When stocks markets are volatile and times are uncertain, investors tend to sell risk assets, often rushing to the shelter of bond funds and other investments deemed safe havens. For a big investment fund manager such as Invesco (IVZ), that sudden churn means cash.
Total operating revenue in the second quarter ending June 30 hit $1.1 billion, up 36 percent from the second quarter of 2010. Net income for the second quarter of 2011 came to $183.1 million, up more than threefold from the $41 million reported in the same quarter in 2010.
Money is flowing into the company, especially management fees. "Invesco's strong, long-term investment performance contributed to positive net inflows of $7.3 billion and strong operating results for the quarter," Invesco President and CEO Martin L. Flanagan says in an earnings release, adding that he expects business to remain healthy.
"Reflecting confidence in our business, we repurchased 11.3 million shares for $280 million."
More fees, please
The increase in revenue "was principally due to increases in investment management fees earned in the second quarter compared to the first quarter," the company says separately in the earnings statement.
Investment management fees jumped to $819.1 million, up 31 percent from the second quarter of 2010. Total assets under management at the end of the quarter stood at $653.7 billion, an increase of $11.8 billion from the first quarter.
Earlier this year, Stifel Nicolaus upgraded the stock to buy from hold while Deutsche Bank reiterated a buy recommendation. The company should release third quarter earnings around Oct. 24.
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