Helped by two large acquisitions, Invesco's AUM growth has been able to keep up with the asset management industry at large but has trailed better-performing peers BlackRock Inc. and T. Rowe Price Associates Inc. Questions remain whether activist investor Trian Fund Management LP's recent involvement, which includes a 9.9% stake and two board seats, will lead to significantly better shareholder and financial performance.
Keeping pace: Invesco had $1.4 trillion in AUM at the end of 2020. Including acquisitions, its average annual growth rate since 2005 was 13.4%. The manager's U.S. DC asset growth kept pace with the industry, but trailed leaders such as Vanguard. However, asset growth surpassed that of Fidelity Investments, the third-largest U.S. DC manager.
Asset growth rates, 2005-2020
Acquisitions help: Strategic acquisitions of ETF assets and large acquisitions of OppenheimerFunds and Morgan Stanley's retail asset management business have boosted overall AUM by more than $400 billion. Trian is lobbying Invesco to continue looking for merger targets.
Select acquisitions (dollar amounts are in millions)
ETF business of Guggenheim Investments
Religare Asset Mgmt.
Morgan Stanley's retail asset management business, including Van Kampen Investments
Slower growth: Invesco's revenue and profitability have grown at a much more modest pace than its overall AUM. Its profit margin in 2022 is forecast to be less than half of BlackRock and T. Rowe Price, even after cutting $200 million in costs.
T. Rowe Price
Net income (millions)
T. Rowe Price
Lagging peers: Invesco's 5.4% equity return from 2005 through 2020 trailed rivals T. Rowe Price and BlackRock, with 13.2% and 17.7%, respectively. Invesco's return also lagged the Dow Jones U.S. Asset Managers index and the S&P 500.