Invesco

THE SCOOP

Formerly named AMVESCAP, INVESCO is one of the world's largest publicly listed fund managers, $348.2 billion in assets under management as of March 31, 2009.  The company markets its services to individuals, corporations and government institutions alike, and transacts principally through six brands: AIM Investments, which operates primarily in North America, managing and distributing mutual funds to retail and institutional clients; AIM Trimark, which offers investment solutions to institutions, organizations, companies and individual investors across Canada; INVESCO, which manages a wide variety of financial products, including equities, fixed income, and alternative investment products; Invesco Perpetual, which offers U.K. clients ICVCs, investment trusts, PEPs, ISAs, pension products, offshore funds, institutional funds and other specialist mandates; Atlantic Trust, its private wealth management division for high-net-worth individuals, families and foundations; and PowerShares, which is known for its broad lineup of distinctive exchange-traded funds.


INVESCO, which functions as a holding company, allowing its operating business wide latitude in the areas of fund management and client service, is listed on the London, New York and Toronto stock exchanges.  Its 5,122 employees work in 55 offices and 20 countries in North America, Europe and Asia.  In May 2007, shareholders voted to change the firm's name from AMVESCAP to INVESCO to "more accurately reflect our integrated strategy that united all of our businesses under a shared culture," according to Marty Flanagan, president and CEO, in a press release.


Founded in 1976, Houston-based Invesco AIM maintains INVESCO's biggest U.S. presence.  AMVESCAP's global investment management presence is maintained through INVESCO.  With offices throughout North America, Asia and Europe, the subsidiary managed $348 billion in assets as of March 31, 2009.  Its investment products span a wide range of asset classes from fixed income to value, core and growth equities to alternative investments such as real estate and private capital.


The companies that would eventually become AMVESCAP formed separately in the late 1970s. In 1978, Charles Brady, along with eight associates, purchased the pension management department of the Atlanta bank at which they were employed, and launched INVESCO.  Through several acquisitions over the next 20 years, along with a merger with the 100-year-old Britannia Arrow in 1988, which give the firm its listing on the London Stock Exchange, INVESCO gained prominence worldwide.  At around the same time INVESCO was launched, Ted Bauer, Robert Graham and Gary Crum left the asset management department of the insurance firm at which they were working and opened a mutual fund company called AIM. Soon after, they began a rash of acquisitions that would make AIM a household name.  By 1993, the company would rank among the top-25 U.S. mutual fund managers by total assets.


Both companiesâ€"INVESCO and AIMâ€"continued to grow rapidly and simultaneously, in large part through strategic acquisitions in the 1990s.  In February 1997, through the merging of the two companies, AMVESCAP was born, creating a truly global firm with $200 billion in funds under management.  In 2001, the company established the third of its three major areas of investment distribution with the acquisition of Boston-based Pell Rudman, which offered products and services to the high-net-worth channel.  It later rebranded the business as Atlantic Trust and made two additional acquisitions: New York-based Whitehall Asset Management in 2002, and Chicago-based Stein Roe Investment Counsel in 2004.  In retrospect, some have said that the firms's overpaid for many of its recent acquisitions, particularly given the floundering equity markets.


In June 2003, one of the firm's U.S. mutual fund businesses, INVESCO Funds Group, announced that it would close down 21 portfolios and fold them into other ones in an effort to cut costs. AIM said that seven of its funds and 14 INVESCO funds, with an approximate value of $4.5 billion, would be eliminated as a result of the merged portfolios.  At the same time, the firm decided to use the AIM brand for all of its U.S. retail funds, effectively shutting down INVESCO Funds Group, leaving INVESCO as an institutional brand in the U.S.


The company suffered another blow in 2003, when it was one of many U.S. mutual fund firms charged by the SEC with allowing several unauthorized trades in some of its funds.  As part of an industry-wide crackdown, the firm's INVESCO Funds Group in Denver was accused of being involved in a "massive mutual fund scheme'' by allowing privileged clients to trade in and out of shares of the company's funds, thereby profiting at the expense of the fund's long-term shareholders.  In September 2004, the firm agreed to settle the case, paying $450 million.

 

IN THE NEWS

 

October 2009: Snapping up Morgan’s mutual funds

 

Invesco purchased Morgan Stanley’s mutual fund business, including its Van Kampen Investments subsidiary, for $1.5 billion.  The transaction provided Invesco with $119 billion in total assets under management, and Morgan Stanley with $500 million in cash and a 9.4 percent stake in Invesco.  The deal also put Invesco in the top 10 among U.S. fund managers, along with giving it $70 million in synergies.  Invesco confirmed that it expects to incur about $100 million to $125 million in integration charges in 2010.

 

July 2009: Revenue plunges but beats Wall Street expectations
 
Atlanta-based global asset manager Invesco reported a profit of $75.7 million for the second quarter 2009, a 54 percent fall versus the same period a year earlier.  The firm suffered from lower revenue and fees as a result of weary investors removing money from accounts.  Operating revenue fell to $625 million from $935 million mainly due to lower investment-management fees.  Assets under management totaled $389 million compared with $461 million in the second quarter of 2008, but were up from $348 in the first quarter of 2009.  The increase was due to favorable changes in foreign exchange rates (about one third of Invesco’s clients are overseas).

 

May 2009: A new trust

 

Invesco filed an official statement with the Securities and Exchange Commission to form an IPO for its newly established Invesco Mortgage Capital, a real estate investment trust.  The trust, which will invest in residential and commercial mortgage-backed securities and mortgage loans, is part of a governmental program that uses matching funds from the government to get private investors to purchase loan pools.  Invesco’s investment in the program is part of a group effort led by billionaire Wilbur Ross, who owns the Invesco affiliate WL Ross & Co.


April 2009: Taking a dive

 

For first quarter 2009, Invesco posted a 80 percent drop in net income down to $30.7 million.  The firm cited investment-related writedowns and a 40 percent decrease in investment-management fees as reasons for the decline.  Net revenue, too, spiked 40 percent downward to $548.6 million.  While the industry’s outlook has recovered slightly from the last quarter of 2008, the firm has still been affected by investors’ move away from stick funds.


January 2009: Full-year decline

 

For full-year 2008, Invesco posted $481.7 million in net income, down from the $673.6 million it posted in 2007.  Net revenue took a tumble as well, falling to $2.49 billion in 2008 from $2.88 billion in full-year 2007.  The firm cited “economic uncertainty†and “global market declines†as reasons for “a diminished pool of global of assets under management across the industry.â€

 

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Invesco


4350 S. Monaco St.
Denver, CO 80237
Phone: (720) 624-6300
www.invescofunds.com

STATS


  • Employer Type: Public
  • Stock Symbol: IVZ
  • Stock Exchange: NYSE
  • Chairman: Rex Adams
  • 2006 Employees: 5,574

Key Financials

  • 2006 Revenue: $2,410 million

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