Total operating expenses
Invesco Limited (IVZ) incurred total operating expenses of $1.0 billion in 4Q17 compared to $982.4 million in 3Q17, which reflects a rise of 5%. The company witnessed a decline in business optimization costs from $12.3 million in 3Q17 to $9 million in 4Q17. Due to the foreign exchange rate fluctuations, the company saw a rise of $1.1 million in operating expenses in 4Q17 on a sequential basis.
Invesco’s third-party distribution, service, and advisory costs in 4Q17 stood at $390.9 million compared to $380.4 million in 3Q17. The company’s employee compensation expenses stood at $381.9 million in 4Q17 compared to $393.1 million in 3Q17, which reflected a decline of 2.8%. The company saw a decline in the staff severance expenses with respect to business growth from $7.6 million in 3Q17 to $2.8 million in 4Q17.
Marketing, property, and general and administrative expenses
Invesco saw a rise of 38% in marketing expenses in 4Q17 compared to 3Q17 because of the marketing activities executed in order to promote the European ETF business as well as cross-border funds. However, higher advertising costs associated with client events as well as other marketing expenses also contributed to a rise in the marketing expenses.
Invesco’s property, office, and technology expenses rose 10.8% in 4Q17 compared to 3Q17. The company’s general and administrative expenses rose 32.8% in 4Q17 on a sequential basis.
The enterprise-value-to-revenue ratio of Invesco stood at 3.63x on an LTM (last-12-month) basis. Peers (XLF) Raymond James Financial (RJF), Lazard Limited (LAZ), and WisdomTree Investments (WETF) have ratios of 4.66x, 2.13x, and 5.79x, respectively, on an LTM basis.