Invesco (IVZ) UBS Financial Services Conference summary

Market environment and client sentiment

• Clients are showing cautious optimism, with high cash levels and selective market participation, especially in ETFs and fixed income.

• Fixed income flows are increasing, with more interest in municipal bonds, corporate investment grade, and longer duration assets.

• Private market demand is shifting toward real estate debt and alternative credit, with strong flows in bank loans and CLOs.

• Cash assets remain durable despite rate volatility, reflecting ongoing uncertainty and political changes.

• Some client movement has resulted from competitor disruptions, but impact has been limited.

Fixed income and SMA growth

• Fixed income AUM is about $600 billion, with $400 billion in long-term assets and $50 billion in alternative credit.

• Over $25 billion in fixed income flows last year, with SMAs and ETFs as preferred vehicles.

• Municipal bonds and global corporate investment grade are key growth areas.

• SMA business has grown from $10 billion to $30 billion, driven by fixed income and technology-enabled scaling.

• Focus remains on high-touch client service, disciplined product innovation, and leveraging wealth platform relationships.

Expense management and operating leverage

• Expense growth guided to 1% for the year, reflecting strong discipline and reallocation of resources.

• $60 million in run-rate cost reductions achieved over the past 18 months.

• Investments continue in product, distribution, operations, and technology, with about one-third of expenses now variable.

• Targeting mid-30% operating margin in the medium term, with Q4 margin close to 34%.

• Operating leverage expected to improve as market cycles broaden and global flows return.