IVZ - Earnings call transcript Q4 2017

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Unidentified Company Representative

This presentation and comments made in the associated conference call 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 condition, AUM, geopolitical events and their potential impact on the company, acquisitions and divestitures, 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 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. and to to on described carefully most Form not and forward-looking in investors filed recent you XX-Q urge consider XX-K caution rely SEC. any unduly statements our with We the forms subsequent the risks

reports to to You obligation forward-looking Web site disclaim the statement if be any information in later the at may from SEC's out We inaccurate. www.sec.gov. obtain expressly disclosure turns these update any any public

Operator

be Conference conference Welcome listen-only in recorded. to will Quarter All session. a Today's Results until Instructions]. Call. Invesco's call question-and-answer the mode participants Fourth being [Operator is

If you time. have disconnect at you this any objections, may

I Now, Mr. may begin. President to Flanagan, and over call CEO of Flanagan, to you Starr, the Officer. your would Invesco; for Financial Marty like speakers today; Loren turn Chief

Marty Flanagan

much site. for presentation follow can everybody, you joining inclined, are web and the you Thank you the us so on thank if and you that's available very

spend the involved are financial to full two we a Loren where and the we that few with reviewing results So into go will up an and on will results give are we quarter Q&A. I XXXX, acquisitions fourth open will update minutes and in the results the year of

results by highlighting talking let am So start me full our for firm's year, page if or you along. operating X the on I and are following

movement consecutive term from that performance, X.X%. to XXXX billion year year. our ninth the earnings looking contributed was that Invesco, the growth to record on the efforts, and Organic and highlight year, combination resulted for during I margin do up term really at did return the strong focus adjusted share, the throughout share oriented all Invesco long I and net positive of year, of $XX.X $XXX So up for very performance from net inflows come inflows again, rate The these represents the throughout dividends XX.X% in capabilities be million a strong delivery of to performance, investment XX% achieving We that's investment very was continued on to per long back, clients in Solutions a for year-over-year. to of outcome the But operating $X.XX back per XX.X%. XXXX. minute. will want

So is really to back context the to, to page the X, flows, years turn if I is term diversity want in which you of consistency where our this the long of come inflows. of net nine and

it's X reflects rate the standard years growth rate. the variability growth. shows growth So between sustainability over the growth the that The horizontal and this rate prior through average flows XXXX of organic five and axis the public the page and is axis those vertical of it of chart variability on organic the a the relationship company or peers. The organic deviation was

any not Having position a a strong class. growth one rates channel us our Invesco the put clients. it level But So outside we distribution to of lowest any by if the flows average evident it's better or has absolutely of high peers, flow Invesco additionally, is a of that our really of management against -- organic at overly standard the peer are intend as and makes of being third close. under something reliant group, you that does reflecting the Invesco. asset geography the sets absolutely we assets and top just diversification and in look consistency, group, strong, us of that benefitting to serve offerings diversified business, deviation on

us in We despite represents to proven that inflows concept that Invesco do the lead flow to organic want We our better of these So and to do is opportunity near diversification targeted business And results. in lastly, anymore, our this to this again, good it's that diversification does not growth this a discount for for business, of is I current -- point growth consistency to believe fairly for believe portfolio, of to those sell future. continuous at a reach and is great rate a peers. do flows, X% not and reflects our continues the grow the versus of rate organically. out, X% low volatility valuation ability strong

what of history, future Invesco. measured based well, As think the potential is by on we

complete I $X.XX. for, and firm talk the throughout three our and particular, a are nine years, the to So continued in needs mentioned. that now brings acquisition In outcomes for competitive again, strong to competitive year, about the acquisition managers. on business, important minute. ETF expand a clients Investment And let full on intended performance of that of thing is principal alternative in passive this the and this money which our from year, really to of basis. the XXXX, active, that a as about our year, of business, past of clients. what future advance the and and we are position. all to one continued their good together that share money over five to our year for and of performance Solutions talk about to turn achievements record minute X will Guggenheim past the take developing just help announced of we very And meet we over the were assets, beat strengthen the this me a provide capabilities of clients really looking very during the XX% per talked which which peers in capabilities, page any of XXXX, But was really success further is Investments range earnings a basis that our the Source drivers, we of and ability I manager. We our both was flows to important year build XX% generated did is seeing,

different or we are Solutions opportunities that importantly, and also with parts accounts. the success knows, about institutionally in highlighted things the closed everybody XX Rhode of as and Wealth traction of But the platform, Management world, year, Island, our also. seeing within the within One different was

platform, Wealth with demand enhancing from really build Jemstep offering but to as Regarding them. we strengthen services. our down view particular, sales human of number well advice and implementation the onboarding itself replacing saw are by enterprises continues Jemstep, them with clients, to we digital Management large them, of the and they a pipeline the advisor-powered a it, announced we very-very strong In and enhancing banks, means as several which their technology, digital comprehensive important with partnerships path not differentiates in advice robust. touch, be XXXX, for relationship

partnership well. our and So with it very-very is the important really partners works quite

in our run continue of rate of also savings We as drive XXXX. through savings, $XX the million to optimization more than end delivering program, annual business

get in globally to improved about updates investing, all a have factor-based and better will to help strengthen position We the use A which effort to China, have the which client we might like our of ETF institutional complement I things us talked we for initiatives our the improve key future. business, advance savings competitive example, highlight, initiatives us continued handful self-indexing meet the the look XXXX. of we or will expansion further as business in and that needs, our grow would offset in XXXX, investments we with business, help in to also and

So you Again, Guggenheim, we acquisitions focusing we and in on now the platform. both me global ETF here EMEA also which improving business, the and to think position United the let where upper on update in of minute enhance platform are are a closure our competitive -- ETF expanding been growing our we take of States. which, Source the our helped XXXX. and Both with of has in

see the fixed which and diversity integration issues totaling did and at across integration smart the XXXX, of acquisitions. The commodities, of to end manage billion income equity Our EMEA This ETFs. at post any acquisition, efforts up from time is acquisition. typically that of of $XX happen with expands a successfully ETF the EMEA our often active the our ETFs strong the billion business not acquisition really beta result of we $XX.X

$XXX really quarter platform. business in the in $XXX flows capabilities a inflows passive the to performance, $XXX through quarter. you fashion. demand, year, slide to the during a quarter. prior turn by be remains active on and why Adjusted did investment we sales range again, and of this billion, $X.XX point term drive and demand assets and $X.X had Spending see prior the per results advantage fourth continued saw we million on on per new had complementary on expand prior to from helped intend fourth take retail net strong did return to dividend directed the will quarter, led able platform $XXX we the add launch of capabilities shareholders equity margin We Guggenheim client to of the X.X% active in fixed in the the constant We So adjusted will at solid also demand capabilities very again rapid within growth minute XX long and the and the the million XX; in platform will net solid the alternative under quarter. Gross of during create to the $X.XX. had enhancing still our organic being, was the share ETFs we assets quarter capabilities. and rate about platform. quarterly inflows billion Talking through strong institutional again page under we XX.X% second ETF during it that management $XXX management building have We to investment income of self-indexing to quarter, quarter, We billion, operating dividends to fourth the ETFs, solid of performance Guggenheim as share. for million operating and in to performance The indexes proprietary income, of quarter. The don't close looked was earnings in compared up the XX; slightly quarter. and up

income, a equity. in international flows and fixed solid saw You firms domestic equity taxable

XX. flows you did domestic slide noted in EMEA retail international strong region. building acquisition on demand the and very we up ETF see as in for to We ETFs presentation, strong and during strong passive, see Turning ETFs flows saw contributing fixed and income, quarter, into to is equity institutional will as the our in net equity that demand

Income net have an consecutive of with flows. strong, was last you as number example, they quarter imagine remains High particularly We funds, return saw And led EMEA, and for institutional the this targeted well institutional by a not led by commodity very of market months, investors mitigation flows mandate rising continuing, strong. investors, flows for demand in the markets funded the solid strong saw the strategy Pan-European we ETFs. remains strong pipeline also ever risk can global institutional in as As amongst also but over one, institutional and cross-border and as as positive emerging sixth of in flows

flow continues as the increasing, again, robust look and ever to to be quite So the picture future. we

Let he Q&A. so and turn can will open to then more we it to me specifics over give up Loren, you

Loren Starr

Marty. lot a Thanks

we $XX.X dividends saw were the billion, from fee products total foreign of was by which of billion. earning These exchange X.X%. by $X.X of term $X.X $XX.X outflows of driven in and factors quarter-over-quarter, of increase reinvested $X.X billion, market non-management money gains a institutional AUM quarter. somewhat We saw of inflows inflows So included billion AUM gains market positive or and $X.X translation billion billion. into capital net That long billion $X.X offset

the up third our annualized X% for compared organic the billion, the quarter quarter QX quarter. rate AUM growth and third average in to term in was Our X.X% versus long was fourth that X.X% was $XXX.X

and trusts quick are inflows flows turning one classified I the to fourth net or long are in our wanted known, Before as changes be as this they I to no our and revenue and are AUM well provide quarter, flows are investment term, -- fees, PowerShares longer presentation being as going as products somewhere being was comparability. unit earn periods product from Beginning typically, change as accurately Since leverage do of these the for a going management instead with product, Invesco UITs exclude update and QQQ, long with AUM. consistent with of flows the long prior the reflecting fee nature term products to term quarter calculated. in yield how as the on QQQ to none earning forward. thought non-management All it allow in these of we more presented flows been alongside categorized to those restated have and AUM to

a was fees quarter our acquired a X.X So excluding points QX. the European and ETF of decrease by The in X.X points service me yield points. yield decreased now reduction to business our That basis somewhat foreign net revenues which points, we net of X.X basis in performance basis points. impact the offset X.X reduced for XX.X saw and the on of basis yield and by at results mix, yield; let that distribution non-recurring a also net get full basis was exchange XX.X revenue our versus These then a yield, in quarter. and positive added basis revenue impact of so revenue came were points, by the

the ultimately, the that were last had in materialize, the expecting as fourth quarter, see somewhat well some our higher did provided as fully slowdown a So flows, not fund we expected, to versus in when as quarter. was guidance cross-border outflows from extent we the mix anticipated of equity range that revenue what improvement from modest retail we did U.S. our yield products, net we

to results move our just me operating quarter. for quickly; GAAP that slide provides the Let U.S. XX,

focus comments the is are measures, customary, As my XX. found today related our on non-GAAP variances which page to exclusively will on adjusted

move so quarter-over-quarter. increased net let's page; or that X.X% So by million $XX.X to revenues

a billion, million. positive impact $XX includes which of over exchange $X.X Just foreign

real decreased and in X.X% third and we performance see service earned which came Within million reflects quarter. $X.X adjusted quarter. $XX.X revenue, $XX.X had primarily compared loan average distribution and by bank at to the in Then were management the products. the or investment primarily increased for This fees AUM adjusted fees from QX, that Adjusted you number, $X.XX net will higher billion. million by revenue million to estate

want $XX would million do expect be we per we will here. $XX give Going performance that quarter. versus say our to XXXX, some into to guidance, guidance We fees million up and roughly prior

that increase the fourth came primarily an increased $XX.X from due Our prior in was $X.X million was in million, and real quarter estate revenues adjusted other that at the fees. to of quarter, transaction

expect million per XXXX, remain the through other to here; $XX guidance providing similar would at remainder XXXX. we to Looking around $XX again of at level quarter, forward a to revenues to fourth quarter, million the

the Next, advisory the that gross we against service with X.X%, and increased dropping our expense is from or $XX.X item, third revenues to which related increased revenues, million net party line which retail distribution AUM. derived consistent

yield. I just to expenses, provided revenue me the just turning in Before terms let of summarize all guidance

we by we reduce expect and occurring These impacts the exchange but business. about the is performance by not that Looking from points. as that by X.X excluding quarter basis expect of net to improving rate points see the that acquired is X.X This sales as XXXX, foreign second the as into in points. our that beginning Guggenheim XXXX, XX ETF we yields, inclusion business, would somewhat, ETF modestly, revenue yield fees well our to basis of offset, decline fully approximately be basis in year-over-year decline the results roughly driven assets, are well full trends as European the year will seeing, mix would by will

will or to expenses; $XXX.X on increased on million, that slide, to so on Let our operating the me exchange, that relative the impact expenses you with operating during the our million X.X%, adjusted adjusted an at see $X.X moving expenses move QX roughly $XX.X of by then quarter. million foreign to

charge by driven million, recognized the employee This to defined at benefit $XXX.X of related million which million compensation QX. came $XX.X $X.X or U.K. in lower adjusted is X%. Our and compensation that's plan, a in decrease company's variable we non-cash

taxes one impact expense million seasonality in as reflects increases, Guggenheim into as month of guidance as of The million by XXXX, first base we impact taxes, the the being of then as drop The the higher compensation offset as quarter. foreign be but per the the seasonal exchange. salary should would well ETF providing again well in $XXX expect here, to from compensation the ahead payroll the Looking off QX, as quarter variable well they business, reflected. for would increase $XXX costs roughly

this exchange rates. to fee and well based is provided guidance on So course I as around flat that note that markets, the of consistent foreign earlier guidance revenue as

in the moving marketing business, That costs. and advertising, marketing, acquired marketing normal in as well as funds other adjusted or to that campaigns, million related was to million. seasonal higher and client cross-border ETF our the increased by $XX.X to that's XX.X% $X.X So line; QX, increases events related

was forward technology came that looking line an $X.X So to regulatory as software This that or $XXX.X roughly we required, well million, expect quarter. other reporting, expenses XXXX, as higher marketing in and $XX at to in compliance increase and outsourced administration costs of would costs. quarter. MiFID property, increased office to million X.X% reflects at as per come and with over million adjusted associated II down third the costs, item, Dropping the

roughly to G&A Looking guided. around forward line property, had quarter. we fourth levels, to with we in $XXX higher quarter than came adjusted expect And the per expenses technology expenses would office and XXXX, million our somewhat next, in $XXX million

of These as within million legal, professional As irrecoverable regulatory in an The primarily of costs that of There business which XX.X% line $XX.X included million million, costs or were reflected increase increased we $X.X $XX.X related preparing fourth product item. quarter. initiatives, million, and compared led increase growth -- taxes increase than also know, was QX. the more services to $X.X and costs an regulatory for to overall to quarter consulting, that third changes.

the costs run $XX be be should hard talked payments will the is for rate overall, XXXX. while about But to decrease we by the have that II per our quarter to would past. going course of of around guidance MiFID $XX the incurred in rate that million dollar million quarterly we related expect this G&A terms XXXX, guidance, decrease, In to into see offset partially the

provided exchange, margin So year, XX% foreign flat and believe based and at prior current sustainable the guidance. the today incremental markets with into our we assuming and level, our to is XX% target guidance at remains levels that margin for on certainly our XXXX consistent

Looking with return our historical to believe into could beyond; XXXX XX% guidance. our to and the that we consistent incremental margin XX% level certainly

So back going on down out. the I this to quickly just current will page, results, finish the

You million money by the non-operating on tax at then QX, mark-to-market in And came increased investments. to taxes, moving XX.X%. compared income our effective firm's quarter to rate will $X.X seed gains that see in adjusted the driven

impacted XXXX month. Jobs our tax be Cut expected will As enacted rate which effective the last was act by and Tax

it there have the is Bermuda, current rate will earned, analysis $XXX.X the impacted, XX% the domicile corporate our the is earnings, to for certainly you on reflecting on just the effective the XXXX. tax general, about Guggenheim credit rate, will territorial provided we needed excess these is our is reduced capital reminder, us for amount outstanding of guides Given our up, This is today, review and share the to between from money to seed an onetime be cash revaluation additional be are where point a cash under the the and XX% in This for questions but the anticipated Invesco, of the of was million always reduce to residual estimated priorities tax as continue paid fund And this and which in on could if results; our rules, rates. follow used going QX. to our and benefit our any rate repurchases. therefore, intention, non-GAAP GAAP note we the that deferred in acquisition priorities. a the to finally, levels of in of had tax of income see to lower taxes will acquisition, of just goes adjusted tax our as use to just guidance tax pre-acquisition that we lower balance be stated cash ratio we co-investments, come dividends facility, benefit system the and our back cash U.S. is as majority that to the After to these the U.S. new our will as course results and generated on completed was on quarter, leverage our in legislation. purposes we course, rate benefit out but Other reinvest the jurisdictions then beginning will related you business, through at overall that

largely just that In see for operating $X.XX, have wanted EPS adjusted back net XX.X% I an seen term billion continue offer EMEA business, the done. as we the our This weakness on in overall, through some well U.S. on institutional both flows as retail strength always things flows. And quarter. January, XX, space. we [indiscernible] by somewhat us So margin quarter, turn side. to as But retail significant the flows, current of in back offset been brings we the to before I Asia-Pacific, to the net long has update to January to and have of in Marty, $X

we So and institutional is certainly there month. month, happens with done during the not activity an are that the

I just So over now going could improve that am Marty. the it from number you. turn number to And that, with I gave to hopefully

Marty Flanagan

Thank you, Loren.

up So you open please? can for questions operator, it

Operator

[Operator Instructions]. Worthington speakers, from question is our JPMorgan. of first And Ken

open. is line Your

Ken Worthington

what II ETFs are ETFs now is good impacted And morning can lessons you in my guess and place? are that from the you marketing apply about Europe, U.K.? on behind effort then conversation putting maybe And I Source, factor-based that the MiFID rules investing the terms the so maybe of Guggenheim? and lastly, in Thanks. Hi, you has conversation for that questions. the to in yet? you first, learned How taking you then more are changing, thank in talk have Source could far

Marty Flanagan

Thanks Ken.

landscape, talked place. about, the of of important landscape very investing more even a all Europe we MiFID at being of announcement everything the ETFs it's in time supportive look, advancing, the So being the in that part

us. result we think business very in important to it's for going a So

has nothing So strongly there, changed are we just ahead. moving

people. has what very we complementary have. integration group gone mentioned It of I to talented well. earlier, very-very a is the really As It's

that about. it from see And going active-passive again, of we talked view, So alternatives. have an we results combination been we a using a and point are just what marketing organization, as the doing think we expands of to

supportive. very-very again, So

back up more, come down before me even I to Let back it.

a I the the about of the talked firm, consistency As flows. and flows

rate. a target to X% organic We X% of stated have growth

flows We we pulling we absolutely lever focused driving imagine. to and are want, sales that are you every net on the that gross get can

So and focus much we just can resulting organization, the so for Source, ETF on we positioning distribution what the excellence, Source outcomes at anything part not to global do. firm the clients, institutional overall retail, also throughout very in a strengthen, but net again, is that time will again, of ultimately changed nothing becomes we limit very and and the of looking important the But what at it brand of do flows our to announcement. thought has business, from further

Loren Starr

being to we to is too, one had added business not extremely as and would absolutely Solutions something them, is using the the into is to able context. that salespeople ETFs Solutions Solutions know It's I so, conversations. ETF and the And thing those the available within more really our mention prospect provide I have around are institutional resources excited factoring institutions, about of

the going. past. the able in have we So again, conversation days it's of been But say, where to bit a a different becoming absolutely early to it's little part it's than have

Ken Worthington

sort at net seems gross improved side billion U.S. level. have Okay. and sales but of kind this seeing are Thank somewhat, a that, institutional flatlined sales. material, the Marty, I $X are it or investment it's we recent yet not Asia times And Asia, highlighted have $X.X least of you. and weakened in billion, institutional made couple sales not sales Europe, like of gross yet, in believe calls, you then institutional in the around

news the the when we Thank X, good should comes? sales When is comes, coming? good news Are XX? Like gross good you good of you. how is thinking level good what So like, expect?

Marty Flanagan

Yeah.

So of and over then to I Loren. to make comments am turn going a couple

years, coming, is -- couple you it's good expect material. a quite we look of real and if out So the and

to a to been quality factor a different the and is what have plan. capability, of very intent the outcomes it's the we capability, and and you Again, in have aspiration alternative is set perspective, have happen. things of are Our income from team Solutions and everything not that again, about. place that net The my what are capability, we talking it's seeing, the

are plan. executing actually We the

a So Loren, make do you couple of comments? want to

Loren Starr

know our XX% through indication, Ken, exact is firm's rates fee but we not well XX% the numbers, funded one, rate, if than overall is get Yeah. the mean, I don't above overall of into up rate. up course XXXX. it's the I pipeline higher firm's fee any The fee

XX% is a down seen firm's lower good down the have terms think The in I we versus overall things is so what likely than see of that bit outflows topic news, again, been terminate rate. last have of fee year, are the the a we significantly. And little to around XX% about institutional the on business. termination by way, fee rate

in versus significantly in. outflows So of coming the terms the ones impact lower

we So and all by I our distributed across good. regions, is seeing, mean, it's Asia extremely based are robustly the on and way, what U.S., that both Europe,

is The category around we another just at, things that track look even of thing say that's I'd more opportunities. qualified to exciting other

Europe are that dialogs is probably and largest as with an those we right at And in record, now it was that and our year, happening so having clients active double, and Asia all the is last then are where growth literally time versus well.

off. certainly of is with have pay our seeming institutional exciting business, to resources and what's to be Lot very-very -- been added happening. it to continue So

with moved happening. I line which might that was first tell fourth some And to can't happen quarter. which things the is flowing, the in it felt the quarter, into site believe you So just a again, again I because exactly things of quarter lot volatility, we and of

certainly term we into QX. mandates those see benefits some expect would going some from So of to near

Ken Worthington

very Okay. Thank much. you

Operator

Thank you.

Barclays. Next question Jeremy is of Campbell from

is now open. line Your

Jeremy Campbell

and dividends changed kind you your capital to know reinvestments? have basis influence You not if what's kind think on flow total sales disclosure on gross and the I profile, of guys of us to just sell for incremental wondering, gains. buy from reinvested is but side? am extremely footnote the is a really pretty got I I what's probably out and contemplate active-passive stratified or and you the product helpful separate the

Loren Starr

question first think little more about around your at the of detail that. the question a reinvestments providing level. and got bit I at We detailed a gains But I capital part cut can certainly heard look off. your

it time. long -- Some getting actually data a is hard to sell of just the of got, don't we because third so parties, that to obtain, and we took

aspire to, course, it did something helpful. that, to peers will if because with was largest we more look that to see, and of it have can done, detail. of can So we We that's that is we details, more get we try we do the to industry more consistent felt that some you give

Jeremy Campbell

I what Sure. your were simple something then now that line and disclosures even what to like, would be adding flows, extra get -- old defining you to as mean, Yeah, using are as

Loren Starr

we have -- Yeah absolutely.

not are this. to cute We trying distributing [ph] by anything do

we I can get you think more detail.

Jeremy Campbell

kind just And year you but MiFID if for or guys expenses I then full not, XXXX? do missed know expect I wanted of this to I know; what in don't

Loren Starr

it is and dynamic have for process. we fluid in is payment said the as of terms research, through which said, very Well very we millions, of tens this not go quantification, dollars specific, discussion, the because we of hard a

for equilibrium associated that it a time, leave industry the and of prove out other hard it kind hope research corrects for over will of of research. an hope, may reaches that costs not the I certainly terms as level, and So and than, it's payments adjusts at with in indications may that, pricing early some decline just our is

Marty Flanagan

Right.

-- included though, you in for also the think G&A is that I this is the the impact guidance point in gave full

Loren Starr

Yeah. Absolutely.

that of tens a reduced line QX. item, today millions it the and level G&A So which impact at sits is that's we where included versus have in

Jeremy Campbell

Great. line And has Guggenheim, guys tracking kind here, I level? kind it just that that related guess, you that with like we at Is last our expected, as in the growth? as finally, call of compound since to had Group, how AUM talked about been a flows of sort perform of what

Loren Starr

grown. certainly has It

think versus $XX relatively I in we at it's something when billion announced. XX size

Marty Flanagan

billion. $XX

Loren Starr

excuse billion, $XX sorry. am I me.

million historically. $XXX about it flows, since of terms is of it's was line where flows, with long in think which roughly term I announcement, in

Invesco, and it there we higher think tracking, to We to a actually, hope we becomes trajectory is once right little and what its not to are it's of of we the a the Obviously, prior going Right it plan. do that certainly anything believe growth than AUM can improve improve significantly, terms in level. announcement, able then accelerate more be now. it gone I may now, seems and it part that have is to to flows hoped our bit. negative, our

Jeremy Campbell

lot. a Thanks Great.

Operator

you. Thank

Siegenthaler Craig from Suisse. is Credit question of Next

now line is open. Your

Craig Siegenthaler

good Hey, Marty, morning Loren.

Loren Starr

Craig. Hey

Craig Siegenthaler

start help few on So business win starting you and I when the already and related wins the can wins just and to implementation. already Jemstep; path these know you a us here on just in revenues? up But to of on show will announced some are timing, flows

Marty Flanagan

Yeah.

the developing. strength I have We So coming you keep to be I what's enhance is -- this in strategic But it is to very think a couldn't just of from We that our developing. these it just are it what So back more it's the about -- -- we think to really again, the implementation, is excited just competitive I business but will right? -- it low. be exciting. mean, think standpoint is. look we nature XXXX, it's are again, future, of

Craig Siegenthaler

in deck that you know, in Got it. pipeline. the slide on the And the Jemstep, sales then, comment it's also

does You noted of robust things What like client I in banks. terms of what average size, pipeline? just am it characteristic in base, bank as is especially among the that? wondering, sort look the that like of

Marty Flanagan

little be from But broad. [indiscernible] because I careful, quite it I banks, banks mean to is Yeah. very announcement. regional a really large would the

development something and us important to is seem ourselves between that think banks we partnership and the line a very for again, nicely. the it's, very-very So up

Craig Siegenthaler

Got it. Thanks Marty.

Operator

Thank you.

Next Davitt from Autonomous question is Research. Patrick of

Your line open. now is

Patrick Davitt

out been on metrics? with II. Good you morning. those chatter reporting troubles and how to a with your came little that new expense theme, I'd think all-in like the get that on MiFID you thoughts There about has within

Marty Flanagan

Sorry, up can not kept with have what -- chatter. I But tell the you is I

Loren Starr

about it. heard Never

Marty Flanagan

about heard it. have I because [Indiscernible], not

Sorry just had I I about color. more that. wish I don't.

Patrick Davitt

just that pipeline just Europe Asia as earlier is the just through; then -- of or went and And guess, all is color, follow-up data pipeline? I institutional Sure. that a the on total you the

Loren Starr

mentioned, as I about third it's That's the each Invesco. total But of pipeline in all for a region.

Patrick Davitt

long and January. Is that? in a Great. flows then, lot the reinvested $X there in of dividend term of capital net And billion gains

Loren Starr

that's reflected None. None that right number. in now

Patrick Davitt

you. Thank Perfect.

Operator

you. Thank

Citigroup. Bill question of from Next Katz is

Your line now is open.

William Katz

Okay. Excuse me, a flu. apologize having for the little voice here,

margin And Just sort a bending is into is function think relatedly, curve get coming the investment the a growth? contributed down much will understanding XXXX, trying Guggenheim incremental back to for Just you the as business? us, some of drivers the by be? it of revenue of how versus about core to expense to just will the of the how or is what guidance; parse then driver be bending out much the up expense for better it

Loren Starr

is, QX. in is at that Guggenheim coming Total are XX% is Guggenheim period beginning coming associated said, excess with incremental of in, about margin really are $XX of expenses as a we assuming at little So for the of in we time. million

that's element and one coming through. that's of the spending, So

of to incremental few. sort existing related these to name things business and The no to the percentage our that well the factor-based, by other just the that's XX for Guggenheim was growth more incremental beyond in funding above growth driving year. business, as what's And amounts points margin, ultimately ETF the than a of roughly, as down investment earlier, are about that, are institutionals, talking the Jemstep, further Marty of

to the going margin is trajectory, our driving we what's of you going gives accelerate selling, revenue do expansion that that products into hopefully, also the because I what be of the that So is. color of hope XXXX beyond. some think, mix and growth, are to

William Katz

you you a institutional that's for run but you time? then just thinking question about the cash from Okay, [indiscernible] off little the how And the bit helpful. at topics, in more commoditized here? opportunity How there how think business, it that or growth broadly Is critical of is a evolves industry? you that real for sort of a service and more it are Marty, point a is this business the to

Marty Flanagan

it's business this well a of for need, money striking be you need. a players is important Look an reform. been happened there really what's will need. I a growth the been We the as think But a for always know with anybody, continue has to fund us. there though opportunity There the just has it's consolidation -- then, --

of And so, spiked but down have have than -- the now. down more track people, they are numbers, who the just right lost by that XX% of

So to the it. be be to to have committed business, really in you

well. think some it we and for have to have we us, business You an important do very it's scale,

William Katz

Thank Okay. much. very you

Operator

you. Thank

is of from Brennan Next Hawken UBS. question

is line Your now open.

Brennan Hawken

Thanks morning. Good for question taking guys. the

accounting share a XX% tax in XX% Loren, First, on the year? to last comp impact of rate follow-up the effective here change into the your guide. that went effect based Does XXXX include

Loren Starr

think that up, this And typically does. do that that again impact first will good there because it I quarter Yes a there, quarter. you that is happen bring you see and

Brennan Hawken

terrific. ex Okay, run back rate, noise? And -- longer we out, have of you XXXX, to that can what what that if order would sort of then run we just were for into XX% to that so do magnitude about be embedded think XX%

Loren Starr

will always be year. there, noise that Well every

if it's something So to I am sure, factor in. not

percentage can't But than have the again, develop. it's I more point. [ph] Certainly exact So calculation. I something a unfortunately, we imagine don't could

Brennan Hawken

just for, that, was here; Sure. quick we looking follow-up guide then, a that's expense better guidance, later And can the than a guide we no were question worse. maybe the And problem. revenue on so bit

on seems included I of line being tens think millions I tech might have in and spoke also expense but from and uplift I to, an you included not G&A, the that that wanted the heard optimist the the correctly, wanted it referenced, -- So property just like follow-up am, to you guide; just also I it to MiFID.

then expense investment from millions to that was fund technology was exclusive and purely more idea MiFID that. the and for was So tens of guide of incremental the research,

is costs to bit it little to think above going a that way that? about baseline, the is all-in be right So

Loren Starr

run [indiscernible] to Well so that transfer to G&A, may In and who us is well, cost period the need up on the forth. provider, with that's ultimately as And lot I MiFID elementary gets run due as tech, Again, the we the property, drop. does II. there related that millions. pay But some what services agency of rate party the not and tens that away, of has is business just a -- rate office our numbers some time, of those of third gone really go be includes this to mean, unfortunately helps benefit for a that research. over a

$XXX you to quarter. that that per gave million in So I'd guidance, like it we to reflect over million $XXX

is change the or themselves unless number good made one. think stringent, less sort of regulations So I -- that get a

Brennan Hawken

the for Thanks Okay. color.

Operator

Thank you.

Lee KBW. of from question is Robert Next

Your line now is open.

Robert Lee

on through a Thanks and questions maybe [indiscernible] there, space. larger taking just you Morgan my intermediaries contain of Stanley soon. is update shelf could us I guess, kind know, thanks. -- whittle others, for going Great, guys. round you another Marty, down that

that, you also, maybe or you helping extent what opportunities us you platform of sustain on in shelf your feel kind just update ETF maybe are could faring So of in to giving you space distributors? is how kind and you like those

Marty Flanagan

Yeah.

Your very question well. almost summarized it

with a are it the they of platforms funds. are working again, big is -- to who fact, the narrowing, and continue We number

done have quite we far, that. well through So

that. are during to funds not of say suffer funds underperforming that or do But that our percentage very-very to a That's expect our We be going tends to small in smaller to under management. future. the assets it

ETF So you can contrast our that business. to

what's on really would important But ETFs, starting platforms. last more is, these our just mean, [indiscernible] and think a have I by really you of we as platforms imagine, in I of we to been to and fully strong opportunity has the not quarter, the conviction. really already see the go it smart-beta, start embraced are factor to very yet.

early in are we again, So the opportunity. days

alternatives strongly do firm a the really really capabilities -- the that, our and the kind is traditional active the we of so the strength with believe capability range platform. of And factor of to

confident about we future. good, the are So far so

Robert Lee

stands? have maybe in a announced incremental the sense price? you point, thinking value of so Guggenheim the but same are Just on out, your had at Now pointed that maybe rates? as to reduce up go accretion in forward that Guggenheim a us get decline assets does tax about you of follow-up where can of on of the from And the trying at priced Okay. that update are purchase some kind the since away, you you time, clearly tax a terms or will speak, yield, on get also the mean, deal, how this the to transaction. you some, I but

Loren Starr

mean, U.S. another. benefit tax I the the the value value think I largely the Yeah. purely like of year. a income based million was, in But offsets The value. that one half $XX more. is operating significantly it roughly of Obviously, tax yield is obviously

goes impactful So of to the the it if to value not business [indiscernible]. it ultimately full off us, is

Robert Lee

question, And from the am Okay, curious changing simple territorial benefit tax just domiciled I more U.S. being to system, a still Bermuda? last with one then great. in

Loren Starr

-- mean, think I I no territorial. impact there is both They really. are

like or screen. where playing I fully, it field think us there are Ultimately, any continue an Doesn't make it's about is something we radar domiciled that But where before understand to we is with we happened now, is absolutely our of equal it do on which look legislation, certainly reconsideration it. impact do we doesn't changing to think So is at are. change what we need us, level to need I fine. think

Robert Lee

was Great. questions. That Thanks taking my it. for

Marty Flanagan

Robert. Thanks

Operator

Thank you.

question from America. Bank is Michael Carrier, of Next

now is line open. Your

Michael Carrier

is maybe Thanks Loren, growth the in the guidance, I digits, that put if it just [indiscernible] double expense seems it the XX%, expense guys. on XX%. to call the low outlook, like

some elevated think the I investments, when of post the think is that any and needs, for and in core you just run these about rate. And down, deals XXXX that break that core have to run gave But investments, you I we figure the to XXXX? trying out, business think you got is got of what some am you color. deals, wanted then seeing us way know, of Just in these maybe kind have versus but are out, I your have us to the way level you of the some there rate about

Loren Starr

are is, mean, the look good through what accelerating really stable can we future estimates think they I aren't see, course forecast is, a of I Your lot. mean, I of in out news and in expenses the roughly XXXX. terms the We all fixed. our say and

without good the foreign margin of I very to of news exchange. that expansion of see in the through think we would any or terms further course in expect market XXXX, benefit that's

fixed I has us, fairly expenses. always think than variable margin, we a incremental more as large for been, it So see

it's stated, is we going we said, we we out a run into to so have and But margins course This have invested by We that think you year. it, through sort going roughly, of the above around are XXXX, to of heavily building flat know, are things. that be you manage run expenses are rate. I'd have rate, of end certain the that that say, XX% well

from no market I here. increase mean, So

Michael Carrier

Okay. And particularly on then, and with Marty, just in opportunities Asia, China. the

to you Just given like over see years? it's few out that next more guys the do playing look how continues market up opening the positioned more? and and you are How

Marty Flanagan

China. we Look, as are positioned well manager in any as think I

at strengths. probably China you'd the one look absolute being If the point you of institutional, to as

the want. have we'd that The just China, venture all multiple stronger. to mandates there, is and strong We very-very institutions organizations in continues it joint with get

continue a it. there have we do. XX years and and been at we that market. years, we next matter We for experience as huge have important to And opportunity to almost to knowledge five that's We longevity you same a think view very does that three us now, look opportunity, and in and pursue the intend and the for really

Michael Carrier

Okay. Thanks a lot.

Operator

you. Thank

is from Bedell question Bank. Next of Deutsche Brian

line open. is Your now

Brian Bedell

taking for questions. my Okay. Thanks

me to correctly, that tens that, for the Just that, on that potentially European I timeframe recall millions and of And but adopt tens am over what looking if globally, were at would clients correct on II, the think wrong I guess, of are rate, how you run [indiscernible]? you kind nothing as impact of, if I if was back MiFID millions I the only? based on adoption

Loren Starr

saw in on what be. think the at did in we happening, the advance and research what more have this potential impact I Europe, that. regulation I we of rationalize and to our started Similar rate of to applied of use certainly this had basis mean, that might we potentially being looked when global is, a we effectively, optimize

right that and it of Again, doing happen, in U.S. elsewhere. but this, actually view now We without will full ultimately could. are the

really think millions. size. deal when U.S. large be premature out Europe But what mean, to would the we tens anything maybe all to sort to more first obviously number and it's be That enormously what our big was comfortable, benefit reality in going at that think bearing I of if than put in no down point. able pretty be see it'd would that this we to to had I financial happens the number take, bring a me that of a something, don't make it's and started to at it half position, So I not it's pretty feel of my big on being a material the

Brian Bedell

words, it sounds scale other are you able to In essentially? investment some of like that

Loren Starr

Absolutely.

the do applying and that it discipline all. work agrees, to now here. are same everyone rigor With more something into be U.S. to come victory using and we and we it don't is want I done. for at are to us But that in the more Europe, we there declare is sense makes to and believe

Brian Bedell

then compelling broader of now. the really a components more have just a broadly. be And there question, lot just great. we of but ETF is lot factory abated Marty, a that, of on based Okay, recently, maybe flows Obviously, seen investing

ETF industry measures, XX% just ETF of January, once you more about X%. about it's the I think it's and according and -- to captured growth XX% XXXX our it's like of about in in only [indiscernible],

broadly? So to to based I stronger to become going do a flow what factor broadly think mean get you take investing just speaking, it's category

Marty Flanagan

It's been this with identify and cap a weighted market really The flow, all issues in can the bottom whatever, the since, cap-weighted indexes question. has good in XXXX we too. market indexes

to what aren't seeing that it, said, portfolios, doesn't risks based, moving question. cap large [indiscernible] want cap-weighted I call act we the more, level just combination to think people if spectrum, that's the up of, understanding retail More a it have what are are the and your factor too That I fees. the and and are and indexes their today. they back that concern institution. and as I weighted with others, to and this they that, a is alternative, risk-return client it's within an that are of or they think many clients More a building taking more do, matter correlates

way the so of future, it And consistent with the Solutions effort also. very our and is and that's

really it's portfolios just totality not breadth of want, capabilities So the the really Solutions together, and to build they the effective a mean, they I the put we to capabilities to rate but have, fee of build. responsive clients, of want also combination that just the be the

skill the one and seeing to to blocks just to are back that and build advisors to financial channel look earlier, advisors as really understand the and have indexes forward. going if platforms decade. the we it thing is been at over single can retail in put manner, their in they specifically, said focused them Every wanting for and factor past it. tool want. say, But are portfolios what cap-weighted coming what the in bulk intellectually the the attention that of an their to It's ETFs a important having to building memory, muscle have the going I another you on of, the particular they So turned it

it help China, goes that. this in of the And portfolios companies we seeing with looking because we again, again, do success are actually of our some to Wealth on platforms, mentioned the is these insurance factor had thing for organizations Solutions need there capability, them seeing holistically. this So build back Management sorry, can type the are that very -- and I to that are capability a actually

within particular it's largest second ETF, So player, I'd beta close with Guggenheim and the the closes, say to think in we smart will of our important be success, by the we the early time again, very and again future. an with or days player, active factors an part top

Brian Bedell

And think a XXXX? material is do could in more Jemstep be XXXX, flows also a contributor to that you or like

Marty Flanagan

platform the is -- really models, XXXX. helps built And within is of they and a many open partner -- alone. so our is guess, point the passive but many-many of it Jemstep, this And asked factor what what helping is financial we really -- the It for, them connecting platforms. all the active for based again, also advisors just dots. the have and combination clients, have I

these are it's to again, that platforms So on Jemstep. going be through available models these

And a do it's really, things a it's where very a all moving. to switch are again, to things, all that now. we us uniquely think think to put doing clients but and right in combination position catch-up are we of So turn these of hard I our the

Brian Bedell

Great. Thanks for the taking question.

Marty Flanagan

Yeah. Thank you.

Operator

Thank you.

Chris of Harris from Next is Wells Fargo. question

line is now Your open.

Chris Harris

guys how fixed to to Can Thanks. is respect that, remind question your and with dividend income you income And have a strategies. us lot higher of believe business then I positioned related you rates? a

those So how affect demand might higher for strategies rates particular? in the

Marty Flanagan

fixed Maybe of and line, piece income. you equity I take will take the the

you we would the seen off that of we is markets switch we that's with anticipate flows what with and our suite, from have off, the anticipated value just a And again, are relative is beginning you have where in Though along. has you that predict, to capabilities, the look see. have all really the stronger. been accordingly. we as much has are what would you again, the something It of it if said strategies. that lot deep think to value What getting to been falling it investments performance historically, traded I seeing, largely, some at dividend

Loren Starr

a basis. think income I the money of fixed discussion, more Yeah, were we type loans, bank our markets, have on assets, all we that amount floating substantial in fortunate a of

impacted play don't significantly they interest by rates. rising So necessarily,

corporate that the Europe, their lower we with position the they more to have But is portfolio part bond offshoring. business would our where think long tend of in duration, I duration. be

well relative positioned. would Europe, and So as in on when start a that rates be basis, rising

any of term our isn't way, none income. by -- effective. not some exposure. there is And But a business. that our short than is term of have core that of it's We significant do not there is majority too. of floating, actually more So value stable $XX longer be business substantial the it billion a component which could and is is The and part also in fixed excess

helps. that also So

Chris Harris

peers. organic And question it Yeah just guys really on the versus competitively had I does. mean, rank absolutely your is do growth. I other you very

terms us to out. bit That's revenue you where that pointed wondering little harder think see? growth? you You a are But guys of for just in organic

Loren Starr

which we the growth pipeline have about, the fund part talked as I I of institutional the the range, growing is higher a Yeah. part firm much fastest mean, growing think that fee But business, in significant given of do border business, of moving believe, cross at we mix. I the of than lot our on a fastest rate our things is certainly one certainly and around our our overall.

is by the are of the commoditized of of the driven more would multi-product. mix course yield provide flows will list the fee step through changes higher sort some on say, the acquisitions, being that coming with function come in, over cloud going a I obviously, are these we assets that years impact still than large Our a positive. of overall actually revenue on trendlines. But mix But to rate our

Marty Flanagan

the Let and about mean, me way it as I was I about us earlier. that; organization, an answer this think talking for to

about continuum fee you if fee, get so low of just fee, active again. factor So upgraded think from what indexes high higher you conviction, for, investment being capabilities you very the paid higher and alternative higher

you you and of know lower to with close business, at changing, clients of much of scaled limited so, response active Guggenheim and capabilities, capabilities there rate, and you point them more where the with it when down. sort And a is factor it's see but of some fee is mix acquisitions the Source the where the effective our business

the and client range are need competitive of our is, point, fees, right? that we meet that's they think really, and fees have, it's the what's a about So So the you competitive that fees needs. have you we and that I to business important other think continuum have capabilities to

that So pointed as that's building that the is it difficult ascertain to, our really just overall the really Loren to what to quite you margin, back our we if overall -- Loren where is rate, gets it's are looked and in thing out, getting has at fee

Loren Starr

not this as I -- before. from if I rate better the fee But products lower is mean, measure. mean, the some said on than have We good, margin. the fee one margin are obviously these of an overall

which these So with it we requires plan do products. growth, what scale and is to

as ETFs get these to institutional focused upside probably on, or lot we things be value on when is maximize if will, But that a our we and growth, do into going some we there know drive fee objective, good really rate, margin. So huge things would and a we not going will we going are and areas. of single cash to provide that forward, flow scale going of kind trying are if not as

Operator

Thank you.

Next Glenn Evercore. question is from Schorr of speakers

now line open. is Your

Glenn Schorr

Hi.

sure, follow-ups; had the two just would any you have to on client whole evidence, two on in suggest Just want have I you a any take it that the coming dialog MiFID seen more years? make conversation, quick would cost global nature

Marty Flanagan

have know, you know We dialogs. public the right? You No seen what

responsible back a had publicly. said, U.S. the MiFID all just versus the We created do it Loren are complicated debates, just situation, would you where I back that's come to of consumer we do? research. a to think regulation really the what what regulation, I

continue will to We be.

with of aware if news a outcome, I'd a changes to. a scale, are is, we event. a it a is of do do it the you firm good in well of like The possibility are will firm not like something to think think is come that we back you don't is, are The bad great global well news disadvantaged, quite becoming that's but We And and with position us, and fact I very a the that. really we well, are matter.

us the we to adopting going don't outcome did the a we techniques all really we during So what as that but be, is are MiFID, know for globally firm.

be I wish So I could more specific.

Glenn Schorr

just dialog consultants is returns to Marty. if No, know what and is given that's how and helpful. happening am equity last on divergence a I run curious of outlook or right we is, if I clients I appreciate for income. with the growth equity I not that. rebalancing Just now, between just have it hot it's The curious such than and allocations after expect, one in XXXX have curious, complex you fixed am more heavy see? is higher? people I the

Marty Flanagan

I lot tend I to I to clients, I Yeah. think had quickly, have good I a up they you more have describing. but environments of can't term that I wish to insights, energy mean, the view -- But question. like institutional of and a any sort a don't. really It's longer I react picked have that say to are this. not that some But I

Loren Starr

appetite. could an I say, mean, to only seems this be I just thing The increased

it institutional these regions allocation the the changes, the side So which provides and that in. flexibility current the different through operate retail and to on on Ultimately navigate different ways we parts both certainly of in in asset nimbleness are products.

asset So in terms activity of of in U.S. in recent factoring the positive of allocation sort the a of in -- our big around funded way, I opportunities, retail and not that and certainly potential is some pipeline think one our and side also,

Marty Flanagan

to good opportunity probably very ETR a your and That's good expand point. way a likes. with That's the

So I outside both of -- the to individuals sort -- institutions guess want [indiscernible]. really are some conversations, level, are at

Glenn Schorr

awesome. That's Thank All both. you Right. right.

Operator

you. Thank

Capital question from Kenneth is Next Markets. of Lee RBC

is line open. Your now

Kenneth Lee

taking my Thanks for question.

chart; organic flow And think potentially back, on down the stepping any rates between higher about you volatility flow impact wondering looking trade-offs growth clients, line? the do at if attaining towards organic the Just to increasing the shift volatility potentially? would potential and volatility relatedly, flow exposure how impact institutional growth

Marty Flanagan

We that would look forward to problem. this. question. is good [indiscernible], intention But a It's Yeah. our

mix, going continue is So the really to the that low institutional what those the retail not change that fundamental and think underpins is are the of is, this I institution, and diversification keep underlying asset -- global the channels volatility. global fact will to

of all sudden switch going by really a we focus. environment. if up very don't Our our think you driving gross to is -- and volatile are do clients, focus that the good a a for to job number really a is see I

then Now about just news all banks. you the get are the it, terminated, win But the mandate, when institutional excited you a good know, excited it we that about of and when is less of are nature what is. you large because you it is do very

Loren Starr

of say obviously -- say standard the different we terms have I'd I would mean probably regions, deviation, one a thing just we I of is, of low offer we I in and the say other the would in and capabilities greatest are function portfolio of that when of focused they the will breadth that peers we too by compete investment that around we managing the the see is down, capabilities close And approach very teams have the them the breadth being performance growth. with. of much also impacted

have huge in of to of the returns you capability, of not because any sort concentration just diminishing of are particular assets so And clients. nature going to

probably So be institutional side. have of on trying we are so always at rate we a basis, scaling do we greater be growth capabilities capabilities the low up. move think, What the through the more volatility to do effectiveness our that on the and can we end platforms is, really also, we global will and

Kenneth Lee

just I these performance bit fees; about real And the equity, one past Great. products performance lot think kind of loans, you the a fees. of estate that generate mentioned the in private bank

and the Thanks. drove what's guidance quarter, potential this XXXX? potentially increase wondering, in fees the in most driving fees or also Just of performance in what

Loren Starr

Yeah.

between it this rest So half saw quarter, was of -- from estate. of allocation. -- About mostly, in that we it asset real of coming global and terms bank about loans the

were drivers. the those So primary

it's terms from grow In of profile. the a be similar a and similar to to the have and it be of coming way. each and so, we that we in gave, continue these past, XXXX buildup guidance nice will the very believe again, very the We areas for seen places we going in

Kenneth Lee

Okay. Great. Thank very much. you

Loren Starr

problem. No

Operator

Sachs. from question Alex next is Your Goldman of Blostein

Your line open. now is

Alex Blostein

taking the question Thanks for guys.

have you sort underperformance, short of kind you guess a the fee the challenges the think of more performance the one guess, when what the the in sensitivity, some meaningful well. in faced rates business equity business a issue; are U.K. had the such asset us, to importantly, the I base recently. product the they at customer remind base basis? the Just look what there tough over around XXXX today, albeit I U.K., specific I you know Can could and as term channels,

Loren Starr

that not in on half I equity So and think income, less I income. was maybe U.K. all billion think retail total, is equity than about $XX is

not really even overall smaller other team terms of outflows cross-border driven in become places those performance, going about stable operate. But offset in So of it some has just in material the where more of really little -- though challenged, that. the XX it in has and -- actually on have the there is a mean, business and terms of products it's that been in impact, by what's any has that way. we Also than much bit a think, situation. I part I business,

GTR fixed capabilities, underperformance some is stopping pan-European not equity of the U.K. overall but business, given equity that there capability, ultimately, income certainly is income So growth the in the retail it capabilities. capabilities, the

So enough at for business us. this point, certainly topic not creating

Alex Blostein

great. your some to really And target But just I discussion, when just more the -- I way am percentage growth, on so X% a flows the follows now. of at that guess, I and or guys a organic new I of it growth, based organic clarification. convention to guess, going the full it, Got look back dividends and disclosing results, bigger assuming about the reinvested at XXXX point of to picture X% then you describe

X%, you to that this to really is to to way X% if compare were apples-to-apples, is talk So of kind we used [indiscernible]? the about guys

Loren Starr

of of Yeah. sort probably lower the I mean, that. at us it end would higher end our because of range, aspirations put that of versus the immediately

that investment. into we gains target, yeah, get reached trying we thinking with that target. about, to certainly I that the even capital into not So our factor mean, have

to So we terms of level. feeling, that getting in are

mean, think get to that be to X% place would So us a we I for still X% good to.

Alex Blostein

X% to the is X% with the reinvested dividends? But

Loren Starr

is. It

Alex Blostein

Yeah. Got it. Great. Thanks.

Operator

Thank you.

Next Jefferies. question is Fannon of Dan from

line is Your now open.

Dan Fannon

Thanks.

the close institutional. year-over-year. of But a XX, kind quarterly all follow-up your or backlogs to being being year, generally being this on recall, at -- the slide up. growth I want guess, each sales to the backlogs Just I looking reconcile quarter slide on record just down I comments if

So just throughout the year.

the just there connect So of what just kind to curious as for dots of kind us? --

Loren Starr

-- into Well picture, as I that business got going think come to that fourth of the is flow probably that we had bit tax funded of lot moved. surprising I to it knowing And quarter, a but little happen XXXX, things into moved mentioned, one, a not it and many the volatility how was was around going rates I versus just actually was not. so what and think has

which be then by is there uncertainty my which caused should slowdown, that's that QX. explanation, pickup So was a offset in a

Dan Fannon

just sales you backlog, kind to recall I of and Okay. the materialize? am I record taking or is are funding that's but guess year, just -- gross about the did a the XQ, looking guys But if of periods were throughout I high the down lot across levels the the talk year-over-year board, year. guess, throughout I the dynamic, so longer at

Loren Starr

question. they ultimately terms to I mean, the what funding take it's done. mean months, could be six get I a longer require good lot a of of in will

the there we was more That pipeline had generally. has expected within So some been than movement timing. probably around

we the on expected were the originally institutional that's as say the our well as to more in business that looking [indiscernible] going we -- they the business I We granted, based themes So could would like fund in possibly at. pipelines than much on and sales say, XXXX. feeling is, it XXXX, not do other materialize the see have case, maybe on is far side seem we I'd think that

Dan Fannon

Great. Thank you.

Operator

question Morningstar. And from Warren next of your is Greggory

open. now line is Your

Greggory Warren

guys. morning good Yeah,

on platforms. retail a bit the follow-up to distribution little wanted Just

to issue, that but of then with kind on and particular or just, business how in what's noted on, [ph] in the but [indiscernible] of years, calling on top say, especially two much going to really you You that wouldn't of much lot third party know part of Merrill with much from going both last U.S. that, guys there platforms? on XX% just a not Morgan curious, of your exposed your you retail, on have we the how that have I would of industry business? that pressure within performance, say seen of is and the actual as what's it's fees platform I is opposed the an And much, have You Stanley.

Marty Flanagan

address to try me some of it. Let

the the on is it's quality platforms on they also, a competitive there that end if looking we are that those at, top so I on really of quite at am fewer using can beyond and lose the been They the than going that want looking factors classes the what of the last also are are are platforms. and have asset a just the criteria have update they their done we what So in -- magnitude. of criteria, the And if once and I But the providers, used, rates. that track is get platforms, is is and some fee specific, of a factor, Taking performance a up that historical of fund-by-fund of the that well. sort of are on they they third generally managers, analysis managers, to the determine the total had the terminated. judged more

So not it's same the just but a consolidation, manager fund consolidation time. a at

the I'd prior bit been myself -- that a conversation. repeating So from has be so little

it of the So have. so it that is it just we the totality all not also mutual ETFs, is it's offering, is funds, capabilities, alternative which of

out the be well think continue quite we we and if to I again, have will and firms clients, high continue do this. our one quality conserve will well, So that we capabilities, we which do to of of

and remain the on because remain part not obvious, will on. focus will to and managers be of other there turned money managers beneficiaries, the the those has the be of think to, ultimately managers where the that go net fewer platform I focus, will the

been which math, going way quickly, happen the out to client of to forced not taken right Now, math exactly holdings, the off your is you the is not your have because their [indiscernible] do platform, that's if -- it.

I our again, telling anything that's am don't but So I analysis. don't know you know, if

Greggory Warren

And to a index. kind were lot dire, business of lot you mean, since in like of on wondering, been just that, I beginning. well. that I just have you with products guys all you there talked additional feel smart guys the I you a appropriately are that newer as platforms. and But there but the any the a the am product hasn't bought well market, in set to that being am products these been kind the you relative guess beta side. part follow-up entry you come plain earlier real of lot of has was priced curious, on guys sort was I I what's has the PowerShares products, compression of for market on these just fee on? of if if been feel a on about you you that at No And you curious, guys just wonder of do on vanilla going to are competing with positioned I pressure

Marty Flanagan

my We do. to back going comments. And think I

that broadest gone into just If And returns important, much ETF, generate, you to meant exposure, because Probably a you lot weighted a very and doesn't entry, much you has gone ETFs good you are just for will I those follow launch I that much it. shouldn't of a success, smart more And capability there launching mean at it. it, high investment been doesn't taking at it's right? you the of money our so it's of is it. of get too the an money one with an range it's than also There barrier an and just think the long fail. has to It Cap much think was do is the barrier lot a just importantly, ETF. into ETFs it low And are you follow beta look if what ETF, which track to notion are index, records. right. of

ETFs, XX liquidity So also it's lost the track the with I think people. also a year on it's that's not the and of important. has And I that records, is what think also lot and itself, fee just

So set clients are entrants difficult it of ultimately record and when and track consider have a some a you looking if you liquidity, so for really combinations, long it makes for. really it's new important what

factor that very think look you I for to these well bodes investing on as future the [indiscernible]. so And

Greggory Warren

is U.K. for of the know more much of sort II to of class, of that I stuff. the talk your am of But in does how I and that curious, it much side. because I probably AUM is good sort follow-up MiFID institutional, How of just that's That's of mean, but AUM that's exposed. insight to? relate quick Perfect -- one relate Europe, much really on you I Europe in your of it how had not research? tens too you on AUM exclusive? and millions that MiFID some Does cost sort probably going to about the is as everything really just Marty. exposed II to so rules, to pay

Loren Starr

at mean, the to Yeah. I that which largely is business, of billions. the so it's value have full AUM, European you'd look hundreds of

Greggory Warren

about -- right now. probably $XXX So billion you have

So --? I'd of maybe X% assume it is or institutional, is that

Loren Starr

about business. of Probably that's that XX% institutional

Greggory Warren

guys. Thanks perfect. Good it's quarter. Okay,

Marty Flanagan

you much. Thank very

Operator

time, Thank this At questions in the queue. you. further are no there

Marty Flanagan

Great. much Well thank very for you XXXX. and time happy everybody's

in be touch We will soon.

Operator

for call. today's Thank all concludes joining. you And that you, conference speakers. Thank

may You now disconnect.

Invesco (IVZ) 31 Jan 182017 Q4 Earnings call transcript