Invesco Plc (IVZ)

IVZ 
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Invesco Ltd. (IVZ)

Q3 2009 Earnings Call Transcript

October 21, 2009 10:00 am ET

Executives

Martin Flanagan -- President and CEO

Loren Starr -- CFO

Analysts

Michael Kim -- Sandler O'Neill

Tim Shea -- JPMP

Roger Freeman -- Barclays Capital

William Katz -- Buckingham Research

Dan Fannon -- Jefferies

Mike Carrier -- Deutsche Bank

Keith Walsh -- Citi

Robert Lee -- KBW

Cynthia Mayer – Bank of America

Jeff Hopson -- Stifel Nicolaus

Douglas Sipkin -- Pali Capital

Craig Siegenthaler -- Credit Suisse

James Shanahan -- Wells Fargo

Presentation

Unidentified Speaker

This presentation and comments made in the associated conference call today may include forward-looking statements. Forward-looking statements include information concerning future results of our operations, expenses, earnings, liquidity, cash flow and capital expenditures, industry or market conditions, AUM, acquisitions, debt, and our ability to obtain additional financing or make payments, regulatory development, demand for and pricing of our products and other aspects of our business or general economic conditions.

In addition, words such as “believes,” “expects,” “anticipates,” “intends,” “plans,” “estimates,” “projects,” “forecasts,” and future or conditional verbs, such as “will,” “may,” “could,” “should,” and “would,” as well as any other statement that necessarily depends on future events are intended to identify forward-looking statements.

Forward-looking statements are not guarantees, and they involve risks, uncertainties, and assumptions. There can be no assurance that actual results will not differ materially from our expectations. We caution investors not to rely unduly on any forward-looking statements and urge you to carefully consider the risks described in our most recent Form 10-K and subsequent Form 10-Q filed with the Securities and Exchange Commission. You may obtain these reports from the SEC's Web site at www.sec.gov. We expressly disclaim any obligation to update the information in any public disclosure if any forward-looking statement later turns out to be inaccurate.

Operator

Welcome to the Invesco Investors Conference Call. All participants will be on a listen-only mode until the question and answer session. (Operator instructions). Today's conference is being recorded. If you have any objections, you may disconnect at this time.

Now I would like to turn the call over to the speakers for today, Mr. Martin L. Flanagan, President and CEO of Invesco and Mr. Loren Starr, Chief Financial Officer. Mr. Flanagan, you may begin.

Martin Flanagan

Thank you very much. And I want to thank everybody for joining us today. We want to provide some additional background to what we think is very exciting news regarding Invesco's acquisition of Morgan Stanley's retail investment management business, which includes Van Kampen.

But first, in addition to obviously welcoming the analyst community, we're joined by some colleagues at Invesco, but also Morgan Stanley and Van Kampen and welcome to the call. Loren is here with me and between the two of us we'll cover the transaction itself, but also we will talk to the third quarter results which were released this morning. We're going to be speaking to the presentation that got posted this morning around 7:30 A.M. on the Web site if you are so inclined to follow that.

Let me start and put this all probably in perspective. And for those have been following the Company for a while, this will sound familiar, but again I think the perspective is very, very important.

Over the past four years, we've been guided by four strategic priorities and the first of course and most important is focus on achieving consistent, good, long-term performance for our clients. Second has been a strategy of delivering our distinctive investment management capabilities to our clients wherever meet their needs.

Then thirdly, as you know, we've put considerable effort into working more effectively as a global firm seeking to get greater efficiencies from our global operating platform and then finally, spent a lot of time building a high performance organization that attracts, retains, motivates, and rewards outstanding individuals for outstanding results.

So together, it's really these four strategic priorities that form our multi-year strategy and it's really by successfully executing against them that we've built this unified business globally that has just we think put us in a strong position to and set the foundation for today's announcement.

And it's really the work that we've done over the past four years as well as disciplined approach that we took to the markets over the last 18 months and put us in a position when the markets recovered and the economy recovered that we would participate and become that much more competitive.

So the acquisition we announced yesterday, last evening, is fully aligned with these strategic priorities and it really represents for us what we think is a tremendous opportunity.

You saw in our press release we entered into an agreement to acquire Morgan Stanley's retail asset management business including Van Kampen Investments. And you can see if you are following this on slide #4 the transaction includes the associated investment management teams, bonds, mandates and assets under management of that business.

And we are particularly pleased to expand the exceptional talent we have with what will be about 650 individuals, investment professionals, distribution professionals and support professionals that will be joining Invesco at the time of our close.

So, why don't we take a look at assets under management by asset class, by channel and domicile to start to put this into perspective? I'm just going to refer to the total $119 billion that are included in this transaction as Van Kampen for simplicity. You'll see that it is somewhat broader than that. But what you will note is one of the reasons we felt this opportunity was so compelling was the highly complimentary nature of the business.

And collectively, we believe both firms are better off in meeting the client needs which we think is just very, very important and probably a hallmark of successful transactions as you look at them. And Van Kampen's investment capabilities are highly complimentary to Invesco's with strong equity and specialized fixed income capabilities. In addition, you'll see there is additional balance mandates, but also there is a UIT business and some elements also in alternatives for us.

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