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Money Management

Invesco AUM down 9.5% in quarter, 5.3% for year

Invesco (IVZ) reported $888.2 billion in assets under management as of Dec. 31, down 9.5% from three months earlier and down 5.3% from a year earlier, according to the company's fourth-quarter earnings results released Wednesday.

The firm expects its total AUM will be more than $1.1 trillion in the second quarter of this year, once its acquisition of OppenheimerFunds from Massachusetts Mutual Life Insurance Co. closes, its earnings report said.

Invesco reported net outflows of $18.1 billion for the fourth quarter, compared to net outflows of $4.9 billion for the third quarter and net outflows of $3.2 billion for the fourth quarter of 2017.

Long-term net outflows were $20.1 billion in the fourth quarter, compared to $11.2 billion in net outflows in the prior quarter and $1.5 billion in net outflows in the fourth quarter of 2017.

Net outflows from active strategies of $16.4 billion were the highest contributor to long-term redemptions, while net outflows from passive strategies totaled $3.7 billion in the fourth quarter.

Similarly, in the third quarter, the $10.9 billion of net outflows in active strategies far outpaced the $300 million of net outflows from passive strategies. In comparison, in the fourth quarter of 2017, active strategies saw $2.3 billion in net outflows and passive strategies saw $800 million in net inflows.

Invesco (IVZ)'s institutional money market business had $3.2 billion in net inflows during the quarter ended Dec. 31, compared to $3.1 billion in net inflows in the third quarter, and $3.3 billion in net outflows in the fourth quarter of 2017.

Non-management fee-earning AUM, including Invesco's PowerShares ETF business, experienced net outflows of $1.2 billion in the fourth quarter, net inflows of $3.2 billion in the third quarter and $1.6 billion in net inflows in the fourth quarter of 2017.

Net revenue was $919.2 million in the fourth quarter, down 4.9% over the prior quarter and down 8.5% from the year-earlier quarter.

Net income was also down for the quarter and year. In the fourth quarter, net income was $114.2 million, down 57.6% over the third quarter and down 72% compared to the fourth quarter of 2017.

Invesco has separately implemented cost-saving initiatives in the fourth quarter, which included canceling requests to fill open roles at the company, deferring new hires and "limiting discretionary, non-client-related travel, conferences and professional/contractor services," the earnings report said.

" Invesco's fourth-quarter operating results reflect market declines and a challenging investment environment at the end of 2018," said Martin L. Flanagan, president and CEO, in news release that accompanied the earnings report.

Regarding the acquisition of OppenheimerFunds, Mr. Flanagan later added: "The combination will further accelerate the firm's growth initiatives, strengthen Invesco's scale and client relevance, expand our comprehensive suite of differentiated investment capabilities and provide compelling financial returns for shareholders."