Invesco(IVZ) - 2024 Q4 - Annual Report

Assets Under Management (AUM) - As of December 31, 2024, Invesco's total Assets Under Management (AUM) reached $1,846.0 billion, with a year-over-year increase of 16.0$1,265.6 billion (21.5% increase) and Institutional at $580.4 billion (6.8$484.0 billion (33.7% increase), while Private Markets decreased by 0.9% to $128.5 billion[56]. - Active AUM totaled$1,026.5 billion (4.2% increase), while Passive AUM reached $819.5 billion (36.6$538.0 million, a significant recovery from a net loss of $333.7 million in 2023[301]. - Covenant Adjusted EBITDA for 2024 was reported at$1,557.0 million, an increase from $1,438.3 million in 2023, indicating improved operational performance[301]. - Interest coverage improved to 26.84 in 2024, up from 20.40 in 2023, demonstrating enhanced ability to meet interest obligations[301]. - Total operating revenues for 2024 were$6,067.0 million, an increase of 6.1% from $5,716.4 million in 2023[355]. - Investment management fees increased to$4,342.3 million in 2024, up from $4,106.0 million in 2023, reflecting a growth of 5.7$832.1 million, a significant recovery from an operating loss of $434.8 million in 2023[355]. - Net income for 2024 reached$752.4 million, a significant recovery from a net loss of $168.2 million in 2023[358]. - Total comprehensive income attributable to Invesco Ltd. was$303.7 million in 2024, compared to a comprehensive loss of $193.1 million in 2023[358]. Risks and Challenges - Invesco's revenues are primarily derived from investment management contracts, which are sensitive to market fluctuations and client withdrawals[62][66]. - The company faces competitive pressures that may force a reduction in fees, potentially impacting profitability[75]. - The investment management industry is experiencing transformative pressures, including increased fee competition and a shift towards passive investment strategies[73]. - Rapid advancements in technology may hinder the company's competitiveness if it fails to implement newer technologies or advanced platforms for its services[77]. - The company's private market products expose it to various risks, including illiquidity, credit risks, and potential reputational harm due to investments in emerging companies[78][79]. - Changes in market conditions could negatively impact the quality of the credit portfolio, leading to increased default and delinquency rates[86]. - Evolving sustainability and ESG disclosure requirements may pose regulatory and reputational risks, affecting the company's ability to attract and retain clients[96][97]. - The company faces risks from potential conflicts of interest that could lead to litigation or regulatory enforcement actions[100]. - The company must continuously manage and improve its technology systems to meet internal and client needs, which may require significant capital and resources[106]. - The company faces risks from strategic transactions, including potential customer loss or underperformance of acquired businesses[121]. Assets and Liabilities - The company recorded a non-cash impairment of$1,248.9 million related to indefinite-lived intangible assets during the year ended December 31, 2023[114]. - Goodwill and indefinite-lived intangible assets totaled $8,318.1 million and$5,749.3 million, respectively, at December 31, 2024[114]. - The total liabilities decreased to $11,340.1 million in 2024, down from$13,017.8 million in 2023, a decrease of 12.9%[353]. - The company's cash and cash equivalents decreased to $986.5 million in 2024, compared to$1,469.2 million in 2023, a reduction of 32.8%[353]. - The company has a total debt of $890.6 million, which is actively managed through cash flow forecasts and a committed revolving credit agreement[302]. Regulatory and Compliance - The company operates in a highly regulated environment, with potential enforcement actions or changes in laws that could negatively impact AUM, revenues, and liquidity[125]. - Regulatory changes, including those related to privacy and ESG factors, could impose new compliance costs and affect the company's ability to provide certain products[130]. - The legal and regulatory environment surrounding AI technology is rapidly evolving, posing risks to the company's operations and compliance costs[112]. Shareholder and Capital Structure - Significant shareholders, such as MassMutual, have the ability to influence company decisions, which may conflict with the interests of other shareholders[123]. - Future sales of common stock by significant shareholders could adversely impact the trading price of the company's shares[122]. - The company issued approximately$4 billion of 5.9% fixed rate perpetual preferred stock, which may limit its ability to raise additional capital and fund other priorities[116]. Technology and Cybersecurity - The company is highly dependent on information technology, and any failures or cyber-attacks could result in significant operational limits and reputational damage[103]. - Cybersecurity incidents have been increasing globally, and the company is at risk of being targeted due to its status as a global financial institution[104]. Cash Flow and Investments - Net cash provided by operating activities was $1,190.0 million in 2024, a decrease from$1,300.8 million in 2023[361]. - The company reported a decrease in cash inflows from investing activities, with net cash provided of $68.4 million in 2024 compared to an outflow of$244.3 million in 2023[361]. - The company’s investments are categorized as equity investments, equity method investments, and other investments, primarily related to affiliated funds and equity method investees[389][390].