Invesco Ltd at Bank of America Financial Services Conference Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Craig Siegenthaler - Bank of America - Analyst : So Invesco is one of the largest asset managers in the world with $1.8 trillion in assets under management. Its business is diverse across client channel and across product with scaled businesses in secular growth segments, including ETFs and private markets. This has helped Invesco generate the strongest organic asset growth in our coverage last quarter. So Allison, maybe we'll start with the macro. I will only hit on net flows because last year, flow trends are really driven by ETFs and money market funds which Invesco is very well positioned for. But as we look into the future, the yield curve is steepened, and we're now in year three of the equity bull market. So there is a potential for clients to start re-risking into alts and extending duration into fixed income. What is your thought on this topic?

Question: Craig Siegenthaler - Bank of America - Analyst : Allison, if we do see duration extensions in fixed income, which segments or categories do you think will be -- will benefit the most?

Question: Craig Siegenthaler - Bank of America - Analyst : So I want to hit on the revenue side of growth because Invesco has been generating the strongest organic growth in my traditional asset management coverage. So congrats on that. Although we have monitored the decline in the fee rate offsetting some of the impact on revenue. So from a forecasting modeling perspective, how should we think about long-term revenue growth in light of very strong AUM growth offset by some fee rate declines?

Question: Craig Siegenthaler - Bank of America - Analyst : So as we move through the EPS algorithm from flows, revenues, now operating leverage, you had a 40% margin a couple of years ago. The bear market put pressure on everyone's margins in '22, but you've been making some improvements there. This could be a huge accelerant to EPS if that upward trajectory continues here. How should we think about long-term expense growth? And how is that flex in different market environments, strong or weak?

Question: Craig Siegenthaler - Bank of America - Analyst : Allison, you really strengthened the balance sheet in the last couple of years. So now that you're generating cash flow, you can do different things with, how do you rank the different potential uses and then when we think about M&A, how do you view large-scale consolidation type transactions today?

Question: Craig Siegenthaler - Bank of America - Analyst : So you kind of hit on my next question. But in terms of product gaps, you said there's not a lot, you kind of addressed that. Is tuck-in a small strategic acquisition? Could it look like a team lift out, or could it be either?

Question: Craig Siegenthaler - Bank of America - Analyst : So if I look at the returns in Private Markets since 2021, private credit by far the strongest, and that's a big business for you, but real estate for the industry by far the weakest, and that's also a big business for you. So maybe you can give us a state of the union for your Private Market business? And I'm also curious how redemption requests and sales have been trading in the real estate business, too?

Question: Craig Siegenthaler - Bank of America - Analyst : So India has become a more exciting market for you. You just formed a joint venture. To me, the playbook looks a lot of like what you did in China with Great Wall like 20 years ago. What are you doing in India? And also, is this something you can replicate? You said you feel very good in your geographic presence, but I know you don't have a lot of business in Brazil or South America at this moment.

Question: Craig Siegenthaler - Bank of America - Analyst : So before we go to Q&A, I'd like to get your perspective on what we could be missing from the Invesco stock today? I know you own some stock. It's -- I know it's important to you, but you do speak to lot of investors, sell-siders like myself. What do you think we're missing? What do you think we need to know about in Invesco?

Question: Craig Siegenthaler - Bank of America - Analyst : Actually, I just had one follow-up on China. As you pointed out, second most successful foreign-owned firm, but a lot of American firms, a lot of European firms have tried to grow in China. They haven't been as successful. More recently, a number of firms have started wholly-owned ventures in China. So my question is, first, why was -- how has Invesco been so successful over 20 years? And is there an opportunity to take your stake up in that JV because I believe it's around 49%?

Question: Craig Siegenthaler - Bank of America - Analyst : Allison, let's see if there's any questions from the audience. (Event Instructions) Unidentified Participant (inaudible - microphone inaccessible)

Question: Craig Siegenthaler - Bank of America - Analyst : Thank you for the question. Do we have any other questions in the audience? We have one in the front here. Get a mic. Unidentified Participant (inaudible - micrphone inaccessible)

Question: Craig Siegenthaler - Bank of America - Analyst : So Allison, I think with that, we are out of time, out of questions. So on behalf of all us from Bank of America, thank you very much for joining us. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 11, 2025 / 1:00PM, IVZ.N - Invesco Ltd at Bank of America Financial Services Conference