Invesco enjoyed solid gains for the latest quarter, with President and CEO Andrew Schlossberg, on an earnings call, reporting record assets under management, continued robust net long-term inflows and improved operating leverage.
The Atlanta-based manager reported $16.5 billion in net long-term inflows for the three months ended Sept. 30, roughly in line with the prior quarter's $16.7 billion and up sharply from $2.6 billion for the year-earlier period.
Together with market-related gains, the latest inflows lifted Invesco’s AUM to a record $1.8 trillion, up 4.7% from the prior quarter and up 21% from the year before.
Passive strategies accounted for the bulk of Invesco’s third quarter gains, with $17.1 billion in net, long-term inflows more than offsetting $600 million of outflows from Invesco’s active offerings.
The manager reported $17.7 billion of net long-term inflows for the firm’s ETFs and index strategies. Inflows of $5.9 billion for fundamental fixed income, meanwhile, were offset by $6.3 billion in outflows from fundamental equities. Elsewhere, multiasset strategies saw inflows of $300 million, but the firm’s APAC managed and private markets businesses saw outflows of $800 million and $300 million, respectively.
Retail funds saw net long-term inflows of $12.9 billion, while institutional inflows came to $3.6 billion.
The firm’s latest adjusted operating margins stood at 31.6%, up from 30.9% in the prior quarter and 28.2% for the year-earlier quarter.
Allison Dukes, Invesco’s chief financial officer, while welcoming the latest improvement, told analysts the firm is focused on “getting ourselves back to a mid-30s operating margin ... we’re nowhere near where we want to be or intend to be.”
Schlossberg told analysts that signs of life now in the long-struggling China market, where the firm’s joint venture, Shenzhen-based Invesco Great Wall Fund Management Co., currently manages roughly $90 billion for local investors, could help Invesco move in that direction.
With China’s government showing a willingness to take stronger stimulus steps in recent weeks, the dynamics have certainly “changed a lot in China and will have an impact,” auguring a shift from fixed income to equity strategies there over time, he said.
“From a fee rate perspective … that’s a generally good thing for our business,” even if the situation is likely to remain volatile, Schlossberg said.
Schlossberg noted that Invesco’s three big geographic segments all enjoyed net inflows for the latest quarter. The firm’s Asia-Pacific business saw net long-term inflows of $5.1 billion, or 9%, to $266.6 billion, while inflows of $8.3 billion, or 4%, for its Americas business lifted AUM to $1.24 trillion. The EMEA region, meanwhile, saw net inflows of $3.1 billion, or 5%, to $234.6 billion.
