What You Need to Know about Invesco's 2Q17 Performance

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What You Need to Know about Invesco's 2Q17 Performance PART 1 OF 5

What Led to the Rise in Invesco’s Total Operating Expenses

Marginal rise

Invesco’s (IVZ) total operating expenses rose marginally between 2Q16 and 2Q17, to $935.5 million from $887.9 million, a 5.4% increase. This rise was mainly due to third-party distribution and G&A (general and administrative) expenses.

What Led to the Rise in Invesco&#8217;s Total Operating Expenses

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In 2Q17, Invesco incurred third-party distribution expenses of $365.9 million, compared with $348.4 million in 2Q16, a 5% increase. This rise was due to higher service fees, asset and sales fees, rebates, and renewal commission.

Invesco’s G&A expenses rose to $85.9 million in 2Q17 from $78.6 million in 2Q16, an increase of 9.3%. This rise was mainly due to higher legal, consulting, professional, and audit expenses.

Invesco’s property, office, and technology expenses rose 8.1% from $82.3 million in 2Q16 to $89.0 million in 2Q17. This increase was due to higher communication, technology, office, and rent expenses, and property taxes.

Earnings margin

Invesco’s EBITDA (earnings before interest, tax, depreciation, and amortization) margin stood at 27.5% on June 30, 2017. Peers’ margins were as follows:

  • BlackRock (BLK): 44.0%
  • T. Rowe Price Group (TROW): 46.4%
  • Franklin Resources (BEN): 36.3%

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