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Invesco's October AUM Increases

Zacks Equity Research

Invesco Ltd. (IVZ) reported a rise in its preliminary month-end assets under management (:AUM) for Oct 2013. The AUM for the month was $763.9 billion, up 2.5% from $745.5 billion at the end of Sep 2013.

Favorable market returns and positive long-term net flows primarily aided the growth. However, foreign exchange led to a $1.2 billion decline in AUM. In October, Invesco’s preliminary total average AUM was $752.4 billion and preliminary active AUM was $621.4 billion.

At the end of October, Invesco’s total equity AUM increased 3.7% to $366.2 billion from $353.2 billion at the end of Sep 2013. Moreover, fixed income AUM rose 0.9% from the prior month to $174.0 billion.

Invesco’s balanced AUM grew 0.9% to $54.0 billion in the reported month. The company’s money market AUM totaled $81.6 billion, rising 0.6% from the previous month. Also, alternative AUM came in at $88.1 billion in the reported month, increasing 3.3% from the prior-month level.

Notably, all the figures have been adjusted by excluding Atlantic Trust’s balanced AUM and equity AUM of $22.8 billion and $0.5 billion, respectively. The latter is to be sold to Canadian Imperial Bank of Commerce (CM) for $210 million.

Among other investment managers, Franklin Resources Inc. (BEN) announced preliminary AUM of $868.9 billion by its subsidiaries for Oct 2013, up 2.9% from $844.7 billion as of Sep 30, 2013 and 15.3% from $753.9 billion as of Oct 31, 2012. Further, Legg Mason Inc. (LM) is expected to release its preliminary AUM later this week.

Invesco’s operating leverage is expected to improve significantly over the long term due to the company’s cost-control initiatives. Additionally, meaningful capital deployment activities continue to enhance shareholder value.

On the flip side, the company’s high debt levels and rising expenses remain causes of concern. Nevertheless, given Invesco’s diversified footprint, it is poised to benefit from improvement in global investment flows.
Currently, Invesco carries a Zacks Rank #2 (Buy).

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