Q1 2025 Federated Hermes Inc Earnings Call
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Chris: Sure as can be given as to future results et cetera did Hermes assumes no duty to update any of these forward looking statements Chris.
Chris: Thank you Ray and good morning all.
Chris: I will review Federated Hermes business performance, Tom will comment on our financial results.
Chris: We ended Q1 with record assets under management of $840 billion, driven by record if money market assets of 637 billion.
Chris: Looking first at equities.
Chris: Assets increased by $1 5 billion from year end due mainly to net sales of $1 4 billion.
Chris: Equity sales in the first quarter were led again by our M. D T fundamental quant strategies.
Chris: Looking at the MDT strategies and funds and SMA has on a combined basis.
Chris: Net sales were $2 5 billion in Q1 more.
Chris: More than double the prior quarters, one 2 billion.
Chris: Q1 continued the sales momentum from last year when net sales for these strategies reached $3 4 billion.
Chris: Up substantially from $411 million in 2023.
Chris: For the second quarter through April 18th.
Chris: These strategies have had net sales of $345 million.
Chris: We are also seeing MDT interest from institutional investors as evidenced by net sales of nearly $700 million in Q1.
Chris: And by M. D T wins of $1 7 billion that have yet to fund.
Chris: Q1 saw a further improvement in flows from strategic value dividend strategies, both domestic and international the.
Chris: These strategies had Q1 combined fund and SMA net sales of 100 and.
Chris: $88 million.
Chris: Combined funds and separate accounts compared to a negative $221 million of.
Chris: Net redemptions in the prior quarter.
Chris: For Q2 through April 18th these strategies had net sales and combined funds and SMA of $47 million.
Chris: We had net sales in 18 equity fund strategies during the first quarter, including the aforementioned MDT mid cap growth MDT large cap growth importantly, the MDT mid cap collective also MDT all cap core MDT.
Chris: Large cap value.
Chris: And again MDT large cap growth E T F.
Looking at our equity performance at the end of the first quarter end using Morningstar data for trailing three years, 44% of our equity funds were beating peers and 31% were in the top quartile of their category.
Chris: For the first three weeks of Q2 combined equity fund and SMA had net sales of $208 million.
Chris: Now turning to fixed income.
Chris: Assets increased by about $1 4 billion in the first quarter from year end.
Chris: Due mainly to higher market valuations, partially offset by net redemptions.
Chris: We had 19 and fixed income funds with net sales in the first quarter, including government Ultrashort fund and the municipal Ultra short fund.
Chris: Regarding performance at the end of the first quarter using Morningstar data for the trailing three years, 44% of our fixed income funds were beating peers.
Chris: 18% were in the top quartile of their category.
Chris: For the first three weeks of Q2 combined fixed income fund and SMA had net redemptions of $888 million.
Chris: And the alternative.
Chris: Private markets category assets increased by $562 million in Q1.
Chris: Due mainly to the impact of FX rates.
Chris: Net sales of about $61 million, mostly an M D T market neutral fund.
Chris: We are in the market with European direct lending three the third vintage of our European direct lending fund.
Chris: To date, we've closed on approximately $350 million the target raise is about $750 million.
Chris: E D L.
Chris: One raised $300 million and E. G L. Two raised about $640 million.
Chris: We're also in the market with global private equity co invest fund, which is the sixth vintage of the P. C. We call it the <unk> series.
Chris: First close in April for about $114 million with a target raise of about $500 million.
Chris: Pac one through five raised about $400 million to $600 million in each fund.
Chris: The Federated Hermes G P innovation fund to the second vintage of our Pan European growth private equity innovation fund.
Chris: As in the market as well and to date, we've closed on approximately $110 million with a target raise of $300 million are first vehicle here raised about $240 million.
Chris: We're also in the market with a European real estate debt fund.
Chris: New pulled European debt fund and its marketing here in 25 with an overall target of $300 million.
Chris: Now we continue to develop our private markets business for growth. This month, we completed the acquisition of a majority interest in a U K renewable energy company called Rivington Energy Management limited.
Chris: The acquisition enhances our private markets platform by adding project development expertise.
Chris: And specialist energy transition sector experience to our institutional investment and asset management capabilities in the infrastructure asset class.
Chris: This acquisition offers access to an existing renewables pipeline and a track record of innovation, enabling us to identify emerging sub sectors with significant commercial opportunities and deal flow for future fundraising.
Chris: We believe that access to high quality proprietary deal flow grounded on innovation and thought leadership will be critical to future fund raising.
Chris: This combination creates the capability to manage end to end energy transition projects for investors.
Chris: And adds a highly complementary skill set and offering to our private markets business.
Chris: Across our long term investment platform, we began Q2 with about $3 9 billion in net institutional mandates yet to fund into both funds and separate accounts.
Chris: Equities expected net net additions totaling one 8 billion.
Chris: The wins are led by M D T with global equity participation.
Chris: Approximately one 7 billion of total net wins are expected to come into private market strategies.
Chris: The Windsor in private equity and direct lending.
Chris: Fixed income expected net additions totaled about $400 million and the Windsor in sustainable investment grade credit active cash short duration and government bonds.
Chris: Now moving to money markets.
Chris: We reached another record high for money market assets at the end of the quarter.
Chris: 465 billion and total money market assets of 637 billion.
Chris: Total money market assets increased by about $7 billion in the first quarter as money funds added $3 2 billion and money market separate accounts added $3 6 billion.
Chris: We were able to increase our money market managed assets in Q1.
Chris: Seasonal factors that have often resulted in lower assets.
Chris: Against the recent backdrop of market volatility market conditions remain favorable for cash as an asset class.
Chris: In addition to the appeal of relative safety in periods of volatility money market strategies present opportunities to earn attractive yields compared to alternatives such as bank deposits and direct investments in T bills and commercial paper.
Chris: Our estimate of money market mutual fund market share, including our sub advised funds was about 7.1% at the end of Q1 down.
Chris: Down slightly from about 722% at the end of 2024.
Chris: Looking at our money market fund market share changes from Q4 <unk>.
Chris: The Q1 over the prior four years, we saw an average decrease in that timeframe of about 34 basis points.
Chris: Now as we look at recent asset totals over the last few days managed assets were approximately 828 billion.
Chris: Including $629 billion in money markets.
Chris: $78 5 billion in equities.
Chris: 98 billion in fixed income.
Speaker Change: <unk> 20 billion in our alternative private markets.
Speaker Change: <unk> 3 billion in multi asset.
Speaker Change: Money market mutual fund assets were 456.
Tom: Yes, Tom.
Tom: Okay.
Tom: Thanks, Chris.
Tom: Total revenue for Q1 decreased slightly from the prior quarter as higher revenue from money market assets of $9 8 million were offset mainly by lower revenue of $9 2 million from fewer days and lower revenue of $3 2 million from equity.
Tom: Assets.
Tom: Total Q1 carried interest and performance fees were $5 9 million compared to $4 8 million last quarter.
Tom: Approximately $1 3 million of the Q1 fees were offset by nearly the same amount of compensation expense.
Tom: Q1 operating expenses decreased.
Tom: <unk> decreased by $22 5 million from the prior quarter due mainly to $13 7 million of lower FX related expense.
Tom: So the pilot strengthened versus the dollar.
Tom: And our credit up to $12 9 million from a VAT refund.
Tom: Compensation and related expense increased by $6 1 million from the prior quarter due mainly to seasonally higher expenses for stock based compensation and payroll taxes.
Tom: Advertising and promotional expense decrease due mainly to the timing of our advertising campaign spend.
Tom: The Q1 tax rate of $23 six was lower than the expected range, we expected tax to be in.
Tom: In the 25% to 28% range for 2025 the.
Tom: For Q run rate was impacted by the UK entity reporting pre tax income as a result of the $12 9 million that tax refund with no additional tax as a result of valuation allowances from prior year tax losses offsetting this income.
Tom: And the net income attributable to nonrecurring.
Tom: Non controlling interests, which are not tax.
Tom: At the end of Q1 cash and investments were $542 million cash.
Tom: Cash and investments excluding the portion of attributable attributed to Noncontrolling interest was $476 million.
Tom: In addition to investments for growth, we seek to use to use acquisitions dividends and share repurchases as levers to add value for shareholders. So far in 2025, we've used all three.
Speaker Change: In addition to the Remington acquisition, Chris already mentioned the board of the board of Directors yesterday declared a <unk> 34 said.
Speaker Change: Per share dividend, an increase of nearly 10% from the prior quarter dividend.
Speaker Change: During Q1, the company purchased just over 3 million shares or almost 4% of its stock for about $120 million.
Speaker Change: Finally, we would like to open the call up for questions now.
Speaker Change: Certainly 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.
Speaker Change: Information 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.
Speaker Change: For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.
Speaker Change: One moment, please while we poll for questions.
Speaker Change: Your first question for today is from Ken Worthington with Jpmorgan.
Ken Worthington: Hi, good morning, Thanks for taking the questions.
Ken Worthington: I wanted to start sort of digging into the money market market share.
Ken Worthington: So it looks like the industry money market fund a U M increased about 110 billion in one queue, suggesting inflows I think that Federated money market fund AUM was up around $3 billion, suggesting outflows.
Ken Worthington: Okay.
Ken Worthington: You know we know the money market fund business is very competitive so maybe can you talk about the competitive environment.
Ken Worthington: <unk> that you're seeing that might be driving this divergence in sort of growth and it feels like we've seen this since the fed began to cut so any.
Ken Worthington: Any comments there.
Speaker Change: Kevin what did you mean by $3 billion of.
Ken Worthington: The outflows when you were saying there were $3 billion of inflows.
Speaker Change: Right.
Speaker Change: What I tried to say was you had $3 billion of increased money market fund.
Speaker Change: Which actually suggests outflows for Federated in money fund assets for the quarter.
So the industry had inflows it looks like you had outflows that's what I was getting at.
Speaker Change: Okay.
Speaker Change: Not sure I follow the math on that Ken. This is Debbie the implant is where were definitely positive they were not as positive as some others in the industry maybe.
Speaker Change: Maybe just to break the quarter down a little that first of all I would start by saying usually the first quarter is the worst quarter of the year on a cyclical basis for all of the industry from a liquidity business standpoint, and this has to do with a lot of strength that comes from players from the fourth quarter and a window dressing manner to some degree.
Speaker Change: Great.
Speaker Change: First thing in the first week and early part of January of every year that Didnt happen. This year. So that's a positive from an industry standpoint, but I'd also note is that from a percentage standpoint within the first quarter through the middle of March our assets were up.
Speaker Change: Up substantially more than what they ended up being.
Speaker Change: Being positive for the end of the first quarter that had a lot to do with.
Speaker Change: Starting with March 15th.
Substantial outflow due to corporate taxes that that I think was probably.
Speaker Change: A little bit worse for us just simply because of our larger institutional nature.
Speaker Change: And then.
Speaker Change: Secondly towards the end of the quarter. It was a rough quarter and I think a lot of that had to do with what was happening from a broader macro perspective.
Speaker Change: With the tariff issues that had not yet been fully fully understood or announced but concerns about them.
Speaker Change: And the volatility that was happening in many of the other markets again looking at our institutional nature.
Speaker Change: We had substantial outflows due to large and calls I think on other customer to institutional customers other assets that came out of their liquidity portions.
Speaker Change: We even carry that further now into the month of April personnel taxes, and additional margin calls.
Speaker Change: From institutional customers continue to be a negative plan. Despite the fact that it's been a general positive trend to Q2 today within within the month of April, but definitely a different first quarter than would be the norm in the money markets.
Speaker Change: Ken This is Tom just to give you the the assets in the money markets.
Speaker Change: So December.
Speaker Change: Year, and we ended up at.
Speaker Change: <unk> 630 and.
Speaker Change: March 31, 25, we ended up at 637.
Speaker Change: And then more importantly for our revenue as the average assets so the money market average assets.
Speaker Change: In.
Speaker Change: And during Q4 were 601.
Speaker Change: For Q1 were 639.8.
Speaker Change: So just.
Yeah got it I appreciate that.
Speaker Change: And then just on the April data you gave in fixed income suggested some elevated <unk>.
Speaker Change: First income outflows, what's sort of driving that it seems to be sort of a change from what we saw in recent quarters.
Speaker Change: But the numbers there were basically made up of total return bond fund and high yield.
Speaker Change: With about three fourths of the 888 being in total return and another the rest of it in high yield.
Speaker Change: The.
Speaker Change: One of the things that were.
Speaker Change: We're happy with is that the total return funds performance is improving it hasn't moved the three year number yet, but it has moved the recent numbers and.
Speaker Change: So we are optimistic about that.
Speaker Change: The basic call, there, which I think we mentioned on the last call was.
Speaker Change: A kind of a defensive one.
Speaker Change: That.
Speaker Change: Relative to others was not the greatest call for last year, but it's starting to look more a lot better as we work through this part of the year. So that's part of the ebb and flow going on there.
Speaker Change: Great. Thank you very much.
Speaker Change: Yes.
Speaker Change: Your next question for today is from Patrick Davitt with Autonomous research.
Patrick Davitt: Hi, good morning, everyone.
Patrick Davitt: So I appreciate the tax payments always make late March early April seasonally weak.
Speaker Change: So maybe could you frame what you're seeing in money fund flows since tax day, and then higher level, perhaps for Debbie on a date and update on where you think we are in kind of that post fed rate cut institutional rotation into money funds that you've been talking about for some time.
Speaker Change: And then beyond that have you seen any sign that the tariff noise is driving non U S clients out of U S money funds. Thank you.
Speaker Change: I will take the last one let Debbie takes the first two if we can remember them all but over the last one we haven't seen any.
Speaker Change: Of that of tariff noise.
Speaker Change: Causing international clients to do much.
Speaker Change: Much of anything so.
Speaker Change: That will start with that one and then for Debbie's long term views on things sure maybe just to get a little bit of an update since the.
Speaker Change: Personal tax date on April 15th.
For the next week basically we have lease side.
Speaker Change: Pretty substantial flows back and this is both from a retail as well as an institutional standpoint, a little bit less so this week.
Speaker Change: If I look at what we're expecting going through.
Speaker Change: The 2025 timeframe from a rate cut standpoint, two to three and three more likely with a fall back in queue. That's from where we kind of started the year at one more likely with a fall back in queue, but in any case.
Speaker Change: The expectations are for higher for longer.
Speaker Change: You look back to when this cut.
Cutting season started in September of 2024, we were expected to be close to 2% already by now given that we started with that 50 basis point rate cut back in September. So we're not in EMEA anywhere near to there and I think that both retail and institutional continue to enjoy the floor plus handles that they have.
Speaker Change: <unk> on their money market.
Speaker Change: <unk> at this point with the expectation that even if they go down into the mid threes, that's still a substantial win over where they had been commentary timeline rates were back in <unk>.
Speaker Change: Inflation definitely is a wild card, we continue to see sort of the hard data of inflation, the hard data of employing and leaning toward a fed that would be maintaining higher rates for a longer period of time and not lowering them at the pace that some of the industry hits.
Speaker Change: <unk> is assessing now when you look at some of the softer data the confidence data the survey data.
Speaker Change: Ultimately you've got a deterioration in that to add at that wood.
Speaker Change: Expect that that would lead you to maybe expect a little bit faster rate cutting policy by the fed.
Speaker Change: And.
Speaker Change: That still remains to be seen we're going with the hard data for now are looking at fewer rate cuts than what <unk>.
Necessarily the beginning of the year and the.
Speaker Change: At that rate cutting cycle would have initially expected and ultimately that still brings.
Speaker Change: <unk> positive flows from retail and institutional into the product. So it's happening we continue to that that <unk> expect to keep that pace if not grow it.
Speaker Change: Hey, Patrick this is Tom just the <unk>.
Speaker Change: Specific since that tax money.
Speaker Change: Money.
Speaker Change: Stop, believing we're up about $5 billion.
Speaker Change: As we said both both on the money fund side and on the institutional side.
Speaker Change: Okay.
Speaker Change: Great. Thank you.
Speaker Change: As a quick follow up there has obviously been a lot of FX noise in your numbers last few quarters I guess, what is the steady state number for that other line item without all of the FX noise now and.
Speaker Change: Do you have an idea of what the impact is looking like so far in Q Q given all the FX volatility. Thank you.
Speaker Change: Okay. So we have over $100 million and pounds that we are hedging because of our UK office that that earns.
Speaker Change: Revenue in dollars and as expenses in pounds. So it is the hedging thing and yes.
Speaker Change: <unk>.
Speaker Change: In Q4, the dollar versus the pound the dollar was up and then in Q1.
Speaker Change: One the pound was up and so far this quarter the pound is up.
Speaker Change: We'll see what happens.
Speaker Change: In terms of what's the normal steady state number in that other line.
Speaker Change: It's around $4 million.
Speaker Change: Thanks.
Speaker Change: Your next question for today is from Bill Katz with TD Cowen.
Speaker Change: Okay. Thank you very much and good morning, everybody.
Bill Katz: Based on your inter quarter update that you had bought back about 600000 shares through early March and then you did 3 million plus for the entire quarter, which suggests a pretty substantial ramp even before the stock took an incremental hit with the whole sort of posed to predict deliberation day market decline. So I guess the broader.
Speaker Change: Is what are the allocations are.
Speaker Change: For capital from here and then just in terms of acquisitions I appreciate you're building out the <unk> platform, but are you looking at anything that might be a little more of size that could be a little bit more of a substantial.
Speaker Change: Shift in the profile of the ability to grow in the old platform. Thank you.
Speaker Change: Bill.
Tom.
Speaker Change: Yes, we bought 3 million.
Speaker Change: Shares over 3 million shares and we just.
Speaker Change: Looking at what was going on and looked at our cash position.
Speaker Change: We do have a.
Speaker Change: Number of things that we're looking at there is nothing to announce or talk about and some of them are.
Speaker Change: Maybe a similar size to the Remington thing and some of them are a little bit bigger but.
Speaker Change: And of course, we'll have to see what happens there.
Speaker Change: In terms of the future for buying shares we increased.
Speaker Change: To increase the dividend.
Speaker Change: And we will remain active in the share price.
Speaker Change: Last quarter, we talked about why did we buy more than in Q4, when the prices in the in the <unk>.
Speaker Change: The price went down.
Speaker Change: We decided to buy more we still think it's undervalued.
Speaker Change: And we will see.
Speaker Change: Basically.
Speaker Change: Each day, what we're what we're willing to buy so that's giving no indication of what we're going to buy but we will continue.
Speaker Change: Continue we have about $2 7 million shares left and approval from the board.
Speaker Change: So.
Speaker Change: I would expect this year for sure that we would be renewing that.
Speaker Change: With a new program.
Speaker Change: Okay. Thank you for that and then just as a follow up.
Speaker Change: You go around your conversations and maybe it's a little too soon just given the.
Speaker Change: The intensity of the volatility coming off the quarter into the new quarter, but what are you hearing on the institutional side in terms of allocations where might the incremental interest be where a decision makings at this decision, making she's made at this point in time any delay or what was the compensation is like and what are you seeing the greatest opportunity for Federated. Thank you.
Speaker Change: On the institutional side, we are really happy about the $3 9 billion in mandates yet to fund and we one of the most encouraging things is the interest in MDT and part of the reason for that is there risk controls and the diversification that that particular.
Speaker Change: <unk> offers to say nothing about the performance over 135, and 10 year period.
Speaker Change: And so.
Speaker Change: We are seeing a good bit of interest on that.
Speaker Change: From the RFP.
Speaker Change: Perspective as well.
Speaker Change: The.
Speaker Change: The private equity and direct lending numbers.
Speaker Change: Or also as I've mentioned them and I don't have to go over them again.
Speaker Change: <unk>.
Speaker Change: That's another $1 billion seven that we're very happy with.
Speaker Change: Then active cash in short duration remains a constant.
Speaker Change: Part of enthusiastic activity.
Speaker Change: We have two accounts that will be funding actually, especially end of Jan and I will now happen in the beginning of July after the fourth of July holiday.
Speaker Change: That is a substantial win from another state perspective.
Speaker Change: We are at a point in time, however, when most of the state accounts that we have are in basically the period where were their asset start to decline on a cyclical basis, but if you look at the growth that they've experienced on a year over year basis, its still pretty substantial.
Speaker Change: Even though we would expect those assets to go down still on a year over year basis, there, they're substantially higher than before and based on trips. The three of us have taken out to Asia over the last three months.
Speaker Change: Yes MDT.
Speaker Change: Yes, cash, yes trade finance, Yes, Asia ex Japan mandate.
Speaker Change: And yes.
Speaker Change: Yes, guy or as equity fund. So those are the ones that are gathering the most attention.
Speaker Change: Thank you very much.
Speaker Change: Your next question is from Dan Fannon with Jefferies.
Dan Fannon: Hi, Thanks, Good morning wanted to follow up on the strong equity flows and MDT in particular can you talk about the fee rate of that subset versus the active exist. Other the rest of the overall equity franchise and then maybe the performance of some of the products here of late given the strength in flows how they have weather.
Speaker Change: Here. This most recent bout of volatility.
Speaker Change: Was it the performance has weathered very well and I'll, let ray tell you about the fees.
Speaker Change: Yes.
Ray: The fee rates, we've talked about it on a blended basis.
Speaker Change: If you took that down to the product level the MDT.
Speaker Change: Equity strategies would be slightly below our average fee rate but.
Speaker Change: But not not materially below.
Speaker Change: And in terms of the performance comment as Chris said.
Speaker Change: As we look at their strategies now post.
Speaker Change: Through through the first couple of weeks of April.
Speaker Change:
Speaker Change: The three.
Speaker Change: The three year records remain.
Speaker Change: In the top.
Speaker Change: Typically in the top decile.
Speaker Change: Plus 2% for the large cap.
Both strategy the top 2% for the large cap value strategy being being examples of that.
Speaker Change: So they came through.
Speaker Change: The April volatile utility with their long term records.
Speaker Change: Intact.
Speaker Change: Sure.
Speaker Change: With good performance, even during the periods of volatility.
Speaker Change: Got it so just to confirm that these products are below the overall fee rate.
Speaker Change: <unk> is what you said.
Speaker Change: So of the equity fee rate of the equity and then what is the size of MTT as a percentage of the whatever 80 plus billion of.
Speaker Change: Equity products.
Speaker Change: It's about $15 billion.
Speaker Change: Yes.
Speaker Change: Thank you and then just in terms of expenses, if I could just follow up.
Speaker Change: Understanding the onetime dynamic with the B, a T charge and some of the FX up.
Speaker Change: The rest of the line items are these reasonable jumping off points for the remainder of the you know as we think about <unk> and beyond.
Dan Fannon: Sure Dan.
Dan Fannon: Comp comp was little higher because of the seasonal things I mentioned the stock based comp.
Dan Fannon: Payroll and benefits in Q1 so.
Dan Fannon: We ought to take a little bit off of there.
Dan Fannon: Distribution.
Dan Fannon: What are the assets going to be that flows with the assets, we hope that goes up.
Dan Fannon: Systems and communications.
Dan Fannon: We expect that to go up the professional service fees and occupancy and intangibles I don't see much changes advertising that flows with when we're doing our campaigns and we're starting cafe. So that should go up a little bit and travel that I'll go a little bit up.
Dan Fannon: Our sales force gets out there more when I say, a little bit up in those categories I'm talking like only $1 million or something like that for the next quarter.
Speaker Change: Great. That's helpful. Thank you.
Speaker Change: Your next question is from John Dunn with Evercore ISI.
Speaker Change: Hi, maybe just to extend the fee rate conversation a little bit.
Speaker Change: Particularly the pipeline you mentioned, the MDT rate, but overall it would seem that mix the whole pipeline would be accretive.
Speaker Change: Could you maybe talk about where the blended average of the whole pipeline might be and where compares to historical levels.
Speaker Change: Yeah.
Speaker Change: Yes.
Speaker Change: Would be accretive given the skew towards private markets and.
Speaker Change: Equity.
Speaker Change: <unk> and.
Speaker Change: And then <unk> in particular.
Speaker Change: Typically if you look at our pipeline in the past it would have.
Speaker Change: Been weighted more toward some of the institutional fixed income strategies that have lower fee rates, including things like ASP is fashion.
Speaker Change: In short duration, so yes the pipeline.
Speaker Change: Will be accretive to the overall blended fee rate of the company.
Speaker Change: Got it and then.
Speaker Change: The MDT ETF came up earlier in your prepared remarks, but could you just remind us kind of like the outlook.
Speaker Change: How much do you have an active etfs in the plan for maybe a.
Speaker Change: Building out the roster.
Speaker Change: We plan to add a handful of Etfs, each year and Theres always a rigorous.
Speaker Change: Enthusiastic discussion about which candidates will be first.
Speaker Change: And how that will turn out.
Speaker Change: The Etfs are over $800 million right now as a group.
Speaker Change: And we also should add in that discussion a little bit on collectives, which is a completely different business and I know not the government of your question, but it's another way of our being in different as to the buckets or the packaging, but getting the investment management through in different markets.
Speaker Change: So that's our strategy on active Etfs and we still feel we're in the early innings on the active Etfs and our read.
Speaker Change: Ready to proceed.
Speaker Change: And you asked the specific question about how much is in the MDT.
Speaker Change: ETF is at 25, yes.
Speaker Change: There are four active.
Speaker Change: MDT Etfs and they collectively have.
Speaker Change: $250 million and they're relatively new they were launched in July of 2024.
Speaker Change: Got it thank you.
Speaker Change: Okay.
Speaker Change: Your next question is a follow up question from Patrick Davitt. Your line is live.
Speaker Change: Okay.
Patrick Davitt: Hey, thanks for the follow up.
Patrick Davitt: So I think you said M D T 15 billion.
Patrick Davitt: So that's a pretty incredible organic growth rates are there any capacity issues with them taking them that much money at one time.
Patrick Davitt: No.
Patrick Davitt: We're not looking like on any of those mandates that we're thinking about capacity issues. So.
Patrick Davitt: We're quite enthusiastic about keeping the growth going.
Speaker Change: Great. Thank you.
Patrick Davitt: Okay.
Patrick Davitt: Okay.
Patrick Davitt: We have reached the end of our question and answer session and I will now turn the call over to Ray Hanley for closing remarks.
Ray Hanley: Thank you for joining us today for our call and that concludes the call. Thank you.
Ray Hanley: Thank you. This concludes today's conference and you may disconnect your lines at this time.
Ray Hanley: For your participation.
Ray Hanley: Yes.