Invesco Ltd

Welcome to Invesco's second quarter earnings conference call. All participants will be in a listen-only mode into the question-and-answer session. At that time, to ask a question, please press star 1. This call will last one hour. To allow more participants to ask questions, one question and a follow-up can be submitted per participant. As a reminder, today's call is being recorded. Now I'd like to turn today's meeting over to your host, Mr. Greg Ketchron, Invesco's Head of Investor Relations. Sir, you may begin. Thank you.

Thanks, operator, and to all of you joining us on Invesco's quarterly earnings call. In addition to our press release, we have provided a presentation that covers the topics we plan to address today. The press release and presentation are available on our website, Invesco.com. This information can be found by going to the investor relations section of the website. Our presentation today will include forward-looking statements and certain non-GAAP financial measures. Please review the disclosures on slide two of the presentation regarding these statements and measures, as well as the appendix for the appropriate reconciliations to GAAP. Finally, Invesco is not responsible for and does not edit or guarantee the accuracy of our earnings teleconference transcripts provided by third parties. The only authorized webcasts are located on our website. Marty Flanagan, President and Chief Executive Officer, and Allison Dukes, Chief Financial Officer, will present our results this morning. After we complete the presentation, we'll open up the call for questions. Now I'll turn the call over to Marty.

Thank you, Greg. And I'll start on slide three, which is the highlights of the quarter. So let me start on that page if you don't mind. So the market environment we have experienced for the first half of this year has been one of the most challenging in decades. Global equity and debt markets delivered the worst first half of with rising fears, recession fears, higher inflation, interest rate hikes, and geopolitical tensions against this backdrop for the industry. And despite seeing the first net long-term outflows quarter in two years, our diversified product lineup maintained net inflows in key capability areas, notably ETFs, active fixed income, greater China, where we maintain leadership positions. Our global ETF platform generated inflows of $4.8 billion in the quarter, the equivalent of a 7% annualized organic growth rate. Our ETF product suite remains differentiated from competitors with a strong presence in higher revenue, higher growth segments such as smart beta, and we continue to gain market share during the quarter. Our active fixed income business generated net inflows of $2.2 billion with strong flows into shorter duration strategies given the market backdrop. Our business in greater China delivered $1.8 billion in net long-term inflows this quarter, where we saw strong demand for fixing capital capabilities as investors sought to risk off assets. As we showcased previously, our business in China is uniquely positioned as a result of many years of investment and hard work building relationships with our clients and key stakeholders in the region. Growth in China continued despite difficult business conditions, which included COVID lockdowns in major cities. We are optimistic that the economic outlook in China is beginning to improve as COVID shutdowns ease and the government takes steps to boost the economy. As markets recover, we are well positioned to capture future growth in the fastest growing market for asset managers in the world. I also wanted to highlight our institutional business, which was in net inflows for the 11 consecutive quarters with $1.5 billion. The channel has been a steady source of growth and we have trillion in asset center management. The channel is well diversified by asset class, led by fixed income and alternatives, as well as geography, where we have a significant presence in each of the three global regions. We're proud to serve a broad range of client types, and our pipeline continues to be solid. Our solutions capability remains integral to the success in this channel and enabled a third of our pipeline this quarter. We expect our institutional business to remain a key strength for us in the quarters ahead. Despite broad-based growth and key capabilities, net outflows and equity strategies were $7.7 billion in this quarter and drove overall net negative outflows. In active global equities, in particular, we experienced net outflows and investor preference for risk-off trades led to higher redemptions in the quarter, including our developing markets fund, which saw $2.6 billion in net outflows. We look at Invesco's ability to weather this volatile period and our focus on building a stronger balance sheet has resulted in much greater flexibility. As I mentioned last quarter, we took advantage of the economically attractive opportunity to early redeem $600 million of long-term debt. As a result, total debt outstanding at the end of the second quarter is at its lowest level since 2015, and our leverage profile has been steadily improving. We've increased cash return to shareholders this year via share buyback, along with a 10% dividend increase we announced in April. The progress we've made on the balance sheet will allow us to take advantage of future opportunities and continue to invest in our business and increase return to shareholders over the long term. We met our target of $200 million in annual cost savings from our strategic review. Our focus will now shift to ongoing expense management discipline, and we will be deliberate as a management team in continuing to scale our business platform global business platform, and investment key areas of growth. In this uncertain environment, clients seek an investment manager that can partner with them to meet a comprehensive range of constantly evolving needs and solve their most challenging problems. A broad set of investment capabilities and a differentiated platform, we've built positions as well to continue to meet our client needs and compete in a dynamic market environment. Looking ahead, we will balance managing through near-term volatility capture demands across a wide range of client types and investment capabilities. Challenging times truly separate great companies from the back, and we are confident that our unwavering commitment to client needs will distinguish Infesco as one of the top firms in our industry. With that, I'll turn it over to Allison. Allison.