Federated Hermes (FHI) risk factors, FY2025 10-K

Federated Hermes's FY2025 10-K, filed Feb 27, 2026, lists 25 risk factors in 9 groups. Against the prior year's 25: 1 new, 1 dropped, 17 substantially reworded.

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Risk factors listed
259 groups
New this year
1vs 25 last year
Dropped
1since the prior 10-K
Substantially reworded
17of those kept
Section length
13k wordsItem 1A

What the changes say

  • Strategic-transaction risk now covers partnerships, investments and integration, not just acquisitions.
  • Renewable-energy development adds milestone-based, harder-to-forecast revenue and new competitive exposure.
  • Capital requirements now specifically include the broker-dealer and may constrain subsidiary operations.
  • Interest-rate risk now extends to real estate and other alternative offerings.

What changed since the prior 10-K

New

  • NewOther General Risks

    No Assurance of Successful Strategic Transactions

    Acquisitions and other strategic transactions may fail because suitable targets, capital, aligned partners, agreements, or successful integration are unavailable.

Dropped

  • DroppedOther General Risks

    No Assurance of Successful Acquisitions

Reworded

  • 95% rewrittenRisks Related to Federated Hermes’ Investment Management Business and Offerings

    Risks Related to the Development of New Offerings

    Adds customer demand for tailored investment outcomes and value-added services beyond traditional offerings.

  • 88% rewrittenRisks Related to Federated Hermes’ Investment Management Business and Offerings

    Potential Adverse Effect of Providing Financial Support to Investment Offerings

    Clarifies that financial support may need timely deployment and can reduce capital available for corporate or liquidity needs.

  • 87% rewrittenEconomic and Market Risks

    No Assurance of Access to Sufficient Liquidity or Capital

    Specifically identifies the broker-dealer and warns that capital increases, losses, or extraordinary charges could restrict subsidiary operations.

  • 86% rewrittenRisks Related to Interest Rates and Investment Performance

    Potential Adverse Effects of Rising Interest Rates

    Adds reduced demand, financing costs, and weaker values and returns for real estate and other alternative offerings.

  • 78% rewrittenRisks Related to Federated Hermes’ Investment Management Business and Offerings

    Potential Adverse Effects of Changes in Federated Hermes’ Distribution Channels

    Adds renewable-energy project development, including origination and monetization, and warns milestone-based revenue can be volatile and difficult to forecast.

  • 66% rewrittenRisks Related to Federated Hermes’ Investment Management Business and Offerings

    Potential Adverse Effects of Declines in the Amount of or Changes in the Mix of Assets under Management

    Simplifies the fee and distribution-expense discussion without materially changing the asset-mix risk.

  • 62% rewrittenEconomic and Market Risks

    Potential Adverse Effects of a Decline or Disruption in the Economy or Markets

    Recasts the economic-risk examples and adds private and public debt, fiscal or monetary policy shifts, and central-bank actions.

  • 60% rewrittenRisks Related to Federated Hermes’ Investment Management Business and Offerings

    Potential Adverse Effects of Increased Competition in the Investment Management Business

    Adds intermediary prioritization of proprietary or competitor products and internal cannibalization from clone offerings and exchange-traded share classes.

  • 53% rewrittenRisks Related to Federated Hermes’ Investment Management Business and Offerings

    Risk of Federated Hermes’ Money Market Offerings’ Ability to Maintain a Stable Net Asset Value

  • 50% rewrittenRegulatory and Legal Risks

    Potential Adverse Effects of Changes in Laws, Regulations and Other Regulatory Requirements

  • 48% rewrittenRisks Related to Federated Hermes’ Investment Management Business and Offerings

    Potential Adverse Effects of Termination or Failure to Renew Advisory Agreements

  • 45% rewrittenRisks Related to Interest Rates and Investment Performance

    Potential Adverse Effects of Poor Investment Performance

  • 45% rewrittenRisks Related to Federated Hermes’ Investment Management Business and Offerings

    Potential Adverse Effects of a Material Concentration in Revenue

  • 43% rewrittenRisk Related to Federated Hermes’ Common Stock and Corporate Structure

    Common Stock and Status as a Controlled Company

    Was: Status as a Controlled Company

  • 40% rewrittenRisks Related to Interest Rates and Investment Performance

    Potential Adverse Effects of Low Short-Term Interest Rates

  • 35% rewrittenRegulatory and Legal Risks

    Potential Adverse Effects of Litigation, Investigations, Proceedings and Other Claims

  • 31% rewrittenOperations-Related Risks

    Artificial Intelligence Risks

All 25 risk factors

Headings as the filing states them, in filing order.

Risks Related to Federated Hermes’ Investment Management Business and Offerings

  1. 01Potential Adverse Effects of a Material Concentration in Revenue45% rewritten
  2. 02Potential Adverse Effect of Providing Financial Support to Investment Offerings88% rewritten
  3. 03Risk of Federated Hermes’ Money Market Offerings’ Ability to Maintain a Stable Net Asset Value53% rewritten
  4. 04Potential Adverse Effects of Increased Competition in the Investment Management Business60% rewritten
  5. 05Risks Related to the Development of New Offerings95% rewritten
  6. 06Potential Adverse Effects of Changes in Federated Hermes’ Distribution Channels78% rewritten
  7. 07Potential Adverse Effects of Declines in the Amount of or Changes in the Mix of Assets under Management66% rewritten
  8. 08Potential Adverse Effects of Termination or Failure to Renew Advisory Agreements48% rewritten

Risks Related to Interest Rates and Investment Performance

  1. 09Potential Adverse Effects of Rising Interest Rates86% rewritten
  2. 10Potential Adverse Effects of Low Short-Term Interest Rates40% rewritten
  3. 11Potential Adverse Effects of Poor Investment Performance45% rewritten

Risk Related to Federated Hermes’ Common Stock and Corporate Structure

  1. 12Common Stock and Status as a Controlled Company43% rewritten

Economic and Market Risks

  1. 13Potential Adverse Effects of a Decline or Disruption in the Economy or Markets62% rewritten
  2. 14No Assurance of Access to Sufficient Liquidity or Capital87% rewritten

Regulatory and Legal Risks

  1. 15Potential Adverse Effects of Changes in Laws, Regulations and Other Regulatory Requirements50% rewritten
  2. 16In addition, a FTT, particularly if enacted with broad application in the U.K., the EU, or the U.S., would be detrimental to Federated Hermes’ business and offerings
  3. 17For a further discussion of U.S. and international regulatory developments and regulatory requirements that can impact Federated Hermes and its business and offerings, see Item 1 – Business – Regulatory Matters
  4. 18Potential Adverse Effects of Litigation, Investigations, Proceedings and Other Claims35% rewritten
  5. 19Risks Related to Auditor Independence

Operations-Related Risks

  1. 20Systems, Technology and Cybersecurity Risks
  2. 21Artificial Intelligence Risks31% rewritten

Other General Risks

  1. 22Recruiting and Retaining Key Personnel (Human Capital Resource Management Risk)
  2. 23No Assurance of Successful Strategic TransactionsNew
  3. 24Potential Adverse Effects of Reputational Harm
  4. 25Potential Adverse Effects of Unpredictable Events or Consequences

Other Federated Hermes 10-Ks

  • FY2024 10-K risk factors
    25 risks

    Money market assets generated approximately 51% of 2024 revenue, creating significant exposure to stable-NAV and interest-rate risks.

    Filed Feb 28, 2025

About this page

The headings are the filing's own. The one-line readings and the overview are automated and can be wrong: read Item 1A of the 10-K for the exact wording.