Good day, and Welcome to the Federated Investors Management Company Q3 2024 Analyst Call and Webcast. At this time, all participants are on a listen-only mode. After management's prepared remarks, there will be a question-and-answer session. I would now like to turn the call over to the President of Federated Investors Management Company, Ray Hanley. The floor is yours. Morning, and welcome to the FHI Q3 call. 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 Federated Hermes Limited, 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. 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, all. I will review Federated Hermes business performance, and Tom will comment on our financial results. We ended Q3 with record assets under management of $800 billion, driven by money market assets of $593 billion and record fixed income assets of $100 billion. Looking first at equities. Assets increased by $5.7 billion from Q2 to $83.6 billion, due mainly to market gains of $6.5 billion, partially offset by net redemptions of $1.4 billion. The Strategic Value Dividend strategies had net redemptions of $779 million in the funds in the SMA combined, whereas in Q2, that negative number was $1.9 billion. We had Q3 positive net sales in 15 equity strategies, including MDT Mid Cap Growth, MDT Large Cap Growth, MDT All Cap Core, and US Mid Equity UCITS Fund. We continue to have success growing our MDT fundamental quant strategies and have recently expanded the MDT product set. This year, through the end of Q3, MDT Fund and SMA strategies have had about $2.2 billion in net sales, compared to a little over $400 million in net sales in 2023. In Q3, we expanded the distribution opportunities for MDT strategies with the launch of four new active ETFs and one new collective investment trust. We continue to look to these kinds of product enhancements in a variety of strategies to strengthen growth opportunities in domestic and international markets. Looking at our equity fund performance at the end of Q3 and using Morningstar data for the trailing three years, 59% of our equity funds were beating peers, and 41% were in the top quartile of their category. For the first three weeks of Q4, combined equity fund and SMAs had net redemptions of $51 million. Turning now to fixed income. Assets increased by about $4.9 billion in Q3 to a record high of $100.2 billion. Fixed income funds had Q3 net sales of $305 million, and fixed income separate accounts had net sales of $1.1 billion. The total fixed income net sales, therefore, were $1.4 billion, compared to $1.4 billion of net redemptions in the second quarter. Fixed income fund net sales were driven by about $515 million of combined net sales in Total Return Bond Fund, ETF, and collective investment fund. Fixed income separate account net sales were driven by institutional multi-sector strategies and by the Core Plus SMA strategy. We had 21 fixed income funds with positive sales in Q3, including Total Return Bond Fund net sales previously mentioned and Government Ultrashort Fund. Regarding performance, at the end of Q3, using Morningstar data for the trailing three years, 37% of our fixed income funds were beating peers and 18% were in the top quartile of their category. For the first three weeks of Q4, combined fixed income funds and SMAs had net sales of $365 million. In the alternative private markets category, assets increased by $622 million in Q3 to $20.7 billion, due mainly to the impact of FX rates, partially offset by net redemptions. We are in the market with three programs, the Federated Hermes GPE Innovation Fund II, which is the second vintage of our Pan-European Growth Private Equity Innovation Fund. The first close in this mandate was in 2023 for approximately $110 million. Our target raise is $300 million. The first vehicle raised about $240 million. Next, European Direct Lending III, the third vintage of our European Direct Lending Fund. We had our first close in Q3 for approximately $235 million. Our target raise is $750 million. EDL I raised about $300 million, and EDL II raised about $640 million. Next, European Real Estate Debt Fund, a new pooled European debt fund. We're targeting a Q1 first close and plan to continue marketing in 2025. Our overall target is $300 million. We are also developing the Global Private Equity Co-Invest Fund, the sixth vintage of the PEC series, P-E-C, targeting a Q1 launch. The target raise is $500 million. PECs one through five raised about $400 million-$600 million in each fund. We began Q4 with about $1.5 billion in net institutional mandates yet to fund into both funds and separate accounts. About $1.4 billion of total net wins is expected to come into private market strategies, with wins in private equity and direct lending and outflows in absolute return credit. Fixed income expected net additions are about $1 billion, with wins in ultra-short duration, sustainable investment grade credit, emerging market debt, Core Agg government fund, government bond, with a modest known loss in high yield. For equities, we have $644 million in wins, offset by $1.5 billion of known redemptions. Nearly all of that is from a sub-advisory account that will be internalized by the fund sponsor in Q4. Moving to money markets. In Q3, we reached another record high for money market fund assets of $440 billion, and total money market assets of the aforementioned $593 million. Total money market assets increased by $6.4 billion in Q3, as money market fund gains of $14.8 billion were partially offset by seasonal money market separate account asset decreases of $8.4 billion. Our money market fund assets peaked at about $447 billion on September twenty-third and decreased by about $7 billion over the last couple days of the quarter. We believe a late quarter jump in SOFR rates led to certain investors shifting some assets into the direct market. We also saw certain large clients using money market fund assets to pay down debt going into quarter end. Q3 saw the first of several expected reductions in the Fed funds target rate, driving substantial growth in industry money market fund asset levels, particularly in August and September. Looking ahead for the rest of 2024 and into 2025, we believe that market conditions for money market strategies will continue to be favorable, and that money market fund yields will continue to be attractive compared to the direct market and bank deposit rates. Our estimate of money market mutual fund market share, including sub-advised funds, was about 7.32% at the end of Q3, down from about 7.45% at the end of the second quarter. Looking now at recent asset totals as of a few days ago, managed assets were approximately $799 billion, including $594 billion in money markets, $83 billion in equities, $99 billion in fixed income, $20 billion in alternative private markets, $3 billion in multi-asset. Money market mutual fund assets were $441 billion. Tom? Thanks, Chris. Total revenue for Q3 increased $5.9 million, or 1% from the prior quarter, due mainly to $5.1 million of higher revenue from money market assets, $6.4 million from the impact of an additional day in the quarter, and $2.6 million from higher revenue from equity, fixed income, and private market assets combined. These increases were partially offset by $5.9 million of higher waivers related to fund proxy costs as discussed during last quarter's call. Total Q3 carried interest and performance fees were $3.5 million, compared to $2.8 million in Q2. Looking forward, the Q4 sub-advised account redemption Chris mentioned will impact annualized revenue by approximately $6 million. The impact for Q4 is expected to be approximately $750,000. Q3 operating expenses decreased by $65.2 million from the prior quarter, due mainly to the $66.3 million non-cash intangible asset impairment charge in Q2. All other operating expenses increased by $1.1 million from the prior quarter. Compensation and related expense included an increase in severance and related costs of $3.7 million, primarily from our U.K. office, as we take steps to enhance the sustainability of our operations there. FX-related gains decreased the other expense line item by $5.2 million from the prior quarter as the pound strengthened versus the dollar. We expect the tax rate to be in the 26%-28% range for Q4 and for 2025. At the end of Q3, cash and investments were $565 million. Cash and investments, excluding the portion attributable to non-controlling interests, was $515 million. Kelly, we would like to open the call up for questions now. Certainly. The floor is now open for questions. If you have any questions or comments, please press star one on your phone at this time. We ask that while posing your question, you please pick up your handset, if listening on a speakerphone, to provide optimum sound quality. Please hold just a moment while we pull for questions. Your first question is coming from Patrick Davitt with Autonomous Research. Please pose your question. Your line is live. Hey, good morning, everyone. Good morning. First one, money fund market share. I guess the $15 billion money fund inflow you announced last night was a lot better than the publicly available data we could see, so maybe the real-time data we're getting is just wrong, but it still certainly looks like you lost some flow share in 3Q, and that continues in October, so do you think you're losing flow share? And if so, what is the nature of these big, chunky flows we're seeing going to your competitors that has you missing out on those big, chunky mandates? Thank you. First of all, over a longer-term period, as you've heard me say a hundred times, we end up with higher highs and higher lows over the fifty years we've been doing the money market funds. So a little noise here in the quarter does not disturb us. I mean, we have one client who took $6 billion out because they were paying down debt, and that's the kind of lumpy things that happen that you know you got to be ready for, and that's just part of normal life. I would like Debbie to comment briefly on this dynamic from her perch on the tree. Thanks, Chris, and thanks for the question, Patrick. And ultimately, Chris's explanation, the information that was provided with regard to, you know, the quarter explanation of SOFR rates, that's a very real one. We have a lot of institutional clients who go between the direct market on an overnight basis and money funds. And really, since the Fed rate cut in mid-September, most of those flows have come into the fund side of the market. However, with the jump in SOFR rates at the end of the quarter, there were some that went back out into that sector of the market temporarily on a direct basis. We also are comparing ourselves against a, you know, a very large group of competitors in the marketplace. In particular, it seems as though some of the larger retail players that are in the direct retail market have been gaining market share on a little bit faster basis. And I believe that might have something to do with some of the heat that they've been taking with regard to deposit rates and the customers that have been earning the lower deposit rates rather than money funds. So I believe some of that has been more directed into the money fund sector. Obviously, that's not something we can control or are necessarily even really part of. And then it also looks like in some of our banking, you know, competitors, there's some internal funds that have been going along those ways. So, you know, in general, I think there's lots of explanations. We are not seeing anything on a client basis that would lead us to have concern. In fact, I would say exactly the opposite. When you look at, you know, the complexity and the variation of the client base that we have, broker-dealer, RIAs, trust, wealth management, family offices, they all seem to be very pleased and continuing their increased participation with us. Very helpful. Thank you. And then a quick follow-up on the other expense line. You mentioned $5.2 million decrease from FX. So is the right run rate there, you know, looking into Q4, kind of in the 3.5 to 5 range? Just trying to make it clear what that number should have been without the FX noise. Thank you. There were no changes in the rate. The pound went up. And so, you know, giving a run rate on that, if the pound goes up, we're going to get more, you know, FX help on the expense side because we're hedging our expenses in London. If the FX rate, if the pound goes down versus the dollar, it'll go the opposite way. Yeah, I mean, more just like, what, what's the kind of regular way number there in the quarter without any FX impact? That's what I'm trying to get at. ... take off, three-fourths of the number because we hedge basically a year's expenses, and if the pound doesn't change for the rest of the year, then we will have had this quarter or Q3's expenses in there at the higher rate, and we'll get the higher expenses in the next three quarters. So if you want to, you know, you want to look at it that way and say it's three-quarters of the number, it's going to be higher expenses coming through, not in that category, not in the other category, but in all the rest of them. Got it. Okay. Thank you. Your next question is coming from Ken Worthington with J.P. Morgan Chase. Please pose your question. Your line is live. Hi, good morning. Maybe first on regulation. I believe in October, the final wave of the SEC's money market fund reform rules took effect. Can you just remind us what went into effect and to what extent you're seeing an impact to interest in your prime funds? So we have seen, unlike the last round, back in the day, where basically almost $1 trillion left those funds. The customers are basically sticking with it, and our prime funds are up. And if you look at the stats for, say, a year, you know, the industry assets are up to over $1 trillion, and that's up 17% over the year, and our assets on that category are up 25%. So we're ahead of the industry on that category. So our clients, I think, we're quite appreciative of the fact that we hung in there with those funds, even though we did consolidate from three of those funds down to two. But we went through all the work to make the extra so many basis points available. Ray? Ken, if we isolate just the prime money market funds for the first three weeks or so of October, they're up just a fraction. So, if there have been any changes, we would have had puts and takes because the prime funds are still very attractive from a retail standpoint. We're still getting considerable interest there, even post the rate cut, yields are very attractive. But there's no discernible impact in October from the last of the rule changes going into effect. I'd like to add a couple other things about the rules. You sort of hinted, hey, what went in? Well, remember, they told us we had to have 25% in daily cash. Well, that has a big impact on how these funds work and how people look at them. The other thing is these funds were already a variable net asset value type fund. So people aren't keeping the money they need tomorrow here. They're willing to deal with this modest changes in NAV. So I think those are important dynamics, and I'm sure we skipped something that Debbie's just anxious to say. You're always very thorough, Chris, but I think ultimately, in the end, we had absolutely no shareholders leave our institutional prime or our institutional muni sectors because of the rule changes that went into effect on October second of this year, Ken. And yes, there is a daily process by which we now have to, for those funds, which I might note, are the smallest sector in the total universe of money funds. But on a daily basis, we on a continuous monitoring basis have to review where we are from a flow activity, whether we're in a net purchase or a net redemption phase. And if we get beyond a 5% net redemption phase, we also have a simultaneous process that is running that would look at the price, the cost of redeeming what that greater than net 5% redemption phase would be. And if that price is greater than one basis point, which ultimately with the 50% now that's in weekly liquid assets, always at par, that's a very difficult hurdle to exceed. Then we would have to review the potential for adding some sort of a fee to those who are redeeming. In the end, this is a process that we are running daily. We are monitoring on a continuous basis. We did historical back price testing, back testing on it prior to the implementation of the rule. We're very comfortable that the impact of this on the marketplace and the actual implementation of this that would result in a fee would be very, very few, if any, times. Okay, great. Tom, maybe to follow up for you. You mentioned the proxy costs, and I think there's director costs that flow in maybe this current fourth quarter. Can you remind us of the dollar amounts and where those costs hit? I think some are contra revenues rather than outright expenses. Yeah, Ken, the proxy costs, when we said we talked about it last quarter, we said it would happen in the third and fourth quarter, we didn't know exactly the timing. Well, all the expense came in the third quarter, and it's a contra revenue, $5.9 million, and so that should not happen. It will not happen in the fourth quarter. ... Your next question is coming from Bill Katz with TD Cowen. Please pose your question. Your line is live. Okay, thank you very much. Good morning, everybody. So just going back to money markets, shockingly, just big picture down. If I look at where you ended the quarter and where your inter-quarter update is, at what point do you start to think you see the behavior more robustly migrate back to money markets, if you will? Because what we continue to hear from many of your peers, whether it be the traditional managers or the alternative managers, is that money sitting on the sideline is going to find its way into risk assets, whether it be fixed income, equity, or alternatives. And I'm looking at sort of flattish quarter-to-date update, despite the 50-basis point cut in the Fed. So at what point might we see the behavior change? How do you sort of see that interplay between maybe the retail part of the business and the institutional side, and maybe you can help quantify that mix for us? Thank you. It's really tough to come up with a point or a catalyst, Bill, but we are seeing from the financial advisors a lot of interest in the short duration, a lot of interest in lengthening duration. We've covered those themes before, and we're seeing moves there as I tried to comment on the changes in our fixed income flows during my opening remarks. But these things do not happen in a catalytic way, and it is one FA and one customer and one firm at a time. In terms of the dynamic from what Debbie might see on the money market side, I'll let her comment. Thanks, Chris. I think I'd mentioned on this call before that when you look at the flows in 2023, and really through mid-year of 2024, 80% of the flows came from retail, and that retail trade was out of deposits and into money market funds, and you could almost follow it dollar for dollar. That will continue because banks have already started lowering their deposit rates after having never raised them to the rate of money market fund, you know, market rates. So that trade will continue, maybe not with as robust a pace, but it will continue. Of the other 20% in flows, I'd say probably 10% to 15% was what you're referring to, Bill, as sideline cash. Those that would be naturally in riskier assets with higher return potentials and longer, you know, time frames associated with those, and we're starting to see those move. You heard from Chris's introductory remarks the increases that we're seeing in various of our equity and longer-term fixed income products, and that's absolutely a portion of that sideline cash moving back into and refueling those markets in a positive way, which we obviously want to see occur. It's a reflection of healthier markets and healthier economies. On the institutional cash side, that was probably only 5%-10% of the asset flow in the money markets that we saw. We would expect that as the Fed cuts rates, which we are not expecting to be in that 50- basis point clip, you know, which was, you know, sort of a surprise in a start to this declining rate cycle. But as they, you know, continue to go from a 5-plus% rate down to what we think is a terminal rate of around 3%, you're going to see that institutional flow pick up. It's not going to be. It's not going to reduce the strength, or it's not going to match the strength that we saw in the retail flow, but it will still be a positive. That ultimately, in the end, when we look at industry assets as reported by, you know, Crane at this point, as an industry source at $6.8 trillion, I can still see $7 trillion by the end of this year, growing further into 2025, and ultimately, FHI catching a good portion of those flows. Bill, just to on your question about the mix. So the terms are not precise between retail and institutional, but an estimate of that for us would be about 60% of the money market fund assets, including what we sub-advise. About 60% would be considered institutional and 40% retail, which for us is still coming through an intermediary. By the way, that 60-40 split would be about what the industry split is, as well, using ICI data. That's helpful. And maybe just a question maybe for Saker or whomever, and this might just be rounding. So you laid out a nice pathway for several funds in the market or sort of coming into the market as we look out over the next six to twelve months. But you also round, and maybe it's just rounding, but the AUM in the alts bucket does seem to be down about $700 million quarter to date. Again, it might be rounding. Can you talk a little bit about what we should expect in terms of distributions as we look out through the next six to twelve months or realizations coming out of the portfolio? And can you actually grow the alt bucket, given all the growth opportunities against that? Thank you. Saker, your turn. Thank you very much indeed. You're right, that part of the nature of particularly private equity funds, but the other aspects of private markets is there's constantly a two-way flow, which is it's funds that you've got - the clients expect you to pay out, and then you get some more funds coming in. What I can... I can't provide a very detailed structure of what we're going to see, but I can say this: If you look at all the funds that you've heard Chris talk about, the innovation funds, direct lending funds - if you think about the global private equity fund, all of these funds are growing by going back to our client base, and in many cases, they're re-upping at a higher level than they had in before. Now, we can't quantify this until the close is finished, but the general trend, as far as we can see, is that not only are clients re-upping, but that there is, in some cases that we see so far, an increase in re-upping, but we can't confirm that when all the closes are finished. The second aspect of it is we're not sitting still. We're coming up with new funds within the alternative state of the old space, which gives us extra flows. You heard Chris again mention real estate debt funds and we're doing some stuff in infrastructure as well. So, it's a two-way bet. We think that the re-ups will be from existing clients will increase. We're adding to our client base. That's also important. So there's new clients coming in, and we're innovating our funds and increasing them. All of that leads us to feel that we'll continue to generate higher revenues as we go forward. That's it? Okay. Your next question is coming from Kenneth Lee with RBC Capital Markets. Please pose your question. Your line is live. Hey, good morning. Thanks for taking my question. Just one on the money markets. And I think you mentioned previously that some clients, corporate clients shift money on an overnight basis between direct paper and money markets. Just wanted to get a little bit more detail on that. How easy is that? And you know, to the extent that there's some uncertainty around the Fed rate cuts and the trajectory there, could you see some lumpiness in terms of money market flows, just based on how easy it is to shift one way or the other? Thanks. Debbie? So for the vast majority of our clients, Ken, it is not an easy switch because they don't repo, basically, the SOFR rate indicates what type of return you can get on overnight repo in the marketplace. Overnight repo is not really security, it's a contract, and as such, you have to have repo contracts in place with dealers and banks in order to go into that sector of the market. So for the vast majority of our clients, that is not possible. But for very large clients, large tech firms from the Midwest and West Coast, large oil firm, like, large energy firms, some of the large banks that are players in our market, they have those contracts available and usable by them on a daily basis and are able to switch pretty easily. So even though it's only, you know, a small minority of the actual customers that have that capability to do that switch on, you know, a daily basis, if they choose to do so, it's still a large volume when, you know, that dynamic in the market comes into play. Gotcha. Very helpful there. And just one follow-up, if I may. Any updated- Sure ... thoughts around capital management, and outlook for any kind of potential, inorganic opportunities out there? Thanks. approved a new share repurchase program of five million shares. The board approved a new share repurchase program of five million shares. We have 1.2 million left on the existing one, and we, you know, bought over 800,000 shares last quarter, and we expect to still be active. We don't think the price is at an appropriate level. Therefore, we expect to be active. On the acquisition side, you know, nothing to point to. We're still working away in a lot of different areas, but, you know, I don't have anything to get you excited about or get us, you know, on an announcement process. Gotcha. Very helpful there. Thanks again. Your next question is coming from Dan Fannon with Jefferies. Please pose your question. Your line is live. Thanks. Good morning. I think you mentioned in the prepared remarks, $3.7 million of severance in, I think, associated with Hermes. Curious if this is a part of a broader restructuring or cost-cutting effort that's more elaborate or more of a one-off? I'll make an initial comment, then Tom will comment on the numbers. We always have a duty to run the business better. Tom? Yeah, so, $3.7 million is the severance number out of the London office, primarily, and we are looking across the board to, as Chris said, you know, run the business properly and in a sustainable effort. You know that we had the impairment last quarter, and this is a look at that and make sure we are handling things in a proper fiscal manner. So yeah, we're looking at things beyond just the severance in terms of expense reductions as we can try to manage it as best we can. Okay. I think- And then- You gotta have Saker give a follow-up because we don't want to do expense things that hurt the business. We want to drive the business toward growth, and maybe Saker could give a comment on our expectations and excitement about the London office. ... Well, thank you very much, Tom. So just a couple of comments. As Chris said, we have a duty to manage the business, and that means managing the cost of the business. As we integrate the business together, as we get closer to working in the market, there are many opportunities to do two things. One is to become more efficient in the way that you run the business, and the other one is to increase your opportunity. So the more efficient, you've kind of got the severance costs, and you've heard Tom talk about other efficiencies that can be done through scale, through combined purchasing, and so on. But that should not in any way, shape, or form, take away from the positive things that are happening. And then, briefly, I can point to the following. One is, we have seen on the back of strong performance, interest come back to risky assets that we run here. I mentioned specifically Sustainable Global Equity, Global Equity ESG, the U.S. Small and Midcap Fund, and the Asia ex-Japan fund. And as I say, that came on the back of two things, better performance and also on the back of people coming back more to risk assets. We talked about private markets and the excitement of launching new vintages and new ideas and becoming known as a specialist player in the market. But we're also doing other stuff that's exciting. I mean, when we talk about money market funds, generally speaking, Federated Hermes has tended to concentrate mostly on the U.S. for the money markets. What we're now doing is bringing those to our sales force here out of Europe, and we've seen lots of positive responses to the presentations. The Sterling Prime Money Market Fund has hit an all-time high with GBP 8.4 billion. So that gives you, there's a potential of growth of money markets here and in Asia, by the way, where we've seen flows coming in from 23 new family offices, totaling approximately $300 million in money market flows. Not a huge amount yet, but it tells you about the potential that you can see coming through. MDT, which has had such a fantastic run for us in our home market, the US. You come to this market, we've been taking it out to our client base here. And again, we've had some very positive views within that. And you won't expect me to finish on a positive note without mentioning our stewardship business, EOS. And I would say we've gone over $2 trillion, or we're at $2 trillion of assets that we represent, and that includes the winning of a major US state and pension fund. So we can see the green shoots of recovery here, and we can see the effects of the right kind of investment paying dividends for both assets or funds managed out of London and managed out of the United States. But at the same time, you would expect us to manage our costs in a responsible and dynamic manner. Thank you. Great, that's helpful, and then just as a follow-up, you talked about a sub-advised mandate loss in the quarter, or I think prospectively. Can you just talk in aggregate what the sub-advised total AUM is for you, and maybe the context of the opportunity set for that? Is that a shrinking pool of assets, or has it been a source of growth? Just curious how some more context around that part of the business. In total, the sub-advised accounts would be about $37 billion of our AUM. That's as of the end of the quarter. That would be weighted toward cash to money market, but it does include equity and fixed as well. Has that been a growing, you know, source of AUM or, or shrinking? It's the money market part of it has been growing. It has a retail orientation, and on the institutional side, it's sort of pluses and minuses. It's been relatively stable. Understood. Thank you. Your next question is coming from Brennan Hawken with UBS. Please pose your question. Your line is live. Morning. Thanks for taking my question. You guys saw a constructive outcome with the flows on the bond side, and I'm kind of curious whether or not, given some of the struggles at a large bond manager, whether or not there was any change in either, you know, flows or RFPs that you noticed since late August, or, you know, any interesting trends that you might note in retail versus institutional engagement regarding your bond offering? The clients were attentive to the incident you're talking about, and to some extent, we're there to help our clients when they run into challenges. So it's impossible for us to detect what asset flows came from what challenges in the marketplace versus the regular blocking and tackling that we do all the time. So overall, you've seen money come out of that outfit, and it went somewhere, and we got some of it. But boy, that's hard to follow the bouncing ball. Sure, sure. That's why I was asking about whether or not there's a change in engagement, you know, subsequent post, late August. ... What, it depends on what you mean by engagement. What goes on is when you are in the marketplace with your clients, constantly repeating the sounding joy of the Federated Hermes product array, then when opportunities arrive, you're there to hit the bid. Whereas my father used to say, "If it's raining money, get your buckets out." And so, I think we are engaged with the clients all the time. It's not like, oh, let's go do something new. This is what we've been doing, and it's a lot like the football analogy. Those that are running hard and running to the ball, you know, they're going to get an interception, you know. Look at what Pitt did last night. Okay, let's get on with the meeting. All right. I don't know to run with the buckets or with the interception, but, good enough. Thanks for taking my question. Your next question is coming from John Dunn with Evercore ISI. Please pose your question. Your line is live. Thank you. Could you maybe talk a little bit about, at the time to funding of the pipeline and directionally, where you might expect it to go, over the next, you know, year or so? And then also, could you describe the, you know, kind of the temperature of institutional investors and consultants, you know, looking into next quarter and then twenty-five? I can talk about the timeline, and then we'll get to the rest of it. So of course, in Q4, because of the sub-advisory mandate that we talked about, you know, we'll - we would expect negative from an equity standpoint, and positive, both fixed income and alternative. But those, and fixed income's weighted so that it, the pipeline amounts come in more over Q4 and Q1. Alternative has portions that come in more ratably. Some of that, a good chunk of it is money that's already been committed, but it is not yet earning fees. So you'll see that, really on kind of a almost ratable growth over the next several quarters out through the end of next year. Fixed income, more front-loaded, equity, the negative, more front-loaded, and then alternative, more spread out. In terms of RFP activity, it is very, very strong. That's why on the fixed income side, I go to the trouble of listing the various mandates where we're actually scoring wins. You can go back to the beginning of the call and see the list. It's 6 real strong ones. We see continued RFP interest there. That's where that pipeline builds. I just said in answer to the last question, we're in the market all the time, waiting, looking, and bringing solutions to clients as needs change. Got it. And then, I think we're all going to be talking more about active ETFs than we were in the past. You know, had to make any, like, additions or behavioral changes to market, you know, the active ETF suite? And how significant do you think, you know, that segment can be for you guys? We think it could be very big, very strong. Right now, the ETFs make up about 7%, I mean, the active ETFs make up about 7% of the overall ETF market, and they're continuing to have an increasing percentage of the flows, maybe up to 30% or something, depending on what numbers you look at. And then if you look at our numbers, that from the funds that we have, we're seeing good results in the Total Return Bond Fund and in the Strategic Value Dividend Fund, and the whole suite of products is now over $500 million, and I think Ray can give you the accurate numbers. No, that's about right. Over $500 million weighted toward the two strategies that Chris mentioned. But you know, we've had a lot of good response out of the gate on the MDT strategies that we recently added, both four of them that we launched, active ETFs, one we launched also in a collective format. And you know, we'll continue to look at the product line. You should expect us to continue to add to the active ETF menu over time. But we've certainly covered some of the bigger strategies, both in terms of equity and fixed income with total return bond and strategic value. Thank you. Thank you very much. Your next question is coming from Brian Bedell with Deutsche Bank Securities. Please pose your question. Your line is live. Great. Thanks. Thanks for taking my questions. Just one back on the institutional cash management. And I know we've talked about that a lot during this call. Obviously, it's difficult to predict, you know, what types of cash flow needs those clients will have, both coming in and going out. But do you have a sense of, for those clients that are using your money market funds, what level of assets, roughly at least, are parked in overnight, you know, repo agreements? So almost like an addressable market, if you will, if they were to, let's say, switch all to money funds in a rate cutting cycle. ... Well, if someone knows how long our clients want to keep their money in and what percentage of them are thinking overnight, they'd be smarter than I. And that's why I mentioned the longer-term trends, 50-year, 10-year numbers on Prime. And Debbie has gone through the catalog or the variety of clients that we have, which is an underlying strength to the business because they move at counter times, counterbalancing one from the other. And I don't think we can go past this question without letting Debbie have a comment. Thanks. Thanks, Chris. Sorry, I was having difficulty getting it off of mute. Brian, we definitely have a very rigorous KYC, know your customer process. And so, yes, we have various, you know, spreadsheets that provide information on expectations for various clients, their needs, their cyclicality to some degree, and what their other options are. We have both from a sales perspective, up close relationships with, especially the largest clients, and also from a portfolio management standpoint. And we review and look at that on a regular basis. And although when you look at it on an individual basis, Chris noted the $6 billion that went out right at the end of the quarter due to debt repayment. When you think of it in the context of the $600 billion that we manage in this type of liquidity, it's not a large number. Nonetheless, if you had ten of those $6 billion all together for all the same reason on all the same day, it would be a different type of environment. Thankfully, I think the complexity and the diversification of our clients works in our favor, and oftentimes, when you see a $6 billion outflow, you may see somebody else, you know, six $1 billion inflows that offset that. In this particular case, it just happened to be highlighted because it was at a quarter end. Okay, but do you have a sense of what potentially could move over to institutional that's being allocated overnight right now then, in aggregate? Yeah, I think it's probably something that's less than 10% of the total assets at this point, which is not insignificant, but it's not out of the realm of consideration, you know, and into the problematic phase, anything like that. Debbie, you're talking about from going out from money market to direct- To direct securities. Correct. I think your question is how much could go the other way? Yes. How much can go the other way? That's exactly right. How much could go the other way in going into, riskier types of assets, longer-term equity? No, no, no, no, no. No, going from direct overnight cash into money market funds. When the Fed cuts- Oh, okay. Yeah. So on the inflow side of things. Well, I think, you know, going back to Ray's split of about 60% institutional, 40% retail, at different points in time, that number has been higher towards the institutional side. So I think it's somewhat substantial, probably at least another 10%-20% of asset flows as a potential, if, in fact, money funds, you know, are able to maintain a yield that is better than the direct securities market, especially in a declining rate environment. That would have been very difficult to do after the Fed's initial 50- basis point rate cut back in September. The curve was anticipating faster cuts by the Fed, and we were not in agreement with that, so having difficulty buying longer-dated securities to keep our yield for a longer period of time. Having said that, with some of the stronger economic numbers that have come to fruition over the course of the last three weeks, that has changed, and so we have been able—the market has been able, and given us the opportunity to maintain and lengthen our weighted average maturity so that we will maintain that healthy advantage over the direct securities market. And I think probably, you know, with that, attract some portion of increasing institutional flows over the next quarter. Brian, my answer to you is one word: trillions. Period. Then you go, okay, we could go through catalogs of where all that money is, but, it's so much that we're certainly optimistic about our ability to play in that game. Yeah. Okay. No, that, that is fantastic, Chris. Thank you so much. Maybe I'll just finish up with strategic value. Performance has improved, you know, rather dramatically. It looks like. I know you don't like to compare the fund in the Morningstar categories, but, you know, your, your top quartile over the past two quarters, by our measure, you're top third in that, over a one-year and three-year time frame. The product's still in outflows. Do you expect this performance to, you know, convert to inflows, you know, anytime soon? Anytime soon, I hate putting deadlines on it like that, but that's why I gave you the changes over quarter to quarter, so that you could see what was going on, and we're seeing it in the marketplace. And we get comments now from the field like, "Boy, I'm sure glad I hung on to my Strategic Value Dividend," versus, "What the heck is happening with the performance on Morningstar with Strategic Value Dividend?" And months and months ago, that was the comment you were getting from the field. Now it's, "Boy, I'm glad I'm still there." And it is still a way that the underlying clients can keep some income, get in the market, and buy the kinds of stocks that are owned in Strategic Value Dividend. So yes, I would expect those trends to continue. Exactly when it will cross over to positive is really hard for me to predict. Yeah, fair enough. Thank you so much for all the color. You have a follow-up question coming from Patrick Davitt with Autonomous Research. Please pose your question. Your line is live. Hi, thanks for the follow-up. Just quick, another quick housekeeping. On the $5.9 million contra revenue, was that all in management fees or split across the three buckets? And then if there is some in management fees, how should we adjust the individual asset buckets? Trying to get our fee rates better. Yeah, that was all in management fees. Okay. And how was it split across the equity buckets? I mean, the asset buckets, do you know? It's every fund shares. Oh, okay. Good. Proportionally would be, you know, for modeling purposes be okay. By the way, we got the vote. Good. It was successful. All right, great. Thank you. There are no further questions in queue at this time. I would now like to turn the floor back over to Ray Hanley for any closing remarks. Thank you very much. That concludes our call. Thank you for joining us today. Thank you, everyone. This does conclude today's conference call. You may disconnect your phone lines at this time and have a wonderful day. Thank you for your participation.