Federated Hermes announces two fixed-income promotions, naming next fixed-income chief investment officer and head of Municipal Bond Group

Rhea-AI Summary

Federated Hermes (NYSE: FHI) announced fixed-income leadership changes effective May 1, 2026: R.J. Gallo will become chief investment officer for global fixed income, succeeding Robert Ostrowski who will retire after 38 years; Ann Ferentino will become sole head of the Municipal Bond Group. Fixed-income AUM total $101.8 billion and municipal managed assets total $7.1 billion as of Sept. 30, 2025. The global fixed-income team has 107 professionals; the municipal team has nine members. The moves are described as part of a long-term succession plan and maintain continuity of existing strategies and processes.

Positive

• Succession plan preserves continuity with internal hire R.J. Gallo as CIO
• Fixed-income assets under management of $101.8 billion as of Sept. 30, 2025
• Municipal managed assets of $7.1 billion remain under experienced leadership
• Track record: fixed-income AUM grew by $72.3 billion since April 2004

Negative

• Leadership change effective May 1, 2026 introduces short-term transition risk
• Departure of long-tenured CIO Robert Ostrowski removes 38 years of institutional experience

Key Figures

Global fixed-income AUM $101.8 billion Fixed-income products as of Sept. 30, 2025

Municipal managed assets $7.1 billion Municipal assets as of Sept. 30, 2025

Total AUM $871.2 billion Firmwide assets under management as of Sept. 30, 2025

Fixed-income AUM growth $72.3 billion increase Growth since CIO appointment in April 2004 to Sept. 30, 2025

Global fixed-income team size 107 professionals Average 19 years industry, 14 years at Federated Hermes

Municipal fixed-income team 9 members Average 18 years industry, 16 years at Federated Hermes

Municipal SMA team 8 members Average 26 years industry, 15 years combined firm/CW Henderson

Ostrowski tenure 38 years Investment experience at Federated Hermes prior to May 1, 2026 retirement

Market Reality Check

$52.88 Last Close

Volume Volume of 434,415 shares is below the 20-day average of 549,427, suggesting limited pre‑announcement positioning. normal

Technical Shares at $52.60 are trading above the 200-day MA of $47.52, indicating an established uptrend into this management news.

Peers on Argus

FHI was down 1.0% with several asset‑management peers also lower (e.g., AB -1.19%, VCTR -1.46%, APAM -1.82%, GBDC -2.32%), but no peers appeared in the momentum scanner, pointing to stock‑specific rather than momentum‑driven sector flows.

Common Catalyst Same‑day peer headlines focus on upcoming earnings report dates, indicating routine disclosure activity across the group.

Historical Context

Date	Event	Sentiment	Move	Catalyst
Dec 15	Fund data update	Neutral	-0.5%	Release of month‑end portfolio and performance data for FMN.
Dec 10	Dividend declaration	Positive	+1.5%	Tax‑free dividend of $0.0450 per share with unchanged rate.
Dec 02	Leadership changes	Neutral	+0.9%	Planned shifts in investment and distribution leadership for 2026.
Nov 17	Fund data update	Neutral	-2.4%	Month‑end portfolio composition and performance data for FMN.
Nov 10	Dividend declaration	Positive	+0.4%	Tax‑free FMN dividend of $0.0450 per share and manager retirement note.

Pattern Detected

Recent FHI headlines have been routine (fund data, dividends, leadership changes) with modest price reactions, and no clear pattern of persistent selling or buying around such news.

Recent Company History

Over the last few months, FHI news has centered on fund‑level updates and corporate governance. Two releases on Premier Municipal Income Fund portfolio data in November and December 2025 saw small price moves, while recurring tax‑free dividend declarations produced mild positive reactions. A December 2025 leadership transition announcement for advisory and distribution roles also coincided with a modest gain. Today’s fixed‑income succession update continues this theme of planned management changes within a firm managing $871.2 billion in AUM as of Sept. 30, 2025.

Market Pulse Summary

This announcement details a planned fixed-income succession, with R.J. Gallo set to oversee $101.8 billion in global fixed-income assets and Ann Ferentino taking sole leadership of $7.1 billion in municipal assets as of Sept. 30, 2025. It follows other recent leadership updates and underscores the depth of a 107-member global fixed-income team and experienced municipal teams. Investors may focus on execution of this transition into 2026 and ongoing trends in the firm’s $871.2 billion total AUM.

Key Terms

municipal bond financial

"Municipal Bond Group Co-head Ann Ferentino to become sole head of group"

A municipal bond is a loan investors make to a city, county, school district or other local government agency in exchange for regular interest payments and the return of the loaned principal at a set date. It matters to investors because municipal bonds often provide steady, relatively low-risk income and can be exempt from federal (and sometimes state or local) taxes, so they’re like lending money to a town in return for predictable payments and potential tax savings, while still carrying credit and interest-rate risk.

closed-end funds financial

"served as portfolio manager spanning mutual funds, collective investment funds, SMAs and closed-end funds"

A closed-end fund is an investment pool that raises a fixed amount of money by issuing a set number of shares, which then trade on an exchange like stocks. Unlike bank-style mutual funds that buy or sell shares on demand, its market price can sit above or below the fund’s per-share value of holdings (like a used-car market price versus the sticker price), so investors should watch both the traded price and the underlying asset value for potential bargains or risks.

separate account products financial

"collaborative process for both its fund and separate account products"

Investment portfolios set up and managed separately for a specific client or group within an insurance or asset-management contract, where the assets are kept apart from the company’s own funds. They matter to investors because they offer customized risk and return profiles, clearer ownership of underlying holdings, potential protection from the provider’s creditors, and distinct fees and tax treatment — like having a dedicated suitcase for your money rather than a shared trunk.

assets under management financial

"global leader in active investment management, with $871.2 billion in assets under management"

Assets under management (AUM) is the total value of all the investments that a financial company or fund is responsible for overseeing on behalf of its clients. It’s like a big bucket that shows how much money the firm is managing for people or organizations. A higher AUM often indicates a larger, more trusted company, and it can influence how much money they earn and the services they can offer.

collective investment funds financial

"served as portfolio manager spanning mutual funds, collective investment funds, SMAs and closed-end funds"

A collective investment fund is a pool of money from many investors that is managed together by professionals to buy a mix of stocks, bonds or other assets; think of it as a shared shopping cart where each person adds money to buy a diversified set of investments they might not afford alone. It matters to investors because pooling lowers individual risk, gives access to professional management and scale benefits, and concentrates fees and rules that affect returns and liquidity.

AI-generated analysis. Not financial advice.

• Current Deputy CIO R.J. Gallo to succeed CIO Robert Ostrowski, who will retire in May
  
  
• Municipal Bond Group Co-head Ann Ferentino to become sole head of group

PITTSBURGH, Jan. 8, 2026 /PRNewswire/ -- Federated Hermes, Inc. (NYSE: FHI), a global leader in active investing, today announced that R.J. Gallo, CFA, senior vice president and deputy chief investment officer (CIO) for global fixed income and co-head of the Municipal Bond Group, will become CIO for global fixed income, succeeding Robert Ostrowski, CFA, executive vice president and current CIO for global fixed income. Additionally, Ann Ferentino, CFA, senior portfolio manager and co-head of Federated Hermes' Municipal Bond Group, will become the sole head of the group. The moves become effective with Ostrowski's May 1, 2026, retirement and are part of Federated Hermes' long-term succession plan.

As CIO, Gallo will oversee all aspects of Federated Hermes' investment processes across fixed-income products globally, which represent $101.8 billion in assets as of Sept. 30, 2025, managed in multisector, low duration, high-yield, municipal, US government, US corporate bond, international, global and mortgage-backed strategies. He also will be responsible for developing investment teams, as well as overseeing portfolios and risk management. He will continue to articulate Federated Hermes' fixed-income positioning to stakeholders, particularly clients.

Gallo also serves as senior portfolio manager and head of the duration committee, which is responsible for tactical portfolio duration positioning grounded in macroeconomic business cycle analysis and valuation indicators. In this capacity, he works alongside his peer committee chairs responsible for sector allocation, yield curve strategy, currency management and security selection—playing a central role in top-down and bottom-up client portfolio construction and performance attribution decisions.

Gallo joined Federated Hermes in 2000 and has 31 years of investment experience. Prior to joining Federated Hermes in 2000, Gallo was a financial analyst and trader at the Federal Reserve Bank of New York.

"R.J. has been an integral member of the Federated Hermes fixed-income team for decades and has served as portfolio manager spanning mutual funds, collective investment funds, SMAs and closed-end funds," said John Fisher, president and chief executive officer of the Federated Advisory Companies, the Federated Hermes business unit that oversees the firm's investment management areas. "R.J. not only possesses deep expertise in a wide range of areas, but also an ability to clearly articulate Federated Hermes' fixed-income strategies and how our tactical portfolio allocations reflect the Federated Hermes fixed-income team's market outlook."

As Gallo assumes his new responsibilities, Ferentino will become the sole head of the Municipal Bond Group. In this role, she will assume full oversight for Federated Hermes' municipal managed assets, which total $7.1 billion as of Sept. 30, 2025. Ferentino has been with Federated Hermes for 30 years. She continues to manage eight mutual funds and other client portfolios.

"Ann Ferentino brings a vast knowledge of municipal bond markets to her new role," Fisher said. "She has been integral to the performance of these assets, and we are confident that the team will continue to benefit from her skills, experience and perspective."

Ostrowski retires with 38 years of investment experience, all with Federated Hermes. Under Ostrowski's leadership, Federated Hermes built a deep and experienced fixed-income team and a collaborative process for both its fund and separate account products. Since Ostrowski was named CIO in April 2004, Federated Hermes' fixed-income assets under management have grown from $29.5 billion to $101.8 billion, as of Sept. 30, 2025, an increase of $72.3 billion.

"We thank Bobby for his outstanding contributions during his 38 years with the firm," Fisher said. "During his tenure in investment management, Bobby established and grew our reputation for strong, risk-adjusted results in our multisector products throughout business cycles. Federated Hermes' clients can be assured that we will continue to offer the same strategies and processes that have earned our well-deserved reputation as a strong fixed-income manager."

The global fixed-income team is comprised of 107 fixed-income investment professionals, who average 19 years of industry experience and 14 years of experience at Federated Hermes. The nine-member municipal fixed-income team averages 18 years of industry experience and 16 years at Federated Hermes. The eight-member municipal SMA team led by Matthew Andrews, senior portfolio manager, who reports to Ferentino, averages 26 years of industry experience, including 15 years of combined Federated Hermes and CW Henderson experience.

Federated Hermes, Inc. (NYSE: FHI) is a global leader in active investment management, with $871.2 billion in assets under management, as of Sept. 30, 2025. We deliver investment solutions that help investors target a broad range of outcomes and provide equity, fixed-income, alternative/private markets, multi-asset and liquidity management strategies to more than 10,000 institutions and intermediaries worldwide. Our clients include corporations, government entities, insurance companies, foundations and endowments, banks and broker/dealers. Headquartered in Pittsburgh, Federated Hermes has more than 2,000 employees in London, New York, Boston and offices worldwide. For more information, visit FederatedHermes.com/us.

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Certain statements in this press release, such as those relating to the ability to offer the same investment strategies and processes, may constitute forward-looking statements, which involve known and unknown risks, uncertainties and other factors that may cause the actual results, levels of activity, performance or achievements of the company, or industry results, to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. Other risks and uncertainties include the risk factors discussed in the company's annual and quarterly reports as filed with the Securities and Exchange Commission and in each fund's registration statement (e.g., prospectus and statement of additional information). As a result, no assurance can be given as to future results, levels of activity, performance or achievements, and neither the company nor any other person assumes responsibility for the accuracy and completeness, or updating, of such statements in the future.

View original content:https://www.prnewswire.com/news-releases/federated-hermes-announces-two-fixed-income-promotions-naming-next-fixed-income-chief-investment-officer-and-head-of-municipal-bond-group-302656810.html

SOURCE Federated Hermes, Inc.

FAQ

Who will be Federated Hermes' global fixed-income CIO after May 1, 2026?

R.J. Gallo will become CIO for global fixed income effective May 1, 2026.

When is Robert Ostrowski retiring from Federated Hermes (FHI)?

Robert Ostrowski will retire effective May 1, 2026 after 38 years with the firm.

How much in fixed-income assets does Federated Hermes manage under the new CIO?

Federated Hermes manages $101.8 billion in fixed-income products as of Sept. 30, 2025.

Who will lead Federated Hermes' Municipal Bond Group and what are the municipal assets?

Ann Ferentino will be sole head of the Municipal Bond Group, overseeing $7.1 billion in municipal managed assets as of Sept. 30, 2025.

What experience does R.J. Gallo bring to the CIO role at Federated Hermes (FHI)?

R.J. Gallo has 31 years of investment experience and has been with Federated Hermes since 2000.