IVZ - Earnings call transcript Q1 2018

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Unknown Speaker

[Abrupt Start]

Unverifiable Participant

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 conditions, 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. assurance expectations. results no materially not be our from can that will actual differ There investors to consider caution and and in We not most subsequent urge looking any our with you statements Forms forward XX-Q to the Form carefully recent the filed described rely risks XX-K unduly SEC. on

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

Operator

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

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

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

Martin L. Flanagan

details and greater the of really of within we'll course, talking Q&A. growth key and to some financials our been you, on Thank so quarter; you're presentation, you And I of very and you website. of quarter; some into much; the in will our few for then about go will during And the practice, of then, of differentiators minutes put which the joining us. that the along spend Loren business if strategy everybody has first a of the can our the is I'll the highlights follow hit inclined, opportunities; thank context open as up

We the during volatility, increasing strong the quarterly is We if quarter. of the Adjusted through quarter. and operating quarter, the see behavior, along. And quarter happen impact had reflecting the following $X.XX, focus So, million return during that's the impacted let to me XX.X% net versus investor dividend in begin X returns remained which negatively. $XXX was did strength to of prior inflows a quarter. during shareholders operating the of We dividends are investment to the the for during we highlighting flows increase. by you XX.X% on the performance did providing market margin quarter. X.X% million $XXX net Long-term and quarter the for to business impacting shareholders, the which the on page results first be

Turning to page X.

in investment performance to XX%, the strong of relative numbers and being UK. remained some some headwinds You'll note the and long-term be underperformance and strategies in the a the numbers, five-year investment in did U.S. three we continues And by performance in strong, the XX% although respectively. one-year basis, see larger impacted the short-term

quite particular What to we demand in quarter. see is and Turning the very which our did capabilities, strength robust, is flows. for during both ETFs, with in Europe commodity a passive United States our bit the of and

flow uptick business, our U.S. UK somewhat the with volatility, On the environment in in challenged equities, and which retail as the well in side, from REIT in Japan. our in I and outflows as sub-advised the mentioned, active remained particular,

number of detail more in value, such a him quantitative in globally. the as and Loren Targeted As demand our did offset, a see have summary, solid financial institutional go an areas Return turn strong that, as it let and strategies results. to With stable Global me flows to and we

Loren M. Starr

much, Thanks very Marty.

institutional positive. billion. non-management $XX.X offset billion. a in $X.X billion. of reinvested products exchange somewhat inflows of foreign billion; into AUM and $X.X driven total of at came $X.X long-term our market $X.X of decreased So, saw $X.X losses quarter-over-quarter, money We net then, we Inflows positive distributions saw our We had market AUM or billion These billion. fee our $X.X of were earning factors was That from billion by X.X%. outflows by

first AUM the X.X% QX. was That versus $XXX.X billion. average up was quarter for Our

negative to the for rate points compared in the percentage X.X growth organic long-term quarter. annualized was percentage points Our fourth quarter X.X

So, AUM. our quick to in a of this update before on quarter response a AUM net in reinvested the distributions I We to tables. change to reverted provide flows into of provide long-term and revenue and our separate AUM presented of yield, to presentation to item our transparency sales-driven greater wanted presentation on to just historical turning line investor feedback our composition changes a in

So, in back. you that will see the

to fourth have quarter the also and restated for a We third allow comparability. and of presentation consistent XXXX

let's net revenue yield now, turn the to So, discussion.

a and excluding QX. also we saw points. yield basis a XX.X saw AUM revenue And reduce X.X little asset mix, We in I'll the other change by basis then yield earning was an the Our performance yield at the the was the points. The the basis points. net points days our of reducing by revenues, points. two fewer mention quarter. non-fee also net revenue versus X.X we And saw And yield reduced a that saw impact that growth, recognition fees by impact basis reduced That we in the later. points; XX.X which in came by a basis basis and in the And decrease X.X basis new points. decrease yield revenue X.X yield standard, bit X.X of in

the points. factors somewhat foreign all were mix, offset So, which these by basis exchange then added on positive impact X.X

this approximately focus accounting in And and discussed takes and new that expect puts competitively before which yield touch remain you'll results, of these which changes a about related net points, Anyway, standard recognition XXXX on X original less in measures, flat and for our guidance So, quickly our the U.S. to the of new exchange than we quarter the today returning provides want revenue at results revenues our is mix, variances XX. is My our pricing operating remainder X markets strategically continuation I the on focus slide assumes to clients, and basis of for point non-GAAP of come impact our revenue XX find from to guidance. to comments given GAAP basis again, level. existing our above, foreign and and there. adjusted our changes today's our just And impacted on positioned Slide asset the as products exclusively customary. with the on this expenses. will lot

So, of overall, on certain to changed impact standard this revenue and guidance present us line items. adopt expenses our did many the way has method we periods. elected an and revenue has this not reporting new require to fund-related restate prior The we

the presented guidance, QX are the are the XXXX QX numbers results XXXX under Our new guidance. under old presented but

So, that as impact we'll quarter-over-quarter, variances will discuss. the

included for impact the revenue appendix you'll in revenues $XX.X on by quarter new XXXX. item standard shows line the the And reduced as first million. the have changes that We have of our has slide a recognition note, and expenses the that gross revenues

are However, income immaterial. the overall and net margin operating impact revenues to our

now to operating get So, results the slide on XX. let's non-GAAP

The You'll impact that decreased positive million. of by $XX which recognition a revenues net of $XX.X includes reduced $XXX million, foreign see million million. net by exchange revenue revenue X.X% or quarter-over-quarter impact to $X.X

revenue and excluding decreased there. $XX.X variance million, So, the get net into these let's impacts,

$XX.X these adjusted So, that billion. adjusted fees management fees number fees million. by within you'll FX reduced The increased $X.XX or revenue that decreased investment rec see million of million. management by X.X% impact by investment $XX.X $XX.X to

higher quarter-over-quarter, changes, two two million these which so, AUM. which days management $XX.X primarily in decreased And average offset fewer adjusted quarter, our was fees reflects by by excluding the investment partially

or increased the of increased Our revenues and $XX.X by XX.X%. recognition million by revenue adjusted revenues and service Compared to QX, impact million. $XX.X service adjusted distribution distribution

million equity, the at Excluding distribution other performance $X.X revenues service fewer the quarter loans decreased changes fees these million, fourth products. $X.X were revenues and the decline earned reflects impact in the revenue an Adjusted came quarter by bank adjusted $XX which quarter. was real and changes, came million of days The U.K. the estate prior Adjusted and quarter. The from in prior large primarily at in our driven in million increased from adjusted other million. of estate, the fee recognition increase revenues recognized $XX.X by primarily million, real $XX.X in by quarter. from performance in QX $XX.X

million. our revenues modestly change, that $X.X other Excluding by adjusted decreased

we gross net that against Next, adjusted service increased revenues, advisory $XX.X expense, and or million third-party distribution, X.X%. which

the impact increased. recognition of revenue So, changes

million. Our third-party expenses service advisory adjusted by $XX.X distribution, and

by third-party exchange advisory increased expenses Foreign million. adjusted distribution, $X.X and service

by adjusted distribution, non-recurring these in in million which Excluding third-party changes, were third-party expense, expenses two largely some reductions recognized $X.X by service driven increased advisory and the our quarter. prior

by see Relative So, the Overall, you'll moving now, million $X.X expenses that $X.X operating let's FX of our expenses adjusted by operating adjusted million. quarter. expenses QX, in reduced increased recognition to decreased down, X.X%. at $XXX.X our impact or revenue to move expenses. million $X.X adjusted million operating the by

$XX.X of decreased FX, million. impact adjusted the our and revenue expenses Excluding operating by recognition

an was in Looking $XXX.X $XX.X adjusted million or comp that that to the came X%. at employee increase of number million,

$X.X by expense increased Foreign adjusted compensation exchange our million.

well employee Excluding costs, costs. million, FX, taxes, which as $X benefit seasonal compensation decreases adjusted variable by which partially payroll was offset increased employee in reflects comp our as

adjusted marketing QX million Our decrease campaigns. a decreased reflecting related seasonal and QX from client by again or XX.X% events to in $XX.X expenses $XX.X marketing million,

last million. was and we $XXX.X over Our an That the $X.X adjusted at increase X.X% property, provided or came quarter. the That that was expense quarter. in of office tech with guidance million in fourth line

and increased property, tech $X.X exchange million. adjusted office expense our Foreign by

our That X.X% million. Next, $X.X $XX.X a adjusted impact $X.X of in quarter-over-quarter. was going or at by came expenses adjusted The onto That G&A reduced million recognition of decrease expense. the million. G&A revenue

exchange G&A adjusted by million. $X.X Foreign our increased expense

$X And expected decreased regulatory that course, line the costs expenses with quarter, million, travel G&A and quarter. adjusted this legal during reduced then, were they not costs our of there while points, were decrease lower the and taxes prior costs, quarter. two these lower irrecoverable MiFID in in II the in Excluding in levels reflects quarter,

income investments line operating in non-operating of to guidance. The with us pre-adjusted EPS margin mark-to-market income in difference firm's and net million tax our rate of adjusted our on fourth with the And of the that QX seed the in $X.XX was with XX.X%, effective quarter, provides adjusted compared money Our decreased XX.X%. net quarter. reflecting adjusted compared prior $XX.X

few touch over turning Marty, topics. I before a want just So, to to on

business. trend we It's April. The don't flow that XXXX of bit we ETF a we but month of First, XX% facility. acquisition with outflowed. redemptions. Through a outflow net approximately $X.X sovereign touch not opportunities, and spike-up April. expect for sub-advised want cash it has a credit have picture the billion. borrowing mandate the Overall, as of and approximately well completed XX% with in that long-term experienced certainly management, driven Guggenheim short-term news, On certainly, quarter. completed that in continue through now early on the our capital transaction we've the on was funded combination great a We also something to month single to the as wealth-related current we in outflows was been a April, seen in volatile growth of good flows the but have largely by That

noted, our with And previously down the after to As pay in our levels. that to of balance credit our leverage levels ratios current of over are ratios bring sometime facility course that's we the our line goal the is in reduced return XXXX back that consistent share these leverage that quarter. to historical to should estimate will fourth occur buyback pre-acquisition is practice. And our with a

on organic move Let's we're to near dear, growth. all is and topic a

us the at So, through of The on expect think our composition during we see, actually And I of contributor XX shows us. each diversification want us last that channel, the of the clients really in into chart has XXXX. better benefiting diversifying looking helps it why and allows our over positive distribution been or each nine operate And years. you'll to class. annual firm's overly the any diversification in has our flows last makes explain capabilities slide overall We significantly I years. talk our reliant not geography, to the XXXX then by serve what period. the to helped the to region, and offerings is nine where growth about stronger drive region on flow certainly largest see remainder Each point business and one to some organic asset being our

the relationship is between seen – Next, the Invesco growth public turning Looks and you've slide management growth consistency and XX, that organic for or slide before. variability of this asset just a its at peers.

XXXX. level axis is on growth the those sustainability annual deviation flows standard vertical the axis horizontal to of the the organic reflect On through rate average organic then the XXXX of is period of or for the And variability growth. five-year the

we one growth to today X% XXXX, however, going So, growth long-term areas turn this we And group, that, standard will environment target, about detail with (XX:XX:XX) realistically, volatility more year. But you some had however, investments performance market our is reflects to given flows, to to Invesco of who be X% continue function in it's business organic can benefiting of looking that some targeted increased have flow the the levels that of back group, cover given X% seen level in range has in of we've as of we believe larger previously in, markets, drive evident flows challenges deviations and past. a and of traction, the that discussed for the we'll think when in Marty, against and Invesco past it into And areas that high a our gain that the rate been the viewing over growth. these consistency. XXXX, the diversification generate lowest detail. the We've us. cover But organic of that talked which X% with critical and I'm overall actually the will been in many looking to move growth. we're start greater at that around it that the products, growth this we've making completely historic remainder we will of in we as the to of

Martin L. Flanagan

Thank again, follow to page you, inclined if so on along. And you're I'm XX, Loren.

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the of in marketplace So, comprehensive our really channel growth and our our on long term. the global and as retail and over differentiates both of focus the investment at the I range combination mentioned capabilities, institutional us outset, that presence, it's for success the us positions

to excited factors we'll We it to opportunities the I capabilities about And and for to progress organization up the And with these Loren and potential are that along. and we you update as we'll bring will continue open clients. truly stop; make the that, our questions. for growth and key

Operator

you. Thank

Okay.

of comes Lynch. Bank question Michael of first America Merrill from The Carrier

now open. is Your line

Michael Carrier

just items, maybe it's on thinking line update how Loren, the of line should relative expense on whether the on we guess, thinking guys. about just the some expense? how by should just like be guidance first the overall Thanks, curious, the or I we item last to be moves, about one, call, you XXXX given any gave just that

Loren M. Starr

question. Good Yeah.

competition flexes I for in So, we intact revenues mean, are too. to be, guidance would down, compensation largely sense flex except to expect is going that the down, down the

getting guided previously. But had So, goes. than that $XX where see it's too some we'll probably less I million think explicit, without we

million $XXX like more range So, you're through quarter going XXXX. million the per $XXX to in

which in has one theory. that's guidance the would then, the be revenue impact. change the to So, And G&A, other recognition one

up items. has to $X.X from So, G&A the revenue line million moved

million. be reduction $X.X of a G&A would that by so, And

be Obviously, of sort effective been of be point light So, to. to to what trying depend on in. continue revenues. those more will our with really up the resources. lower It's we flexed are we that will down all to market understand at in efficient going environment volatile. people I'd it certainly, But currently look rather And end you comp should we're and two would

Michael Carrier

Okay, then thanks. Marty. follow-up, a just And

think you a you're the a lot you is I look when the the industry. seeing have pointed that of at out being investments that made, in the products lot and where demand we

think and investments transitioning growth sort Just be from, beyond, whether Loren X% means of fee X% as impact, you're you about say, how XXXX in ultimately, it should the to longer and to XXXX the term. to in rate growth mentioned, couple what margins? Like trying thinking to incremental then a getting new to that also, the rate. like the lot to years, of and financials So, the next translate the strategic like it's we of revenue about and

Martin L. Flanagan

Yeah.

though and the to with the and me the more, in is the, platforms the seeing is but looking that sophisticated range of with States, spent Asia, investment is a is them we strong greater we that look really us it's that of institutions say, analytical with large for high I'd United being have just we're And that at clients and like different world, us, the again, market the this tools, more capabilities going are emerging. have these to the table in forward, solutions, those many of being fewer where that conviction broader very in very stakes. clients, capabilities firms. partner look, Having going. So, is reality, they with EMEA, is with and even traction with clear obviously, mindset capabilities, any it's dealing very traveling And just even a important, engagements time

see And to things so, continue provide growth. that the are that are to we those going

And we though, the where be really put their fee are as So, really going it's by overall building the are clients is rate moving I portfolios. growing driven go. much of in high and rate in context blend's the to than active, where effect the ETFs, really the more towards relative the clients capability factor is or fee on going alternatives lower conviction depend so, to

you I go growth I where continue what goes, give So, growth our the and can't forward. earnings as be know profitability answer will fee and do the a but we to – specific enhances rate to

Loren M. Starr

so in I think in about capabilities. some still bit XX%. continue mean, incremental of incremental and we've said get to scale to changing is our Yeah. certainly year, view talking the XX% range incremental certainly, to Obviously, in by probably subscale this trying long-term for and will a sort historically capabilities, we're I to our And, being we're margin. doing Longer But little sort what shifting year, we to margins, XX% the this market changing. in which to Mike, less been doing has is trying the sort don't of for I of think terms of anybody that parts see build we're how we're very XX% positive of term, that that margin impacts closer

advice, still But incremental some changing us we're quite landscape overall, So, the story. with optimistic brand areas like digital getting into I new still still on think that's margin new.

Michael Carrier

Got it.

Thanks. Okay.

Operator

from Worthington of Thank Ken The question next JPMorgan. you. comes

Your line now is open.

Kenneth B. Worthington

Hi. Thanks for questions. taking my

you Marty, that sales highlighted in see So, What is of of top Invesco like in two two Invesco rank to smart really beta. in smart is terms we'd top AUM. beta

the firms, in So, bought get U.S. you two to quite selling top Source It you're buying, positively and doesn't Guggenheim, three helps. that you

if top to us or three? on that some the you And give two, so, one, can So, be path break specifics more maybe to aspirations top are three? into the

Martin L. Flanagan

Yeah.

where impact be where has really the that's is is, it that greatest our leader the smart in are, closed aspirations our where to last beta been We and to will weeks. emerging So, for The focus, focus. there very, The think Source, need been factor. been is are all responses two, of Guggenheim's be early very, our of positive. very very Guggenheim handful important. the continue have clients,

all. platforms in that ETFs were The those us, but the can't decisions. feedback's timeframe is That placed of platforms. we've strong the you (XX:XX:XX) mode making They We tell you're for important extremely drive talking very already. the of at I about. all on that, met with getting the positive, the don't not But, been flows drive the but had of FAs growth has been that interactions now range we've will Guggenheim would very, is opportunity which are We the with those broadly the outside as imagine. for what that you timetable, their

Kenneth B. Worthington

Okay.

the this about April regions happened you ultimately, outflows? that sovereign And classes of in here? is outflow from asset wealth the the and Can $X.X billion the number, of maybe what taking talk and the In terms place fund sub-advised.

Loren M. Starr

right. All

So, in was our the not active region. of performance-based And were happened these large client-based well. the sovereign U.S. region, equity sub-advised entirely. were terms decisions equity, decisions; as EMEA active class wealth the in They asset

these performance in products. Our was excellent

I I going employed, to So, again, versus active. the think, the to very cash. models being for And our sub-advised, for it's wealth, think index then, sovereign different in client's specific needs the

Kenneth B. Worthington

Yeah.

gone what the deal up, ending and based or Loren, a then, that IRRs reductions the on based now? Has look Guggenheim's for and the it And tax tiny do fee it changes, AUM gone Guggenheim down? Okay. on one. has code like

Loren M. Starr

to days we change it's growth above early early again, improve originally had think, and maybe our what and we're beyond to because going trajectory, see, I days. So, if have modeled,

prior was of fee point creation can modest still, $X.XX then growth. And to in But you we the make probably And move up levels. on a result the nicked slightly probably reductions again, higher solidly in think EPS have XXXX, a think, X impact off so about some of IRR, that. I that off those lower I that just that of so XXs. it's Hopefully, of as heard given just we IRR, BulletShares. the percentage

Kenneth B. Worthington

Okay.

Okay. very much. Thank you

Loren M. Starr

Yeah.

Operator

you. Thank

from UBS. comes question Brennan Hawken Next of

now open. is line Your

Brennan Hawken

for Hoping Thanks morning. here? Good question. could through drove yield little the taking a walk factors maybe expectation the for you in specificity to lower that revenue your you the from more

Loren M. Starr

problem, Yeah. No Brennan.

few we things So, coming a through. have

fee products. more our So, where mix biased the was as at to fee seeing as of well points, original basis assets we're terms kind generating guidance. AUM starting which flows, the lower in of non-revenue which in really are recently growth XX It's

had about recognition we be that's basis X.X points X.X to our impact. Strategic That's probably pricing a The that's off just in about products pricing think them talked basis that point. that, which a of bit impact call so, there. changes, original already, no which basis And X.X little about keeps initiatives, going guidance, rev revenue we our point rec competitive. generally way

Foreign exchange points negative, basis X.X is about too.

if So, basis things, points. points XX go XX add those to you basis up all from you

Brennan Hawken

as of the Okay. we fees, do clarity you investors? when What expectations transparency that more fee that, in in Invesco, you frame about rate, your and on for then, play should How and broadly? here think – to there. competition, MiFID that. pressure Europe, fee and pressure are analysts think region, Thank the in increased hearing especially of light about some we more going how And for that's through Thanks. on

Martin L. Flanagan

Yeah.

Our view not really changed. has

in and what to what alternatives. part to us part most organization think, continue seeing value yeah, seeing an on is we going to world, really money. a up what's landscape the as broader to And an high but to priced. And of that's broader a cap to active conviction as still yeah, competitively regions use that's degrees, you drive we varying seeing as I from organization. for we And bring the weighted of we're factors we are are footprint probably, focus And what different the be indexes, of factors, to for mix. say, have in the

you're the within what we've give and I insight that I talked don't any seeing So, historically. know you what organization about greater can than

Brennan Hawken

certainly, No, that think for into well-positioned about assets the the clients through Is But, where guys. that to you something you assume that for sure. good that a the remixing smart they to least as mix position become traditional have I a seems although assets, retain at fee just their Marty, and at to factors, retain to we region, believe in if point you're positioned fair? the are maybe continued beta I'm so solution, pressure like is want active that risk. you though, you extent probably you're guys should it here, – helps, guess, we from to a

Martin L. Flanagan

I on you right it's in think, States United seeing continent now. are though, UK, the still in more that's the pronounced and than fair. But what

use high to very continue see a you of active portfolios. high conviction So,

has issue. seen of The of high sort investors," that see, and are We a money are at do you've focus. that not the particular, say And closet very managers. issue that you degree still, seeing been UK, so in "active rightfully that most I'd probably on indexers that is group risk of

not are We category. that near anywhere

we that from perspective, are think so, we strongly very placed. And

Brennan Hawken

share And it beta in elsewhere, Thanks. can, you pick was up more lot. a so. of hopefully, than smart helps course, That Yeah.

Martin L. Flanagan

That's right.

Brennan Hawken

you. Yeah. Thank get I it.

Martin L. Flanagan

thank That's you. Yeah, the intention.

Operator

comes Thank you. of Dan The question Fannon next Jefferies. from

open. line Your is now

Daniel Thomas Fannon

to year's growth Thanks. comments clarify, I your rate. Loren, want about just this

including year? think so thus levels I that trajectory to for slightly you of first far, of quarter. the said Are kind the you April in positive similar of kind

Loren M. Starr

I really No high going events monthly think expect Yeah. we mean, bit think recurring. of specific the be was April at to anomaly, to don't into level. that two pipeline still we run It that still is be an was a certainly question. don't to a are We'll I get Institutional strong, rate. pipeline.

have we think generally, opportunities on level rate a just we've that's some historically seen. think of to less I sales. getting sort seen and that us higher a up something about redemptions optimistic Overall, I still growth of so exist than of keeps creeping little

what right So, right to I again think, – of the in point point looking just XXXX, history, basis the focus. when at more think you recent expect I to is probably look or

Martin L. Flanagan

and change to is our are other – seen conviction conversations decisions. having large that Loren turned we positive more And to these markets to are It's And great to and on defensive for to make And talked defensive can very where or position. impossible we direct your equity happen that where again, result That what unease there's – of defensive a is that rapidly into one particular. exactly we repositioning. all tend insight decisions historically. you And clients, not we've think definitely into the hard we redemption I been predict about quickly. They the tend more when very as than pretty conversations a get are a people what your Look, do portfolio more us, those based with going pipeline, frankly, was historically, moving are have too. job people have in we've it that. as the of, seen as and

Daniel Thomas Fannon

it. follow-up And that, like the on just a Got then, sub-advised loss.

I something think this book And the flagged have how shrink over at expect in is is? big or months. sub-advised is you sense you that Can of U.S. broadly, of kind the outlook recent kind one to kind of of a you give stable that that least us – that? guys time, any is second growth within

Loren M. Starr

– question, The $XX book a than it's so, When billion, same Yeah, more some asked who just but there's a this made sub-advised it's And really specific on data sort overall I think away. few any is have I of answer is a yes, points our is it go been of expectation just clients not to is going this that that not small. happening, is things. question. all and I great exact don't think that trend. the This there's side

all how of chunky. (XX:XX:XX) a and in is terms factor. not it these same a onesies made. of in being that of terms But, think play clients making come factors there these they're I They're are decisions. is handful of the Several twosies into

on So, based hope that's intelligence. best our our

Daniel Thomas Fannon

Got it. Thank you.

Loren M. Starr

Yes.

Operator

question next Bill comes Katz The of Citigroup. you. from Thank

Your line is now open.

William Katz

how the maybe moment? you sort us to about of Could think of Okay. onboarding Can of a or think give some the back flows, top size might Thank and to growth, come Jemstep and that? translate for when we unit the of into timing potentially line of kind the even a some you very much. impact the sense to you of revenue

Martin L. Flanagan

Yeah.

see conversation. further right. be these impact. after and we'll have give And we'll we more not relatively a XXXX. XXXX, slow have that platform. I the on is again robust but into what sense going timing have imagine and getting once has the is to is into to an year Where I much impact – it's are in a greater bigger would conviction, changed, of now. will to greater the happen institutions it onboarding the insight So, what's we really But just we'll are would you the these will build, be extrapolating seeing, into right and get as pipeline have to institutions, then that we much uncomfortable that start

William Katz

I so, this a And unrelated but Okay. a apologize, question. – two-part, is

Martin L. Flanagan

(XX:XX:XX).

William Katz

is the where seeing are back keep market. traction? will? to broader pressure the then, On sort ETF one-offs, about in a could to of the same of the the reading lot I'm $X.X $X.X if you billion out of number, the then – frame size And billion, coming sorry pricing European but And question you a you the

and from revenue could of business if talk wondering of you you risk terms you're degradation think what might there is positioned kind Sort perspective? of price today in how of where be from the a about sort a perspective,

Loren M. Starr

So, the fees so of all on kind billion the $X $X.X unfortunately. the billion for $X.X million, mix, that for sub-advised, about was the it was decent sovereign,

general lineup, in not positioned that is and some critical but size, sure So, the go priced smart coming at the ETF on everything is think, has it's more products against similar over, I we're beta, of so we position it's competitors, how profound is similar the pricing products probably looking pressure, I against space. to to price, particularly making as a our success. product of competitively lower for Guggenheim mean, like

that's focus And I'd say, sort on probably our where is product. most strategically pricing so, of

have probably – historically has in on with you that priced sort buy assets two, on strategy. not there into got... line through have number because think are for the lowering product, and our extent need I fees to generated to active there's And buy been value I flows we terms of if Marty, and the of don't or competitors; alpha the products, that think know, they generally in those there's us far pricing that they're less well about good, the one, capabilities changing

Martin L. Flanagan

I agree with no. Yeah, it.

Loren M. Starr

Yeah.

William Katz

you Thank for Okay. taking guys. the question

Martin L. Flanagan

Yeah.

Loren M. Starr

Yes.

Operator

of from you. The comes Craig Credit question Siegenthaler next Thank Suisse.

it's be year? to But should thinking of live a flow really net - for really I'm is institutions financial from frame that how start the XXXX Siegenthaler the thanks line think guys. six just Suisse this potential, Credit source should Thanks. so now some in morning. point really (USA) about we should how open. I Jemstep. Good the LLC business at And on appreciate Your Securities we you large Craig new potential brand this slide color on because wanted XX, for about And that.

Martin L. Flanagan

to what's is important, being that's these believe stakes. and it going Yeah, for capabilities important very future also is is as And with this what the forward. no. really – consistent developments it's the competitive being It – investment us. look we types no really of is We it's we a driven about. of advantage see table create strong is question, is been but talking necessity It advantage set it's we've competitive

successful, the you anticipate yeah, institutions that more to question. I as going So, you in forward. be large, are give we and asked give same the of into The in is, point would And insights, them position time. I we would... will serve the I a really I fact the we again, sizing wish, at not am Bill this potential flow XXXX could but

Loren M. Starr

data... have we Well, no

Martin L. Flanagan

guess, I yeah.

Loren M. Starr

on, it base really. ...to

is, about the So, amounts talking assets with I we substantial happens mean, I not all to we're we XXXX view think of think penetration. this have I clear mean, much even kind modest penetration... if of assuming and of it so that way a kind out

Martin L. Flanagan

Yeah.

Loren M. Starr

of of for on it gets anything, I door is succeed. the - to being always us, a or follow-up really as ETF it's higher hard Draper wondering, is trend SEC also for what more like ETF asset And allowing the barriers enough guess. Bill to SEC low rule Craig policy Credit mean $XX number we're Dan then looks but managers line problem to have we that us digital a competition, more (USA) to the LLC a certainly billions, and open that, advice. mean, Securities (XX:XX), kind that Siegenthaler could think lower more in the I'm is (sic) think [Craig] much self-index, to regulators Suisse a potential my is could I How entry, now too to billion approval to the barrier just there's the further what through entry. there, just have gathered because tens open of that assets it from don't do barrier The you very process. says, sort like I ETFs just of –

Martin L. Flanagan

believe and I now We've over and very would a evidence – strongly, that. support facts this at been the Yeah, think we decade. that would

Just success and having be It the extension or along is it does going that you're it'd different. to different. distribution an ETF historical, success with of really not capability and quite range whether is not natural be successful, knowledge goes mean to either. the is retail, a It institutional quite

new Probably. - think going it's don't Craig And it so. (USA) Siegenthaler Suisse think Credit ETFs? on Thank LLC to we so, Do I bring change positioning? will our competitive you. Securities

Martin L. Flanagan

Yeah.

Operator

Glenn Thank from you. The comes next Schorr question of Evercore.

Your is line now open.

Glenn Schorr

Hi. Thanks.

macro how to get focusing outlook? much and to to it want redemptions, to that? of churn, And (XX:XX:XX) and channel just think consolidating I down, up like you So, relationships, on but activity, when is of and function what outs the just relates – that's mostly sales, looking a in to volatility want at I lots do it don't and call lots obvious things in really of related of broker/dealer ins model the people's pickup the pick-up, portfolios, changing shrinking

Martin L. Flanagan

Yeah.

just within the that is, we've magnitude couple related in the seen So, look to the right change and it question. hit outflows, the change. it's the gross Loren's the more things at quarter, you on of I happen. And my the the think, sense the net a And of if sentiment it's quarter, much

off particular, I that to your being is not going money motion. having not platform, remember, is the But foreseeing in available of U.S. immediate platforms your fund in future of in put for to redemptions. think sales the or taken point the narrowing the

out platforms, So, that foreseeing than they remain chose might take that client time. imagine in. see the – they net that, I answer, correct be The that's of I don't slower capabilities going people but of, because beneficiaries, again, a think not those capability that's and a the you be to that being to on will

Glenn Schorr

the the is, cap to ability think to client that follow-up to they player to have all sentiment I – I talk changes. as and appreciate every will try there move flows much other towards The that. only I desire or we you try covered and capture pretty

going now, is we you'd on if in, there's $XX today, income, out you switching components you this switching like? will, within cash, capturing into billion certain equity, as people but like channel? more channels, out $XX In even a So, other lot billion right that as underneath looks are whole selling to the awesome of switching the as capturing cover. flat are risk if within much fixed are the like managers, this you have a words, relationship into Because active

Martin L. Flanagan

were not right. what you're fact to. Look, would – say, capturing we No, the we would I want would are Yeah. I say, is we

I And efforts right. at will And so, change how historical you that not that? think do change all,

historical practices FA of of to going an in being a So, or aren't change front it. platform

– way to And literally very to FAs are do to much and last it's are analytics, actually, use it money, be redeem, see has they're So, started And exactly in what us. will about more start employ where the change right now. putting in it incredibly are using that and positive predictive year what can a been in things that our – and we to about. was really you're beneficial action really you of really pilot, we predict going in talking to where to

it's again, outcomes $XX talking it as And topic in, Does $XX forward. up will billion out, that degree into different back to about of that now. going very gets I So, the change but billion to this those yeah, been that environment. think say, you numbers? we in types Not the show the again, create we're that right XX the think things we it it would collectively competitive months your, the have

happen and have need those the be to that And the wherewithal. one financial not in forward, effective managers to forward. wherewithal to Those have end to the and much that of the sure them. will money just technologies up industry do to going invest of stronger going be being totality the going in that You we resources I'm is

Glenn Schorr

much, very Marty. Thanks All right.

Martin L. Flanagan

Yeah.

Operator

comes of next RBC Lee Kenneth The you. from Capital Thank question Markets.

now is open. line Your

Kenneth S. Lee

which be biggest in range to toward X%. the of What's terms be the above that range? growth or expectation targeted below X% The can could organic which growth asset specifically, contributors either of rate? categories this And

Loren M. Starr

of what in. we're to depend this So, broad can the think this from of have of good function We're more I are mean, at that on just a of going market really question, digital themes together conjunction environment it's these that looking I sort kind advice, around set classes. so, – catalysts asset with we bring cut general that sort factors we capabilities in generally across

generally, think than we to a continue active. I passive faster probably so, say, would rate mean, at And grow going I to is

aspect in So, other the than predict, income kind of versus really shares be versus the going we're that the probably degree X%. passive of a in well-positioned to although out that's class able to passive real one space. with But alternatives equity, to to pretty think the fixed I of lay little that certainty, to I with both is versus are think, specificity with (XX:XX:XX). that's most think it's particular asset don't X% grow Whether we it active split, any sense to harder I

probably generally grow faster to we alternatives sort think traditional would as classes say more history will the for us. is other the that other we thing think at continue been that I probably of rate though a than

trend growth line just in for area would continue but estate, us, to there commodities. just that looking our be we're in real an at the that, so, of And higher not

a Global I know Marty, to think don't have grow of Targeted types opportunity of lot we Some if you products, the of Return have will faster. And any...

Martin L. Flanagan

Yeah, no.

And where what during is range of Loren showed to put would going of periods like or unknown earlier back X%, time. in the about it's think presentation, context this We've to I in I diversification the us. advantages and over of been X% the what talked not he range XXXX. to those

penetration And our The that the to other platforms, change is it broadening consistency clients, penetration and in X% areas of be The the factual penetration is up going the with of that, U.S. of probably, to and they're we've we whether better put the success I many assets. on that the institutional where our drive is a consistency going What clients our platforms to that doing EMEA unique thing broader be and to and greater of growth industry. particular. business the of in of want can about, have talked our within effort range. the X% really job our their cetera, there's be totality that decide are ETF is in think, et to in the the in parts very that's we a

that's really we think of going So, totality particular, drive is the our effective more being it, much And to that's what distribution the in just capabilities. really, it's offering. with

Kenneth S. Lee

you. And just I more. Got one have

wondered terms view the efforts additions the this area, seen competitors you Solutions how Thanks. to In We've want interest the recent clients. gain more other insurance see picking talk of can team, about growth if you to specifically and to there. just in opportunity I few Global

Martin L. Flanagan

turning opportunity. you're saying, are real attention their managers is growth it to money a it. Yeah, again, as And

matters. be success, is of a from relative the years, having last probably the our to strength and really relative is number continue industry see expertise of within that area you is particular. areas business quite It have the will going one backgrounds an at are the been And we've internally an where to success, also have really, we seen area. We in frankly, successful and in specific few developed and over if we insurance that coming again, of institutional skills where it the area look the

Kenneth S. Lee

Great. Thanks.

Operator

The Blostein Goldman of comes Sachs. you. Alex from next question Thank

open. is now line Your

Alexander Blostein

Guggenheim for recent fee Good to the morning, go with morning, back Marty. Hey, reduction. to Loren. rate Great. discussion Good a second guys. the Wanted

done? with So, kind done your you trying as be reductions of you product, guys price to see this looking broader largely guys that more to kind out, to either we understand out competitive more product broadly, brand need PowerShares in Do are of position any that as Jemstep? ready especially you are getting still you're but of this or incremental roll be

Martin L. Flanagan

was it. Loren about And Yeah. talking

attractive I very we think I competitively the BulletShares at back focused have very set elements priced. the And value is of this around one money. the that really And it is And trying we world, not we're of It Guggenheim. different for low-cost are is right all, now, within comment to appropriately but mutual really be a fund capability. provider strong in feel pricing of priced on think ETF made developed the we earlier. the And it discipline a quite to capabilities. frankly, again, the

the looking be acquisition. period whole like addressed at that, forward. of ETF but We of are as in we of front ETFs you'll nothing look duplications continue would during post our lineup to we range as our look said things that And we competitive the immediately at probably of the time. see we'll will But that and positioning some us,

Alexander Blostein

back going the Got Loren, it. of one And it are for I way cost-cutting sounds guys press to you. about release, the like guess , XX% you through program. the

obviously, using the also lots incremental but still out? of plus get kind more more realistic backdrop organic you the margin, challenging is but robust, about do there are think that and what's your for business in of flattish revenue in and room of then guess, of as growth or account And total. that Jemstep versus to a sounds obviously run here? looking XX% taking we XXXX pieces, rate investing given I quarter methodology, of into in the first XXXX, typical kind moving the sort pipeline might Is as pushed Just pretty

Loren M. Starr

side, to So, on always the there's opportunity we more. cost further think do opportunity do

that to currently are at run look rate. other that continue We not things in

a to roll to but we going overall with be, at of the some close effectively, think, is with to se, specific continue continue, through activities outsource program I firm to XXXX. potentially to opportunities being I optimization it that was activities fairly, other that the to program look come the sense. back per think, extent a really going significant technology more are optimization while the within terms hopefully, of that place going terms to We're makes in think put in done in the I identified, in to

us. it do we Use of that focused need lots people another are on. for robotics that the cheaper, not Those an continue to at just can of firms, be It's whatever. to are faster, things obviously. Someone better, is one opportunity looking

on a than grow would a revenues. one pace So, say and that continue good more come I slower at to to to should allow cost with us

said, I XX% with But so, clear sort for XXXX. I those us anybody And be we opportunity able said to XXXX get think that, have certainly also goes that of internally to to in may levels. we where don't still through at has a of that XX% away. view exist are deliver get XXXX that And to to mentioned,

this at can't commit not other says So, that it point in, than is that, to that there's sort locked ready happen. implicitly of nothing

Alexander Blostein

understood. I Yes.

Loren M. Starr

Okay.

Alexander Blostein

Thanks.

Operator

comes Deutsche Bank. Brian Bedell you. of next Thank The from question

line is now Your open.

Brian Bedell

morning my questions. Great. Thanks Good for taking folks.

Loren M. Starr

Brian. Hey,

Brian Bedell

get franchise. to the beta Marty, the and maybe smart just onto factor-based back

move Just in market active getting people versus view, been to, in smart products. market. has so so, flow bought for the obviously, are the It's beta then beta you're given to positive products, as been well smart conditions see in product versus solution your And slower smart conservative the drivers versus you and like the sounds all, that first a been and actually alluding beta how develop, environment needle? beta this we've like, biggest or it positioning thinking net done them? the passive what you're a more over last of you've a are that that year I'm continues But advisors bigger think effort, financial do strongly. up rather so better for sold can perceiving positively how than making it more pretty a like be And product, a of you as

Martin L. Flanagan

a really, point. important on really, You're really

moment, stay in to think because a States than it's you for United – listened commentary, other If different the and you the markets. I'll would that

build whether where seeing, very we You be. be merits are it's beta are well-developed. in conviction or would can level; financial platforms, could to factors this is factors, high intellectual all, think at be alternatives is it and at institutions, it and portfolios that advisors, the smart adoption rate a it'd again what of it, not. a fact, active to and some not It's in And factors portfolio the implement extending not The embraced. how use high how

level, build create where how, use our model corner literally come it's And team helping at analytics the element an a actually how just institutional why to determine Solutions comes we I also is the it. build use offices, educational And play, what they That's not making where to effectively to of impact. do it because that's not want. it's you outcomes in team the back is, There's help and huge how portfolios FAS, them. so, how people fact, that to of we too, into just at are but analytics more them

of capability. and the right, matter it early learned where the so, is that's Factors fact going outside you're of in And would areas. the in States, the equities it's been the capability, active exactly you're the is more now. retail a level, a States. more U.K. quite is, and it's goes it'd and rate the moment, on So, for period long continent. And and/or a to sold appetite embraced be institutionally much I up, United there's see think, probably whether, different the particular, fixed momentum greater holistically it's at at investing it greater to the say, – level I and that's frankly, United much for bought in or still days, in much as to flows just good adoption in Europe, at similar start these have not a income of time, much a

that of the in thing in interactions interest and the in has from Asia, beginning the frankly, adoption Japan, of capabilities frankly, it we've for having. tell been the have, also same will been particular, channel China, you in a I We marked factor change Asia. retail

Brian Bedell

operate to push about Okay. are And you That's firms a strategies, the great research obviously and do different within obviously, talk how talk different side, push a little know reasonably that about more embracing ways. quantitative kind your in how of embrace this color. decentralized thing. And if decent can subject, of through you implementing quantitative fundamental the you're research base little about in them been you a bit you did their Invesco. it strategies from you sort then, with and maybe there's different organization? own a But presentation, within on are doing a I think it trying teams guys you to quantitative view of teams at lot the implementing tools as

Martin L. Flanagan

Yeah.

The clarify platform. a a but me single investment and – teams, let So, by built they it's processes, unique philosophies point. are all on under

our And different used every the adopted team back and new reality and they're they've been so, XXXXs, what's since that's is and now. quantitative go all quantitative early ways. And are right to of teams, available technologies exactly situation models, of always the in these the tools one you of if the happening to that's to the enhance their teams,

adoption And they be of driven different so, and in is investment the past, the by continue manner. tools no management of really be than in adopted the it'll that And will each teams. to the

know or I that's not. don't helpful if So,

Loren M. Starr

like language are I we of to opportunity things specifically as be able to natural some go mean, know effectively. through at I filings an do looking more – the

in and right AI, around the that's macroeconomic events. the around of So, work macroeconomic some I there's now. views exploration specifically bets around use progress know also And

all been So, explored. I it's think

there out. them. parts as teams to additive their embracing to it's But I think the taking – existing opposed are that are processes,

Brian Bedell

Great, and the you're talking quantitative? about not the fundamental teams

Loren M. Starr

about. The quantity have teams for Yes, this is been time. that doing long all this a talking fundamental we're teams

Brian Bedell

a For long yes. time,

Thank you. great. Okay,

Operator

Cyprys Thank next Morgan Stanley. question Michael you. The comes from of

is now line open. Your

Michael J. Cyprys

for question. Thanks morning taking Good Hi. the

of in China? or Just update China, recent regulatory how progressing, us outlook changes China, curious Great thinking sort and on your just just JV thinking any JV you're And about also, about Wall to that's approaching the structure, the how given in the you curious if change of could you're how there? some

Martin L. Flanagan

different talk world. parts are Yeah. topics a things of to comments. because I'd our probably back the And led a are continues market. in ago. China a the strongest the well penetration number of they that the and we're the frankly channels talking using is technologies a don't about, that we We in I'll to Jemstep a of continues to advanced of the couple Great arguably actually in about more China, learning make Or industry. that some other the thing, many to lot it's say, marketplace, about do years of And in and very increase. it quite retail Wall one lot. the Invesco is one position, And

China. also we'd of everybody more And continue very, see specific be mandates that. you in just top managers, I'd very we'll multiple hope three would with other there. on probably we to be some to So, opportunities platforms digital with have the argue, to strong, here again, that – be Institutionally, we institutional

will bigger a an from is mind the that to feel never point, opportunity of topic say, shareholding are developments your And bigger now. as it well as market. in And the happening can as for you the some placed be And in another China of organization. extraordinarily – our been we changing the right real Michael, is have there. has positive As we that because probably just is of us change which that soon dynamics changed, to top opportunity XX% change, also

Loren M. Starr

Yeah, mean, mean, well. quantitative, I they're fundamental well. and flowing it's fixed would I products, I The really just income, really say, doing

successful growing. one of in overall of rapidly the seem joint be most is and billion to think, about venture largest the I and one It's the there. $XX size

– is that think, Owned element of so opportunities And WOFE kind another into whole Owned we kind Enterprise] is Wall. strategy. Greater Foreign stands that Wholly have focus Great what for, element Entity China the our Foreign of do grow I we a a there's to with how lot which of on So, as well, also [Wholly (sic) continue is the (XX:XX:XX), another that yet

Martin L. Flanagan

And best add, Western the know, of mean, only led think Invesco firm, as And market. can the have we JV, unique management also we in name I Great we're the control that's where the by tell, as you I Wall. just and also is I'd

investment as JV not utilize and afforded So, the in as be of disciplines the And a a like, we we jointly operate it JVs. Invesco, are of able and JV part the market, are the is recognizing whether going organization clients, other to even. capabilities probably success to single it the that of literally, to

So, very in strong again, place we're we a that marketplace. just feel in

Michael J. Cyprys

Great. Thanks taking my questions. for

Martin L. Flanagan

Yes.

Operator

Thank you. Blair. The of next William question Shutler comes from Chris

Your line open. is now

Chris Charles Shutler

morning. Hey, Good guys.

acquisitions allocation capital outline in real on right just and quick that, one now? one Thanks. fall where priorities, that Just mix

Loren M. Starr

roughly then facility, – which it normal where that buybacks, bring again, but sometime dividend. in is and expect as be so levels. which finished back that, an acquisition, to, is investing terms we're Once just our our mostly we remainder would products priorities down happen forward contained credit is. paying – been $XXX be really stock we historically, of have consistent you there, expect growth mentioned, kick seeding did around we the business, priorities given needs to our what And pre-acquisition then to capital we in has to in the is QX, we the to somewhere increase, that in, be again, $XXX the million, behind obviously we would modest, which could to of So, get a our something million down dividend. leverage an allocated would really sort looking price, year, ever-increasing And saw back which to

but trying just we've mentioned, what done, are I those acquisition leverage is us. but that looking terms themselves we've of In might open to bring, Source in always of to I And our come between think what to as There think all. first at to paying want onboard you able present that be been And focus Marty should and has may to I and don't we're to strategies, if moving be things certain is as We we shifting not attention add our success focus just as than and continuing been grow and terms the others. key has to the organically, more I they as opportunities think really well. know foremost, interesting at Guggenheim. industry

Martin L. Flanagan

the on agree. right No, you're mark. No, I

Chris Charles Shutler

Loren. Thanks, right. All

Loren M. Starr

Sure.

Operator

Autonomous Patrick Davitt you. The of comes Thank question next from Research.

line open. Your is now

Patrick Davitt

want choose, one the and powerful Hey. other advisor had to imagine Good behind one But I managers, you'll do the if morning. a use? you how platforms And Jemstep new the away there's of Thanks. Apologize – to robos, they if that they be sitting next other become step this, there's kind ones? chooses some the to are constituencies so pretty I fee which when I during situation where conversation. these asset missed

Martin L. Flanagan

platforms; advisors Yeah, here. institution you the is about environment, their as point wealth choose – no. financial talking install like. organization, in one their so digital to What they and application, clients, think your an the that's multiple an it really and want you application pick serve wants managers you platform, of they these we're one No the digital and

with penetration really that's in first very a to market puts the and clients the you situation. Being point. And so, unique the

are You what then gets how advice working this the for client to their models the want offering. look – you the back ETFs our share factor clients. institution wise. is it decision do open active well would have these that provide – have capabilities, And think team like the really to we Loren models recognize service is turn back start their to white-labeled; what their of become I for And point, also open served built being provider models these using the happen. the organization to platform. just think organization to a of of an relative platforms. we want of again But whether at I and the you here. to to mutual that on do depending think, very to clients; It And are very, time. and the to they a very have a we way it'd not seeing not a totality And client, is to-date for that combination Solutions we our them. the build are institutions. that us we digital serving combination funds an and not like was, with think to be very, It's us platform; to again again, an our gets determine made And us combination No platform institution, market they has

to We to platform. a dramatically relationship are traditional and the modeling be upside a quite different traditional to

Patrick Davitt

a ago the Great. we exposure the in news trend or total income trust about Could kind quick That's week with UK. should a to a all them? so dispute just those helpful. And AUM worry And of us a this There for of trusts? was a give about some fee follow-up. you is enhanced then

Loren M. Starr

the exposure is think large. don't I

probably it's think or $X less. I billion

particular Some have have of know a again too and than gone already if situation seems don't the kind other sort terms comment of through theme. and that more on some was made in of deeply we of trusts that anomalous can adjustments. a was, This I where really dispute

Patrick Davitt

Okay. you. Thank

Loren M. Starr

Yeah.

Martin L. Flanagan

Yeah.

Operator

you. next KBW. Robert Lee comes from question Thank of The

open. now is line Your

Robert Lee

growth, more patience really? about if Great. really we rightly revenue talk you organic than there's industry. Because there's hypothetical organic appreciate earnings the pressure a or way, and isn't a morning. talk shouldn't we how in questions there, regards and do of ability the really into a really, be to regardless a and guess, pre-tax thinking think revenue long a kind be on taking maybe focusing maybe it all pressures net you concern think Thanks incremental to yield growing Clearly, really for you Good real in growth should question about and from but to all about flow? about of regards a you the But fee for generate and call. about EBITDA translate not my I the is lot revenues, incremental so ability growth. even of So, it's income of increment about, anything, operating but your we growth metric and revenues your of peers, and the any for to measure rates. – fee

Martin L. Flanagan

Yeah.

Robert Lee

that I mean, be conversation isn't should having? really the we

Martin L. Flanagan

It's we probably down gets guess, a I a about a something does And where think, sort lost right. right, organic of the think good rate. collectively where conversation the is healthy there it. I talked is But organic and do, path, mean, growth rate you're penetration, I so measure, question. it is I have going, momentum it's growth been And what

traditional think if to in driving where of asset hit going be would equity our – more changing, are this, of to we factor And it, the than you're So, limitation we've on alpha. – you're to assets it's fee to effective change. else. the you that bulk we you a active, time happen effective case? the rate what know range is our again so that in to mix going that particular, rate generate are Why the been fee dissect capabilities, the way, They're bulk – be if over our there's with to size probably focused start in to going and we at really of anything looked what's see going be? a Because going going if to capabilities. capabilities, Where be the do

team right size. the thing a we them more, that's says There's – do. when and I to And same investment to that no So, on the to be alternatives, right. shut is an I'd down. say, going thing think limitation And the

capabilities, scale that And the absolute we meeting fully looked client recognizing when factor build clients. while service capabilities needed you We whole we made forward, can range determination so, this and to frankly, and of needs.

the and And we've think it, get business in it's understanding point at going really that you're What's business, pulling ETF it's So, of you're and fee, really what going driving the a is is been the conversation to the our and to if that way. I scale, is or And of the you it. different it factor implications. out really having. you're because you're get profitability, lower really that to, growth look earnings finally And but profitable, right. important

Loren M. Starr

got really revenues the everybody comes health. is is that, And then, measure. on, Yeah. profits I focused about thinking our But, doesn't is measure. metric we clients I measure mean, do. think, And or growth growth are our a our really a of and terms we're kind growth I products? And Do profits. It's a our clients, time focus matter, We've internally there, from they earnings a client and that our mean, lot don't spend them absolutely myself. in want of of on fiduciary of well? obviously, certainly, mean I and serving

I from again, So, perspective, the question. think get I maybe certainly your

measure would sort people clients. I growth, whether of the of still organic we're things think right find by a doing internally, good very

Robert Lee

And I appreciate the color. Thanks.

Loren M. Starr

Yeah.

Martin L. Flanagan

Yeah.

Operator

Flanagan, may in this Mr. At any don't Thank questions have queue. you time, you. proceed. we

Martin L. Flanagan

you Loren time the interest. on and for and we a will and much day. you good the your behalf very be And team. to you Have of soon. myself Invesco Thank talking rest Thank of

Operator

Thank conference. for today's concludes you That you. all Thank participating.

may disconnect. now You

Unverifiable Participant
Martin L. Flanagan	Invesco Ltd.
Loren M. Starr	Invesco Ltd.
Michael Carrier	Bank of America Merrill Lynch
Kenneth B. Worthington	JPMorgan Securities LLC
Brennan Hawken	UBS Securities LLC
Daniel Thomas Fannon	Jefferies LLC
William Katz	Citigroup Global Markets, Inc.
Craig Siegenthaler	Credit Suisse Securities (NYSE:USA) LLC
Glenn Schorr	Evercore Group LLC
Kenneth S. Lee	RBC Capital Markets LLC
Alexander Blostein	Goldman Sachs & Co. LLC
Brian Bedell	Deutsche Bank Securities, Inc.
Michael J. Cyprys	Morgan Stanley & Co. LLC
Chris Charles Shutler	William Blair & Co. LLC
Patrick Davitt	Autonomous Research US LP
Robert Lee	Keefe, Bruyette & Woods, Inc.

Invesco (IVZ) 26 Apr 182018 Q1 Earnings call transcript