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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.
Who We Are A global leader in investment management
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
Mission: Helping people worldwide build their financial security 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
The Markets Are Global and So is Our Company Our Aspiration: Take advantage of our world of opportunity to become a premier global investment management firm Unlock the power of our global operating platform 2 Deliver our investment capabilities anywhere in the world to meet client needs Achieve strong investment performance 1 Build a high- performance organization 4 3 Our Strategic Priorities
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: 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.
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
AUM: $66.4 billion Investment Prof: 75 Investment focus: U.S., international and global equities San Francisco Denver Austin Houston Invesco Aim AUM: $36.9 billion Investment Prof: 27 Investment focus: Canadian equities, global equities, int’l equities and fixed income Toronto Aim Trimark Taipei, Taiwan Investment focus: Asian Ex-Japanese, Greater Chinese, Japanese and Australian equities Investment Prof: 61 AUM: $26.4 billion Shenzhen, China Hong Kong Tokyo Melbourne Invesco Asia-Pacific AUM: $14.1 billion Investment Prof: 19 Investment focus: Global and international equities Atlanta Invesco Global Equity San Francisco Atlanta Newport Beach London Munich Hong Kong Prague Investment focus: Global direct real estate investing and public real estate investing Investment Prof: 106 AUM: $26.3 billion Madrid Paris New York Dallas Invesco Real Estate AUM: $12.9 billion Investment Prof: 7 Investment focus: ETFs Chicago Invesco PowerShares Atlanta Chicago AUM: $16.6 billion Investment Prof: 31 Investment focus: High-net-worth multimanagement New York Boston Atlantic Trust AUM: $3.2 billion Investment Prof: 6 Investment focus: Global overlay strategies and tactical asset allocation Atlanta Invesco Multiple-Asset Strategies AUM: $73.3 billion Investment Prof: 43 Investment focus: U.K. equities, fixed income and European equities Henley Invesco Perpetual AUM: $2.4 billion Investment Prof: 10 Investment focus: Fund of funds and venture capital private equities San Francisco Denver New York Invesco Private Capital AUM: $6.7 billion Investment Prof: 13 Investment focus: Distressed and restructuring private equities Mumbai Tokyo New York WL Ross & Co. Investment focus: Quantitative active, enhanced and long/short strategies Investment Prof: 56 AUM: $28.6 billion Frankfurt Boston New York Invesco Quantitative Strategies London Houston Frankfurt AUM: $156.5 billion Investment Prof: 120 Investment focus: Money market, stable value, global fixed income and alternatives/financial structures Melbourne New York Louisville Invesco Worldwide Fixed Income
Invesco Delivers Investment Strategies That Meet Our Clients’ Diverse Needs
Institutional separate accounts
Mutual funds (onshore & offshore)
Exchange-traded funds (ETFs)
Variable insurance funds
Delivered the Way Our Clients Want Diversified Investment Strategies
Fixed Income and Cash
Public real estate securities
Private direct real estate
US, Asian, European, Global
Fund of Funds
Buyout, VC, Emerging
Directional Long/Short (130/30)
Commodities/ Natural Resources
Strength Through Diversification – AUM By Asset Classes $215.2B $37.2B $87.3B $40.2B $30.2B $60.2B $470.3B Total Equities Money Market Fixed Income Stable Value Alternatives Equity Balanced Money Market Fixed Income Stable Value Alternatives Equities Money Market Fixed Income Stable Value Alternatives $177.5B $41.2B $50.3B $49.3B $46.8B $21.2B $386.3B Total Equity Balanced Money Market Fixed Income Stable Value Alternatives 21% (10%) 74% (18%) (35%) 184% 22% 2005-08 change Balanced Balanced March 31, 2008 AUM – $470.3B December 31, 2005 AUM – $386.3B
Strength Through Diversification – AUM By Channels $224.8B $228.7B $16.8B $470.3B Total Institutional Retail High Net Worth $179.8B $190.2B $16.3B $386.3B Total Institutional Retail High Net Worth 25% 20% 3% 22% 2005-08 change Retail** Institutional* High Net Worth Institutional* Retail** * 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 March 31, 2008 AUM – $470.3B December 31, 2005 AUM – $386.3B High Net Worth
Strength Through Diversification – AUM By Client Domicile $281.7B $81.8B $33.0B $42.1B $31.7B $470.3B Total United States United Kingdom Europe Canada Asia $235.6B $53.6B $32.0B $42.2B $22.9B $386.3B Total United States United Kingdom Europe Canada Asia 19% 53% 3% (0.2)% 38% 22% 2005-08 change United States United Kingdom Canada Asia Europe United States United Kingdom Canada Asia Europe March 31, 2008 AUM – $470.3B December 31, 2005 AUM – $386.3B
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 *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 Top 10 Markets with Highest Projected Assets Available to Outside Managers $34,866 $6,510 $2,116 $1,877 $1,804 $1,669 $1,630 $1,560 $1,043 $878 ($ billions) 2006–2011 Country 2011 AUM(E) CAGR (E) Invesco Presence** 8.9% 8.9% 11.3% 6.8% 8.7% 6.2% 8.9% 5.7% 5.9% 9.9%
Annual Long-Term and Institutional Money Market Flows Gross sales Gross redemptions Net sales Annual Long-Term Flows ($ billions) Growth in Institutional Money Market ($ billions) * Stable value excluded beginning April 1, 2007
Investment Performance – Overview Asset Weighted 3-Year Performance 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 Includes rated AUM of $380.0bn December 31, 2007 Includes rated AUM of $358.8bn March 31, 2008
Improving Operating Results 507 Assets and Flows IVZ % Change (06/30/05 – 03/30/08) Assets under management and Net Flows ($ 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:
Assets and flows
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 June 6, 2008 Sandler O’Neill Global Exchange and Electronic Trading Conference Colin Meadows, CAO
Schedule of Non-GAAP Information * 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. ($ Millions) 35.9% 25.1% $245.3 17.2 $228.1 $684.2 20.9 (247.1) $910.4 1Q08 18.8% 14.2% $407.9 -- $407.9 $2,166.6 -- (706.0) $2,872.6 2005 31.4% 36.0% Net operating margin** (1) 23.4% 25.6% Operating margin* $762.1 $1,039.8 Net operating income (1) 2.9 45.5 Proportional share of operating income from joint venture investments $759.2 $994.3 Operating income, GAAP basis $2,428.0 $2,888.4 Net revenues (1) 8.1 60.6 Proportional share of revenues, net of third-party distribution fees, from joint venture investments (826.8) (1,051.1) Third-party distribution, service and advisory costs $3,246.7 $3,878.9 Operating revenues, GAAP basis 2006 2007