Invesco LtdIVZ

With around $417 billion in AUM at the end of the third quarter of 2009, Invesco has both the size and scale necessary to remain competitive in the rapidly changing asset-management landscape.

With a diverse mix of assets under management, Invesco has a more complete portfolio, allowing it to sustain its AUM even when market fluctuations or investor demand turn against one asset class.

Invesco's product distribution is weighted more toward institutional clients (49% of AUM), which tend to be stickier than retail investors (47%)--especially in periods of prolonged market weakness.

More than 35% of Invesco's AUM comes from outside of the U.S. The firm is a market leader in both Canada and the U.K. and services clients in more than 100 countries.

The purchase of Morgan Stanley's retail fund operations, which had around $119 billion in AUM at the end of the third quarter, does little to alter Invesco's product mix by asset class and helps fill in a few gaps in the firm's portfolio, particularly in value equity and municipal bond strategies. Read more 

After improving through the first two quarters of 2009, net inflows were flat during the third quarter as outflows from Invesco's institutional money market funds picked up, which is troubling given that these clients had been relatively stable during the last couple of quarters.

Even with more than $535 billion in AUM following the purchase of Morgan Stanley's retail fund operations, Invesco will still be a medium-sized asset manager compared with industry giants like BlackRock BLK, Fidelity and Vanguard, each of which have more than $1 trillion in AUM.

As a result of its purchase of Morgan Stanley's retail fund operations, Invesco's exposure to the retail channel will increase from 47% of its AUM to 57%, and the firm will garner more than two thirds of its managed assets from clients domiciled in the United States (versus 61% prior to the deal). Read more