Invesco (IVZ) 27 Jul 212021 Q2 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 reflect management's expectation about future events and overall operating plans and performance. These forward-looking statements are made as of today and are not guarantees. They involve risks, uncertainties and assumptions and there can be no assurance that actual results will not differ materially from our expectations.

For a 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 is follow-up until the one ask conference session. Second participant. Conference recorded. Quarter one Welcome will This question, can question question-and-answer per in more hour. Today’s to mode Call. only To [Operator Invesco's allow All be listen-only submitted a will being call Results a last Instructions]. and be to participants

If may you disconnect at any objections, have you this time.

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

been tell our to more of a challenging their now virus, in or about they've together. colleagues a employees one reopening And together, again. back success the the see adaptability I But And together a in our it and the coming almost to in we hear these of have follow as continuing months as begin, say, the halfway are and is see best at working to dedicated And different back thank And needs, helping once we're local see everybody, good Thank able see to momentum you back. like many during than to when of from office reported And employees. strong few work at to year and this to point morning. team it's and how before to ensure as last the achieved continue recognize the for to we and you, office results our of team that transition environment. operator, will you and another reached the the you stages and we're the is year more is we're COVID to like, thank client excited our thing that open well-being offices that welcome everybody focus work Invesco, hard the environment and the back collaborating innovating. to great globe. office, hybrid I'd have we our we of the in from I very the employees everybody been take them guidelines, can one to around can of I I business, over time. in results a as and minute always, with we'll them like a And the We've working joining status the working for work-from-home I'd for us health us. future I'm this meeting continued and and our our

follows competitive net the well turn long-term investment up We as So for $XX areas the start if to which billion. for results. so quarter. institutional where going inflows Growth quarter. capabilities. And These a again performance drove I'm in follow the totaling the capability second have growth key into readiness, see is now areas highly in is me quarter This alternative inclined by inflows led strength, the income you on investment $XX three, We're and $XX.X last and second three, ETFs, half fixed the competitive positioned slide where inflows last highlights let for you're presentation, growth. the strong. focused was of net on And we year. are record net and scale, quarter to billion to new our billion achieved in of the slide yearly can

during billion. the raising $X the launched generated business our excluding quarter, the business. quarter inflows the $XX period, $X.X during CLOs inflows were markets billion long-term two net our strength private from billion We generated estate alternatives in our net at of of real $X including during and billion, inflows that Qs EPS, net Looking long-term into

focus space, we in of billion of where last of our to see committed capabilities MassMutual, clients. over the MassMutual the to we benefit the invest also and continue our get market with increasing speed we with benefit which strategies, alternative quarter. has alternative our We various to for highlighted $X partnership which materially can

of of We clients continue other we the services of to which investors UBS, investment strategies Switzerland, we partnership in parts announced global management and EMEA products such innovate INREIT launch retail through property for as in will with Asia. for UBS the with bespoke provide and

billion $X have Oppenheimer had and $X.X during direct income markets billion estate of into net billion long-term for also within capital our billion We capability fixed the accommodation, inflows global real active available quarter. nearly equities, fund, $XX with of $X in active key net We the to that inflows developing see came a deployments. continue

$X us an long-term Chinese to of and from included billion and flows, as continues source for quarter inflows our differentiation a China venture strength Second net of organization. joint be Greater

helping forward on greater including pipeline positive target, to I through we Invesco our Solutions-enabled scale, our operating growth the for we're accounts flexibility generated continue quarter build cash quarter. business, adjusted for team. the delivering net a second I investment readiness, the of flows balance the to a our results the Allison which XX.X% positive Allison being stronger while in in an our with is the flows following leverage over in driving. progress margin walk but going the of large efforts In savings Australia funding well operating Solutions moment in pipeline XX% continued of and note future. outcome this would towards producing our information institutional Strong clients financial a quarter, more for the cash us addition, mandate to will and focus improving position quarter, experiencing provide the passive from it results on detail. that, end, sheet competitive driving our at turn strength, position, will With was enabled the our from pipeline improved by

everyone. morning, Thank you, and Marty, good

was to funds our turn beating strong the the investment XX% a performance quarter with five-year X, you'll globally. basis. actively benchmark equities, second in or in fixed emerging income, peers slide on If market to This strength equities, of top continued see and reflected managed half of equities global a XX-year where clients Asian including continue we areas demand all from in and

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

were in is Australian equities the quarter billion the inflows $XX.X nearly billion significant inflows passive flows. XX.X% The generated of driven year AUM an net long-term second gross inflows driven net by Net growth. from in positive augmented by platform the were in one generated institutional represents of of the ETF quarter year in $X.X improvement the billion channel improvement second billion improvement ago mandate. net billion. channel in $X.X were $XX.X long-term a $XX.X organic in billion This funding long-term annualized net the Our one of long-term quarter, billion generated $XX passive long-term diversified long-term $XX The inflows quarter ago. XX% billion. by Americas. in AUM inflows and a $XXX.X inflows from This retail Active inflows representing net

of excluding net long-term $XX.X our billion. inflows net QQQs retail at generated the inflows ETFs, Looking

following equal Our captured AUM in S&P for level share ETF, quarter half continued market of United inflows first second XXX global in States again, quarter, interest weight high Net ETF of second QQQs, a inflows inflows flows the our quarter. $X.X again generated net of in the excluding included excess ETF in and its billion net platform first the $X of billion in in XXXX. the the of which in

the by strategies, X, net on market the CLOs ETF the that of by the Americas net you'll real Marty driven inflows Looking net $X geography inflows billion flows slide various fixed income at estate long-term and that mentioned. quarter, long-term private direct inflows in note had in

inflows remainder and by billion quarter Greater that capability, the European capabilities. has billion of to large outflows net into in UK, of excluding Nearly from which long-term of the to AUM the delivered net inflows long-term diversified JV, mandate long-term billion Singapore net the long-term and by May. experienced billion UK June. $X.X end outflows second $X.X the finally, multi-asset outflows Japan, and EMEA, areas from from net UK passive were long-term outflows again from funds. capabilities. China fixed net $X.X the Pacific retail fund $XX.X billion inflows was EMEA $X income were $X the first China across alternative, lower improvement billion. The region. other an UK equity compared This during was from the the and across $X.X And global inflows quarter, billion net which for ETF inflows by overall with largely another from arising the outflows of billion. our net from majority in in in were net $X.X $X.X into pipeline Net improvement our of as billion primarily number the quarter. return retail second targeted was billion quarter funded in institutional at inflows globally reflects billion equity driven long-term in US of outflows UK of quarter were our Australian European $XX investment-grade balance loan of net The senior across these $X.X inflows Long-term in of including driven our the in Asia billion a net relate and region. quarter $XX.X strong inflows driven the the flows, institutional particularly

ETF good the and Turning Equity long-term that S&P Weight to reflect of Equal Australian net flows billion XXX of I our including a across mentioned. ETFs mandate $XX asset inflows classes. portion

that pace municipal We into continue net of first were Asia. of first what we institutional in although the funds China fixed have billion. into they include with to products the long-term quarter, inflows the we $XX.X investment-grade maturity of in at second in the fixed launches It's see retail experienced fund net income did various noting fix in quarter not in long-term strategy income flows worth and inflows and quarter. flows in broad Drivers strength

during You to net outflows balanced asset of billion. reflected the billion in the $X.X see net largely this the decrease in flows class quarter in $X.X the

estate, combination the through real business the alternatives a second we reflected flows just driven in Net capabilities. Our of holds these many this primarily by alternative inflows flow quarter. also commodities newly launched CLO, net quarter, long-term is I the alternative the the over and first asset different GTR markets from flows outflow that $X.X by improved capabilities class direct senior billion is loan noted. results saw and and private our in in Included

exclude $X.X outflows billion GTR do the significant you the global net were If inflows long-term quite quarter. net in alternative

X. Slide to Moving

the reflecting by team. XX of June at the our billion solution passive $XX.X custom funding was pipeline Asia in mandate assisted large Pacific institutional Our indexing advisory

the Excluding remains the passive in Overall, in impact and levels of focus. wins of warranting increased has diversified and network quarter, across the our to meaningful and customized prior fee XX% continuing solutions first asset has our in relatively to global across consistent the enabled classes mandate geographies institutional contributed pipeline pipeline and quarter institutional $XX composition. is our of This the and capability, mandates. and terms created growth and pipeline asset billion the investment size

XX. Slide to Turning

to for quarter yield net recover basis waivers of the remain operating more do This mainly Australian including rates was partially waivers basis a in was the You'll average revenue experienced passive in large average quarter was revenue, of minimal the a until offset normalized market operating expect money expenses payroll points shift the markets first The We future quarter impact a benefits that by by was incremental yield second decrease of mandate a mainly X.X% improvement driven the to $XX that in well revenue X.X% taxes the decrease balances from adjusted begin the on and from the impact decrease QX by the fees The increased place in first and the driven of for of second impact million as point. X.X levels. full increased higher in of Total quarter. quarter, net to market our but note excluding higher asset second The level. discretionary quarter. result foreseeable and higher in fee increase money performance yield in funded was second from QQQ levels by variable net XX.X Higher compensation as relative May. X.X the or revenues to $XX.X higher in quarter, the higher first in the we million in marketing. expenses the was quarter. basis points offset seasonally result the mix variable reduction certain AUM the as compensation that a fee as

also the resulting Marketing spend to further quarter is mainly also typically higher $X.X evaluation. We increased in second low which our the recognized recognized the marketing expenses the due quarter to levels strategic relative we -- from savings seasonally first annually. million in point for quarter

We initiatives impact activity the across timing campaigns at of remained spending, levels also branding due discretionary to the expenses and to targeted globe. reevaluated business other and lower-than-historic various quarter in pandemic-driven the launched travel operations. Operating

quarter However, resume client marketing which travel we late second and some is business expense. both G&A reflected did in in in activity the

FX compared from third the expenses expectations As second we our look to change be market levels quarter no and quarter the are for third XX. assuming ahead June modestly to quarter operating higher to in

driven in levels higher variable second and quarter inflows third by have a both and the We the impact revenues AUM expect expenses on associated will quarter. market modest improvement that net in the carryover

a seasonal begin to entertainment impacted in travel third as We will typically and at increase normalize. and when this more to the is, forecast marketing-related still in also point levels area spend expect expenses difficult that's quarters. modest COVID One increases expense fourth

see in domestic of travel across continued third to do in-person activities engaging we quarter. are and more engagement. And We the modest expect these resumption

approved our our agency the funds. services of to has provide Additionally, transfer mutual that changes funds certain U.S. board we to pricing

Offsetting by operating will we As be resulting in and in $XX an property and on which corresponding this, outsourced anticipate revenues, technology will we expenses annual a million to basis. increase a service our increase result, a in office reflect costs administration impact minimal distribution that approximately income.

We this be into fourth structure and pricing effect third fully place to by new expect go to in the the in quarter. quarter,

we our Moving slide we to made strategic with evaluation. on the X, update have you progress

are looking our before, four As we've areas we key expense of noted across base.

XXXX, invest and In real the $X.X of savings. management in our ETFs, areas the continue fixed of we estate including solutions, of growth, Our third-party and footprint, in and savings evaluation, in total, office equities. model, $XXX was in of the expectations. related million alternatives realized will efficiency. property, organizational us million and to to million combined expense million first to quarter $X related and million expenses. million were $XXX savings the compensation quarter, this spend in $XX operations $X global technology savings annualized, million with to through technology realized cost second The our Through $XX savings China cost $X.X XX% we of brings net income, key annualized million or

timing, run the occupancy to remaining we end net million be savings roughly achieved across in through this relates the by million Of $XXX it spread will and of tech the As spend realize XX% with we by end anticipate, expense. the savings compensation The this XX% the of would the year, of the expect realized, still approximately end G&A. be XX%, year of XXXX. or to of by remainder savings $XXX we rate

XX% the across categories. to in be other total savings about the expect compensation of XX% spread program We

expected $XXX associated $XXX degree In this the going forward. by program. continue we in the year, net second million in our million costs per costs. of $XXX nearly that savings in savings rate, the For incurred of net million to were quarterly quarter, we to will million of the with In restructuring of quarter million $XX of the recognized already moderate the $XXX run estimated $XXX restructuring million total, this end

transaction through of to XXXX. a of We program end range the expect be $XX million this the the $XXX for remaining costs million, to realization in of

non-GAAP not the reflected our with evaluation reminder, in a are costs results. strategic associated the As

to XX, reviewed. factors income for full $XXX across platform. operating driven operating first of non-GAAP operating also time leverage the quarter. quarter, our just the point operating Most following second in X.X net acquisition basis compared the improved and margin was quarter At a the we our yield the results by for on importantly, I'll $XX was XX.X%. XXXX, quarter, the we was first scale end the that out, of as to operating adjusted excluding reported our fees third million our million yield, our quarter which focus that in underscoring improved ex-performance to profitability the back of XXX Adjusted times our margin positive diversified of XX.X XX.X% Moving quarter and degree points our driving yet fees reflected revenue adjusted XX.X%. XX.X was slide to was net margin performance of points, basis points. revenue At adjusted XXXX basis our Oppenheimer

in rate due rate our lower second effective for non-GAAP We income due effective a on items meet and compared was our is building quarter. may mix sheet taxing in leverage the approximately changes XXth, items. Few operating balance impact to generate at income out We're requirements. held positive suite estimate on pre-tax been our position June to in compared aligning million on tax $XXX the for Our gains for cash focused nonrecurring XX, increased have quarter, effective regulatory money enabling Non-operating net discrete in in second quarter. of this lower client last included net comments rate the to product from co-investment $XX quarter products. change XX% third base and XX% in net million has unrealized been the rate cash fee $XX income, We the this the slide demand to actual for of firm The was million and billion margin $X.X to client with income gains mix, tax improvement. quarter, and tax business and demand, on our of the between vary first quarter, be estimate the and was gains as expense operating primarily tax The to on portfolios. across jurisdictions. XX.X%, primarily seed in The from to effective XX%

improved largely cash the by over nearly Our in has million, the improvement our by driven position year increasing $XXX income. considerably past operating

as Our debt improved with has well no at considerably draws end. our profile quarter revolver on

we've position. a our substantially net improved As leverage result

$XXX share During the repurchase forward million remaining April there quarter remaining repurchase and liabilities. share we the repaid no contract in are liability

of anticipate of million. this to recorded the to estimate original XXXX. Oppenheimer quarter, MLP requirements reducing this fourth an of associated the with second the liability adjustment purchase future liability terms We quarter we down cash million, our liability $XXX from funding In nearly the in $XXX in

a our to we And completing continue long-term. evaluation our management. needs business grow that to anticipate that, to with the making finally solid in matter, recovery inherently aligns and that While liquidity we're growth degree and the position improve invest the insurance over run strong process capabilities. to in we of recovery. related a our the claims have the position or do not And meet insurance our efforts summary, reallocating and remain build this of strategic franchise line timing update the a to these Overall, while to growth. we us Q&A. we stage client to the remain with and in is In to capital continue disciplined strategy size prudent for in on open of complex do at operator areas financial approach focused flexibility. key we to in and progress see I'll ask resources executing We're up our believe our to We an

question first comes Our ISI. Glenn Instructions] Schorr Evercore from [Operator with

line is Your open.

little talk could we if Wonder much. bit very about markets. you Thank private a Hi.

highest if how doing view You vision but what's bigger your talked this has about, little could the maybe picture curious the how to chance in big see the can What drive retail a a what maybe of get to you're and a -- growth second on specifically growth bit of potential? be? segment well, side quarter take we

Yeah, you that. Glenn, thank for

And an industry. so it's the for been area focus of of obviously much

real Our estate. principal direct estate been global real has driver right real It's estate. now very a strong group

more We that it's year the early based in by our really nonpublic is for has marketplace this is INREIT, or great $XXX trying US, so important. has it's estate was historical into also retail the the Some -- next in million, which channel of the MassMutual as which potential was that think developments days. get the been is of group. the to on available about performance now That in recent funded real

with other Switzerland securities and was parts Asia through UBS same a EMEA other Pac. real some estate venture The direct of offering listed estate thing with really real

investors. seem seeing So gaining record some They our and opportunities. frankly better a be now track record with that we're of immediate the attention been really to has private quite institutional recently follow-on. those more credit And track have with

very part of we go our this forward. business a at look as So we important as

But on Thanks. us And you're could just the we maybe but just appreciate know right said, about flows you short side way XQ. very I just travel, in for if Can spend give level if Allison. to But we? really normal able normal I much a normal expense when quick markets us that? a one happening. mentioned on. and the not know are don't if normal so you is to you contextualize expenses. uptick How below with modest -- expenses Allison normal we you don't have now set

restrictions that to domestic client to a come might not travel just $XX hard that's we'll have seen in overall. we get a and is. for sure in and that back certainly Yeah, we're $XX see seeing it's think look just as we're see the from normal XXXX what would while. activity real to XXXX -- ways going at all been international pickup do we expect are within like million resumption are per some I going But allowing that we to were regions offices think try forward. what and where the And that million certainly starting probably when one, of reopen half we have and it to look out they're the place challenge. of that's we're say the some state I in back last we don't figure a permanent have whatever I that back to to quarter of be off normal think below given we And of travel I I'd half because last just

a is So to good about below normal what to maybe estimate $XX be. I probably think being million think used

some of over back And time. will come element that

That’s that. awesome. for you Thank it. Appreciate

you. Thank

comes with question Ken next Our from JPMorgan. Worthington

Your line is open.

my you first Hi. questions. Marty. high for Super maybe taking level Good morning. Thanks for

to As the direction question the factor-based next maybe over think five you see that's the what investing. future maybe have asked I factor look years I do said the three to what you taking that as might are like most you're thoughts Invesco? But if significant you years influencing five years your today? ago something

Ken, And question. Yes. this think I good it's raised a you've before.

of the I asset I we've -- could it that look don't many you of are of the years say the number within a way seeing very frankly made it's of by quite seen all the years just firm over globally management think But what China. or If you're within right a strength the estimates explain foremost now And And five whether a it as know. major continued just factor. to next be in think flows us half at coming right impact probably material I we've for and and an that's can organization. not the be a in I first through industry investments source our

But most do very to that five view know indexing and And they the And fewer also money the with our about talked business factors. some we by how what of two and almost win are ago. in you in seen. engagements really impact a IFF holistically. do. it that And We is capability just you an clients recognition did ETF to money but you that important solutions was last out engagements. the it which to going do way see index of years and clients embedded years with that as coming seen we've huge to in that. of of our really continue part been is frankly strategic It's our as and it we taken capabilities business using client want fewer Institutionally, and mentioned very all the part the other recently be we've retail become Australia, were of has The you true in managers. called with a institutional you the you've managers from important recently totality factor capability clients element

I now. the think be actually right biggest the happening reality would I would And those that it's trends to. So point

personal that's So perspective. my

Awesome. UK growth Great. outflows you. capital that you declines? the maybe lower in then in to either GTR. Thank mitigating the to some decline or the GTR mentioned Europe, hold or outflows or UK assets within Allison volunteer from is these And including operate required to in Europe operate Does you're elsewhere Europe the

on and Unfortunately, the capital AUM than that a expenses specifically does short bit it question regulatory to it little answer levels. there than have the not the AUM does no. The more that to impact P&L that a we is, decline hold. It's focuses little more complicated

you Thank very Great. Thanks. much.

you. Thank

with comes Our from Lee Robert question KBW. next

line Your is open.

my Great. on had Greater Marty Thanks for questions. a I you question China. taking for

update guess, at on, I while wholly-owned know up to least some majority have Greater an just to us take taking for talked can economically on stake you with able your where but that. on competitors it movement opened you been stands your guess, in of a stake. China about subsidiaries. a I of wholly-owned run, operational majority Others update some have units So but a I or you've opening,

Yes, great.

some might XX% of everybody right now. the own be venture but competitors, we So to joint so it remind of

be being years, reason, for been COVID to would for of the And a we principle, stake. majority Power, There two forward take an moved that agreement one Huaneng in partner conversations Our them. has frankly, but quite in been have various it principal not venture. reason. hurt the not others, has management important to separated a I contrast us. that as our it of our control the is has what really competitors. since thing beginning we've position and compared And But to really had success think, is this to has And our

and operate our we we'll but Wall, INVESCO to markets retail Great large the institutions go within entity institutional retail literally So China one platform institutionally with in as for platform. the

So, growth. again, enabling that's what's the really

focused where with I happened. from is, look also undertakings. to think, think, last trying these to We elements actual most it others market as new to you what's get announcements on a wholly-owned generally, other XX has some of separate months China. And have are, look at at from I And institutions within the over subsidiary down slowed important it

maybe the is State on saw talked Great. going start I it Can you the are a product meeting launched and your my it's follow-up much to too us contributing Citi out haven't so where Farm other that rolls guess I to And it ago, if was it maybe platform. or you do you think, that expectations -- platform, for new see but as a using year update I sales? on Intelliflo, you while, about day, if that the you the is, on

Yes.

$X right about trillion assets advisement. in So, now, there's under

So the the an environment. you've is the of the with was Farm slowed we're focus see and go events get conversation. again, and outcomes Intelliflo. Obviously, And, enough very again, Citi, specific down early in business. days clients optimistic just have relationship pulling we're last to with will Intelliflo to But, prospects a it's are to more of year be State back a COVID together important operating and of sort the of to about But, some, year still sort of you really that now material holistically are starting that elements platform seen starting and some creating momentum past the the nice again, different addition. the have we the growth. single really of to

my Great. Thanks for question. taking

Yes.

Thank you.

Deutsche question Bank. next Brian comes Our with from Bedell

line Your is open.

If folks. can Great. just morning, -- Thanks. start with Good I

Brian. Hey,

into quarter, rate? shift if And your Good given third fee just, on outlook just for lower -- organic all IOER growth at passive active touch growth, for waivers, second rate think yield you the benefit with what growth, net fee can the money you the -- going versus as you quarter? can the market base the maybe Allison, morning in -- given the compared and given organic strong from in revenue the the

Yes.

of a say I'd mean, things. I So, couple

And flows. the and like going really be a client have that's sure of Just platform. across keep revenue of we making scale we -- biggest in a function well-diversified and mind, just feel the again driving really of demand quarter-to-quarter drivers -- yield net to we're really is mix

Fed funds of we of certainly for where more to but would as And going of terms impact yield. But waivers now impactful it as be So waivers, point just demand impact that in right obviously we're that, on that capture quarter impactful, market be drag. exists. correlated going, a about IOER mix will movement do a perfectly isn't dynamics this any certainly is -- would in X.X going given well. there quarter. it's where market And that noted, helpful, be money I an accounted always demand are market And as revenue in see money to a basis have then, competitive because

of across at our retail. be and institutional And positioned, the institutional so, waivers, note we're our market going thoughtful these in element And XX% kind with thoughtful being waivers about about our and and to vis-à-vis, channel XX% competition we're we're about of money waivers. partners making are to smart to the the distribution where I'd sure them sharing

are with that we getting to expecting. share really we the to ensure able are they in partners some outcomes work So clients as waivers these of our

a So ago probably coming higher XX.X%. as XXXX, I comments margin down, basis is, of we couple a on yield, operating our the what of back making years some revenue yields to see net was at focus do you lower think but look net X back and points than we'll grind at modest yet were of sort we is revenue it I'd

So, to We and about revenue sure revenue yield don't make drives want driving think we positive into our underscores we I year leverage we -- platform. the across really But really about quarter-to-quarter. especially really think performance our that do to I net models. last over yield operating get that. revenue is recognize our something And net think ability

sort area, can classify plan the what's launches forward talk bit good drive on a flows, of Yes. And this little an second the in just even and product about first you in if quarter, point. and either going -- of your AUM game for sustainable for how even is? can what sustainable That's then, that. much that. just in Marty products? a the then, Thank And you then, you did flows or of Just passive both if active it's terms sustainable what products, and on product Allison, update generalize would all strategy

Let me make then ESG and on capabilities, pick Allison a sustainable our up. couple of just comments I'll let

XX% So, our the within us across assets whole And important our obviously we do. of organization. of integrated part for what as all now ESG are absolutely we capabilities our integrating we look ESG on have at incredibly ESG focused capabilities. an

look throughout first as our you necessity in $XX if an is is dedicated It's been ESG about organization. today. I think instance. And we by under the totality you business and know, it management think absolute specifically billion at assets really driven EMEA it's the of

see continue there. We to growth

If continue given record, have at to that. shares market of again, our flows you because one long ETFs, our track ESG see we the ETFs highest of and they'll look of

just look and be at it’d absolute through to as is the important we marketplace get the working clients what also literally them the hitting organization So and that to whether with in but how work an this. we us -- to this you but as again, if capabilities right we're imperative manage throughout ensure for money,

Yes.

on hit most of it. I think Marty

the terms In first they were than flows the quarter. of softer for in quarter,

modest bit the the specific less Overall, just the fair ESG than more market some driving pullback than think of shifts of other into wouldn't of performance from be We could quite that capabilities that in terms driving from point in the it our quarter growth. capabilities. quite quarter headwinds. and a I of I certainly anything saw which some say $X perhaps quarter, than bit first in a a there's little second billion. We flows first highs quarter little saw some stronger in the flows market the in was lower really, noted, -- to flows first capturing be terms Marty post-election share we're some demand. could ESG continue strong our as the the and were to And highs and

for Great. Hey, your update. you thank

Thank you.

Thank you.

Our next Dan Jefferies. comes Fannon from question with

open. line is Your

morning. I around wanted thanks. your Hi, comments on balance. follow-up Good to

I is Allison good. launches. fewer you performance had fund That obviously mentioned, outflows, think were but there some category

that an outlook So, could you for on us category? give update the maybe of kind if

just drove launches We watermark overall. launches, fund were had Yes. real and probably in those strength the really particular. size the the given performance both quarter a in the of high What strength in the in first China terms of

think have I on of JV, the shine seven fund launches again inside in quarter. we second the

flows. I about were of driving again billion five in them $X think balanced about

strong to So, be continues it overall.

point necessarily beyond anything specific lumpiness that. quarter-to-quarter, wouldn't some Just I to

changes outlined like any around real kind original we're this helpful. more that areas That's the just Okay. seeing as in on curious quarter, different but might sit savings put strategic those allocating seems there's dollars to you through that been each then, it from expectations if if buckets, originally investments it? of looking to where the some more than growth, be of message understand you're the that any the getting more kind but And of of today, those some curious and you're we're gone evaluation and same or there's the things in targets you kind of detail you've when of

key key the and some there key invested are in The that you'll we each demand I there's on, client isn't these we ahead do but the demand. that would of our going in there. to investment something today capabilities of capabilities stay really is getting areas and same We're I'll that chime be of message need focused the where our capabilities. changing. -- I you're to strategy up continued seeing focus start be areas our continuity client believe say, and our the things pick to consistency on we're expect are these And and it's approach. I because of because those in think we we're quarter, let Marty focus that strategy consistency demand hope on

away our be or market there think that I In a our takes key soften despite little China terms us that I that, noise see quarter-to-quarter. out specific focus belief anything We're don't a change. that, may changes, growth of sentiment to I sentiment there's don't to would know that say always cause would from in bit. for going what political may area is us or

that both Our solutions future. as think pipeline the is a is we're capability our in see overall. driving I capability, I and you really institutional think how key that for ever the as convicted that And growth

than our to be drivers more continue in capturing real capabilities ETF of market of share Our we're growth terms as flows.

X.X%. somewhere was of capture our around think I flows past this quarter

the over because But We that flows revenue the X%, the capture is important Our positioned. captured I quarter think outcomes. market there north really revenue differentiated in relative more of of some They capabilities pool. ETF of a ETFs points pool to which our about they're they're the how the fee terms real of last and of little X% of the X.X%. higher and share our even to universe strength than is capabilities and are there's of demand performance

past operating deliver focus sure operating real margins in to But that in I income us our this had on been back that's doesn't over what supportive year past a is making that helpful. last this which surprises exactly seen the in know don't our year you've base any cost aligning year. deter we're I so deliver think we've and strength market It's as And growth. our

some we opportunity us as results. macro no second few that's They and from investment Dan changed it's organization. with a said. for the ago because as great our an mistake when call disproportionate you We highlights the been us that and capability the quarter look Allison minutes out down. And talked disproportionate haven't areas. key that those that's well about it at where we also heads trends when see align of They has

see to much going quarter-to-quarter. not change a you're So,

you. Thank

you. Thank

comes Hawken from question Our next with UBS. Brennan

open. is line Your

be you have you -- step on repeats sense a stay but seeing Thanks of estimates you provide you or few emulate early whether And actually And subsequent? or maintain do or that And can success morning. do business the how had competitors it is there? with to about also, I how think try do had this quarters ahead? years you that that? know on that strength? a for it's few any question. taking When how your success you've offering, Good Are you solutions much my you've build differentiation? the you how that stats

Yes.

started can't Let -- approach of with recognition describe a a a and great talked been from range But years bit I was investment about. that's question. what ago as any we the so clients our broad building me what competitors we've we've number range -- are broad of doing. it's different that of capabilities little standpoint And wanted out

investment of the did team what Importantly it on top team. sits a building we solutions is

And So the is the it we uses not existing investment marketplace. with unique can capabilities. it somewhat in our does investment best that compete tell the teams as

the these they ago the any what understand what recent introducing the lines. range that few with expanding what index the is institutions. of your we've it's with the one and capabilities in importance so, to to though, mandates was creates portfolios to with minutes relationships. up that an are totality as per such delivering mentioned of capabilities you client trying engagement along are accomplish engagements a clients of client The And literally relationship that's seen. more I end the clients And and And

few does ago the is it's seeing again -- it's And It's channel also I retail in we're -- persistent institutionally. important in said we're but time. quite also. important very minutes as it it a seeing early So days

to the look has look future. we So, it we been just quite frankly way as it's at as the that business done

liquidity Okay. second seen And I more Allison. for continue probably -- to know we've more then question improve.

liability going out the having that, idea MLP to be later funding year. the You laid this we're

liquidity, without with those dramatically far on better than calls ago. some a still a lower So, were but question calls in position they and year

think different So mind, those mind dividend buyback? we from are about, they increase with do How recently. how know all of calls I a in likelihood in your what we your are priorities updated how the liquidity? rank got the that should on? capital in the in But step-up on of here management

a we've to been That's through. get for. resolution for Sure. milestone Thanks Brennan. a MLP will terrific be us now. anticipating there Yes, while for the something been matter out reserving It's the and of

good liability, And as the we be fact that than matter anticipating is that the the news. to what and of were appear in quarter. at about to of this forward resolution does we look so fourth the And previously the funding that lower we moment think do

lot I'll does cash through year we out our were manage get of over things them contingent plus. in that of for needed to be fact the clear cognizant we that flow that, past a call and As liabilities, these

just so look of to And that, sheet say I'd as our I the continue mean, improvement forward, beyond resolution of focus of balance we on a couple things. the One, we overall.

remain that think as profile that's But those to about structure. below leverage strength about be mean, And the I element have non-preferred as And in to of the we XXXX. quarter. come of to that maturities in as do improve and our balance improvement. with you EBITDA, know at we Our areas balance what depending I focused capital the continues yet. but have on sheet we for second we're up XXXX just to think improvement. opportunities Xx on now optionality our how improve noted, you that And going us, leverage, means We're the with sheet. of strong know looking results don't continue I the

buybacks, share our noted, to know as then Beyond our you increased that, be. will And dividend, quarter. with continue increase We for committed longer that to modestly concurrent that term, to be dividend in we last are and sustainable improvement resuming performance to and And will don't common when going we the increasing dividend. the to look continue opportunities results. I

be to get to on capital shareholders. we continue to we As profile. to focused I to buybacks share continue MLP for remain leverage the through return an said, certainly us and opportunity But the matter want

color. for Thanks that

you. Thank

comes Citigroup. Our question from with next Katz Bill

open. Your line is

maybe need see, capital through with maybe versus think then, Okay. a organically you to through is questions could just for M&A? discuss Thank Excuse taking them maybe you, that very your much this you my the opportunity question you grow that Where opportunity here, pipe, on their C Marty go for relationship with MassMutual. think distribution me. maybe as maybe working from morning. any and an does about

Bill. Thanks Yeah.

multifaceted, So out. you're again, as been it pointing has

the been very not clients. institutional positive, the seed a So, with investment but seed co-investor enabler sort credibility is, of other one for and really investor just alternatives, itself, very, that's of

the about the of $XX us to And the billion channel the platform they've where now, And that correct know organization be now. we it's retail retail looks forward. recently going on business number you me the an so flowing right REIT as to about is that like for Allison as move acquisition closed within right opportunity

cultural look much, is, as work on just various our regular organization. what to to question basis understand So about It's want be again, as along improves future. we not And we alignment, exactly they of our our something the in There's the lines sense, I'm on it past, of to regard necessity if made if sure the strategic to sort very the together they would sure that. an With that a business. strategy it M&A talked you to the of very call supportive we've opportunities, complementary position. continue

one thing The I'd about $X the Yeah. platform. on say is we manage billion broker-dealer

Thanks, Yeah. Allison. me. Excuse

Secondhand there. flows

Okay. to the with a go to year little still the That's you return certainly today, appreciate the your a opportunity But fourth trading helpful. you then, on Thank buy moment, internal in liability that between back given for points? the rate buybacks coming against is new uncertainty, stock talk be where outstanding. And of just bit as back follow-up management to relative capital price coming these assumption of end would versus positioning, your just growth maybe a the list. the business just at I'm Can a have you surprised about door little you. stock the

don't imply we've would need Yes. as that And I imply. not of to fourth it's list. quite as the that it's said the on I mean, want before, as waterfall

we I one buybacks. to being thoughtful The to about we we opportunities. opportunity return the invest our should in growth. constantly And certainly, timing our are to we thing about product say, to Buybacks of and means And the continue didn't internal liabilities own aren't that had thinking how progress parallel are have invest own past drives making think and any when some as contingent longer-term number making going resolving are and is by other and a year number to in resume all as we've of is have continue that really we good we these balance this invest opportunities last our have looking there growth well fourth sheet We're and said but we're in opportunity the we relative launches we think one shareholders paths I improving over about rate We that to are have. of overall. we think thoughtful running would and for. about been the capabilities, we've progress, about as these own

guys. you, Thank

you. Thank

Thank you.

next with Sachs. question Our from Alex Goldman comes Blostein

Your open. is line

and Good of kind little well. hoping Maybe you're taking you amount need space opportunity sort really of go-to-market market strategy you the I of of capabilities? your you in back a as discussion retail to for on Great. question see there there? kind for significant private to open specifically penetrate appetite footprint more for what for Thanks retail markets and considering with is of in do additional the on And go organically, a the you was to zone second sort retail Invesco. product, building morning. acquire can just get aiming think a channel, color or solutions to what the private

Yes.

So illustrate introduced it's which the a right it capability. our said, now to INREIT, to question. very the is good And was retail I market being

capability Our for for to globally. largest unique not in is direct us. the opportunity And that is that's real growth channel the retail view estate

have have in those And you capability. very figure with how many an it's like presence be the to best if firms distributors, think firms particular, best channel. and I alternative But you're the of hard retail from to out firms, tried to wholesalers how really that to alternative successful. the and need access firm that standpoint

very are that like And so there firms few us can pull that off.

this we development so really us. look for at And as important

UBS now done So distributors with States. the multiple and again, in here just we've United through what

what within So forward we're to channel demand going move we capabilities we and think see far don't for early have the to that days it's concerned in – as as I'm that here. that are

is to organically like path sounds market private opposed all the as here on kind of it anything inorganic? So,

Yes. Yes.

to the plenty now retail that right the channel. with we have give We in capabilities have

institutional And Great. part pipeline? a Thanks. billion any you. $XX about of? can if but Got you again comprise maybe Allison just quick a rates for curious does the with then associated you, I then bit old of pipeline within institutional follow-up, it what the fee missed And strategies little talk the that apologies the

the below disclosed institutional look fee Sure. pipeline average if look the the the fee previously We to tends we've but what to the been the – at of – of think for I second be tends is rate our rate, basis in points. XXs, it's end highest at it rate and I pipeline firm pipeline kind be at high the look quarter, as the XXs of low at And fee it's I Invesco. I've I've the since at seen the

our those the I back asset of $XX and channel exists demand States, in those senior and of bullish as and capabilities, And was $XX And, replenished both in terms of again in fee as in back the the last pretty regions few funding classes to quarters. just so across second itself And performance private higher well the of look of terms the United on the part think, as billion real average the size, to Australian it's Pacific composition question, the in kind pipeline both of at terms institutional across bit capabilities a EMEA. asset of our strength the loan I rate billion following capabilities. but capabilities And the again it actually balance And to quite really than that classes, overall. markets it I'm has Asia to that's the I little mandate. estate coming the alternative our been points and side pipeline it's balanced think the your of the speaks our

Thank very you much. Great.

with our JPMorgan. And Michael you. from last Thank comes question Cyprys

open. is line Your

in Hi. Stanley. for Thanks Mike me here. from Cyprys It's Morgan squeezing

success you Just on over a given China that there. had question the guys

well in approach touch how talk you What's as your could to your the And to maybe the from as distribution? lessons digital you relates hoping distribution What worked, in little bit as Just it evolving? distribution about could do upon away a well? worked experience you some region also China. deep of initiatives hasn't what that's take

Great Thanks, Yes. Mike. question.

very engagement is how But us those different with helped engage the are the other on think the very parts they within from is the to see have in digital platforms it might little in marketplaces. way channel the where I'll more flows extraordinary. as I that half is if platform. And in in banks came most is of the it case us What us. come we important success into retail say typical benefit with deeply as getting manager the a be way. say, the very you to then with for you needless market has to Chinese, foreign local and think digital is evolve in engagement a continue driven in which then type early the United by see first States is that you'll platforms of with expanded other some you insurance to of have started world now that as only Financial that level just competitive quite Ant also it's So there to in sophisticated the and their right are by and money we embedded a service on your organization other the going clients world are retail the very, China the of and on and engagements large marketplace. demands money of on and large to capabilities And fund we it companies our business types at in

depth is thing the bring world and same it of serve very where the another multiple investors be And institutional the and the of those institutionally in us institutional the at and example and the breadth able the best channel organization full is to necessity reflects of some a an clients high have sophisticated largest organization and penetrations in mandates just retail of really is level. this clients just the capabilities. from the range brightest China So within to institutional the with -- some to you of for it representing most

us. So I but what's insightful, worked that's don't for know if that's

around base. question impact more the maybe for follow-up Great. your a Thanks. And expense just on Allison of market movements

I is so Is thinking we base of you've market expense about slide past $XX being $XX one-third by comp right? And think on then variable How in Should the $XX that? the about in you moves in called should or movements that X. maybe or about for with we or into that the million market. the out said about market X% your impact AUM so quarter on that be annually. still million the I appreciation so think impact side driven see million translating

-- expenses and portion of flows things. nature One would drive driven say, I'd one-third. couple be our certainly a be variable yes, it primarily would other by markets, the you're as in that of about but So well would

there there's market on FX slide that variable of terms in In as well. X comps

Did but mind. you in So what yes, break I'll increases. and the we've so just to answer leave really in and don't as I look some can relationship that. revenue I things all you even revenue performance it relationship kind the at question? historical guided past. And, of consistent to see AUM drives in compensation. at comp to that of any these that -- with do there's It's variable consistency, your of keep compensation drive But, that the wouldn't yes, there. in still point increase

Sure. Thank you.

you. Thank

Yes. Okay. sorry. I'm off? you Operator, Did I cut

Go ahead, sir.

touch. to -- thank your Good. I Yes. just very for of be time good Allison rest Allison, appreciate the and I I of a much Have the -- we'll in on you day. behalf engagement want and just

today's you. you for participating. Thank That concludes conference. Thank

this at time. disconnect You may