Reflections on the week ending April 30, 2010

Invesco Limited had a few announcements this week that reinforced some of my views on the company.

On April 28, 2010, Invesco reported results for the quarter ended March 31, 2010. Adjusted Cash Earnings per Share of $0.27 was almost 2.5 times that of the same quarter in 2009. Similarly, Franklin Resources reported that its Diluted EPS for the quarter ended March 31, 2010 had more than tripled versus the same quarter in the preceding year. I find these results to be consistent with the investment thesis that Wealth Managers disproportionately benefit during market recoveries.

On April 27, 2010, Invesco announced it held a final closing for its Mortgage Recovery Fund with total commitments of more than US$1.46 billion. This unique offering from Invesco, which is part of the US Treasury’s Public-Private Investment Fund initiative, is illustrative of the unique ability of Invesco to bring together the specialized capabilities of Invesco Fixed Income, Invesco Real Estate and W.L. Ross & Co., the distressed investment affiliate of Invesco.

As part of its earnings announcement, Invesco also announced that its acquisition of the Van Kampen/Morgan Stanley asset management business is on track to be completed by June 1, 2010. This acquisition increases the depth and breadth of Invesco’s investment capabilities and offering, strengthens its access to distribution through the relationship with Morgan Stanley and is expected to increase efficiency and economies of scale of its operations.

Reflecting on these announcements, I could not help but think “crisis = danger + opportunity”. During the last year, not only has Invesco benefitted from the market’s partial recovery but, during the crisis it was able to make strategic acquisitions and seize new opportunities that, in my view, position it well for the future.