Federated Hermes' APAC Tokenization Push: A New AUM Growth Lever?

Federated Hermes, Inc. FHI is expanding its presence in the Asia-Pacific (APAC) region through a strategic alliance with Singapore-based Conduit Digital Holdings, a subsidiary of Conduit Group. Under the agreement, a regulated tokenized fund structure will be established in APAC, through which a Conduit-managed fund will invest in FHI’s Short-Term U.S. Prime Fund. Shares of the Conduit-managed fund will then be tokenized and offered to institutional and wholesale investors across the region.

The initiative gives FHI another channel to distribute its money market capabilities while tapping into the growing institutional adoption of blockchain-based financial infrastructure. Importantly, the latest move is FHI’s first digital-assets initiative in APAC, adding a new dimension to its regional growth strategy.

The alliance builds on FHI’s established APAC footprint. The company has maintained a presence in APAC since 2010, with offices in Singapore, Tokyo and Sydney, and plans to open a Hong Kong office to deepen relationships with private banks, family offices, wealth intermediaries and institutional investors. Adding regulated tokenization infrastructure to this footprint could help FHI broaden access to institutional investors and expand its reach across the region.

The Conduit partnership also complements FHI’s broader efforts to bring money market products into the digital-asset ecosystem. In June 2026, the company launched its first GENIUS Act-aligned money market fund in the United States to support stablecoin reserves, with potential for tokenization. Earlier, in October 2025, FHI partnered with UK-based Archax to provide tokenized access to three UCITS money market funds, marking its first non-U.S. digital-assets initiative. The latest alliance therefore represents a further step in FHI’s strategy to integrate its money market capabilities with emerging digital-finance infrastructure.

FHI’s strong money market franchise provides a solid foundation for these initiatives. Its money market assets increased at a five-year compound annual growth rate of 10.2% through 2025 and reached $676.9 billion as of June 30, 2026, up 7% year over year. It accounted for nearly 74.2% of total assets under management (AUM). This sizable asset base gives FHI significant scope to use tokenization to expand distribution as digital investment products gain wider institutional acceptance.

Beyond expanding distribution, tokenization could enhance the utility of FHI’s money market products. Tokenized fund shares could support faster settlement, facilitate collateral management and enable integration with digital treasury and AI-based treasury management systems. As digital-finance infrastructure develops, these capabilities could make money market funds more relevant to institutional workflows and potentially support demand for FHI’s products.

Overall, the Conduit alliance strengthens FHI’s broader APAC expansion and digital-assets strategy rather than serving as an immediate earnings catalyst. Its established regional presence, strong money market franchise and growing tokenization capabilities could broaden distribution and create new avenues for AUM and fee-revenue growth. However, adoption, regulatory developments and institutional demand will determine the pace and financial impact of these initiatives.

How Other Asset Managers Are Expanding Into Tokenized Finance

Similar to FHI, its peers, Franklin Templeton Inc. BEN and BlackRock BLK, are expanding their presence in tokenized assets and blockchain-based financial products.

Franklin Templeton is deepening its focus on tokenized financial products. In June 2026, Franklin Templeton partnered with MoonPay to expand distribution of its tokenized money market funds and facilitate stablecoin-to-fund access for eligible institutions. Its tokenized fund offerings and broader digital-asset initiatives could broaden distribution, attract institutional flows and create new growth opportunities beyond traditional asset management.

BlackRock is also expanding its digital-asset capabilities. In August 2026, BlackRock launched tokenized share classes for select European Institutional Cash Series money market funds through Kinexys, J.P. Morgan’s blockchain and tokenization platform. Earlier, in November 2025, it partnered with Binance to allow its tokenized BUIDL money market fund to serve as collateral for crypto trading, enhancing its utility and institutional appeal.

FHI’s Price Performance & Zacks Rank

Over the past six months, shares of Federated Hermes have gained 10.5% compared with the industry’s growth of 10%.

Image Source: Zacks Investment Research

The company currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Research Chief Names "Single Best Pick to Double"

From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.

This company targets millennial and Gen Z audiences, generating nearly $1 billion in revenue last quarter alone. A recent pullback makes now an ideal time to jump aboard. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research