Invesco Ltd., owner of the Invesco, Van Kampen and PowerShares funds, said third-quarter profit increased 2.2 percent as rising stock markets and investor deposits boosted assets.
Net income rose to $170.6 million, or 38 cents a share, from $166.9 million, or 36 cents a share, a year earlier, Atlanta-based Invesco said today. Invesco said adjusted profit, excluding certain one-time items, was 42 cents a share, missing the 45-cents-a-share average estimate of 20 analysts in a Bloomberg survey.
Chief Executive Officer Martin Flanagan has pushed into products such as private equity, exchange-traded funds and multi-asset class investments as investors industrywide have fled traditional stock mutual funds. Invesco’s assets rose from a year earlier to $683 billion, and increased 5.6 percent during the quarter as investors deposited $11.7 billion in the three months ended Sept. 30.
“Assets are meaningfully higher than they were a year ago, and it’s a pretty strong picture across a number of investment strategies,” Michael Kim, an analyst with Sandler O’Neill & Partners LP in New York, said in a telephone interview before results were announced.
Investors put $5.8 billion into Invesco’s passive, long-term investment products and $3.6 billion in active products.
Invesco rose 1.7 percent $24.74 at 4:15 p.m. in New York. The stock has risen 23 percent this year, compared with a 21 percent gain by Standard & Poor’s 20-company index for asset managers and custody banks.
The average management fee that Invesco earned per dollar that it oversees rose for the first time since the fourth quarter of 2009.
“We’ve seen the fee yield on assets declining for several years because of people moving to lower-fee products and lower-risk products,” Chief Financial Officer Loren M. Starr, said today in an interview. “This is very positive that we’ve seen that trend reverse this quarter.”
Revenue increased 4.4 percent to $1.04 billion, as the firm earned more, on average, from every dollar under management.
Expenses rose 7.2 percent in the quarter to $825 million. Employee compensation rose 8.3 percent, driven in part by $8 million in costs related to a change in the way the firm accounts for pay, Starr said.
“We feel really good about how the fourth quarter is shaping up,” Starr said. “The trends we’ve seen in the third quarter are continuing.”
BlackRock Inc. and T. Rowe Price Group Inc. also reported higher quarterly profit after global stocks rallied in the past year and rose 6.2 percent in the three months ended Sept. 30, as measured by the MSCI ACWI Index.
BlackRock, the world’s biggest money manager, said Oct. 17 that net income rose 7.9 percent in the third quarter as market appreciation offset $55 billion in client redemptions from the New York-based firm. T. Rowe Price, based in Baltimore, said Oct. 24 that profit rose 33 percent as investors deposited $4.3 billion.