Item 1. Business

Introduction

Invesco Ltd. (the Parent) and its consolidated subsidiaries (collectively, Invesco or the company) is an independent investment management firm dedicated to delivering an investment experience that helps people get more out of life. Our comprehensive range of active, passive and alternative investment capabilities has been constructed over many years to help clients achieve their investment objectives. We draw on this comprehensive range of capabilities to provide customized solutions designed to deliver key outcomes aligned to client needs.

With approximately 8,600 employees and an on-the-ground presence in more than 20 countries, Invesco is well positioned to meet the needs of investors across the globe. We have specialized investment teams managing investments across a broad range of asset classes, investment styles and geographies. For decades, individuals and institutions have viewed Invesco as a trusted partner for a comprehensive set of investment needs. We have a significant presence in the retail and institutional markets within the investment management industry in the Americas, Europe, Middle East and Africa (EMEA) and Asia-Pacific (APAC), serving clients in more than 110 countries. As of December 31, 2022, the firm managed approximately $1.4 trillion in assets for investors around the world.

The key drivers of success for Invesco are long-term investment performance, high-quality client service and effective distribution relationships delivered across a diverse spectrum of investment management capabilities, distribution channels, geographic areas and market exposures. Through our focus on these areas, we seek to deliver better outcomes for clients and generate competitive investment results, positive net flows, increased AUM and associated revenues.

We measure relative investment performance by comparing our investment capabilities to competitors' products, industry benchmarks and client investment objectives. Generally, distributors, investment advisors and consultants take into consideration longer-term investment performance (e.g., three-year and five-year performance) in their selection of investment products and manager recommendations to their clients. Third-party ratings may also influence client investment decisions. We monitor the quality of client service in a variety of ways, including periodic client satisfaction surveys, analysis of response times and redemption rates, competitive benchmarking of services and feedback from investment consultants.

The company is organized under the laws of Bermuda. Our common shares are listed and traded on the New York Stock Exchange (NYSE) under the symbol “IVZ.” We maintain a website at www.invesco.com/corporate. (Information contained on our website shall not be deemed to be part of, or be incorporated into, this document.)

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Strategy

The company focuses on four key long-term strategic objectives that are designed to sharpen our focus on client needs, further strengthen our business over time and help ensure our long-term success:

• Achieve strong, long-term investment performance** across distinct investment capabilities with clearly articulated investment philosophies and processes, aligned with client needs;

• Be instrumental to our clients' success** by delivering our distinctive investment capabilities worldwide to meet their needs;

• Harness the power of our global platform** by continuously improving execution effectiveness to enhance quality and productivity, and allocating our resources to the opportunities that will best benefit clients and our business; and

• Perpetuate a high-performance organization** by driving greater transparency, accountability, diversity of thought, fact-based decision making and execution at all levels.

As an integrated global investment manager, we are keenly focused on meeting clients' needs and operating effectively and efficiently. We take a unified approach to our business and present our financial statements and other disclosures under the single operating segment “investment management.”

We believe one of Invesco's greatest strengths is our separate, distinct investment teams in multiple markets across the globe. A key focus of our business is fostering a strong investment culture and providing the support that enables our investment teams to maintain well-performing investment capabilities. We believe the ability to leverage the capabilities of our investment teams to help clients across the globe achieve their investment objectives is a significant differentiator for our firm.

Industry Trends

Trends around the world continue to transform the investment management industry and underscore the need to be well diversified with broad capabilities globally and across asset classes:

• Distribution partners are becoming more selective and continuing to maintain fewer relationships and partners, reducing the number of trusted investment managers with whom they work. Invesco provides a comprehensive range of capabilities, a robust set of value-added services and investment solutions that deliver key outcomes aligned to their investment objectives.

• Clients and distribution partners are also demanding more from investment managers. While investment performance remains paramount, competitive pricing, client engagement and value-added services (including portfolio analytics and consultative solutions) increasingly differentiate managers. Clients and distribution partners are also increasingly discerning and focused on greater value for their money. Invesco delivers competitive pricing, investor education, thought leadership, digital platforms and other value-added services that enhance the client experience. The firm is also working to enhance the client user experience through digital marketing (web, mobile, social) and improved service.

• Investors continue to demand alternative, passive and smart beta strategies. As a consequence, the industry is seeing client demand for certain active core equities portfolios decline as a share of global flows. Invesco is the 4th largest exchange-traded funds (ETFs) provider globally. Invesco sponsors 72 ETFs each with greater than $500 million in AUM. Invesco also has a strong lineup of alternative and multi-asset strategies supported by ongoing product development.

• Environmental, social and governance (ESG) investing is one of the fastest-growing segments of the asset management industry. Invesco offers a broad range of ESG investment capabilities, which enables clients to align their investments with their values. Our approach is "client-led" and "investment-driven" – that is, we seek to offer clients investment products tailored to their specific investment objectives. We offer a broad range of ESG capabilities for clients seeking strategies that align with their interests and investment objectives. We deliver these capabilities through equities, fixed income, multi-asset, alternatives, real estate, ETFs and custom solutions. We also integrate financially material ESG considerations in our investment capabilities.

• The asset management industry is experiencing pressure on net revenue yield, arising from increased use of low-fee passive products and further concentration within channel distribution partners (which increases their ability to negotiate pricing).

• Regulatory activity remains at increased levels and is influencing competitive dynamics. Increased regulatory scrutiny of asset managers has focused on many areas, including transparency/unbundling of fees, inducements, conflicts of interest, capital, liquidity, solvency, leverage, operational risk management, controls and compensation. Invesco continues to work proactively with regulators around the world to better understand and help shape the evolving regulatory landscape. Efforts to further modernize and strengthen our global platform will enhance our ability to

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compete effectively across markets while complying with the variety of applicable regulatory regimes. This is a key differentiator for large, scaled firms such as Invesco.

• Although the developed markets in the U.S. and Europe are the two largest markets for financial assets by a wide margin, other key emerging markets in the world, such as Greater China, are growing faster and are positioned for greater future growth over the long term. In particular, the Chinese mutual fund management industry has grown from zero to nearly $4 trillion, and it is expected to become the second-largest fund management market in the world by 2025 with nearly $6 trillion in assets. Building on nearly two decades' presence in the market, Invesco is the largest foreign-owned asset manager with an onshore presence in China. Additionally, population age differences between emerging and developed markets will result in differing investment needs and horizons among countries. Asset allocation and retirement savings schemes also differ substantially among countries. We believe firms such as Invesco, with experience across a variety of key markets and diversified investment capabilities and product types, are best positioned to meet clients' needs in this global competitive landscape.

• Technology advances are impacting core elements of the investment management industry, which lags other industries in its use of technology. Clients increasingly seek to interact digitally with their investment portfolios. This is leading to established managers investing in and/or acquiring technology platforms. As the investment management business becomes more complex, automation will become increasingly important to serve clients effectively and efficiently. Invesco is leveraging technology across its business and exploring opportunities to work with third-party technology firms to enhance our clients' investment experience. In addition, over the past few years, Invesco has made investments in its digital wealth business, intelliflo.

These dynamics are driving fundamental changes within the industry and, we believe, will drive increasing consolidation. We believe the steps we have taken over the past decade strengthened our ability to understand, anticipate and meet client needs and will help ensure Invesco is well-positioned to compete within our industry over the long term.

Investment Management Capabilities

We believe that the proven strength of our distinct and globally located investment teams and their well-defined investment disciplines and risk management approaches provide us with a robust competitive advantage. There are few independent investment managers with teams as globally diverse as Invesco's and with the same breadth and depth of investment capabilities and vehicles. We offer multiple investment objectives within the various asset classes and products that we manage. Our asset classes, broadly defined, include equity, fixed income, balanced, alternatives and money market. We offer custom solutions across all asset classes and increasingly incorporate financially material ESG considerations into our investment capabilities and processes. Our Global ESG team provides support and analysis, while our investment managers maintain discretion on portfolio decisions.

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The following sets forth our major managed investment objectives by asset class:

Equity			Fixed Income			Balanced			Alternatives			Money Market
● Custom Solutions			● Custom Solutions			● Custom Solutions			● Custom Solutions			● Custom Solutions
● Environmental, Social and Governance			● Environmental, Social and Governance			● Environmental, Social and Governance			● Environmental, Social and Governance			● Cash Plus
● Core/Value/Growth Style			● Buy and Hold			● Balanced Risk			● Absolute Return			● Government/Treasury
● Emerging Markets			● Convertibles			● Global/Regional			● Commodities			● Prime
● International/Global			● Core/Core Plus			● Single Country			● Currencies			● Taxable
● Large/Mid/Small Cap			● Emerging Markets			● Target Date			● Direct Lending			● Tax-Free
● Low Volatility/Defensive			● Government Bonds			● Target Risk			● Distressed Debt
● Passive/Enhanced			● High-Yield Bonds			● Traditional Balanced			● Financial Structures
● Regional/Single Country			● International/Global						● Global Macro
● Smart Beta/Factor-based			● Investment Grade Credit						● Infrastructure and MLPs
● Thematic/Sector			● Multi-Sector						● Long/Short Equity
			● Municipal Bonds						● Managed Futures
			● Passive/Enhanced						● Multi-Alternatives
			● Regional/Single Country						● Private Real Estate
			● Short/Ultra-Short Duration						● Public Real Estate Securities
			● Stable Value						● Senior Secured Loans
			● Structured Securities
			● Smart Beta/Factor-based

Distribution Channels

Retail AUM typically originate from clients investing into funds available to the public in the form of shares or units. Institutional AUM originate from entities such as individual corporate clients, insurance companies, endowments, foundations, government authorities, universities or charities. AUM disclosed as retail channel AUM include AUM distributed by the company's retail sales team. AUM disclosed as institutional channel AUM include AUM distributed by the company's institutional sales team.

The company operates as an integrated global investment manager, presenting itself as a single firm to clients around the world. Dedicated sales forces deliver our investment strategies through a variety of vehicles that meet the needs of retail and institutional clients. Note that not all products sold in the retail distribution channel are in "retail" vehicles, and not all products sold in the institutional channel are in "institutional" vehicles, as described in the table below. This aggregation, however, is viewed as a proxy for presenting AUM in the retail and institutional markets in which we operate.

The following lists our primary investment vehicles by distribution channel:

Retail						Institutional
● Closed-end Mutual Funds						● Collective Trust Funds
● ETFs						● ETFs
● Individual Savings Accounts						● Institutional Separate Accounts
● Investment Companies with Variable Capital						● Open-end Mutual Funds
● Investment Trusts						● Private Funds
● Open-end Mutual Funds
● Separately Managed Accounts
● Société d'investissement à Capital Variable
● Unit Investment Trusts (UITs)
● Variable Insurance Funds

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Retail

Retail AUM were $872.3 billion at December 31, 2022. We offer retail products within all of the major asset classes. Our retail products are primarily distributed through third-party financial intermediaries, including major wire houses, fund supermarkets, regional broker-dealers, insurance companies, banks and financial planners in the Americas, and independent brokers and financial advisors, banks and supermarket platforms in EMEA and APAC.

The Americas and EMEA retail operations rank among the largest by AUM in their respective markets. As of December 31, 2022, Invesco's U.S. retail business, including our ETFs franchise, is a top 10 asset manager in the U.S. by total AUM, and Invesco's retail business in EMEA is among the largest non-proprietary investment managers in the retail channel. In addition, Invesco Great Wall Fund Management Company Limited (IGW or Invesco Great Wall), our joint venture in China, is one of the largest Sino-foreign managers of equity products in China, with total AUM of approximately $89.3 billion at December 31, 2022. We provide our retail clients with one of the industry's most robust and comprehensive product lines.

Institutional

Institutional AUM were $536.9 billion at December 31, 2022. We offer a broad suite of domestic and global strategies, including traditional and quantitative equities, fixed income (including money market funds for institutional clients), real estate, financial structures and absolute return strategies. Regional sales forces distribute our products and provide services to clients and intermediaries around the world. We have a diversified client base that includes major public and private entities, unions, non-profit organizations, endowments, foundations, pension funds, financial institutions and sovereign wealth funds. Invesco's institutional money market funds serve some of the largest financial institutions, government entities and companies in the world.

AUM Diversification

One of Invesco's competitive strengths is the diversification of AUM by client domicile, distribution channel and asset class. We serve clients in more than 110 countries. The following tables present a breakdown of AUM by client domicile, distribution channel and asset class as of December 31, 2022. Additionally, the fourth table below illustrates the split of our AUM as Passive and Active. Passive AUM include index-based ETFs, UITs, non-management fee earning AUM and other passive mandates. Active AUM are total AUM less Passive AUM. See the company's disclosures regarding the changes in AUM for the year ended December 31, 2022 in Part II, Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations - Assets Under Management” section for additional information regarding the changes in AUM.

By Client Domicile
($ in billions)			Total						1-Yr Change
c Americas			999.4						(11.8)		%
c EMEA			186.3						(19.4)		%
c APAC			223.5						(9.6)		%
Total			1,409.2

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By Distribution Channel
($ in billions)			Total						1-Yr Change
c Retail			872.3						(21.2)		%
c Institutional			536.9						6.4		%
Total			1,409.2

By Asset Class
($ in billions)			Total						1-Yr Change
c Equity			637.0						(24.3)		%
c Fixed Income			313.7						(6.3)		%
c Balanced			67.1						(24.3)		%
c Money Market			203.5						36.8		%
c Alternatives			187.9						(4.7)		%
Total			1,409.2

Active vs. Passive
($ in billions)			Total						1-Yr Change
c Active			976.2						(9.8)		%
c Passive			433.0						(18.1)		%
Total			1,409.2

Corporate Responsibility and Human Capital

Invesco’s long-term success depends on our ability to retain, develop, engage and attract top talent. Invesco invests significantly in talent development, health and welfare programs, technology and other resources that support our employees in developing their full potential both personally and professionally. We believe that an employee community that is diverse and inclusive, engaged in community involvement and invested in employee well-being will drive positive outcomes for our clients and shareholders.

We believe that diversity and inclusion are both moral and business imperatives. We are committed to further strengthening diversity at all levels and in all functions across our global business as evidenced by our Chief Executive Officer (CEO) and senior managing directors including a diversity and inclusion goal in their performance goals. Increasing representation of women and other underrepresented employees remains a focus for Invesco, as does building a more inclusive work environment. At the end of 2022, our global workforce was 40% female and 60% male (2021: 39% female and 61% male), with

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37% of senior managers worldwide being women (2021: 35%). All new employees are required to take unconscious bias training. Our employees are also encouraged to participate in any of our twelve business resource groups where employees with diverse backgrounds, experiences and perspectives can connect. Our business resource groups are sponsored by senior leaders and are designed by employees, for employees.

As of December 31, 2022, the company had 8,611 employees with an on-the-ground presence in over 20 countries (December 31, 2021: 8,513). Our employees are not covered under collective bargaining agreements.

The company is committed to reducing our impact on the environment. Across Invesco offices, we carefully manage our operational activities with a focus on using natural resources wisely, increasing efficiencies wherever possible and providing a safe and healthy workplace for employees and visitors. This is the foundation of our environmental, health and safety management approach.

Competition

The investment management business is highly competitive, with points of differentiation including investment performance, fees, range of products offered, brand recognition, business reputation, financial strength, depth and continuity of relationships and quality of service. We compete with a large number of investment management firms, commercial banks, investment banks, broker-dealers, hedge funds, insurance companies and, increasingly, firms outside the traditional financial services industry, such as technology providers. Many of these competitors have greater financial resources and higher brand recognition than Invesco. However, we believe our experience as a trusted partner to clients, the quality and diversity of our investment capabilities, product types and channels of distribution, and our commitment to innovation enable us to compete effectively in the global investment management business. There are few independent investment managers with teams as globally diverse as Invesco's and with the same breadth and depth of investment capabilities and vehicles. We offer multiple investment objectives within the various asset classes and products that we manage. We also believe being an independent investment manager is a competitive advantage, as our business model avoids conflicts that are inherent within institutions that both manage and distribute and/or service those products. Lastly, we believe continued execution against our strategic objectives will further strengthen our long-term competitive position.

Management Contracts

We derive substantially all of our revenues from investment management contracts. Fees vary with the type of assets being managed, with higher fees earned on actively managed equity and balanced accounts, along with real estate and other alternative asset products, and lower fees earned on fixed income, money market and stable value accounts and ETFs. Investment management contracts are generally terminable upon thirty or fewer days' notice. Typically, retail investors may withdraw their funds at any time without prior notice and institutional clients may elect to terminate their relationship with investment managers or reduce the aggregate amount of AUM with very short notice periods.

Risk Management

Invesco is committed to continually strengthening and evolving our risk management approach and activities to ensure they keep pace with business change and client expectations. We believe a key factor in our ability to manage through challenging market conditions and significant business change is our integrated and global approach to risk management. We seek to embed risk management in our day-to-day decision-making as well as our strategic planning process, while our global risk management framework seeks to enable consistent and meaningful risk dialogue up, down and across the company.

Our framework leverages two governance structures: (i) our Global Performance and Risk Committee oversees the management of core investment risks; and (ii) our Enterprise Risk Management Committee oversees the management of all other business- and strategy-related risks. A network of regional, business unit and risk-specific management committees, with oversight by the Enterprise Risk Management Committee, provides ongoing identification, assessment, management and monitoring of existing and emerging risks across all domains of our business.

Available Information

The SEC maintains a website that contains reports, proxy and information statements and other information regarding issuers at www.sec.gov. We make available free of charge on our website, www.invesco.com/corporate, our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, proxy statement and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC.

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