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Invesco’s Total Operating Revenue Rises Marginally

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Sep. 28 2017, Updated 6:43 a.m. ET

Performance fees

Invesco (IVZ) generates the majority of its operating revenue from performance, investment management, service, and distribution fees. The company’s operating revenue rose 5.5% to $1.3 billion in 2Q17 from $1.2 billion in 2Q16, mainly due to higher performance fees.

Invesco’s performance fees were $16.7 million in 2Q17, compared with $8.9 million in 2Q16, reflecting a substantial 87.6% rise. Its private equity and UK investment teams contributed $5.8 million and $7.4 million, respectively, to performance fees.

However, Invesco’s service and distribution fee revenue rose 3.9% to $211.3 million in 2Q17 from $203.4 million in 2Q16, mainly due to a rise in AUM (assets under management).

Notably, Invesco had investment management fees of $1.0 billion in 2Q17, compared with $946 million in 2Q16, reflecting a 6.7% rise. This rise was mainly due to the company’s higher AUM.

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Peer comparison

Over the last 12 months, Invesco has generated a free cash flow yield of 3.2%. In comparison, peers’ (XLF) yields were as follows:

  • BlackRock (BLK): 2.9%
  • State Street (STT): 2.5%
  • Franklin Resources (BEN): 5.5%
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