Quantcast
The MFWire
Manage Email Alerts | Sponsorships | About MFWire | Who We Are

Subscribe to MFWire.com's News Alerts [click]

Rating:What Invesco Gets Out of OpFunds Not Rated 0.0 Email Routing List Email & Route  Print Print
Friday, October 19, 2018

What Invesco Gets Out of OpFunds

Reported by Neil Anderson, Managing Editor

Buying OppenheimerFunds [profile] is Invesco's [profile] biggest deal yet, and Marty Flanagan says there are several key things that the publicly fund firm is getting from the combination. And he confirms that there will be "expense synergies", though he declined to share details.

"The power really comes from a combination of four different areas: scale and client relevance, differentiated investment capabilities, compelling financial returns, and the strategic relationship with MassMutual," Flanagan, president and CEO of Invesco, told analysts yesterday on the Atlanta-based firm's Q3 2018 earnings call, as transcribed by Seeking Alpha.

To the first point, Flanagan reiterated that once the deal closes Invesco will be the 13th largest asset manager in the world (with more than $1.2 trillion in AUM) and the sixth largest U.S. retail asset manager (with $680 billion in U.S. retail AUM).

"The immediate impact of the combination will create a clear leader in the U.S. retail," Flanagan said, pointing in particular to Invesco's relationships with key distribution platforms. "We will have five relationships with more than $30 billion in assets under management [each]."

On the financial side, the Invesco team expects to realize "expense synergies" (i.e. cost cuts of some kind) to the tune of $475 million.

"The scale benefits from operation are astonishing," Flanagan said in response to a question from Citi analyst Bill Katz. "Oppenheimer was already heading down the path to make a number of changes themselves."

Yet Flanagan declined to share specific details about the expense synergies or on any possible fund merges.

Also on the financial side, Flanagan revealed that OpFunds has an operating margin of 40 percent and net annual revenues of $1.4 billion. That translates the $5.7-billion price tag into a big more than four times revenue.

On the investment side, Flanagan described the two firms' strengths as "very complementary to one another" and points in particular to OpFunds' expertise in "international equities, emerging markets, global equities, income-focused alternatives" (such as bank loans, high yield, and munis).

"75 percent of the assets are hard to replicate differentiated active and alternative strategies," Flanagan said of OpFunds' offerings. "59 percent of assets are in four and five star rated funds."

As for the relationship with MassMutual, which will become Invesco's single biggest shareholder with a 15.5-percent stake, Flanagan offered some hints when asked by J.P. Morgan analyst Ken Worthington about cross-selling possibilities.

"As you know they have 8,500 advisors in the United States and so that is something that's going to be an obvious focus area for us," Flanagan said of MassMutual. 

Stay ahead of the news ... Sign up for our email alerts now
CLICK HERE

0.0
 Do You Recommend This Story?



GO TO: MFWire
Return to Top
 News Archives
2024: Q2Q1
2023: Q4Q3Q2Q1
2022: Q4Q3Q2Q1
2021: Q4Q3Q2Q1
2020: Q4Q3Q2Q1
2019: Q4Q3Q2Q1
2018: Q4Q3Q2Q1
2017: Q4Q3Q2Q1
2016: Q4Q3Q2Q1
2015: Q4Q3Q2Q1
2014: Q4Q3Q2Q1
2013: Q4Q3Q2Q1
2012: Q4Q3Q2Q1
2011: Q4Q3Q2Q1
2010: Q4Q3Q2Q1
2009: Q4Q3Q2Q1
2008: Q4Q3Q2Q1
2007: Q4Q3Q2Q1
2006: Q4Q3Q2Q1
2005: Q4Q3Q2Q1
2004: Q4Q3Q2Q1
2003: Q4Q3Q2Q1
2002: Q4Q3Q2Q1
 Subscribe via RSS:
Raw XML
Add to My Yahoo!
follow us in feedly




©All rights reserved to InvestmentWires, Inc. 1997-2024
14 Wall Street | 20th Floor | New York, NY 10005 | P: 212-331-8968 | F: 212-331-8998
Privacy Policy :: Terms of Use