Invesco Ltd · NYSE:IVZ
Invesco — Q3 2011 Earnings Presentation
49 slides from Invesco's earnings presentation, Oct 24, 2011
Slide 1: Invesco third-quarter 2011 results
Invesco third-quarter 2011 results Martin L. Flanagan President and Chief Executive Officer Loren M. Starr Chief Financial Officer October 24, 2011
Slide 2: Forward-looking statements
Forward-looking statements This presentation, and comments made in the associated conference call today, may include “forward-looking statements.” Forward-looking statements include information concerning future results of our operations, expenses, earnings, liquidity, cash flow and capital expendit
Slide 3: Discussion topics
Discussion topics Third-quarter overview Investment performance Financial results Questions Appendix 2
Slide 4: Third-quarter overview
Third-quarter overview Continued positive momentum in a volatile market environment Maintained strong, long-term investment performance across the enterprise during the third quarter Continued positive trend of net long-term inflows across all channels Increased cash $136 million and reduced l
Slide 5: Summary of third-quarter 2011 results
Summary of third-quarter 2011 results September 30, 2011 AUM of $598.4 billion versus $653.7 billion at June 30, 2011 Assets under Average AUM was $632.7 billion versus $652.8 billion for the management second quarter Total net inflows of $2.2 billion Net long-term inflows of $3.3 billion Fl
Slide 6: Discussion topics
Discussion topics Third-quarter overview Investment performance Financial results Questions Appendix 5
Slide 7: Investment performance – overview
Investment performance – overview Aggregate performance analysis – asset weighted Percent of assets in top half of peer group* 1-Year 3-Year 5-Year 68% 78% 82% 22% 18% 32% % Assets top half of peer group % Assets bottom half of peer group * Includes AUM of $338.8 billion (57% of total IVZ) for 1 yea
Slide 8: Investment performance (5-year)
This image cannot currently be display ed. Investment performance (5-year) % assets top half of peer group % assets bottom half of peer group By investment objective* Percentages in parentheses represent %AUM of each investment objective as a ratio of all objectives (Total ranked AUM of $329.1 billi
Slide 9: Investment performance (5-year)
Investment performance (5-year) % assets top half of peer group % assets bottom half of peer group By investment objective* Percentages in parentheses represent %AUM of each investment objective as a ratio of all objectives (Total ranked AUM of $329.1 billion) Equities Global ex-U.S. and Other Globa
Slide 10: Quarterly flows – total flows
Quarterly flows – total flows Continued positive momentum in long-term flows during the third quarter Quarterly long-term flows ($ billions) Total AUM AUM ex-ETF/UIT/Passive ETF/UIT/Passive AUM 19.0 18.1 15.2 15.8 14.7 12.2 12.5 10.8 8.1 4.6 4.0 3.6 2.7 0.5 0.9 -1.1 -7.6 -12.0 -11.9 -11.6 -11.8 -1
Slide 11: Quarterly flows – by channel
Quarterly flows – by channel Continued net inflows across all channels Quarterly long-term flows ($ billions) Retail(a) Institutional(b) Private Wealth Management(c) 1.1 0.8 0.8 0.8 0.9 0.8 0.7 0.6 0.6 0.3 0.4 0.2 0.2 0.1 0.1 0.1 -0.5 -0.5 -0.5 -0.5 -0.7 -0.4 -0.7 -0.7 4Q09 1Q10 2Q10 3Q10 4Q10 1Q1
Slide 12: US Retail gross sales increased 39% versus prior year
US Retail gross sales increased 39% versus prior year, despite volatile environment Percentage above the bars is change in gross sales from prior quarter ($, billions) +36% Net sales +29% +9% (27%) +25% +10% IVZ Industry Invesco US Retail excludes PowerShares QQQ. Industry redemption rates includes
Slide 13: Premia Plus Strategy
Premia Plus Strategy Differentiated Portfolio Construction Weight Risk Contribution 100% Bonds 80% Bonds Traditional Weight % Balanced 60% Weights drive Portfolio 40% risk allocation Stocks 20% Stocks 0% Portfolio Risk = 10% Risk Contribution 160% Weight 140% 120% Bonds Weight % Commodities Stocks 1
Slide 14: Premia Plus Composite
Premia Plus Composite SUPPLEMENTAL INFORMATION COMPOSITE PERFORMANCE HISTORY AS OF 09/30/11 50% 36.33% Premia Plus Strategy 28.48% World Balanced Index** 21.68% 25% 14.76% 12.72% 3.72% Return 1.80% 1.97% 0% -8.36% -6.37% -10.40% -25% -21.87% -50% 10/08 - 02/09 03/09 - 03/10 04/10 - 06/10 07/10 - 04/
Slide 15: Premia Plus Composite
Premia Plus Composite GIPS® COMPLIANT SCHEDULE OF INVESTMENT PERFORMANCE Composite Total Firm Gross Rate Net Rate Benchmark Number of Assets Assets Composite Period of Return of Return Return Portfolios (USD Millions) (Billions) Dispersion 2010 15.26 % 14.75 % 0.15 % 1 $ 489 $ 475.3 N/A % 2009 21.41
Slide 16: Premia Plus Composite
Premia Plus Composite GIPS® COMPLIANT PERFORMANCE NOTES Invesco Worldwide claims compliance with the Global Investment Performance Standards (GIPS®) and has prepared and presented this report in compliance with the GIPS standards. Invesco Worldwide has been independently verified for the periods 1st
Slide 17: Discussion topics
Discussion topics Third-quarter overview Investment performance Financial results Questions Appendix 16
Slide 18: Total assets under management – 3Q11 vs. 2Q11
Total assets under management – 3Q11 vs. 2Q11 ($ billions) 3Q-11 2Q-11 % Change Beginning Assets $653.7 $641.9 1.8% Long-Term Inflows 45.9 42.7 7.5% Long-Term Outflows (42.6) (38.9) 9.5% Long-Term Net flows 3.3 3.8 (13.2)% Net flows in Inst. Money Market Funds (1.1) 3.5 N/A Market Gains and Losses/R
Slide 19: Non-GAAP operating results – 3Q11 vs. 2Q11
Non-GAAP operating results – 3Q11 vs. 2Q11 ($ millions) 3Q-11 2Q-11 % Change Adjusted Revenues Investment Management Fees 804 844 (4.8)% Service and Distribution Fees 189 206 (8.3)% Performance Fees 3 8 (60.5)% Other 27 32 (17.1)% Third-Party Distribution, Service and Advisory Expenses (317) (339) (
Slide 20: Third-quarter overview
Third-quarter overview Continued positive momentum in a volatile market environment Maintained strong, long-term investment performance across the enterprise during the third quarter Continued positive trend of net long-term inflows across all channels Increased cash $136 million and reduced l
Slide 21: Discussion topics
Discussion topics Third-quarter overview Investment performance Financial results Questions Appendix 20
Slide 22: Discussion topics
Discussion topics Third-quarter overview Investment performance Financial results Questions Appendix 21
Slide 23: Commitment to investment excellence
Commitment to investment excellence Source: Invesco. All data as of September 30, 2011. The listed centers do not all provide products or services that are available in all jurisdictions, nor are their products and services available on all platforms. All entities listed are wholly owned, indirect s
Slide 24: Investment performance
Investment performance % of AUM above 1st quartile By investment objective* benchmark 2nd quartile Equities U.S. Core U.S. Growth U.S. Value Sector 99% 96% 96% 51% 45% 66% 66% 9% 18% 65% 59% 31% 63% 28% 89% 52% 1% 51% 33% 32% 53% 50% 49% 51% 27% 2% 41% 32% 20% 33% 15% 18% 8% 15% 6% 1-yr 3-yr 5-yr 1-
Slide 25: Investment performance
Investment performance % of AUM above 1st quartile By investment objective* benchmark 2nd quartile Equities Global ex-U.S. and Other Global Emerging markets Balanced Alternatives 95% 91% 92% 80% 82% 77% 75% 75% 73% 39% 73% 27% 68% 2% 29% 13% 61% 30% 70% 10% 75% 45% 25% 64% 43% 45% 44% 48% 42% 2% 32%
Slide 26: We are diversified as a firm
We are diversified as a firm Delivering a diverse set of solutions to meet client needs By client domicile By channel By asset class PWM 3% Canada 4% U.S. 69% Institutional U.K. Retail 38% 14% 59% Europe 5% Asia 8% 1-Yr 1-Yr 1-Yr ($ billions) Change ($ billions) Change ($ billions) Change U.S. $411.
Slide 27: Non-GAAP operating results – quarterly
Non-GAAP operating results – quarterly ($ millions) 3Q-11 2Q-11 % Change* 1Q-11 4Q-10 3Q-10 2Q-10 1Q-10 4Q-09 Investment Management Fees 804 844 (4.8)% 816 799 749 653 618 628 Service and Distribution Fees 189 206 (8.3)% 199 202 192 139 113 111 Performance Fees 3 8 (60.5)% 4 19 3 4 1 7 Other 27 32 (
Slide 28: US GAAP operating results – quarterly
US GAAP operating results – quarterly ($ millions) 3Q-11 2Q-11 % Change* 1Q-11 4Q10 3Q-10 2Q-10 1Q-10 4Q-09 Investment Management Fees 780 819 (4.8)% 792 774 726 628 594 612 Service and Distribution Fees 189 211 (10.5)% 199 202 192 139 113 111 Performance Fees 3 8 (65.8)% 4 19 3 4 1 7 Other 27 32 (1
Slide 29: Total assets under management - quarterly
Total assets under management - quarterly ($ billions) 3Q-11 2Q-11 % Change 1Q-11 4Q-10 3Q-10 1.8% $616.5 $604.5 $557.7 Beginning Assets $653.7 $641.9 Long-Term Inflows 45.9 42.7 7.5% 48.0 40.4 36.8 Long-Term Outflows (42.6) (38.9) 9.5% (41.4) (57.4) (31.9) Long-Term Net flows 3.3 3.8 (13.2)% 6.6 (1
Slide 30: Total assets under management – by asset class
Total assets under management – by asset class Fixed Money ($ billions) Total Equity Income Balanced Market Alternative March 31, 2011 $641.9 $303.0 $139.7 $44.7 $71.0 $83.5 Long-Term Inflows 42.7 22.9 8.8 2.7 0.3 8.0 Long-Term Outflows (38.9) (25.5) (5.3) (2.2) (0.5) (5.4) Long-Term Net flows 3.8 (
Slide 31: Total assets under management – by asset class
Total assets under management – by asset class Fixed Money ($ billions) Total Equity Income Balanced Market Alternative September 30, 2010 $604.5 $294.4 $130.8 $41.3 $69.9 $68.1 Long-Term Inflows 40.4 20.3 10.6 2.5 0.4 6.6 Long-Term Outflows (57.4) (44.5) (6.2) (1.9) (0.4) (4.4) Long-Term Net flows
Slide 32: Total assets under management – by channel
Total assets under management – by channel ($ billions) Total Retail Institutional PWM March 31, 2011 $641.9 $396.2 $228.3 $17.4 Long-Term Inflows 42.7 33.2 8.6 0.9 Long-Term Outflows (38.9) (30.3) (7.9) (0.7) Long-Term Net flows 3.8 2.9 0.7 0.2 Net flows in Inst. Money Market Funds 3.5 - 3.5 - Mark
Slide 33: Total assets under management – by channel
Total assets under management – by channel ($ billions) Total Retail Institutional PWM September 30, 2010 $604.5 $359.3 $229.0 $16.2 Long-Term Inflows 40.4 29.6 10.0 0.8 Long-Term Outflows (57.4) (30.0) (26.7) (0.7) Long-Term Net flows (17.0) (0.4) (16.7) 0.1 Net flows in Inst. Money Market Funds (1
Slide 34: Total assets under management – by client domicile
Total assets under management – by client domicile Continental ($ billions) Total U.S. Canada U.K. Europe Asia March 31, 2011 $641.9 $435.2 $28.2 $94.2 $36.2 $48.1 Long-Term Inflows 42.7 26.8 0.7 4.3 4.9 6.0 Long-Term Outflows (38.9) (27.0) (1.5) (3.2) (4.1) (3.1) Long-Term Net flows 3.8 (0.2) (0.8)
Slide 35: Total assets under management – by client domicile
Total assets under management – by client domicile Continental ($ billions) Total U.S. Canada U.K. Europe Asia September 30, 2010 $604.5 $400.0 $26.7 $89.8 $33.6 $54.4 Long-Term Inflows 40.4 27.6 0.5 3.3 5.0 4.0 Long-Term Outflows (57.4) (26.2) (1.7) (3.3) (4.1) (22.1) Long-Term Net flows (17.0) 1.4
Slide 36: Assets under management – ETF, UIT and passive – by asset class
Assets under management – ETF, UIT and passive – by asset class ($ billions) Fixed Money Total Equity Income Balanced Market Alternative March 31, 2011 $91.7 $47.3 $23.7 $0.0 $0.0 $20.7 Long-Term Inflows 14.7 10.0 3.0 - - 1.7 Long-Term Outflows (13.8) (10.9) (0.3) - - (2.6) Long-Term Net flows 0.9 (
Slide 37: Assets under management – ETF, UIT and passive – by asset class
Assets under management – ETF, UIT and passive – by asset class Fixed Money ($ billions) Total Equity Income Balanced Market Alternative September 30, 2010 $89.9 $57.5 $17.1 $0.0 $0.0 $15.3 Long-Term Inflows 15.8 9.3 4.3 - - 2.2 Long-Term Outflows (30.4) (28.4) (0.6) - - (1.4) Long-Term Net flows (1
Slide 38: Assets under management – ETF, UIT and passive – by channel
Assets under management – ETF, UIT and passive – by channel ($ billions) Total Retail Institutional PWM March 31, 2011 $91.7 $78.2 $13.5 $0.0 Long-Term Inflows 14.7 12.7 2.0 - Long-Term Outflows (13.8) (13.3) (0.5) - Long-Term Net flows 0.9 (0.6) 1.5 - Net flows in Inst. Money Market Funds - - - - M
Slide 39: Assets under management – ETF, UIT and passive – by channel
Assets under management – ETF, UIT and passive – by channel ($ billions) Total Retail Institutional PWM September 30, 2010 $89.9 $66.7 $23.2 $0.0 Long-Term Inflows 15.8 12.9 2.9 - Long-Term Outflows (30.4) (11.8) (18.6) - Long-Term Net flows (14.6) 1.1 (15.7) - Net flows in Inst. Money Market Funds
Slide 40: Assets under management – ETF, UIT and passive – by client domicile
Assets under management – ETF, UIT and passive – by client domicile Continental ($ billions) Total U.S. Canada U.K. Europe Asia March 31, 2011 $91.7 $88.0 $0.0 $0.0 $1.4 $2.3 Long-Term Inflows 14.7 14.6 - - 0.1 - Long-Term Outflows (13.8) (13.7) - - (0.1) - Long-Term Net flows 0.9 0.9 - - - - Net fl
Slide 41: Assets under management – ETF, UIT and passive – by client domicile
Assets under management – ETF, UIT and passive – by client domicile Continental ($ billions) Total U.S. Canada U.K. Europe Asia September 30, 2010 89.9 70.5 $0.0 $0.0 $1.1 $18.3 Long-Term Inflows 15.8 15.7 - - 0.1 - Long-Term Outflows (30.4) (11.7) - - (0.1) (18.6) Long-Term Net flows (14.6) 4.0 - -
Slide 42: Reconciliation of US GAAP to non-GAAP – three months ended September 30, 2011
Reconciliation of US GAAP results to non-GAAP results – three months ended September 30, 2011 ($ millions) US GAAP Proportional 3rd party Acquisition Market appreciation Consolidated European Non- Consolidation distribution, related / depreciation of Investment Infrastructure GAAP Basis of Joint ser
Slide 43: Reconciliation of US GAAP to non-GAAP – three months ended June 30, 2011
Reconciliation of US GAAP results to non-GAAP results – three months ended June 30, 2011 ($ millions) US GAAP Proportional 3rd party Acquisition Market appreciation Consolidated European Non- Consolidation distribution, related / depreciation of Investment Infrastructure GAAP Basis of Joint service
Slide 44: Reconciliation of US GAAP to non-GAAP – three months ended March 31, 2011
Reconciliation of US GAAP results to non-GAAP results – three months ended March 31, 2011 ($ millions) US GAAP Proportional 3rd party Acquisition Market appreciation Consolidated Other Non- Consolidation distribution, related / depreciation of Investment Reconciling GAAP Basis of Joint service and d
Slide 45: Reconciliation of US GAAP to non-GAAP – three months ended December 31, 2010
Reconciliation of US GAAP results to non-GAAP results – three months ended December 31, 2010 ($ millions) US GAAP Proportional 3rd party Acquisition Market appreciation Consolidated Other Non- Consolidation distribution, related / depreciation of Investment Reconciling GAAP Basis of Joint service an
Slide 46: Reconciliation of US GAAP to non-GAAP – three months ended September 30, 2010
Reconciliation of US GAAP results to non-GAAP results – three months ended September 30, 2010 ($ millions) US GAAP Proportional 3rd party Acquisition Market appreciation Consolidated Other Non- Consolidation distribution, related / depreciation of Investment Reconciling GAAP Basis of Joint service a
Slide 47: Reconciliation of US GAAP to non-GAAP – three months ended June 30, 2010
Reconciliation of US GAAP results to non-GAAP results – three months ended June 30, 2010 ($ millions) US GAAP Proportional 3rd party Acquisition Market appreciation Consolidated Other Non- Consolidation distribution, related / depreciation of Investment Reconciling GAAP Basis of Joint service and de
Slide 48: Reconciliation of US GAAP to non-GAAP – three months ended March 31, 2010
Reconciliation of US GAAP results to non-GAAP results – three months ended March 31, 2010 ($ millions) US GAAP Proportional 3rd party Acquisiti Market appreciation / Consolidated Non- share of JV distribution, on depreciation of Investment GAAP Basis service and related deferred compensation Product
Slide 49: Reconciliation of US GAAP to non-GAAP – three months ended December 31, 2009
Reconciliation of US GAAP results to non-GAAP results – three months ended December 31, 2009 ($ millions) US GAAP Proportional 3rd party distribution, Acquisition Consolidated Non-GAAP Consolidation service and advisory related Investment Products basis Basis of Joint expenses Operating Revenues Ven