Invesco (IVZ) 27 Oct 202020 Q3 Earnings call transcript

Good morning and thank you all for joining us.

As a reminder, this conference call and the related presentation may include forward-looking statements, which reflects management's expectation about future events and overall operating plans and performance. These forward-looking statements are made as of today and are not guaranteed. They involve risks, uncertainties and assumptions, and there can be no assurance that actual results will not differ materially from our expectations.

For discussion of these risks and uncertainties, please see the risks described in our most recent Form 10-K and subsequent filings with the SEC. to forward-looking obligation no makes update statements. any Invesco financial today's call. may also during non-GAAP discuss We measures Reconciliations non-GAAP end of of at our found these earnings financial measures presentation. be may the

participants until the session. Third Conference Quarter recorded. Welcome is Today's question-and-answer in to mode Call. [Operator Invesco's All listen-only a will conference Results being Instructions] be

you you disconnect may If at this any objections time.

and call and Now I Chief Greg Flanagan, speakers President CEO for of Flanagan, Invesco; your Senior Investments. Financial would like you McGreevey, Officer; over to Director Managing may today, to turn Dukes, of the Allison Mr. Marty begin.

and everybody thank Thank us you you, this morning. joining for

in So meaningful what highly a and decade, investments we've position is past competitive over capabilities dynamic industry. key several clients that have the deliver strategic competing made and to us now initiatives and well undertaken our for

Looking to forward, our while long-term organic to on strategy, further executing to sustainable is focused returning meet our very strengthen intended client needs to firm ability we which be the continue growth.

Pacific significantly. in billion we and were during to and in uncertainty continued environment net their been improved global this quarter, saw institutional the regions remains up remain in economic into the the objectives, Asia clients saw pipeline meeting ensuring in significantly also fixed Asia With investment during that capabilities of very the flows Americas while again, this we and running across channels, we're asset outflows a the $X demand Net improved the outflows be the we investment broad variety and really in quarter quarter. disciplined the driven pandemic billion robust, $X focused billion with geographies and quarter strong, on Solutions-enabled the our long-term $X.X and during prior we third inflows our by Retails continued during net quarter lead Pacific from saw uncertain quarter, focused a time. net combined business to performance on classes. long-term efforts in capabilities These the significantly inflows during high very EMEA strong income and inflows of

of As growth client in we reducing we analytics evaluation directly we've enhancing not areas as improving environment. touch noted and and of several outcomes and such by Alternatives and organic including during the quarter to a and this undertaken ETFs, Solutions, aligned our We and strategic optimized evaluation streamlining objectives, our invest the growth, our with to China, areas call, opportunities complexity strategic has plan see areas in clients. do operating look business, these that include data Global as primarily and business of supported Equities, also second

moment. optimization a normalized of expect end operating just reduce net more XXXX, $XXX expenses to by speak this We annual our in million and this the will a Allison by will

addition In various our and improving balances. we during reducing positive through clients outcomes built sheet by our depth under and deliver quarter, with Invesco the balance manage continued outstanding revolver, cycles. for borrowings a while cash to diversified the market to business global, resiliency breadth has the

trends macro future industry. that are several of We of shaping have invested ahead the our

ETFs, in growth we future are working Solutions with aligned the significant and and areas. a income, sustainable These competitive business and very investment a meeting our running now volatile global and focused alternatives growing we result, factors, positions areas fastest the remain And on needs China in equities, of disciplined would which capabilities demand leadership As include majority again, environment, a of towards this our strong clients the very growth. growing key organic while fixed in market. emerging highly include with with effort markets,

regularly growth. that me business driving shareholder strengthening We to was a engagement, given October filed engaged and sustainable are a further the during The that by major Trian valued with turn are active still With welcome position our over over with process call them. Trian as comment shareholder we're we're our the in in And further we turn and the Xnd. as today. at Allison. in a in on to constructive not this that, conversations aimed let on and of dialogue and looking XXD I Allison, comment on call it Before let the on shareholders you for topic appreciate, constructive me to we're

reflecting performance. strong income, and basis, Slide on had we continue funds demand X-year X XX-year managed including see globally. and all everyone. equities, XX% in to from a you, Asian of the on Marty. Thank summarizes equities, in clients top fixed investment global actively a XX% We Good areas markets strength appears morning, our half emerging where

to market Moving billion ended in we the X, in quarter quarter. AUM. a $XX over of Of increased values $X.XXX $XX billion approximately function AUM the Slide with as growth, the

quarter third $X X.X% Turning billion, activate passive broad-based generated Notably, inflows X, representing net generated and growth. to billion. annualized organic of of Slide positive inflows net long-term and of the in AUM AUM our we billion $X.X in $X.X platform

EMEA income, classes XX% in $XXX flows US which fixed improvements flows quarter. the quarter, ETF ETF in which equity significant the representing leadership contributors increases with US across quarter Including net $XX.X in ETFs benefits in ESG for representing best including industry QQQs, the retail in ETFs The relevance brand billion the times and commodities, Invesco's the the $X.X narrowed equity. and second XX-year Long-term X the asset for Positive ETFs it in QQQs marketing ETF the of including and third flows to flows drive listed $X.X meaningful industry outflows, inflows equity market. the those million QX. share. billion, our experienced and their net industry largest in have diverse in Our long-term QQQ ETF our that billion the flows and quarter, oriented of is third success sector awareness, delivers the their broad of were overall and net in in our to ETF footprint, history market

side, on slides. few On had inflows the little on and billion net I'll next of a $X.X provide the we those more color institutional flows

our $X.X net flows at stable you'll was capability the $X.X fixed our improvement in capability, particularly billion the strategies, of was improvement strongest significant by in the net by ETF, This our one of by balanced of quarters inflows fund. balanced Asia mandates funds. its and by income which an primarily flows Flows Japan in our note $XX.X XXX and outflows inflows and UK, $X positive EQQQ quarter, income ever, improvement income growth were billion billion net value inflows fixed Looking billion billion value various equity driven by fixed the risk international Americas, the and in strong and driven inflows in the geography, for quarter. net and funds our exchange traded redemption finally, our with of S&P JV. into delivered equity capability. and driven net into and generating $X.X China EMEA rates to Pacific And turns driven quantitative in gold, institutional close institutional

$X JV this to us with take long-term quarter. It's the we has since and the third in billion of noting Our following fixed opportunity. positioned on macro quarter $X.X fixed inflows see XXXX our of second across in continue long-term China reinvestment in income markets and that worth in growth in net all advantage uniquely to inflows that's operation net billion, channels strength income of has long-term been

This on to remains contributed the has institutional the geographies, moving Solutions robust during our Now pipeline a billion pipeline across remained our X, capability pipeline at meaningful strong Slide pull quarter. third of institutional institutional strong $XX.X asset heels the and across growth our classes network. to through in and

we institutional evidenced by Solutions clients investments the far been have impactful are with Our having pipeline. thus as into team the to our dialogue

product capabilities include market. and of in fixed of future Turning investment and China the our aligned remarks, fast-growing mentioned X, we effort, These positioned breadth capabilities are to diversification including his areas. illustrative well income, offering. factors, Slide are emerging as high-performing growing and growth markets, Solutions equities, key Marty capabilities the to are ETF, alternatives the opening in global with These

capabilities are growing of tremendous addition, In large present in market. the opportunity these that parts and

certain performance, we demand Markets seen On the varied offerings, the Growth slide, our including and Through deep capabilities left OFI China, of we global platform with we Developing good offerings. and broadened as strong highlight our transaction, International Oppenheimer well have in income side and equity as fixed the this where sizable capability.

We well return. have good we're positioned areas, and for performance these to in demand client

of Additionally, strategies we across spectrums offer estate geographies. and a range risk real investment

upon slide, such one is the expand. of ETF look side QQQ The right we illustrate which we to capabilities the will example. ETF On

investors. allow announced which expanded us this QQQ the As month, and to to earlier suite new product different will market the capability we've

$XX ESG over $X with inflows ESG net investors ETF million the billion seeing have capabilities. sold third we're Year-to-date, We ESG addition, ETFs The client ETF manage In billion ESG $XXX gathered industry our for of in as flows. quarter. demand in top selling ETF. our net over in

areas be will to believe We important market organic invest contributors to will in capabilities we there's and opportunity these to share and that continue take our these growth.

excluding revenue, other note fee products in you'll strong Total non-fee a mix down quarter. QX. basis to adjusted our to is QX this, revenue eight-tenth revenues basis compensation against increased second operating operations. AUM than due the driven in driven continue increase were a increased QQQs. performance experienced historic leverage. rate other business pandemic million XX, X.X% creating largely in spending, driven the was the the million from our X.X% Slide by $XX in lower or and higher average by shift travel yield, the to XX% increase quarter, that across decline the to impact The the Operating in Turning Net levels higher X.X% positive of modestly points, by $XX driven quarter. yield operating activity of growth point as due second market the fees discretionary declined we the of of in quarter. the be expenses to in from expenses result in operating expenses growth Outside XX

a completed our delivering the Slide additional to $XXX million savings little more to opportunity our against and overall. the of of successfully integration we XX, organizations' color turning see on expense combined OppenheimerFunds expenses Now base, for model. Having optimize

creating and of As China, in third supported strategic evaluation, strategic key four estate expense footprint, in operations savings guided from and we including of generated we included be efficiency. key on ETF, party XXth, Through conducted spends invest operating real call I areas by aligned to realigning evaluation million A primarily our a with element this expense management key we model, realization significant Global will across of and see opportunity analytics, January data $X.XX synergies. to an non-client-facing growth of XXth, $XXX the support and growth, improvements earnings areas a locations. Alternatives and in to of organizational billion, lower technology base. permanent of our cost Solutions, of Equities, our the base; which expense rate and noted our workforce XXXX normalized areas repositioning while net July full our plan Oppenheimer operating our to our On run the of

Our provided the year. beginning the expense annualized rate market-driven $X.XX run COVID-induced billion, operating and the at which reductions of of impacts this is third we quarter expense from business as reflects guide

to normalized and our Our payroll to expense expense, the further of an operating million reinvestments. largely operating third quarter opportunity normalized our by eventually billion. bring roughly would add of to our We'd operating once business compensation this base globally. within $XXX taxes expense to $X.XX This And expense see the subsides normalization run reduce G&A pandemic that rate conditions rate return of normal annualized million additional $XXX expense assumed an net run base. to marketing would seasonality

XX% $XXX achieved The in of saving the the We XXXX. savings ETFs next years. about low XXXX, accretion remainder double-digit be with end in of the run expect by or the million two to recognized represent to of each rate

the one-time XXXX in discrete to in those XXXX years, We September expenses, occurring them would of practice, FX quarter, quarter expect by of charges and under going XX% With realization transaction driven fluctuate in to million of modestly forward. these marketing $XXX two items XX% XXXX fourth for operating Consistent primarily $XXX is with total, the to our be fourth over the in any XXth, quarter. in this respect and the XXXX. roughly remainder past spend, levels based to next expect QX, be range costs activity reflecting may expense the increased with program guidance higher with and expenses this client assets million management, therefore higher the on market and than and I promotional non-operating

paid second million improved $XX compared equity to and second quarter. operating EPS The Interest lower expense the was quarter $X.XX by QX quarter Now the as related XX, included million increases to million compared to the income reflecting million leverage which the the demonstrated settle April $XXX non-cash income in margin moving of in we in core quarter higher for reduced second facility compared valuation third and the positive period. of $X.XX in Adjusted balance driven increase $XX.X to net our by quarter driven primarily and to our operating XXX was in agreements, income. second basis value million adjusted as which to quarter, credit January the the of in XXXX. earnings some to $XX.X gains business. the $XX.X purchase in to forward non-operating Slide in and a a was in by earnings third Adjusted compared points would X.X% during net CLO was improved dividends holdings, quarter, share in quarter. Non-operating market the our non-operating the by I driven the recovery note the final in expenses XX.X%. and loss operating lower which quarter, equity

will As a interest decrease approximately result, fourth expense we quarter. million $X in the expect by

fourth to the and rate rate Slide in for XX%, quarter, differ million balance quarter, was the profile. tax A and few leverage to commitment the due between for rate effective the to million estimate may revolver with actual consistent tax tax third our Our $XXX on by to while our XX. non-recurring XX.X% quarter be XX% or our $XX discrete our improve reduced We items. we comments

in of improve reduce our leverage, In balance to financial addition billion from at second seek liquidity we sheet QX quarter. to to the to $X.XXX end improved using cash To position $XXX million excess cash flexibility. our that and end, the

XXth, build approximately requirements, excess and holding capital to remains at $X we in billion goal Our in $XXX million requirements. to regulatory September cash regulatory of excess were of

summary, approach times, a we're dividend building As modestly and us we're of our our to combination dividends returning shareholders and uncertain we capital making we're indicated, and capital increasing resources growth, remain management. evaluation prudent remain In cautious we've financial on share in a position to we longer-term focused We committed these efforts. our sustainable in reallocating and for repurchases. our to and through strategic and to in flexibility solid to progress believe

build range Our we the focus with driving in a to greater global effectiveness very on I'll back call over invest continue puts a and strong Invesco business capabilities position long-term. into and platform, in And run meet disciplined comprehensive our efficiency our combined with work have a to business of franchise Marty. done with and a client that, the to the grow turn needs, to

Thank you, Allison.

address the Allison questions, Greg, will operator, we them. and So can up open please. myself And

Flanagan. Jefferies. first with Mr. from Certainly, Fannon Instructions] [Operator Dan question Our is

Your line open, sir. is

of you expand a mentioned you hoping was gave also I you think bit not the is could But on some cutting, client-facing. buckets. really morning. I good cost Thanks, it the areas

want to And just see from might be going the size kind come the in in it's maybe that then from? just some changes million cost disruption what of $XXX areas if So could know, terms you to these where percentages, of cuts? also you of

say on would in remainder XXXX. Of XX% the I off would about I'd will I and $XXX Sure. of through of expense. XXXX of Marty that might occur XX% come the XX% in we've million noted, in or And expect client-facing and Greg Thanks, about fall chime the to compensation start Dan. that let I'll that impact. that, to

G&A, tech be going expense I and that's would The other expense to of XX% and be that occupancy expect split across across to 'XX 'XX. split kind occupancy, evenly and XX%

I pushed in think expense and be the 'XX tech recognize G&A the component XXXX. to will probably fully closer will

investing more help, capability. that, to make announcements point. were but compensation That publicly. that in lower happy sure little have been the it us to locations, our a to let workforce I'm our on There Greg we're reorganizing realigning already On at bit highest some that's and side, comment business Dan? primarily across behind this made reallocating our is largely cost and

just side, you could changes what or But about might put, so does. just of that thinking then components we're about think anything you AUM Yes, and risk the professional know, client-facing at the on happen? we investment

Yeah, good let me take, Really Dan. question.

changes reassign a about and So our that is teams capabilities teams, as that's just global processes processes, $XX non-investment is the eliminate even overall to reduce if were can needed and strategic teams, accomplish equity to though drive the total was focus, which little and so then to. we perspective really want improved small changes on Two more better evaluation complexity couple a continue bit level, did the One enhance the our high investment a stronger investment redundancy, service professionals And performance. amount, to would and small side a to to. one, include just improved in really that and performance. you the we from it's really enhance can impacted expect, believe that relatively really for to frankly the prioritization. certain is talk to our examples. where Maybe of levels in a organization, to assets Three and is that you investment billion about offerings. we We simplify designed

of standpoint. with and So us sense are side, by from received, think changes well feedback very we've everybody and strategic been talked large, behind the a said completely internally externally and has we it very I those investment employees, clients, lot to thoughtful detailed conversations on made had and a the and

Great, thank you.

Dan. Thanks, Great.

your you question. Thank for

Suisse. is question Craig Credit with next from Our Siegenthaler

is Your sir. open, line

- Craig morning, Good

Hey. Good everyone. morning,

morning. Good

morning. Good

Invesco to I scale at enough in of you distribution trillion AUM successful comments has your actually for now be interested believe the Marty. Question's side? was especially $X.X Marty, do and on

Yeah.

answer great to last clearly me dynamic so know, let there's you years, question. And, whether step on probably again, back me let few world So And question, the in in different the the yes you know, as with money world. retail very the the talked driven going channel, channel industry work something Clients and - the it's we'd of institutional a for fewer the by about to and, around that's geography is are managers. choosing and every simple. the very it's core

And so clients from of broad more we to for clients all way. that, managers, capability, are from that in what so range money leadership, they're that they expecting them us they looking it's for Solutions help build models to for want the but want want thought from capabilities way is, beyond the passive ability have alternatives, any they

so that a in see inflows core of just there. firm, can has us and a - you you you the as the And growth know inflows, been that know, the it gross impact for net focus now

to important. for So you clients, be have and that's difference make relevant to you a clients have to really

can things it's not proven done of technology years any So number so ourselves that create doing depth we've I you want interactions think It's in to other again, know, your too been what to for you of that proves your have do, you like And organization, and create once again, the global skill services. which - capability, never have much to you it's capabilities. skills of also, you during you And, technology reinvest a yes, difference pandemic, say can back but and been of I and also think was very have conversation we've efficiencies can driven and know capabilities have you just the historical for And I'd know, is, larger today really us surprised do the into know, breadth firms experience drive client you by well but really clients you again, have you all and if that that better. clients. better to over unique a so to the investments, and

one Thanks, Marty. I actually And - just had

- Yeah

- follow-up one had I Marty,

- Yes, please

Craig For the strategic on expense initiatives.

- So

Yes, please.

funds mean that equity will the professionals and shrinking does the enhance other the funds, number mean products? teams? of in investment this the removing emerging you reducing Does of also this say When number changes offering, global

it's Yeah, combination of a so things, of Craig. some those

strategic that nascent global right will. gaps we're acquired global we know, you capabilities know, now, we on in kind effort, Oppenheimer to the if filling other you have some But So, had within that capabilities especially from very was equity you the we that terms of that our side we've overall will, of portfolio.

reassigning going So equity our Canadian to York global many into our Canadian things core messaging equity global to be umbrella overall able of offerings of New And and and it's that to not then team streamline simplifying Atlanta-based to to capabilities, our equity we're going team, be team things branding so doing into the to those our only our kind global offerings. our be our team. that is but it's equity going simplify global marketplace, realigning under types going that doing we're

done And - Allison both have point, just now. moving clients clear be have we're made. and we're the been and forward virtually with I can want the we're And made. changes contacts - And Greg I to made changes, because just been very this

So want mystery that make there. I just there's sure no to

Craig, addressed your that question.

great. Yeah,

Greg. job, great Thank Yeah, you.

you your Thank question. for

Our Deutsche from Bedell next question with Brian is Bank.

open, sir. is line Your

dollar the a exclude said are think you expense expense, folks. confirm Maybe just any the to, of out that to data. September with Great, the base started this, I market Good assumptions, question Allison thanks. on based appreciation impact morning, just XX amounts, but

market we, say, you the from returns just get the numbers, of million normalize so with you additional So, revenue. $XXX playing of end around if year, we or if know

that market would of compensation how that? just So revenue comp might on fortune, million grow then few a to their hundred dynamic number be put to return line in and fair expense think a to the take it on the base that in about just off

question got ways about and think of you obviously a Yeah, could it's it. couple a great

the a and is XXth levels, expense September $XXX FX. beyond So little me bring market guidance, all One, guidance of based million to yes, that the on the quarter just asset clarity try let target bit all and to fourth it.

the XX% XX% know, would you that that reduction, components, about expect again, and compensation, comes that from $XXX compensations balance reduce the tech component or the most think asset As expense. occupancy, tied is across our G&A you levels that and performance. it I that that really most any and of fluctuates be has with to market items as and and obviously variable million to the is, to is, you change The discrete

so quite And same on level. or doesn't have dependency market it the asset

enough. Okay, you talk then And side, fair Yep, if or just sales can thanks. on Marty, the maybe to on, Allison. you, Marty or

flows But can the give in October the think both you of over to you talk just a on the and you could initiatives on near-term confidence some comment for talk far. that you terms generate that? know couple don't in you And sustainability on If long-term? and about the flows of XQ, that improved key positive of of can you saw if continue drivers sustainability that want confidence you of to your into so - maybe I the do flows that

Allison I'll Greg let Yeah, me a comments. And couple chime make of let and in.

a to Americas the we strong very So, And look dramatically. yes, back pointed, you seen always. point know over yes, the to just strong. what to track again, EMEA look the continues again, you we really And is and if always improving market And the at flows. that's strong. to coming Asia-Pac number time, business business, again, And in right. know pipeline, be the answer to period on the last you continues And it the to gross of health a very indicator saw you've change be you continue institutional is

of generally But the breath not the area it's really headwind performance, a it's you it's right in So strength the And confidence the it's of continue we what's That's you be behind ETFs marked improvement to to powerful, important be a of fixed demand. for our absolute continues just where US, biggest is in also have great flows. the just quite an client team, quality saw know long-term. And element now. the the the team. income

when if equity you markets, strength global that know, you so the retail You the know, going use is the because something. including But know, US as look clients want it's as something you emerging capabilities, channel as the strength you you're And, don't some headwinds outflows information. forward. know the know, the we and of two a strong proxy, there. real you it's hard those public get overcome our know some of we capabilities capabilities equity in and are But have The in largest headwind, global second areas out equities a that. challenges US is to category some you are

So Greg. the policy, the or seeing and is overtaking the important. what you're part that's really I organization Allison of rest that, think of

look category a thing if only and managed business flows I'd the our significant look, Yeah, add is, you in at quarter-over-quarter our every investment improvement we on saw a perspective, basis. broad on

we assuming So performance, think, continued is I sustainability, have think strong I there.

bank were positive the In negative except retail quarter. category, our fact, loans bank if essentially equities for in were you retail where they and look loans, at flows quarter, in third every the slightly

the institutional positive you retail you and number. of balanced when business, products, institutional at look retail, the to, kind fixed flow and and equities, institutional income, overall alternative contributed So institutional all know,

the we're by that flows sustainability, the encouraged that moving category every more in much we're testament magnitude is by asset really and broad probably think more But So forward. a improvement we encouraged to of trend. our of

And I'd add other one thing.

So a know, the factor from the out big the we of as and capabilities lumpy, are but success you and continue and the passive, of coming lot are to they right. mandates, see they know Solutions you

seen on probably you could a you you from know, but, that's you we've some in the see past, thing historically good balance, than know, lumpiness my more know So perspective.

know third all And trend from quarter? measure, but. do You you terms see this it's short October continuing of the the of this in in

to going so. surface. not we're that Yeah, our We're that's month-to-month definitely do that, talking not

Yeah.

So.

fair. that's fair, That's

Were helpful, been constructive don't think I likely it's so. but

Okay. you. Yep, thank

your Thank question. you for

Schorr Our Glenn from question Evercore. next is with

line is Your sir. open,

success, if I about comments deliver significant construct how the And you what wonder you that the because, talk sauce to you going expand be secret deliver about and here. you you be Solutions types, that clients to help think all consolidating growing it thank you as could very of built you've I you the your effort want that's on great little to seems know on the Hi, with company. mentioned, much. you that guess a to takes how measure providers combined everything and I

if little that bit. on Thanks. expand curious you So could a

to couple then make have Yeah, I'm Greg. a and of comments, going

what that talented the obviously very group of know, But is, way built you of sits across our globally. investment does Solutions So we've teams our business, all it people. it

different that have models capabilities, organizations from, have again, And Solutions creating know, by the but know, investment use marketplace. more, through a for somewhat with also, know, known, changes Greg. know, And And, for literally a So purposes approach, outcomes really analytical the own it's, built teams. do that they you institutions of we conversations. self-indexing different seen work, capabilities. you we've have in view own that spectrums their it that to been the minority don't I asset the with very well our do, client want, that's teams, compete the resources creating But indexes of use they're that sophisticated a content to all just you to, wanting taken you from relationship the know, enable these from the to they with for have conversations which, but the they again, and that investment depth across team you it's And people them organizations. know, classes, tools these think get these the the and their you

best with capability is of business just Look, to comments. to two distribution primary to where going an add to those with our has enabling determine conjunction really the needs and to Marty's Solutions needs. capability, kind - we're enablement align - individual to in in client help segments. One Maybe

that engagement skills to client then we so need a And really to across specific really great strong the analytics. be provide asset and And to client you is is know needs number tailored second and classes. we're outcomes different of strong where customized going

skills. to allocation strong And so need great, they're very be asset you

our of off I company ago a assets years in really we're that we've the up what so half of significant significantly, on under significant most Allison that what enabling saw of Solutions business. build the investment in done we've the areas. three chart a And four years under and made those engagement five also that last assets over investments side. the pipeline portfolio is both both improvement management, had significant one started of in seen And that really that level is the about, is our to the channel, capabilities seeing think in in talked institutional But which over has you advisement, where reviews retail probably

third favorable going within I conditions in concert So think to we a the got is strong to pipeline additional with business. the that Solutions, in quarter more provide tailwind market

about, you And you so the we're in in excited know, just near-term and pretty opportunities, long-term. the know, the both,

Thanks that. it. for Appreciate all

you. thank Great,

question. your for you Thank

is from Brennan Our Hawken UBS. with next question

is line Your open, sir.

much potential been headwind the provider view; more to you've Good about in momentum but I How curious fact future. turn will a retail for thanks fairly was US be investment other independent bright how slow the a in the you been footprint And given that past spoken there? You've about a parts the the SMAs bit one so think business small been has that that a of morning, has for do dominant has the you retail spot channel. also the I in got retail fact question. sort a you've know no taking around the you, that in of bit about that longer that got of in in particularly you're SMA.

firms from independent provider might And FAs. another so some there for be demand and increased some

how in And when start So far as to market? your opportunity? that worth are capabilities while investment you Where think about is you do dollars here? view you that that as

they trend the We'll is application we into know to have And goes. think we've very area our expand Fidelity, different the have news and market strong management strong know non-transparent because still with always we're that in that of think great And where mechanisms, other the the capability Oppenheimer, non-transparent over delivering brought to a to channels talked we've capability which it's aligned good the and Yeah, partner that core become have with And with of you're working world from going, the the starting ETFs, to you're and the the excited a time income. where we're about the you bringing fixed is investment capabilities we're separate who's I client end and a SMAs parts on the rise you that a I SMA the to important before we'll flows. question. had year, turned to of see where see that's continue vehicles know largely demand, attention agreed to segments wealth of our we've different it, where deliver, when have you response of all as highlighting different channels. it's you have

the As the client with have that's I've really dated, to we but also. just said, I longer to highlighting needs need vehicles I'm to, respond think

only we that, we of one time look, thing and bit acquisition, to have we market. able add to retail little the the recognize then the Marty legacy the are with SMA business spot bright is, I'd Oppenheimer business, a a Yeah, were spending that acquire we with in it's our

all that spending strong to support in fixed to to think really I efficiency now points, We're the things are that are in team Marty's kind and that going tech's So be operations, right of capabilities requirements kind our income. time business areas of and technology overall. the in of

the we time spending market. understand So question of into that we your we're bright sure make that spots and to the essence address

Greg. and that for Thanks Excellent. Marty color,

of be the might that that going some too set if we that? way is to in to that you And lineup or for case? in although it into investments You sounded like there some also product I flight of the have looking That comments, reading I - the some of development further that, sounded might like, make trying It to some ETF a QQQ products. ESG. made misinterpreted related you're few expand a that allow How do Invesco that think actually Qs? Invesco? into the that about to What better Is generate for to should think innovation? result much kind of on economics on will opportunity you're expand going

the typical complementary of great the expansion it's the success are sort more Q Qs. couple last so they partner. the again, we typical more following, what NASDAQ Yeah to suite. allowance marketing of entered structures - with And weeks a you know, we really an was fantastic produced in of with, in Qs. know, the with know, and economics, then, nature the the They're you with you QQQ, have

of years. capabilities, So we good market for been Suite. in number spoke of ESG Allison natural a ETF to, client the a demand extension see there. related the the as they've of And showed Q some It's

matter. So records the And know record turning people does are just to grow there the and there beginning to are are you really ESG. now track track assets as seriously more

there strong as, other we you focus ESG everybody's in very have But have know turning look their internally you follow we those you that will forward. know product again, areas We there. attention capability know, a capabilities and as

crack the at point. that's So, your

Yeah, okay.

Thank Yeah. you, Marty.

Yep.

your Thank you for question.

question with is Our next Ken JPMorgan. from Worthington

Your line is sir. open,

morning. good Hi,

to further balance Given near-term consolidation so, pursue would of asset M&A? Invesco where if large the given practical it the program, you've with is And is efficiency be itself, for pursuing M&A its pursuing and goals in if sheet? given the Oppenheimer theme large - days the traditional managers opportunity out scale pointed interested and a presented is, for an these scale Invesco integration in

question. a it's Yeah. great Ken

So in of think about put let it me the how things. we context

the of contrast it. are has risky need clients we want. I've that ups know, something to not day, over you investment some believe they in the things And not have is going you they of complementary don't the order the principles needs that. to We differentiated, notion disruptive, It time, It's know, changed. the of of read would financial to to need be that to the roll be and be it's to be it I acquired have have strategic, obviously, has organization, clients be additive to to capabilities, supportive

will area and we So if has And to continue will us it. also we you it always, to pay to not, we point, be financially got again, will makes sense know strategic sound. it's be the you and your for to know to be attention it

and changed our not have So there. thoughts beliefs

position everything position the to et fit right know, something And in know, all to if you like that sense everything fit that is mentioned would criteria opportunity near-term, after in the sense, make Yep. pursue you is presented do XXXX, you made Invesco But itself? is digested, find a in or if you if cetera. longer-term, something, now a Invesco

we've feel really hypothetical. really What the we can the is, I accomplished. address can't we I good tell about Again, now you what organization, about right feel good

now many of COVID you It experience. off a for you like we had against knocked other for back and took organizations, during XXXX we right sort We're the our making see sure of on us it, welcome do plan factually. us, can know, not And You results. opportunities, the we seriously this know, these period that know, in we was it very right now. resources you believe time,

So executing again, to and and we doing good about we're really are we're heads it. down I - - what feel we're

we're And continue in that objectives, committed continuing our to making a flexibility, our profile and financial is cost you gives the to business sure growth. that. are leverage opportunity that comes to our invest our underscore our that we announce to uncertainty can going I'd for way weather our balance announced of very to we today. to any position and commitment invest reducing in capabilities what to and our tell And take scale us advantage improve I'd the to in we're our And sheet strong target

you to And to want let back, back belief. our me just more, Ken come basic just the step know,

firms of dynamic, consolidation talked a believe question get word no know, there's stronger, that stronger the consolidation money the said there is lot managers about we where are many clients happen, that, organizations what served. you some are organizations. just doesn't know going for the you others, the is think in I they're will what think one be consolidation of that But leaving mean And, do for in clients, what know, to everything, past know, So industry. about thrown and the looking know, organically, from are because buy, you just we the around will I I buying better you you no

the with and again, consistent our you is very out. know thoughtful principles not very we'll the think be But So I we've focus And think we laid do about that's it. at will moment. that how anything

Awesome, so thank you much.

you. thank Yeah,

your Thank you for question.

Blostein Alex Goldman Our Sachs. next question from with is

Your open. line is

you I Great, guys hoping on highlighted bit on question. the the institutional a billion was expand thanks side. $XX you little for pipeline could

maybe of you're redemptions on any and things? lumpier again notable the associated with that the aware more color fee of So, side little a on also revenues the that or rates

I Sure. Thanks, say would could classes as and looks Alex compared see. you actually quarters know, it as pipeline, obviously, to balanced, strong, very pretty across the you regions prior asset

it's the maybe continuing be a a second strong rate, in at income strong healthy fee which Overall, good really bit pipeline. very a we've And rate just fee quarters seen the from and call mostly higher continues see of consistent. drive that capabilities little a States higher. And to as them the the the the pipeline perhaps it's indication, modestly we're a is it really from well, so. I'd growth fixed of equity number United say highest mix I'd it's to of of terms In quarter, modest, end than the

would of about I client institutional in two-thirds continue really within third of mix it's their continue activity. look notable, those quarter, terms pipeline the And in at if from our mandate. redemptions, of on own itself, very about clients the to be so In to the redemptions, nothing from or another flows focused were anything, note terms third nothing just was as think unusual. we I

and the are So pipeline, strength the underscores just think from come overall. of of relationships augmentation I not existing flows from the they really institutional franchise just we're coming seeing that the

question back, Got the a could hoping operating income taking total that you. and contribution little today. step a from to second then a talk bit Invesco about China AUM JV. my base was you relationship of And sort around I the maybe just the if taken what guys

what of of the that products time, it break organization? more could to that you the you of helpful. sort this sort out expenses you as most? scaling would kind if this meaningful be so And resonating over are it revenues, contributor grow can And be are How about could think

level know, high talk for you me just about a at us. Let conceptually China

continues capabilities at highs just just as generated what's breadth anticipate for and forward, We the at broad it's look and going to base China depth stronger. in you its they're a of forward. us, experience of JV. again, And we through products product it's to and going it opposed happening continue just to existing all-time institutionally, If have great by And kind and launches driven of there. largely that get

it'll So know just again, just there we are material and we move a in contributor anticipate you position a be very we strong forward. as

Any that? numbers around

billion $XX you have of asset I'd kind different about variety a of give kind across numbers, a in couple we we that So - of of categories. footprint China have Mainland overall, is

about they third relate there to within If thing I Asia at the know, you think within standpoint, products flows think just category Asia with investment to in think just look of asset an from Pacific of quarter, about were $X the and related diversified capabilities of Pacific every and positive broad performance China you have a nature billion given quite area to flows of balanced of broad, in in base overall driver a needs the kind the you very the lot I balanced the largest of is products, based it's that. set only that diversification, strong

Great, you. thank

you. Thank

your you Thank question. for

comes question next Our Cyprys with from Michael Morgan Stanley.

Your line open. is

morning. good Hey, for question. Thanks the taking

are talk you're could exactly that? in? net just that you're the mount? talk And that about top business. What you three I savings, investing How was back in how of you what coming say Just base about approaching much in sizing understand million Maybe to areas could back the $XXX you're there the I you the gives expense of investments, net investments you that? for the would confidence embedded about hoping how right

just me let again. talk So

get So we're going specifics. not to into

know, broad. You very as comprehensive we've was I we work all and that did said, think, very the

talking know, continue you care be So realignment there just we going against was to a a lot of China seriously is and it contributor. about. movement, And of to about was resources

continues resources for a important. very there know, be a you that we very be The we're continues priority So continue sure that driver to and, subset to have all see have to ETFs important know, factors need. of that, the we us. we continue, making you that we as a

all we've that talked Solutions years the about.

management most are go portable under we now areas that - these again, the of have think we we demand are So high and assets as forward. resources, in they're right

to just we're add Michael, way on leverage, operating leverage. operating And positive sustaining focused that creating the that is, and I

And the to we so expenses, have invest alter Marty looking gives capabilities, spoke so at capacity to of. opportunity it the these in or permanently or targets, flexibility some our realign and out cost investments those to continue the that take all us

example, million break think the say, Okay, with conditions. is versus normalized you relative like pre-COVID? How be XX% pre-COVID? I about normalized and drivers how it on what do how for So on And slide is there? just describe on $XXX you say, should would does thinking just uplift, guess business we How that? to about TNE the that down? that

Yeah, sure. Good question.

of about So, you couple know, to again, a there this. ways think are

tell you seasonality function So the $XX of about really expense. in $XXX is million, compensation you or it's a rather specific I number, so know, a is but million know, - I'd purely

how there. And, you has of of running I and COVID closed you, back. run not of So or know, I be most XX% you so much for of rate to and third tell back traveling. it comes to can tell back million create our comes a couldn't it's really you either mean, of it it's XX% capacity. XX%. nothing tell comes remain would or we're it, so or way plus, not do induced. hard And a it the which just very out the know, right that The I to remainder which at $XXX if in quarter offices us timeframe I or is quarter in we're figure that can with somewhat any the you COVID,

about you around would know, we're so if that, everywhere. clients, tied expect think having in-person you be you would the expenses And consistent what with not with just that engagements

largely at there there when it's, in mean, we're respects, be, know we you used to forever, you know, don't X% the I we some together I back don't So of to we'll just it could assume believe we we're then that of do expect again, we what where of see do over that we someday, don't independent stay environment clients believe to with reasonable And largely know are been are some that traveling expect $XXX earlier and in-person back, to is discrete is time. COVID do where it have environment. an back back. comes items has again, that and all made really the tied line do would just it's point million to come when. a to I nothing it's in that we We office it come really think identified,

Great, thank you.

you Thank question. your for

is Mike of Bank Carrier Our next question America. from with

open. line Your is

and question. Good taking thanks for the morning,

turn on was the is spikes I some non-AUM, I fee the rise still by First think that that great, but excluding it rate quarter realized markets. down the impacted take of every inflows the in

have? line trend If theory versus the the fee you that that the color know inflows, pipeline could disengage provide to we versus on on you the due some overall institutional Solution rate, more prior

I rate for is that would the very say components pipeline the driven fee institutional consistent. the it's by Solutions, and

quarters just it what and prior I certainly of think you of in So that. to couple to very probably, than experienced consistent third would quarter, a know, the we've

very get of a we then, to or rise business where has when at outlooks improve different how Allison you is just then, guidance you longer-term, invest like roughly right free I'm just, markets, industry, exit the each your know has you're And because of given Okay, industry. us offsetting looking think the up know the trying variable the structural could further, you at margin it in let to level? when about just initiatives do money the efficiency initiatives, the you headwinds if know, the to line a sense way niches and you and know know, a if you now kind core adjusted is can just firm component in in expense XX% sector, get margin POS, and a efficiency in in you X% that these how the the the impact strategic,

reinvesting the quarter. hard that's we and positive say, operating business we in quarter that commitment can't after But quarter would is, after the to And that's to have know, medium-term, create our positive we to longer-term you about it's we leverage firm. operating do way capacity able flow dynamics we're capabilities, thinking leverage, what to to trying the growth actually so because underscore and want what be I those So longer-term create that's, we're to reinvesting the of over the our believe really reinvest. enough drives in value it

fee leverage, so at And know, than you pressure, the the same think that about is fact think quarter-after-quarter. it anything. operating environment one there general, we we as is the more But is downward and macro the is in downward is level, down not pressure a that pressure about

to we for we a these line. business level, platform And just creating in profitability levers so as the the the we that's and reinvest to at fee are as to where growth seek top continue broad get create looking the drive to to we operating continue as we Suite, think and maintain expense us leverage. to across our And the see really of thinking ETF capacity way the QQQ

point general to variability. the base third I a our in just In terms I that expense of fixed. two-thirds variable, fact mean, the about is

think about so to in a reasonable point data you you. And rise a markets, as that's

thanks. Got it,

five As next your Instructions] minutes in about call. [Operator Thank left conference today's our take reminder, have you for question, we before question. we

Katz come will question Citigroup. with Bill next Our from

Your open, line is sir.

Okay, thanks.

my question asked. Just and lot one have of been clarification

you to that of this billion associated time? do the sticky identified some think been be what subject of there that $XX off? with that? point run with team of in sort changes. some Is that Or the AUM be money On at might had revenues And could sort

with Yeah, strategically And the the the them and both behind teams rationale did positive mentioned, we them. you before, I sticky, like changes for it's that I as feedback we the Bill, we know, why had quite that clients. our made mentioned quite was I and we've think, both think conversations

performance those where you move related we and is overall. expect think strong a advisement teams to be there really we're marketplace So do with assets strengthen use know runoff to just to under what demand amount better in significant to to areas there things is, the of trying don't or assets then we stronger processes the and those

kind was through those So tough a see clients, you doing that but it's to strategically not do things, know, know, good business. look is for you right should the of go things thing to overall that the

are know ETFs. might the just your to come within of from? Is that commentary relative you you you to existing quick Okay. sort in that that follow-up. active, prepared know, of mentioned just or within then looking And take to sense the share is transpire? players share of how that you get that bucket one trying was the broadly some I passive a would where share Marty, wondering, I'm

can Yeah, a and right. combination, those be

ETF strong a And at I we when to an sort earlier us, capability. for talked that will with think strong about here of that's our you spot you QQQ the area Suite, be fundamental factor it's Suite. know, look a very

now, know, end I to know, of And, ESG related that as I it year. you at non-transparent start have, that Fidelity non-transparent an longer know, it's some again, of sort future, records $X out get you we you area the of the longer with we'll the sense you still you area. look dated, is there, is we are is continue important with moving when, right also and broadly by attention billion should again, in think market to know we'll track you ETFs along what about launch something about of into look an so it. as but to know, that small happens of so so are, paying ETFs think mentioned relatively it And having you demand those as growth we as know, area also,

Bill. So pretty broadly,

Marty very you and Okay, [ph]. Greg thank much,

Appreciate it.

Thank your you question. for

We Lee from have a KBW. with Robert question

Your line is open, sir.

Great, thanks thanks for your and But patience. both questions.

been rolling on thanks product how have broader you the focused Most a really dissipating on a of the end touched specific appreciate ESG strategy Firstly, then of active you're to to bit I were how if apologize thinking But, that? broadly, mainly just and you'll elaborating the as a the on on but to you I asked. you But more ETF earlier. questions missed my disclosure, is suite sense and really it. process, of Marty, more you broader are ESG trying on you where are strategies, strategies, into more business thematic see business investment you get looking incorporate know of can kind it

and let can me couple make Yeah, a chime Greg of comments in.

multi-tiered. it's So

again, So know, the our know you a strength across thing, know right it we that's We're of it, well an then throughout ESG know, for know, I'd you and, in of area process. well seriously. leadership we're we'll fixed And a an are that, be Greg, add? you different that's into area embedded other embedding just parts very been you that's, with capabilities. taken underway. suites - and, investment is you you world. would you anticipate take then, the in And different all world is, strategies capabilities, you will the principal area say alone, look the looking And in aren't stages, the longer, again, is activity embedding us, you're not probably in know, income that and think that of competitive ESG at it I just you know, we some at to capability know, you know, not leader active just Europe, you is ESG there continues at have ETFs now your our if world. reality product thought across but and ESG

ESG about [ph] strategy Yeah, a by is the we positioned, think, billion move now, XX,XXX ESG if quickly, our across do narrowest the mandates prepared we're we're lot to thing of side. to need very and about, Robert that, perspective, client roughly of you're of about going think by mandates we point look, right have you to geography $XX market market quickly, moving I know, Marty's to well varies for the definition, that's and

have ESG in to grow for top significant of we and know, entire as that and be know, big point our which you a a firm, ESG systematically kind continue view So prepared you array to ESG integrated something area across desire to we're we'll tier sustainability the of region products growth global with undertaking a we that kind in strategically have impact overall. manager is, be will a every Marty's of and importance we'll to support platform, then the

teams sure globally that set all really ESG of then a asked comprehensive incorporate areas, to that with And very strong is it's critical provides moving key a make our we investment-led, our So and we and and key by a model ESG manage performance, in tools. we forward, team that's processes. investment-led, specific guess, and expertise about this is you team's requirements each support why and I how

So it we moving a confident you I look and the do lot and ESG forward. and a of we're of understanding be to taking opportunity going and this think and is how gives seriousness work how

So we believe we answered the question.

Yes, it much. does. so Thanks Thank you.

thanks Good, Robert.

And again. we'll up wrap call the so

described feel us that very ongoing all focused we we You as a make questions, know, and the better forward stronger to conversation. good good all very and we we'll about the They're for you Again, and we the on about move today. continue thank thoughtful. that feel much for meant be undertakings to quarter very the And firm.

of and So day. thank you rest have good a much very the

you does conference participating. conclude thank for today's We This call. all

disconnect a your now may rest and have day. of great You