Invesco Ltd.: Asset Management in Transition

Abstract

This case is used in Darden's second-year "Financial Institutions and Capital Markets," elective. Using Invesco Ltd. (Invesco) as an example, the case examines the strategic challenges facing the asset management industry. Marty Flanagan, Invesco's CEO, must position Invesco to compete in an industry undergoing systemic change, including active and passive products and flows, lower levels of organic growth, fee compression, softening revenues and profitability, shifting profit pools, channel dynamics and preferences, and legacy operating models.

Excerpt

UVA-F-1856

Nov. 7, 2018

Invesco Ltd.: Asset Management in Transition

We cannot change the direction of the wind, but we can adjust the sails.

—Indian proverb

On April 25, 2018, Marty Flanagan, CEO of Invesco Ltd. (Invesco), reviewed his talking points in preparation for the quarterly earnings call that was to occur the following day. The quarterly results he was to discuss were largely positive: earnings per share for the quarter were in line with consensus estimates and had risen nearly 10% above the same quarter the year prior. Operating revenues and net income were up (see Exhibit1), and the company attracted strong net flows. Its average assets under management (AUM) rose by nearly 15%.

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Keywords: asset management, Mayo Center for Asset Management, Invesco, strategy, smart beta, ETF, M&A, value chain, robo, active, passive, flows, organic growth, fee compression, profit pool, institutional, retail