Invesco Net Income Rose 12% as Market Rally Boosts AssetsSabrina Willmer
Invesco Ltd., owner of the Invesco, Perpetual and PowerShares funds, said third-quarter profit rose 12 percent as a global market rally boosted the assets it manages for clients.
Net income increased to $256 million, or 59 cents a share, from $228.1 million, or 51 cents, a year earlier, Atlanta-based Invesco said today in a statement. Excluding certain items, earnings of 64 cents a share beat the average estimate of 62 cents in a Bloomberg survey of 19 analysts.
Invesco Chief Executive Officer Martin Flanagan has relied on growth in the U.S. and continental Europe for much of the past year to overcome client withdrawals in the U.K. linked to the April departure of star fund manager Neil Woodford. Invesco’s active strategies attracted the most capital from clients, taking in $6 billion after losing $8 billion in the second quarter.
“It was one of our best showings in terms of active inflows,” Invesco Chief Financial Officer Loren Starr said today in an interview.
Invesco shares rose 2.2 percent to $39.68 in New York. The shares advanced 6.7 percent this year through yesterday, compared with the 1.4 percent gain by Standard & Poor’s 18-company index for asset managers and custody banks.
Invesco PowerShares QQQ and money-market funds had withdrawals of $3.2 billion and $800 million, respectively. The PowerShares exchange-traded fund is technology and growth-oriented, so is vulnerable to withdrawals when the market turns sour, said Starr.
Assets fell by 1.6 percent in the three months ended Sept. 30, and rose 5.9 percent over the past year, to $789.6 billion.
“Positive momentum continues to accelerate across asset growth and margins,” Daniel Fannon, an analyst at Jefferies & Co. in San Francisco, wrote today in a note to clients. “Net flows also came in above our expectations, remaining positive despite increased market volatility.”
The decline in assets was mostly due to foreign exchange and market volatility. Foreign-exchange losses accounted for a decline of $9.7 billion in assets, and the market drop contributed a decrease of $5.1 billion.
Revenue increased 12 percent to $1.3 billion, driven by an increase in fees. Investment management fees rose 15 percent from the previous quarter. Expenses rose 11 percent to $981 million.
Money managers including BlackRock Inc. and T.Rowe Price Group Inc. saw their profits increase in the third-quarter. BlackRock Inc., the world’s biggest money manager, said October 15 its profit rose 26 percent in the quarter as investors added cash to its funds, boosting fees for managing client money. T.Rowe Price Group Inc. reported Oct. 23 that its earnings rose 12 percent as stock-market gains boosted assets.