Invesco Ltd. (IVZ) reported a slight rise in its preliminary month-end assets under management (AUM) for Dec 2013. The AUM for the month was $778.7 billion, up 1.5% from $767.3 billion at the end of Nov 2013.
Favorable market returns and positive long-term net flows primarily aided the growth. Moreover, foreign exchange led to a $0.9 billion increase in AUM. In December, Invesco’s preliminary average AUM was $761.7 billion and preliminary average active AUM was $627.6 billion.
At the end of December, Invesco’s total equity AUM increased 2.4% to $383.1 billion from $374.3 billion at the end of Nov 2013. The company’s money market AUM totaled $82.7 billion, up 5.5% from the previous month. Also, alternative AUM came in at $87.9 billion in the reported month, increasing almost 1.0% from the prior-month level.
However, Invesco’s fixed income AUM slipped 0.9% prior month to $171.7 billion. Further, the company’s balanced AUM stood at $53.3 billion, down 1.3% sequentially.
Further, Invesco completed the sale of its division – Atlantic Trust Private Wealth Management to Canadian Imperial Bank of Commerce (CM) on Dec 31, 2013.
Among other investment managers, Franklin Resources Inc. (BEN) announced preliminary AUM of $879.1 billion by its subsidiaries for Dec 2013, increasing nearly1% from $870.6 billion as of Nov 30, 2013 and rising 12.4% from $781.8 billion as of Dec 31, 2012. Further, Legg Mason Inc. (LM) reported its preliminary AUM of $679.5 billion, up nearly 1% sequentially for the month of Dec 2013.
Invesco’s operating leverage is likely to improve significantly over the long term due to the company’s cost-control initiatives. Further, the rebound in the equity market will act as a catalyst.
However, the company’s high debt levels and rising expenses remain concerns. Nevertheless, given Invesco’s diversified footprint, it is poised to benefit from the improvement in global investment flows.
Currently, Invesco carries a Zacks Rank #2 (Buy).
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