Asset Managers Fall Most Since 2011 After Brexit Decisionby
Invesco plunges 14% for steepest drop among 19-member group
Companies with operations in U.K. hit hard, analyst says
Money management stocks fell the most in almost five years, led by a 14 percent drop for Invesco Ltd, after voters in the U.K. decided to leave the European Union.
The 19-member Standard & Poor’s index of asset managers and custody banks lost 8.3 percent Friday, the steepest slide since August 2011. Invesco’s decline was its biggest one-day drop since December 2008.
“It was a difficult day for financials in general, but companies with more operations in the U.K. were hit especially hard,” said Macrae Sykes, an analyst with Gabelli & Co.
Asset managers earn fees on the money they oversee, which means that lower stock prices translate into less revenue. The MSCI World Index lost 4.9 percent Friday.
In a Friday note, analyst Craig Siegenthaler of Credit Suisse said Atlanta-based Invesco had the largest U.K.-based business among asset managers, estimating that British clients contribute 15 percent of the company’s total assets under management and 25 percent of gross revenues.
“We have estimated that the firm’s potential exposure to redemptions due to Brexit is low,” Martin Flanagan, chief executive officer for Invesco, wrote in an e-mailed statement. “We have strong measures in place to ensure that any immediate market volatility created by the vote and any changes brought about by this transition are well managed.”
Other asset managers that fell included Affiliated Managers Group Inc., down 12 percent; Ameriprise Financial Inc, down 10 percent; and Legg Mason Inc., off 9.6 percent.