Federated Earnings Ride High on Money Fund Asset Surge in Q2. Federated Investors announced impressive Q2 2007 earnings last night and hosted its conference call this morning. Assets and earnings were up 23% over the year earlier period. "The environment for cash management products during the second quarter benefited Federated across our distribution channels, as the firm saw $8.6 billion in asset growth in our money market funds, said CEO J. Christopher Donohue. Federated's money fund assets reached a record $193.4 billion, up $35.1 billion (22%) over 1 year and up $7.4 billion (4%) in Q2. Increases were largest in the broker-dealer segment (up $5 billion) -- the acceleration was caused by "interest rates making money funds more attractive". The company now manages $450 million in CFTC and $800 million in OCC "functional equivalency" collateral cash. Federated continues to lobby for 15c3-3 broker cash, noting the introduction of House bill 1171. Money funds account for 48% of Federated's revenue, so the company serves as a bellwether for the industry overall.

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