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Invesco (IVZ) Nears $1B Deal With Guggenheim Partners

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Invesco Ltd. (IVZ - Free Report) , which was supposedly in talks with Guggenheim Partners LLC earlier this month to buy its entire retail business, is perhaps nearing a deal to acquire only its exchange-traded funds (ETF) business.

According to The Wall Street Journal, quoting people familiar with the matter, Invesco, which had offered to pay $2 billion to acquire the retail business, will now buy the ETF business for more than $1 billion.

Guggenheim’s ETF business includes a portfolio of fixed income securities that are traded under the name of BulletShares. The company is said to have assets under management (AUM) worth more than $30 billion.

This move is part of Invesco’s efforts toward expanding its asset class further. Invesco had $858 billion in AUM as of Jun 30, 2017. This deal is expected to add to its already-expanding portfolio, which offers ETFs under the PowerShares label.

Also, this should further lead to improvement in the company’s top line, which has been growing since the last few years, owing to continued improvement in its AUM balance.

Invesco has made such deals in the past as well. In April, it announced plans of buying a London-based ETF provider, Source, with $25 billion in AUM.

ETFs are one of the fastest-growing products in the asset management industry. It allows investors the ease of trading the entire portfolio of stocks against trading only one stock. They are often constructed to track a broad market index, which can be done at quite a low cost.

Shares of Invesco have gained 5.5% in a year’s time, underperforming the 21% growth for the industry it belongs to.



Currently, Invesco carries a Zacks Rank #3 (Hold).

A few better-ranked stocks from the same space are Woori Bank Co., Ltd. (WF - Free Report) , Ameriprise Financial, Inc. (AMP - Free Report) and Cohen & Steers, Inc. (CNS - Free Report) .

Woori Bank has witnessed an upward earnings estimate revision of 14.9% for the current year over the past 60 days. Its share price has increased 54.6% so far this year. It currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Ameriprisecarries a Zacks Rank #2 (Buy). The stock has witnessed an upward earnings estimate revision of 4% for the current year over the past 60 days and has increased 24.8% year to date.

Cohen & Steers’ Zacks Consensus Estimate for the current year has been revised 3.6% upward over the past 60 days. Its shares have gained 12.4% year to date. It also carries a Zacks Rank #2.

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