business. That is pricing and sharing on distribution that we do here. We've talked before about the funds that we've started here, and there's a solid arrangement there for sharing. We've talked before about the funds. I don't think we updated that. Over $100 million of the funds that we started here. We've seen some green shoots on institutional starting to arise where our distribution in the U.S. is selling Hermes products. We're excited about that. It's nothing big in terms of US dollars in the valuation yet. Then the EOS business, that's a whole Hermes business. While Chris mentioned the number of people and the growth there, that's all contained in Hermes. It's not a whole lot of what we're generating as it stands. We have a lot of efforts and energy and a whole business development committee expecting that to grow into the future and starting to see it work. Okay. Great. Thank you very much there. The money fund business, I believe you guys have said in the past that even in the worst of the financial crisis, that the money market fund business was a profitable business for you. Given that the yield environment is sort of worse now than it had been, and even if it's just temporary, is the money market fund business still a positive earning enterprise for you guys? Or are yields terrible enough at this point where it's more like breakeven or even generating losses? It is not generating losses. It is still a profitable, good thing to be doing. Okay. I'm sorry, I'm going to be greedy and do one more. Given that your competition in money market funds is probably under huge pressure, is there more opportunity to do these money market fund blocks or outright deals? Or is the business just sort of consolidated enough where that opportunity is not really much of an opportunity anymore? There will be more of those come along, Ken. Each step in this process from prior to the big recession, 2008, 2009, as I mentioned before, there were over 200 people doing money market funds. If you look at the list, it's 50 people or so. A lot of those are just in it because they totally control the money in and out. As time evolves and as these things occur, people decide they're going to throw in the towel. Then we work out a deal, not unlike we worked out with PNC, that works out for everybody. As I always like to say, we are a warm and loving home for any money market fund assets. Great. Okay. Thank you very much. Our last question comes from the line of Kenneth Lee with RBC. You may proceed with your question. Hi. Thanks for taking my question. Just one on the money market fund fee waivers. I think in the prepared remarks. You mentioned something about not obtaining cost sharing for certain distribution partners. Just wondering if you could clarify that, and wondering if you could just talk about expectations for cost sharing going forward. Thanks. Sure, Ken. Generally, as rates go down in this period and in the last period, we have shared pro rata with our distribution partners, we get part of our administrative fee, basically. It's fees in total. When we get down to where there's no more sharing, i.e., the distribution partner is at receiving zero, there's no more sharing that they can do, we take the brunt of the hit on the decrease in waivers or increase in waivers, decrease in rates. That's why you saw late in the first quarter where that switched over to rates were low enough, where the distribution expense couldn't go any lower, it hit all to us. Got you. That's very helpful. Just one follow-up, if I may, and this is just on the HGPE carried interest. Perhaps this will just help me understand and make sure I got all the nuances. Just wanted to see, is the level of carried interest, is that going to be dependent upon portfolio realizations going forward within HGPE, or are there other nuances that we should be aware of? Thanks. It's in HGPE, the carried interest. That's mainly where it shows up. Okay. Is it going to be dependent on portfolio monetization? The carried interest, if I may. The carried interest specifically in GPE is realized. There are several funds, when these funds, the assets that they hold come to maturity and they sell them off. Which is the normal course of action within the carried interest, which is purely within the private equity of GPE. Performance fees is in our other private market assets and go on a slightly different cycle from that. You are correct as far as the private equity fund is concerned, yes. Got you. Very helpful. Thank you very much. Ladies and gentlemen, we have finished our question and answer session. I would like to turn this call back over to Mr. Ray Hanley for closing remarks. Well, that concludes our call, and we thank you for joining us today. Thank you for joining us today. This concludes today's conference. You may disconnect your lines at this time.