Invesco Ltd. ((IVZ)) has held its Q3 earnings call. Read on for the main highlights of the call.
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Invesco Ltd. recently held its earnings call, revealing a strong financial performance marked by record assets under management (AUM) and significant inflows across various asset classes and regions. The sentiment during the call was largely positive, highlighting successes in expanding ETF offerings and private markets. However, challenges in fundamental equities and the slow restructuring of the QQQ ETF were noted as areas of concern.
Record AUM and Strong Inflows
Invesco achieved a record AUM of $2.1 trillion, with net long-term inflows of nearly $29 billion, representing an 8% annualized organic growth. This marked the best flow quarter since 2021, showcasing the company’s robust performance and investor confidence.
Successful ETF and Index Expansion
The company’s ETF and index offerings reached a milestone of $1 trillion in AUM. Invesco launched several new ETFs, including active ETFs, contributing to a 15% annualized organic growth in this segment, demonstrating strong demand and strategic expansion.
Progress in Private Markets
Private credit and direct real estate were significant contributors, driving $600 million in net inflows. Invesco launched three new CLOs and expanded partnerships with Barings, accelerating growth in private markets.
Strong Performance in China JV
Invesco’s joint venture in China reached a record high AUM of $122 billion, reflecting a 16% increase over the last quarter. The JV delivered $8.1 billion in net long-term inflows, highlighting its success in the region.
Deleveraging and Capital Management
Invesco repaid $260 million of a bank term loan, with plans to repay the remaining $240 million by the end of the month. This move is expected to capture 60% of the anticipated EPS run rate benefit, indicating strong capital management.
Fundamental Equities Outflows
Despite overall positive performance, Invesco faced $5 billion in net outflows from fundamental equities, primarily due to strategic repositioning in developing markets funds.
Non-Cash Impairment Charge
A non-cash impairment charge of $36 million was recorded following the sale of Intelliflo, a cloud-based practice management software subsidiary, reflecting strategic realignment.
Challenges in QQQ ETF Structure Change
The process of soliciting shareholder approval for modernizing the QQQ ETF structure has been slower than anticipated, requiring additional time to reach a quorum, posing a challenge for the company.
Forward-Looking Guidance
Invesco’s forward-looking guidance indicates significant progress across strategic initiatives, with expectations of continued growth driven by strong AUM and operational outcomes. The firm anticipates further streamlining operations and enhancing shareholder returns, positioning itself for sustained growth in dynamic markets.
In conclusion, Invesco’s earnings call reflected a positive sentiment with record AUM and strong inflows, particularly in ETFs and private markets. While challenges remain in fundamental equities and the QQQ ETF restructuring, the company’s strategic initiatives and forward-looking guidance suggest a promising outlook for sustained growth.