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Invesco. Sandler O’Neill Global Exchange and Electronic Trading Conference. June 6, 2008. Colin Meadows, CAO. Forward-Looking Statements.
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Invesco Sandler O’Neill Global Exchange and Electronic Trading Conference June 6, 2008 Colin Meadows, CAO
Forward-Looking Statements This presentation may include statements that constitute "forward-looking statements" under the United States securities laws. Forward-looking statements include information concerning possible or assumed future results of our operations, earnings, liquidity, cash flow and capital expenditures, industry or market conditions, assets under management, acquisition activities and the effect of completed acquisitions, debt levels and the ability to obtain additional financing or make payments on our debt, regulatory developments, demand for and pricing of our products and other aspects of our business or general economic conditions. In addition, when used in this release, words such as "believes," "expects," "anticipates," "intends," "plans," "estimates," "projects" and future or conditional verbs such as "will," "may," "could," "should," and "would" and any other statement that necessarily depends on future events, are intended to identify forward-looking statements. Forward-looking statements are not guarantees of performance. They involve risks, uncertainties and assumptions. Although we make such statements based on assumptions that we believe to be reasonable, 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. In connection with any forward-looking statements, you should carefully consider the areas of risk described in our most recent Annual Report on Form 10-K and any subsequent Quarterly Reports on Form 10-Q, as filed with the United States Securities and Exchange Commission (“SEC”). You may obtain these reports from the SEC’s Web site at www.sec.gov. We expressly disclaim any obligation to update any of the information in this or any other public disclosure if any forward-looking statement later turns out to be inaccurate, whether as a result of new information, future events or otherwise. 2
Who We AreA global leader in investment management Mission: Helping people worldwide build their financial security • We’re one of the world’s leading independent global investment management firms. • We draw on the strength of many resources: • $470.3 (U.S.) billion in assets under management • Client support in 20 countries serving clients in more than 100 countries • 13 specialized investment centers • More than 5,000 employees worldwide • More than 500 investment professionals • We deliver on a single focus: investment management. • We have the leadership, resources and integrity to look after our clients’ interests: • Long history of managing assets for clients on a global basis • Publicly traded on New York Stock Exchange with $10.3 billion in market capitalization All data as of March 31, 2008, unless otherwise noted. Source: Invesco Ltd.
2007-2008 Summary Industry Trends We Identified A Set of Key Trends That Appear To Be Shaping The Future of Our Industry • Shifting Demographics… ageing population in developed world increasing focus on retirement assets • Total Relationship Focus… sophisticated global distributors looking at multiple factors in addition to investment performance • Separation of Alpha & Beta…continued acceptance and growth of “alternatives”, ETF’s, and structured products • Globalization of Investment Markets…steady growth in “established” markets augmented by rapid growth in demand from “emerging” markets • Scale and Relevance… asset flows and operating efficiency appear to benefit from increased scale and relevance to distributors • War for Talent… effectiveness in developing and retaining high performance organization increasingly critical to long term success
Our Strategic Priorities The Markets Are Global and So is Our Company Achieve strong investment performance 1 Deliver our investment capabilities anywhere in the world to meet client needs 2 Build a high- performance organization 4 Our Aspiration: Take advantage of our world of opportunity to become a premier global investment management firm 3 Unlock the power of our global operating platform
The Value We Deliver to Our Clients • 1 Commitment to investment excellence Clearly articulated investment disciplines aligned with client expectations and underpinned by diligent oversight and rigorous quality control processes • 2 Specialized investment expertise globally Distinctive investment teams designed around unique asset class, product or regional expertise • 3 Diversified strategies Investment solutions across all major equity, fixed-income and alternative asset classes • 4 Multiple delivery vehicles Investment strategies delivered to clients through various packaging options • 5 Global reach Distributional and operational strength and breadth to deliver solutions independently and objectively through local knowledge and brands
Commitment to Investment Excellence • A focus on delivering investment quality is inherent to our mission. • Achieving strong investment performance is our top strategic priority. • Our operating structure puts investments at the heart of our activity for the benefit of our clients. • We’re dedicated to attracting and retaining top investment talent.
Specialized Investment Capabilities Globally Investment management team network Each of Invesco’s investment centers adheres to clearly defined investment strategies and philosophies intended to align with client expectations. Harnessing the distinct expertise at each center, Invesco’s teams draw on the strength of global resources and independent vision provided by: • The stability of $470 billion in assets under management (AUM) • More than 500 investment professionals worldwide • Investment centers operating in 25 cities in 12 countries • Client support in 20 countries • The value of a single focus — managing our clients’ money Data as of March 31, 2008 Note: The listed centers do not all provide products or services that are available in the U.S., nor are their products and services available on all platforms. Not all of the Invesco brands listed are available in all countries, nor are they available on all platforms. Please consult with your Invesco representative for more information on any of our brands mentioned. Source: Invesco Ltd.
Invesco Delivers Investment Strategies That Meet Our Clients’ Diverse Needs Diversified Investment Strategies • Equity • Market cap • Investment style • Global/regional/single country • Developed/Emerging • Sector • Quantitative • Asset Allocation • Traditional balanced • Target maturity • Target risk • Fixed Income and Cash • Duration • Quality • Sector • Global/regional/single country • Developed/Emerging • Taxability • Alternatives • Real Estate • Public real estate securities • Private direct real estate • US, Asian, European, Global • Private Equity • Direct • Distressed • Fund of Funds • Buyout, VC, Emerging • Absolute Return • Market Neutral • GTAA • Active Currency • Multi-strategy • Alternative Beta • Directional Long/Short (130/30) • Financial Structures • CDO/CLO/CSO • Opportunistic • Commodities/ Natural Resources • Customized solutions • Portable alpha • Liability-driven Delivered the Way Our Clients Want • Institutional separate accounts • Collective trusts • Mutual funds (onshore & offshore) • Exchange-traded funds (ETFs) • Private placements • Sub-advised • SMA/UMA • Variable insurance funds
Strength Through Diversification – AUM By Asset Classes March 31, 2008 AUM – $470.3B December 31, 2005 AUM – $386.3B Alternatives Alternatives Stable Value Stable Value Fixed Income Fixed Income Equities Equities Money Market Money Market Balanced Balanced 2005-08 change Equity Balanced Money Market Fixed Income Stable Value Alternatives $177.5B $41.2B $50.3B $49.3B $46.8B $21.2B Equity Balanced Money Market Fixed Income Stable Value Alternatives $215.2B $37.2B $87.3B $40.2B $30.2B $60.2B 21% (10%) 74% (18%) (35%) 184% Total $470.3B 22% $386.3B Total
Strength Through Diversification – AUM By Channels March 31, 2008 AUM – $470.3B December 31, 2005 AUM – $386.3B High Net Worth High Net Worth Institutional* Institutional* Retail** Retail** 2005-08 change Institutional Retail High Net Worth $179.8B $190.2B $16.3B Institutional Retail High Net Worth $224.8B $228.7B $16.8B 25% 20% 3% Total $386.3B $470.3B 22% Total * Includes separate accounts, collective funds, and investment trusts, includes the AIM Institutional cash assets ** Includes open-end funds, closed-end funds, wrap account, and sub-advised accounts 100
Strength Through Diversification – AUM By Client Domicile March 31, 2008 AUM – $470.3B December 31, 2005 AUM – $386.3B Asia Asia Canada Canada Europe Europe United States United States United Kingdom United Kingdom 2005-08 change United States United Kingdom Europe Canada Asia $235.6B $53.6B $32.0B $42.2B $22.9B United States United Kingdom Europe Canada Asia $281.7B $81.8B $33.0B $42.1B $31.7B 19% 53% 3% (0.2)% 38% Total $386.3B Total $470.3B 22%
A Leader in Global Investment Management Large U.S.-Based Asset Managers With Global Client Bases Share of Client Assets From Outside the U.S. As of Year-End 2007 Invesco
Invesco is positioned to capture assets in key markets Top 10 Markets with Highest Projected Assets Available to Outside Managers 2006–2011 Country 2011 AUM(E) CAGR (E) Invesco Presence** 8.9% ü $34,866 8.9% ü $6,510 11.3% ü $2,116 6.8% ü $1,877 8.7% ü $1,804 ($ billions) 6.2% ü $1,669 8.9% ü $1,630 5.7% ü $1,560 5.9% ü $1,043 9.9% ü $878 *Source: Cerulli. Data as of June 30, 2007. The top 10 markets listed are those with the highest projected 2011 AUM. Includes mutual fund and retirement assets only. **Source: Invesco Ltd. Data as of March 31, 2008. ***All asset figures provided in US Dollars
Annual Long-Term and Institutional Money Market Flows Annual Long-Term Flows ($ billions) Growth in Institutional Money Market ($ billions) Gross sales Gross redemptions Net sales * Stable value excluded beginning April 1, 2007 15
Investment Performance – OverviewAsset Weighted 3-Year Performance Includes rated AUM of $380.0bn Includes rated AUM of $358.8bn December 31, 2007 March 31, 2008 Rated AUM as of March 31, 2008 was $358.8bn. Rated AUM as of December 31, 2007 was $380.0 billion. Unrated assets as of March 31, 2008 $112.6bn: Private Wealth: 17bn, CDOs: 13bn, US Institutional: 7bn, Private Equity: 5bn, Real Estate : 22bn, Stable Value + Div. FI: 30bn, SPG 8bn, Other assets: 10bn
507 Improving Operating Results Assets and Flows IVZ % Change (06/30/05 – 03/30/08) Assets under management and Net Flows ($ billions) Operating income ($ millions) Net Operating margin* (%) Net Flows ($bn) $(16.2) ($1.4) ($3.4) $(8.4)* *See the Schedule of Non-GAAP Information in the appendix of this presentation for a reconciliation of net operating margin to the most directly comparable US GAAP financial measure.
Well Positioned for Growth • Invesco is a strong global firm • We are building real momentum in terms of: • Investment performance • Assets and flows • Business performance • Delivering the combined power of our distinctive worldwide investment management capabilities adds substantial value for our clients • We are committed to achieving investment excellence • Led by a powerful strategy…that delivers on our aspiration to become a premier global investment management organization
Questions & Answers Sandler O’Neill Global Exchange and Electronic Trading Conference June 6, 2008 Colin Meadows, CAO
Schedule of Non-GAAP Information ($ Millions) * Operating margin is equal to operating income divided by operating revenues. ** Net operating margin is equal to net operating income divided by net revenues. (1) Net revenues, net operating income and net operating margin are non-GAAP financial measures. Management believes that these measures are additional meaningful measures to evaluate our operating performance. The most comparable U.S. GAAP measures are operating revenues, operating income and operating margin. Management believes that the deduction of third-party distribution, service and advisory costs from operating revenues in the computation of net revenues and the related computation of net operating margin provides useful information to investors because the distribution, service and advisory fee amounts represent costs that are passed through to external parties, which essentially are a share of the related revenues. Management also believes that the addition of our proportional share of operating revenues, net of distribution fees, from joint venture investments in the computation of net revenues and the addition of our proportional share of operating income in the related computations of net operating income and net operating margin also provides useful information to investors, as management considers it appropriate to evaluate the contribution of its growing joint venture investment to the operations of the business. Net revenues, net operating income and net operating margin should not be considered as substitutes for any measures derived in accordance with U.S. GAAP and may not be comparable to other similarly titled measures of other companies.