Liquidity

Alongside our equity, fixed income and stewardship capabilities, Federated Hermes provides a range of liquidity solutions and manages over US$560bn in liquidity assets globally.¹ Liquidity is one of our core capabilities, developed over 50 years of managing cash assets for our clients.²

¹ As at 31.12.2023.
² Federated Hermes Inc. (FHI) has been running institutional money market portfolios since 1974.

Overview and investment approach

We offer a range of sterling-, euro- and dollar-denominated short-term and standard money market funds as well as bespoke solutions for institutional investors. Our clients include multi-national corporates, pension funds, local government organisations and wealth managers.

We seek to provide liquidity, the stability of principal and a competitive yield – driven by a relative value approach across the yield curve, across different sectors and across different security types.

We seek to:

Why Federated Hermes liquidity management?

A unique offering

Expertise at scale

A tried-and tested investment process

In-depth industry experience

A unique offering.

Our UK sterling-denominated funds are the only UK-domiciled money market funds.

Expertise at scale.

We are one of the industry’s largest liquidity managers. Cash management is a core focus, fuelled by our commitment to the innovation of liquidity products.

A tried-and tested investment process.

We have an established and thorough credit process that includes ESG analysis to compile a select approved credit list.

In-depth industry experience.

The UK portfolio management team has over 20 years’ average experience managing liquidity assets.

Investment philosophy and process

Credit research

Credit research is the foundation of our investment process. Our experienced team assesses capitalisation, liquidity, qualitative considerations, profitability and agency ratings. We then use proprietary decision tools to determine an internal credit rating.

ESG

We integrate environmental, social and governance (ESG) factors into an intensive credit review process in a non-exclusionary way.

ESG Dashboard

We synthesize key metrics into a proprietary ESG Dashboard, which provides a concise assessment of a company’s exposure to material ESG risks.

Portfolio

Our portfolio managers construct portfolios based on an approved-issuer database while considering relative-value analysis, average maturity targets and liquidity management.

Liquidity solutions at-a-glance

Short Duration Bond

* Only available to UK investors.
** These strategies are run by our US-based Liquidity Management Team.
*** This strategy is run by our US-based International Fixed Income Group.

Targets cannot be guaranteed.

ESG in liquidity

Integrating environmental, social and governance (ESG) issues into the investment management process has evolved with the market’s recognition of how an institution’s long-term strategic focus on corporate sustainability can enhance its risk-return profile. Lessons learned from the recent past also underline the importance of identifying and avoiding risky corporate management structures and/or ill-focused strategic priorities.

Despite the relevance of ESG considerations for investors, the money market space is particularly challenging when it comes to integrating ESG data into the investment process in a non-exclusionary way.

Federated Hermes believes the combination of deep ESG analysis and impactful engagement can make genuine ESG integration possible. We combine ESG analysis on an issuer level with direct engagement with corporate entities, global banks and other issuing institutions.

Sources:

Investments

Sustainability

EOS Stewardship

Insights

Overview and investment approach

Why Federated Hermes liquidity management?

A unique offering.

Expertise at scale.

A tried-and tested investment process.