Invesco Net Income Rises 81% on Sale of Atlantic Trust Unit

Jan 30, 2014 4:58 pm ET

(Updates with analyst’s comment in fourth paragraph, closing share price in sixth.)

Jan. 30 (Bloomberg) -- Invesco Ltd., owner of the Invesco, Perpetual and PowerShares funds, said fourth-quarter profit rose 81 percent, helped by the sale of its Atlantic Trust Private Wealth Management unit.

Net income increased to $287.4 million, or 64 cents a share, from $158.7 million, or 35 cents, a year earlier, Atlanta-based Invesco said today in a statement. Excluding the Atlantic Trust sale and other items, the company earned 58 cents a share, compared with the average estimate of 57 cents in a Bloomberg survey of 19 analysts.

Chief Executive Officer Martin Flanagan, 53, has invested to increase sales outside the U.S. and made acquisitions to diversify the firm’s mix of products. Clients deposited a net $5.2 billion in the quarter, even as $4.8 billion was pulled from its U.K. equity income strategies following the resignation of Neil Woodford, who oversees the category.

“A total outflow related to Woodford of under $5 billion is pretty low in my view,” James Shanahan, an analyst who covers the company at Edward Jones & Co. in St. Louis, said in a phone interview.

Woodford, who oversees more than $50 billion and runs the U.K.’s largest equity fund, said Oct. 15 that he’ll be leaving the firm after more than 25 years to start his own company.

Shares Rise

Invesco rose 1.4 percent to $33.50 at 4:15 p.m. in New York. The stock has dropped 8 percent this year, compared with the 5.9 percent decline by Standard & Poor’s 20-company index for asset managers and custody banks.

Client deposits were driven by $2.6 billion into Invesco’s exchange-traded fund tracking the Nasdaq 100 Index. The index climbed 35 percent in 2013. Invesco’s assets climbed 17 percent in 2013 to a record $779 billion, helped by a 30 percent rally in the Standard & Poor’s 500 Index of U.S. stocks. Assets rose 4.5 percent from the prior quarter.

Invesco completed the sale of Atlantic Trust to Canadian Imperial Bank of Commerce, Canada’s fifth-largest bank, for $210 million in the final days of December, Starr said. Canadian Imperial Bank of Commerce announced the completion of the transaction on Jan. 6. Atlantic Trust managed about $24 billion as of Oct. 31, according to the bank.

‘Solid Fees’

“Solid performance fees and other revenues” helped Invesco beat estimates, Luke Montgomery, a research analyst who covers asset managers at Sanford C. Bernstein & Co. in New York, said in a note to clients.

Operating revenue increased 17 percent from a year earlier to $1.23 billion as investment management fees jumped by the same rate. Expenses climbed 11 percent to $931.8 million, led by a 30 percent jump in marketing spending. The company spent about $4.5 million in the quarter opening new funds, Starr said.

BlackRock Inc., the world’s largest asset manager, said Jan. 16 its fourth-quarter net income rose 22 percent to $841 million. Investors deposited a net $40 billion, driven by money going to exchange-traded funds.

--Editors: Christian Baumgaertel, Sree Vidya Bhaktavatsalam, Josh Friedman