Martin L. Flanagan President and CEO Invesco Ltd. · 2016-06-13 · Positioned for success in a...
Transcript of Martin L. Flanagan President and CEO Invesco Ltd. · 2016-06-13 · Positioned for success in a...
Positioned for success in a changing world Martin L. Flanagan President and CEO Invesco Ltd.
All information as of Sept. 30, 2012, unless otherwise noted. Please refer to the Appendix for important information.
What will global winners look like?
Exclusive focus on investment management
Strong, long-term investment performance
Broad range of investment capabilities
A strong presence in established and emerging markets globally
Strong investment culture
Deep, stable teams
Deep knowledge of clients and their evolving needs
Client relationship diversity via asset class, geography of origin and channel representation
Robust risk management and oversight
Financial stability and strength
Operating capability that benefits clients and shareholders
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Our discussion today
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The world is changing around us
Key trends in the US
Positioned for success in a changing world
Global population has grown to 7+ billion people worldwide
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314
1,343
1,205
127 81 206 63 66 61
US China India Japan Germany Brazil UK France Italy
Sources: Invesco; USA Today; US Census Bureau, Population Division, International Programs Center — data estimate as of July 2012; CIA World Fact Book, Eurostat
People, in millions (in order of GDP)
Disposable income is expected to grow exponentially in developing countries
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Sources: Bloomberg L.P., Invesco as of December 2011. Actual results may differ from current expectations.
No. of Households (Millions)
0
50
100
150
200
250
300
1991 1996 2001 2006 2011e 2016e 2020e
China
India
Russia
Brazil Japan
US
Household disposable income more than US$10,000
China US India Brazil Japan Russia
China’s 2020 GDP projection is equal to the combined GDPs of several countries
6
Sources: HSBC, CEIC, IMF, CIA as of December 2011. Actual results may differ from current projections.
Zambia
Israel
Kenya
Switzerland
Kazakhstan
$500bn–$1,000bn
$100bn–$500bn
Below $100bn
Egypt
Thailand
Malaysia
Netherlands
South Africa
Nigeria
Denmark
Saudi Arabia
Korea
Argentina
Colombia
Turkey
Canada
Russia
Belgium
Venezuela
Singapore
Greece Iran
Spain
Indonesia Poland
Argentina
Australia
Sudan
Sri Lanka
Above $1,000bn
Established markets currently have the lion’s share of $52 trillion global AUM …
7
4,390
23,207
15,374
1,446 379 4,372 345
1,428 1,380
0
5,000
10,000
15,000
20,000
25,000
Asia
Pacificex Japan
United
States
Western
Europe
Latin
America
Eastern
Europe
Japan Africa Middle
East
Canada
Source: McKinsey & Company Global Banking Pools; Empirical Research Partners, as of August 2012. Note: Includes all institutional and retail AUM.
Total AUM 2011 Estimates US$Billions
… however, China and other emerging markets are experiencing the greatest growth
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Source: McKinsey & Company Global Banking Pools; Empirical Research Partners, as of August 2012. Note: Includes all institutional and retail AUM.
12.3
5.8 6.3
7.3
11.9
2.9
7.2
11.8
4.3
0
2
4
6
8
10
12
14
Asia Pacific
ex Japan
United
States
Western
Europe
Latin
America
Eastern
Europe
Japan Africa Middle
East
Canada
Total AUM Growth 2011–2014 Estimated CAGR %
While the prevalence of DC assets differs by market, DC’s relative importance continues to grow
81
19
2
98
7
93 57
43
4
96
43
57 39
61 60
40
2011
Source: Towers Watson 2012 Global Pension Asset Study; Invesco estimates * Data shown for the UK is as of 2006, as 2001 data was not available
North America Europe Asia
US Canada UK Switzerland Netherlands Japan Australia Overall Average
+9% +1% +6% +11% +5% +2% -2% +5%
10 Year Change in DC as a % of Total Pension Assets
Defined benefit Defined contribution
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Summary of significant global trends
US remains the dominant market
Critical to be a market leader in developed markets
Strong presence in emerging markets a key driver of long-term success
DC’s relative importance continues to grow globally, though significant opportunity remains in DB
Well-diversified managers will be best positioned to meet investor needs across different market cycles
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Our discussion today
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The world is changing around us
Key trends in the US
Positioned for success in a changing world
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Source: Bloomberg L.P. , Invesco. Data as of October 31, 2012. VIX is based on real-time option prices, which reflect investors' consensus view of future expected stock market volatility. During periods of financial stress,
which are often accompanied by steep market declines, option prices - and VIX - tend to rise. The greater the fear, the higher the VIX level. As investor fear subsides, option prices tend to decline, which in turn causes VIX to decline. It is important to note, however, that past performance does not necessarily indicate future results.
0
10
20
30
40
50
60
70
Dec-9
9
Jul-
00
Feb-0
1
Sep-0
1
Apr-
02
Nov-0
2
Jun-0
3
Jan-0
4
Aug-0
4
Mar-
05
Oct-
05
May-0
6
Dec-0
6
Jul-
07
Feb-0
8
Sep-0
8
Apr-
09
Nov-0
9
Jun-1
0
Jan-1
1
Aug-1
1
Mar-
12
Oct-
12
Post-crisis uncertainty is driving market volatility and investor anxiety
VIX - CBOE Market Volatility Index
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Source: Invesco RIA Survey conducted by Cogent Research, 2012. Results based on web survey of 189 registered investment advisors with $50M+ in AUM.
Delivering absolute return 11%
Other 12%
Exceeding a benchmark 12%
Wealth preservation 25%
Managing risk 40%
Invesco research indicates advisors are focused on managing risk post-crisis
14
-200
-100
0
100
200
300
400
2006 2007 2008 2009 2010 2011 YTD 9/12
Alternative Fixed Income US Equities International/Global Equities
Source: Strategic Insight 7/31/12 (LT-OE Mutual Funds; Includes fund of funds). Values represent sum of annual net flows for each category.
US$Billions
Flows into fixed income underscore the challenges of risk mitigation
15
2001: $27B
Source: Simfund. Data as of July 31, 2012. Includes fund of funds.
2012: $374B
Real Estate Bank Loan Nontraditional Bond
Commodities Broad Basket Global Real Estate Long/Short Equity
Equity Precious Metals Market Neutral Multi-alternative
Currency Managed Futures Bear Market
Trading-Based
Alternative mutual fund assets have experienced significant growth and diversification
16
Source: Simfund. Data as of July 31, 2012. Includes fund of funds.
2001: $208B 2012: $1,287B
Balanced and Target Risk
Target Date World Allocation Retirement Income
Major shift from traditional balanced funds to target date and world allocation funds
5,236 7,005
8,109 8,031 9,200 10,100
11,100 12,200
536
786
1,005 1,061
1,300 1,400
1,500 1,700
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
2008 2009 2010 2011 2012E 2013E 2014E 2015E
Mutual Funds ETFs
17
Source: Strategic Insight and Cerulli. 2012-2015 estimated projections, not actual figures.
Projected Mutual Fund and ETF Assets (US$Billions)
ETFs remain an important vehicle
18
3.1 4.0 4.9 6.6 9.0 12.3
16.6 20.0
25.6 31.7
35.3 40.1
52.2
69.4
0
10
20
30
40
50
60
70
80
1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 2010 2020 2030
Source: U.S. Bureau of the Census (middle series projections)
Estimated Number of Individuals in US Age 65+ (millions)
Baby boomers have started to turn 65
E E
10,000 baby boomers will file for Social Security benefits every day for the next 20 years.
20
25
30
35
40
45
50
2000 2002 2004 2006 2008 2010 2012E 2014E 2016E
DB DC IRA
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Sources: Department of Labor, ICI, U.S. Census Bureau, Federal Reserve, PBGC, EBRI, Cerulli Associates
Retirement Market Assets by Segment (%)
IRA assets growing at a faster rate
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Source: Cerulli Associates. Advisor Portfolio Construction Dynamics. 2011.
Annuitization 12%
Retirement Income Funds 6%
Dividend-paying equity mutual funds 31%
Bond mutual funds 41%
What Advisors “Always Use” for Retirement Income
Advisors prefer to build retirement income portfolios
70%
30%
Independent Conglomerate
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Source: Simfund. “Independent” and “conglomerate” classification based on current corporate structure as of September 2012 and kept historically. Based on the sum of all 4/5-star AUM of the peer universe and subtotal for each peer set (independent vs. conglomerate) as % of total 4/5-star AUM.
Mutual fund assets in 4/5-Star Morningstar rated funds
Independent asset managers consistently deliver superior investment performance over conglomerates
As of September 30, 2012
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Source: Simfund as of November 2012
Independent asset managers are attracting significant flows versus conglomerates
98 114 91
559
1,969
43 95
(33)
403
706
YTD 1Yr 3Yr 5Yr 10Yr
IndependentConglomerate
Long-term net flows (US$Billions) Based on aggregates for each peer set
Summary of significant US trends
Post-crisis uncertainty driving market volatility and investor anxiety
Population is aging
Advisors and consultants are focused on managing risk
In this environment, investors favor fixed income, alternative and target date/world allocation funds
IRA and DC assets are outpacing the growth of DB assets
Independent asset managers are best positioned for client success
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Our discussion today
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The world is changing around us
Key trends in the US
Positioned for success in a changing world
We are a leading independent global investment manager
Source: Invesco. All data as of September 30, 2012. Not an exhaustive list of capabilities. Please consult your Invesco representative for more information. Leading asset manager based on assets under management.
Global presence Client focus Organizational strength
More than 750 investment professionals globally
On the ground presence in more than 20 countries
Serving clients in more than 150 countries
“Investors first” focus
Commitment to helping clients meet their financial goals
Dedicated relationship professionals
Wide variety of practice management solutions and experts
Objective investment perspective and industry voice
One of the world’s leading independent global investment management firms
$683 billion AUM
More than 6,000 employees worldwide
Publicly traded on NYSE; S&P 500; market cap of approximately $10 billion
Solid financials, investment-grade debt rating, strong balance sheet
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Our investment-centric culture …
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Governed by performance measurement and risk assessment
Traded on a global platform
Connected through our “Investors’ Forum”
Begins with disciplined, repeatable investment philosophies and processes
Client Portfolios
“Investors’ Forum”
Global Trading Platform
Performance measurement and risk assessment
Disciplined, repeatable investment philosophies and process
1-Year
Assets top half of peer group
Assets bottom half of peer group
5-Year
Percent of actively managed assets in top half of peer group*
63%
37%
67%
33%
78%
22%
…enables us to deliver strong, long-term investment performance to our clients…
* Excludes passive products, closed-end funds, private equity limited partnerships, non-discretionary funds, unit investment trusts; fund of funds with component funds managed by Invesco, stable value building block funds and CDOs. Certain funds and products were excluded from the analysis because of limited benchmark or peer group data. Had these been available, results may have been different. These results are preliminary and subject to revision.
Data as of Sept. 30, 2012. Includes AUM of $399.7 billion (59% of total IVZ) for 1 year, $397.5 billion (58% of total IVZ) for three year, and $378.9 billion (55% of total IVZ) for five year. Peer group rankings are sourced from a widely-used third party ranking agency in each fund’s market (Lipper, Morningstar, Russell, Mercer, eVestment Alliance, SITCA) and asset-weighted in USD. Rankings are as of prior quarter-end for most institutional products and prior month-end for Australian retail funds due to their late release by third parties. Rankings for the most representative fund in each GIPS composite are applied to all products within each GIPS composite. Performance assumes the reinvestment of dividends. Past performance is not indicative of future results and may not reflect an investors experience.
3-Year
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(a) Retail quarterly flows include retail products in the U.S., Canada, U.K., Europe, Asia and our offshore product line. (b) Institutional quarterly flows include our institutional business in the U.S., Continental Europe and Asia and exclude institutional money market. (c) PWM quarterly flows include our high-net-worth business in the U.S.
0.8 0.8 0.9 0.81.0 1.0 0.9 1.0
-0.7 -0.7 -0.7
-0.4-0.5
-0.4
-0.7 -0.8
0.1 0.1 0.20.4 0.5 0.6
0.2 0.2
Retail(a) Institutional(b) Private Wealth Management(c)
4Q10* 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12
* 4Q10 excluded the impact of the previously announced passive outflow. 2Q10: $15.8 billion excluded from gross sales 4Q10: $18.6 billion excluded from gross redemptions
Quarterly long-term flows ($ billions)
Gross sales
Gross redemptions
Net long-term sales
…and helps drives flows to our global business Net long-term flows during the third quarter equaled $9.4 billion
WU401KL-PPT-1I 08/11 invesco.com/us
Board of Directors and Independent Fund Boards
Executive Management Team
Global Performance Measurement and Risk
• Facilitates investment oversight function • Independently reviews investment
execution and process application
• Monitors consistency of investment results with mandates, market environments, client and CIO expectations
• 50+ professionals
Compliance and Internal Audit Facilitate and monitor internal control at all levels
Investment Credit/Asset/
Liability Financial Operational Business
Risk Areas of Focus
Investment Risk Management
Managing our core risks through the Investment Centers
Business/Operational Risk Management
Managing all other risks in the business
Risk Management Facilitation
Risk management embedded in the business
Internal Control
Risk Oversight & Governance
Corporate Risk Management Committee • Timely and consistent identification,
evaluation, and mitigation of operational and business risk
• Senior executives from all major business functions
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We have an effective foundation for a sound risk culture
We are diversified as a firm and well-positioned to stay ahead of evolving market demand
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44%
9% 11%
24%
12%
69%
4%
15%
5% 7%
62%
35%
3%
By client domicile By asset class By channel
As of September 30, 2012.
($ billions)
US $474.5
Canada $25.0
UK $99.6
Europe $35.6
Asia $48.3
Total $683.0
($ billions)
Retail $423.4
Institutional $240.0
PWM $19.6
Total $683.0
($ billions)
Equity $300.6
Balanced $57.9
Money Market $73.2
Fixed Income $167.0
Alternative $84.3
Total $683.0
We have specialized investment teams with local knowledge of key markets across the globe
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Source: Invesco Ltd. assets under management are as of September 30, 2012, and include all assets under advisement, distributed and overseen by Invesco, including those of its affiliates Invesco Distributors, Inc. and Invesco PowerShares Capital Management LLC.
A truly global firm with: $683 billion AUM More than 750 investment professionals On the ground presence in more than 20 countries, including:
Australia Austria Belgium Canada China Czech Republic France Germany Hong Kong India Ireland
Italy Japan Korea Luxembourg Netherlands Singapore Spain Taiwan (ROC) United Arab Emirates United Kingdom United States
We deliver a wide range of investment capabilities through a diverse set of investment vehicles
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Investment Capabilities (AUM)
Equity ($300B) Fixed Income
and Money Market ($240B)
Alternative ($84B)
Asset Allocation ($58B)
Source: Invesco. Invesco Ltd. assets under management are as of September 30, 2012, and include all assets under advisement, distributed and overseen by Invesco, including those of its affiliates Invesco Distributors, Inc. and Invesco PowerShares Capital Management LLC, which have an agreement with Deutsche Bank to provide certain marketing services for the PowerShares DB products. Invesco PowerShares Capital Management LLC is the sponsor for the PowerShares QQQ and BLDRS products and unit investment trusts. ALPS Distributors, Inc. is the distributor of PowerShares QQQ, BLDRS Funds and the PowerShares DB Funds. Invesco PowerShares Capital Management LLC and Invesco Distributors, Inc. are wholly owned, indirect subsidiaries of Invesco Ltd. Invesco Distributors, Inc. is the U.S. distributor for Invesco Ltd.’s retail products. Invesco Ltd. is not affiliated with ALPS Distributors, Inc. or Deutsche Bank. Please consult your Invesco representative for more information. Not all products listed are available to all investors. Some products are available via affiliates of Invesco Distributors, Inc. The listed investment capabilities and vehicles are not available in all jurisdictions globally.
Delivery Vehicles (US)
Mutual Funds
SMAs/UMAs
VI Funds
Unit Investment Trusts
ETFs
Sub-advised
Collective Trusts
Institutional Separate Accounts
Private Placements
Customized Solutions
A key strength of the firm is delivering capabilities anywhere in the world to meet client needs
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23%
33% 36% 37%
0%
5%
10%
15%
20%
25%
30%
35%
40%
2009 2010 2011 2012 YTD
Global gross sales as a % of total gross sales
Extending our asset allocation strategies to meet client needs across the globe…
2008 Originally introduced to US institutional market
September 2010 Design elements exported to Canada on Intactive mutual funds
June 2009 Added to US retail market
September 2009 Added to offshore fund market
2012 Continued expansion of the product range
January 2013 Addition of dedicated multi-asset team in the UK
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0.0
5.0
10.0
15.0
20.0
25.0
4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12
Invesco Global Asset Allocation AUM ($ billions)
Asset allocation extensionstrategies (global aggregate)
Invesco Balanced-Risk Allocationstrategies (global aggregate)
-1.0
0.0
1.0
2.0
3.0
4.0
5.0
4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12
Invesco Global Asset Allocation Net Flows ($ billions)
Asset allocation extensionstrategies (global aggregate)
Invesco Balanced-Risk Allocationstrategies (global aggregate)
Source: Invesco. Asset allocation extension strategies include balanced-risk commodity, balanced-risk income and active balanced strategies This is not to be construed as an offer to buy or sell any financial instruments nor does it constitute a recommendation of the suitability of any investment strategy for a particular investor. Additionally , this strategy may not be available to all investors or in all jurisdictions. To determine if this strategy is available in your jurisdiction, contact your local Invesco office and carefully read all legal documents before investing. The strategy is managed and distributed by wholly-owned affiliates of Invesco Ltd. See appendix for additional disclosure.
…has resulted in continued strong demand, with more than $20 billion in assets currently
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What will global winners look like?
Exclusive focus on investment management
Strong, long-term investment performance
Broad range of investment capabilities
A strong presence in established and emerging markets globally
Strong investment culture
Deep, stable teams
Deep knowledge of clients and their evolving needs
Client relationship diversity via asset class, geography of origin and channel representation
Robust risk management and oversight
Financial stability and strength
Operating capability that benefits clients and shareholders
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Invesco
Positioned for success in a changing world Martin L. Flanagan President and CEO Invesco Ltd.
All information as of Sept. 30, 2012, unless otherwise noted. Please refer to the Appendix for important information.
Appendix
Additional disclosure for Invesco Balanced-Risk Allocation Fund
* Source: ©2012 Morningstar Inc. All rights reserved. The information contained herein is proprietary to Morningstar and/or its content providers. It may not be copied or distributed and is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Ratings are based on a risk-adjusted return measure that accounts for variation in a fund’s monthly performance, placing more emphasis on the downward variations and rewarding consistent performance. With-load ratings include the effect of sales charges, loads and redemption fees. Load-waived ratings exclude sales charges, loads and redemption fees, and are only applicable to investors not subject to sales charges. Had fees not been waived and/or expenses reimbursed currently or in the past, the Morningstar rating would have been lower. The overall rating is derived from a weighted average of three-, five- and 10-year rating metrics, as applicable. Ratings are as of the most recent quarter end and are subject to change every month. A fund is eligible for a Morningstar rating three years after inception. The top 10% of funds in a category receive five stars, the next 22.5% four stars, the next 35% three stars, the next 22.5% two stars and the bottom 10% one star. (Each share class is counted as a fraction of one fund within this scale and rated separately, which may cause slight variations in the distribution percentages.) Ratings for other share classes may differ due to different performance characteristics. Past performance does not guarantee future results.
** Source: Morningstar Inc. Morningstar rankings are based on total return, excluding sales charges and including fees and expenses, versus all funds in the category tracked by Morningstar.
*** Source: Lipper Inc. Lipper fund percentile rankings are based on total returns, excluding sales charges and including fees and expenses, and are versus all funds in the category tracked by Lipper.
Invesco Balanced Risk Allocation Fund is a US registered ’40-Act mutual fund that is distributed by Invesco Distributors, Inc., a wholly-owned indirect subsidiary of Invesco Ltd.
Overall 1 Year 3 Years 5 Years 10 Years
vs. Morningstar World Allocation Category*
A Shares (Load) N/A N/A N/A
A Shares (Load Waived) N/A N/A N/A
Number of Funds in Category 258 N/A 258 N/A N/A
vs. Morningstar World Allocation Category** 29% (133 of 468)
3% (7 of 258)
N/A N/A
N/A N/A
vs. Lipper Global Flexible Port Funds Category***
26% (88 of 347)
5% (8 of 191)
N/A N/A
N/A N/A
Morningstar Ratings and Rankings and Lipper Rankings Class A Shares as of Sept. 30, 2012
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Important information
The opinions expressed are those of Mr. Flanagan, are based upon current market conditions and are subject to change without notice.
This presentation is for informational purposes only. This is not to be construed as an off to buy or sell any financial instruments and should not be relied upon as the sole factor in an investment making decision. As with all investments, there are associated inherent risks. Please obtain and review all financial material carefully before investing.
This presentation does no form part of any prospectus.
While great care has been taken to ensure that the information contained herein is accurate, no responsibility can be accepted for any errors, mistakes, or omissions or for any action taken in reliance thereon.
Asset management services are provided by Invesco in accordance with appropriate local legislation and regulations.
Forward-looking statements This presentation, and comments made in the presentation 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 developments, 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 Forms 10-Q, filed with the Securities and Exchange Commission.
You may obtain these reports from the SEC’s website 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.
For additional information, contact the Invesco representative in your local jurisdiction.
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