Invesco Ltd. (NYSE:IVZ)

CAPS Rating: 4 out of 5

The Company is an independent global investment manager, dedicated to helping people worldwide build its financial security.


Player Avatar MoneyChampion (< 20) Submitted: 11/28/2006 6:25:31 PM : Underperform Start Price: $20.68 IVZ Score: -26.77

Amvescap's profit margins are among the worst of any asset manager we cover due to lax expense control and a spate of costly legal settlements.

Growth has been anemic in recent years with a combination of poor investment returns and well-publicized ethical lapses driving many investors away.

Though Amvescap's recent purchase of private equity house WL Ross & Co. should boost the company's profile in the alternative investments arena, management will have to scare up plenty of demand to justify the deal's $130 million-plus price tag.

Amvescap's AIM mutual funds have been unimpressive performers on the whole, with the average AIM offering (on an asset-weighted basis) garnering fewer than 3 stars under Morningstar's rating system.

Though by no means over-leveraged, Amvescap carries more debt on its balance sheet than the typical asset manager. This could hamper the firm's flexibility to acquire or tactically invest in the future.

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