Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Forward-Looking Statements

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with the Condensed Consolidated Financial Statements and related Notes thereto, which appear elsewhere in this Report. Except for the historical financial information, this Report may include statements that constitute “forward-looking statements” under the United States securities laws. Forward-looking statements include information concerning future results of our operations, expenses, earnings, liquidity, cash flow, capital expenditures, and assets under management (AUM) which could differ materially from actual results due to known and unknown risks and other important factors, including, but not limited to, industry or market conditions, geopolitical events and pandemics or health crises and their respective potential impact on the company, acquisitions and divestitures, debt and our ability to obtain additional financing or make payments, regulatory developments, demand for and pricing of our products, the prospects for certain legal contingencies, and other aspects of our business or general economic conditions. In addition, words such as “believes,” “expects,” “anticipates,” “intends,” “plans,” “estimates,” “projects,” “forecasts,” and future or conditional verbs such as “will,” “may,” “could,” “should,” and “would” as well as any other statement that necessarily depends on future events, are intended to identify forward-looking statements. None of this information should be considered in isolation from, or as a substitute for, historical financial statements.

Forward-looking statements are not guarantees, and they involve risks, uncertainties and assumptions. There can be no assurance that actual results will not differ materially from our expectations. We caution investors not to rely unduly on any forward-looking statements and urge you to carefully consider the risks described in this Report and our most recent Form 10-K and Forms 10-Q filed with the SEC.

You may obtain these reports from the SEC’s website at www.sec.gov. We expressly disclaim any obligation to update the information in any public disclosure if any forward-looking statement later turns out to be inaccurate.

References

In this Report, unless otherwise specified, the terms “we,” “our,” “us,” “company,” “firm,” and “Invesco” refer to Invesco Ltd., a company incorporated in Bermuda, and its subsidiaries.

Executive Overview

The following executive overview summarizes the significant trends affecting our results of operations and financial condition for the periods presented. This overview and the remainder of this management’s discussion and analysis and supplements should be read in conjunction with the Condensed Consolidated Financial Statements of Invesco Ltd. and the notes thereto contained elsewhere in this Report.

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 solutions designed to deliver key outcomes aligned to client needs. One of Invesco's core strengths, and a key differentiator for the company within the industry, is our diversification across asset classes, distribution channels and geographies. This broad diversification helps to mitigate the impact on Invesco of different market cycles and enables the company to take advantage of growth opportunities in various markets and channels.

Volatility and uncertainty continued to define global financial markets during the third quarter of 2023. With interest rates rising and investors awaiting more clarity from central bankers, cash has been moved to the sidelines where investors can earn acceptable returns while they await more certainty. We are strongly positioned to capture flows with scale, performance and competitive strength in capabilities that will drive the asset management industry forward including Exchange-traded funds (ETFs), Fixed Income, Private Markets and APAC.

The table below summarizes returns based on price appreciation/(depreciation) of several major market indices for the three and nine months ended September 30, 2023 and 2022:


	Index expressed in currency	Three months ended September 30,						Nine months ended September 30,
Equity Index	2023			2022			2023			2022
S&P 500	U.S. Dollar	(3.7)	%		(5.3)	%		11.7	%		(24.8)	%
FTSE 100	British Pound	1.0	%		(3.8)	%		2.1	%		(6.7)	%
FTSE 100	U.S. Dollar	(3.0)	%		(12.1)	%		3.0	%		(23.2)	%
S&P/TSX 60 Index	Canadian Dollar	(3.5)	%		(2.6)	%		0.3	%		(13.2)	%
S&P/TSX 60 Index	U.S. Dollar	(5.7)	%		(9.0)	%		0.2	%		(20.4)	%
MSCI Emerging Markets	U.S. Dollar	(3.7)	%		(12.5)	%		(0.4)	%		(28.9)	%
Bond Index
Barclays U.S. Aggregate Bond	U.S. Dollar	(3.2)	%		(4.8)	%		(1.2)	%		(14.6)	%

We had $2.6 billion of net long-term inflows for the quarter with net long-term inflows of $11.8 billion from ETFs.

We remain highly focused on expense management and capital priorities, investing in our key capabilities, and efficiently allocating our resources. We are undertaking a multi-quarter reorganization plan to simplify and streamline the organization to achieve greater scale, consistent investment quality, and improved profitability. In connection with these efforts, we incurred $39.3 million of costs due to organizational changes during the third quarter.

Consistent with our commitment to improve our leverage profile, we continue to maintain our debt at lower levels. We ended the quarter with no balance on our credit facility and continued to maintain debt below $1.5 billion. We remain committed to a sustainable dividend and to returning capital to shareholders through a combination of modestly increasing dividends and share repurchases.

Presentation of Management’s Discussion and Analysis of Financial Condition and Results of Operations - Impact of Consolidated Investment Products

The company provides investment management services to, and has transactions with, various retail mutual funds and similar entities, private equity, real estate, fund-of-funds, collateralized loan obligations (CLOs) and other investment entities sponsored by the company for the investment of client assets in the normal course of business. The company serves as the investment manager, making day-to-day investment decisions concerning the assets of the products. Investment products that are consolidated are referred to in this Report as CIP. The company’s economic risk with respect to each investment in CIP is limited to its equity ownership and any uncollected management and performance fees. See also Note 11, "Consolidated Investment Products," for additional information regarding the impact of the consolidation of managed funds.

The majority of the company’s CIP balances are CLO-related. The collateral assets of the CLOs are held solely to satisfy the obligations of the CLOs. The company has no right to the benefits from, nor does it bear the risks associated with, the collateral assets held by the CLOs, beyond the company’s direct investments in, and management and performance fees generated from, the CLOs. If the company were to liquidate, the collateral assets would not be available to the general creditors of the company, and as a result, the company does not consider them to be company assets. Likewise, the investors in the CLOs have no recourse to the general credit of the company for the notes issued by the CLOs. The company therefore does not consider this debt to be a company liability.

Due to the significant impact that CIP has on the presentation of the company’s Consolidated Financial Statements, the company has elected to deconsolidate these products in its non-GAAP disclosures (among other adjustments). See "Schedule of Non-GAAP Information" for additional information regarding these adjustments. The following discussion therefore combines the results presented under U.S. GAAP with the company’s non-GAAP presentation.

This Management’s Discussion and Analysis of Financial Condition and Results of Operations contains four distinct sections, which follow the AUM discussion:

Results of Operations (three and nine months ended September 30, 2023 compared to three and nine months ended September 30, 2022);
Schedule of Non-GAAP Information;
Balance Sheet Discussion; and
Liquidity and Capital Resources.

Summary Operating Information

Wherever a non-GAAP measure is referenced, a disclosure will follow in the narrative or in the note referring the reader to the Schedule of Non-GAAP Information, where additional details regarding the use of the non-GAAP measure by the company are disclosed, along with reconciliations of the most directly comparable U.S. GAAP measures to the non-GAAP measures. To further enhance the readability of the Results of Operations section, separate tables for each of the revenue, expense and other income and expenses (non-operating income/expense) sections of the income statement introduce the narrative that follows, providing a section-by-section review of the company’s income statements for the periods presented.

Summary operating information is presented in the table below:


(in millions, other than per common share amounts, operating margins and AUM)	Three months ended September 30,						Nine months ended September 30,
U.S. GAAP Financial Measures Summary	2023			2022			2023			2022
Operating revenues	$	1,442.0		$	1,445.7		$	4,303.0		$	4,605.5
Operating income	$	227.7		$	350.2		$	641.0		$	1,072.6
Operating margin	15.8		%	24.2		%	14.9		%	23.3		%
Net income attributable to Invesco Ltd.	$	131.4		$	177.4		$	408.6		$	496.1
Diluted EPS	$	0.29		$	0.39		$	0.89		$	1.08

Non-GAAP Financial Measures Summary(1)
Net revenues	$	1,098.2		$	1,110.6		$	3,264.8		$	3,536.9
Adjusted operating income	$	309.2		$	369.4		$	938.1		$	1,275.9
Adjusted operating margin	28.2		%	33.3		%	28.7		%	36.1		%
Adjusted net income attributable to Invesco Ltd.	$	159.2		$	155.8		$	477.0		$	595.4
Adjusted diluted EPS	$	0.35		$	0.34		$	1.04		$	1.29

Assets Under Management
Ending AUM (billions)	$	1,487.3		$	1,323.3		$	1,487.3		$	1,323.3
Average AUM (billions)	$	1,528.7		$	1,416.2		$	1,495.5		$	1,472.8

(1)Net revenues, Adjusted operating income (and by calculation, Adjusted operating margin), and Adjusted net income attributable to Invesco Ltd. (and by calculation, Adjusted diluted EPS) are non-GAAP financial measures, based on methodologies other than U.S. GAAP. See “Schedule of Non-GAAP Information” for a reconciliation of the most directly comparable U.S. GAAP measures to the non-GAAP measures.

Investment Capabilities Performance Overview

Invesco's first strategic objective is to achieve strong investment performance over the long-term for our clients. The table below presents the one-, three-, five-, and ten-year performance of our actively managed investment products measured by the percentage of AUM in the top half of benchmark and in the top half of peer group.(1)


	Benchmark Comparison								Peer Group Comparison
	% of AUM In Top Half of Benchmark								% of AUM in Top Half of Peer Group
	1yr		3yr		5yr		10yr		1yr		3yr		5yr		10yr
Equities (2)
U.S. Core (4%)	31	%	42	%	21	%	16	%	21	%	—	%	16	%	12	%
U.S. Growth (6%)	37	%	12	%	25	%	42	%	37	%	—	%	12	%	12	%
U.S. Value (6%)	70	%	62	%	100	%	62	%	62	%	62	%	49	%	49	%
Sector (1%)	45	%	8	%	2	%	24	%	45	%	43	%	22	%	54	%
U.K. (1%)	95	%	59	%	40	%	47	%	63	%	100	%	46	%	41	%
Canadian (<1%)	88	%	100	%	88	%	45	%	100	%	100	%	67	%	—	%
Asian (4%)	45	%	58	%	76	%	91	%	63	%	36	%	36	%	81	%
Continental European (1%)	73	%	74	%	25	%	74	%	78	%	81	%	40	%	70	%
Global (5%)	87	%	33	%	36	%	78	%	85	%	79	%	9	%	15	%
Global Ex U.S. and Emerging Markets (7%)	77	%	18	%	35	%	99	%	87	%	13	%	16	%	11	%
Fixed Income (2)
Money Market (29%)	97	%	91	%	97	%	100	%	86	%	87	%	87	%	99	%
U.S. Fixed Income (10%)	74	%	76	%	84	%	97	%	62	%	57	%	63	%	93	%
Global Fixed Income (6%)	75	%	80	%	93	%	93	%	69	%	68	%	69	%	93	%
Stable Value (6%)	—	%	100	%	100	%	100	%	97	%	97	%	97	%	100	%
Other (2)
Alternatives (5%)	76	%	76	%	70	%	75	%	41	%	61	%	55	%	56	%
Balanced (7%)	47	%	62	%	66	%	60	%	51	%	77	%	90	%	94	%

(1) Excludes passive products, closed-end funds, private equity limited partnerships, non-discretionary funds, unit investment trusts (UITs), fund of funds with component funds managed by Invesco, stable value building block funds and collateralized debt obligations. Certain funds and products were excluded from the analysis because of limited benchmark or peer group data. Had these been available, results may have been different. These results are preliminary and subject to revision.

Data as of September 30, 2023. AUM measured versus benchmark on a one, three, five and ten year basis represents 57%, 57%, 54% and 49% of total Invesco AUM, and AUM measured versus peer group in the one, three, five and ten year quartile rankings represents 44%, 44%, 44% and 40% of total Invesco AUM, respectively. Peer group rankings are sourced from a widely-used third-party ranking agency in each fund’s market (e.g., Morningstar, IA, Lipper, eVestment, Mercer, Galaxy, SITCA, Value Research) and asset-weighted in USD. Rankings are as of prior quarter-end for most institutional products and prior month-end for Australian retail funds due to their late release by third parties. Rankings are calculated against all funds in each peer group. Rankings for the primary share class of the most representative fund in each composite are applied to all products within each composite. Performance assumes the reinvestment of dividends. Past performance is not indicative of future results and may not reflect an investor’s experience.

(2) Numbers in parenthesis reflect AUM for each investment product (see Note above for exclusions) as a percentage of the total AUM for the five-year peer group ($650.3 billion).

Assets Under Management

The following presentation and discussion of AUM includes Passive and Active AUM. Passive AUM includes index-based ETFs, UITs, non-management fee earning AUM and other passive mandates. Active AUM is total AUM less Passive AUM.

Non-management fee earning AUM includes non-management fee earning ETFs, UITs and product leverage. The net flows in non-management fee earning AUM can be relatively short-term in nature and, due to the relatively low revenue yield, can have a significant impact on overall net revenue yield.

The AUM tables and the discussion below refer to certain AUM as long-term. Long-term inflows and the underlying reasons for the movements in this line item include investments from new clients, existing clients adding new accounts/funds or contributions/subscriptions into existing accounts/funds. Long-term outflows reflect client redemptions from accounts/funds and include the return of invested capital upon the maturity. We present net flows into money market funds separately because shareholders of those funds typically use them as short-term funding vehicles and the flows are particularly sensitive to short-term interest rate movements.

Changes in AUM by Investment approach were as follows:


	Three months ended September 30,
	2023						2022
(in billions)	Total AUM		Active		Passive		Total AUM		Active		Passive
Beginning Assets (June 30)	$	1,538.2	$	1,016.6	$	521.6	$	1,390.4	$	957.9	$	432.5
Long-term inflows	67.4		36.0		31.4		68.7		44.5		24.2
Long-term outflows	(64.8)		(46.9)		(17.9)		(76.4)		(51.8)		(24.6)
Net long-term flows	2.6		(10.9)		13.5		(7.7)		(7.3)		(0.4)
Net flows in non-management fee earning AUM	3.6		—		3.6		1.9		—		1.9
Net flows in money market funds	(16.1)		(16.1)		—		10.0		10.0		—
Total net flows	(9.9)		(27.0)		17.1		4.2		2.7		1.5
Reinvested distributions	1.1		1.1		—		0.9		0.9		—
Market gains and losses	(34.2)		(17.7)		(16.5)		(55.1)		(32.0)		(23.1)

Dispositions	(1.4)		(1.4)		—		—		—		—
Foreign currency translation	(6.5)		(5.5)		(1.0)		(17.1)		(15.4)		(1.7)
Ending Assets (September 30)	$	1,487.3	$	966.1	$	521.2	$	1,323.3	$	914.1	$	409.2
Average AUM
Average long-term AUM	$	1,101.0	$	780.3	$	320.7	$	1,071.9	$	793.0	$	278.9
Average AUM	$	1,528.7	$	994.5	$	534.2	$	1,416.2	$	961.6	$	454.6
Average QQQ AUM	$	203.4	N/A		$	203.4	$	165.9	N/A		$	165.9


	Nine months ended September 30,
	2023						2022
(in billions)	Total AUM		Active		Passive		Total AUM		Active		Passive
Beginning Assets (December 31)	$	1,409.2	$	976.2	$	433.0	$	1,610.9	$	1,082.5	$	528.4
Long-term inflows	218.1		123.0		95.1		256.4		155.0		101.4
Long-term outflows	(214.6)		(144.8)		(69.8)		(253.7)		(172.8)		(80.9)
Net long-term flows	3.5		(21.8)		25.3		2.7		(17.8)		20.5
Net flows in non-management fee earning AUM	3.1		—		3.1		(1.1)		—		(1.1)
Net flows in money market funds	7.0		7.0		—		26.3		26.3		—
Total net flows	13.6		(14.8)		28.4		27.9		8.5		19.4
Reinvested distributions	3.1		3.1		—		3.5		3.5		—
Market gains and losses	74.2		13.1		61.1		(278.3)		(143.6)		(134.7)

Dispositions	(1.4)		(1.4)		—		—		—		—
Foreign currency translation	(11.4)		(10.1)		(1.3)		(40.7)		(36.8)		(3.9)
Ending Assets (September 30)	$	1,487.3	$	966.1	$	521.2	$	1,323.3	$	914.1	$	409.2
Average AUM
Average long-term AUM	$	1,090.0	$	785.6	$	304.4	$	1,125.6	$	839.4	$	286.2
Average AUM	$	1,495.5	$	1,000.9	$	494.7	$	1,472.8	$	1,000.3	$	472.5
Average QQQ AUM	$	180.1	N/A		$	180.1	$	174.6	N/A		$	174.6


	Three months ended September 30,		Nine months ended September 30,
	2023	2022	2023	2022
Revenue yield (bps) (1)
U.S. GAAP Gross revenue yield	40.0	43.7	40.8	44.6
Net revenue yield ex performance fees ex QQQ (2)	32.9	35.3	32.7	36.0
Active net revenue yield ex performance fees	38.5	40.6	37.9	41.3
Passive net revenue yield ex QQQ (2)	16.3	17.8	16.3	18.2

(1) U.S. GAAP Gross revenue yield is not considered a meaningful effective fee rate measure. Gross revenue yield on AUM is equal to U.S. GAAP annualized total Operating revenues divided by average AUM, excluding Invesco Great Wall Fund Management Company Limited (Invesco Great Wall or IGW) AUM. The average AUM for IGW in the three and nine months ended September 30, 2023 was $86.1 billion and $88.9 billion (three and nine months ended September 30, 2022: $93.1 billion and $95.4 billion). It is appropriate to exclude the average AUM of IGW as the revenues resulting from these AUM are not presented in our operating revenues. This ratio is not a good measure because the numerator of the U.S. GAAP Gross revenue yield excludes the management fees earned from CIP; however, the denominator of the measure includes the AUM of these investment products. Net revenue yield metrics include the Net revenues and Average AUM of IGW and CIP. See “Schedule of Non-GAAP Information” for a reconciliation of Operating revenues to Net revenues.

(2) Performance fees are earned when certain performance metrics are achieved and QQQ ETFs do not earn net revenues. Therefore, net revenue yield is calculated excluding performance fees and QQQ AUM. Passive net revenue yield is calculated excluding QQQ AUM.

Flows

There are numerous drivers of AUM inflows and outflows, including individual investor decisions to change investments, fiduciaries and other gatekeepers making broad asset allocation decisions on behalf of their clients, and reallocation of investments within portfolios. We are not a party to these asset allocation decisions, as the company does not generally have access to the underlying investor’s decision-making process, including their risk appetite or liquidity needs. Therefore, the company is not in a position to provide meaningful information regarding the drivers of inflows and outflows.

Market Returns

Market gains and losses include the net change in AUM resulting from changes in market values of the underlying securities from period to period. The table in the “Executive Overview” section of this Management’s Discussion and Analysis summarizes returns based on price appreciation/(depreciation) of several major market indices for the three and nine months ended September 30, 2023 and 2022.

Foreign Exchange Rates

During the three and nine months ended September 30, 2023, we experienced a decrease in AUM of $6.5 billion and $11.4 billion, respectively, due to changes in foreign exchange rates. In the three and nine months ended September 30, 2022, AUM decreased by $17.1 billion and $40.7 billion, respectively, due to foreign exchange rate changes.

Total AUM by Channel (1)


	Three months ended September 30,
	2023						2022
(in billions)	Total		Retail		Institutional			Total		Retail		Institutional
Beginning Assets (June 30)	$	1,538.2	$	968.5	$	569.7		$	1,390.4	$	898.8	$	491.6
Long-term inflows	67.4		49.9		17.5			68.7		47.3		21.4
Long-term outflows	(64.8)		(45.6)		(19.2)			(76.4)		(58.9)		(17.5)
Net long-term flows	2.6		4.3		(1.7)			(7.7)		(11.6)		3.9
Net flows in non-management fee earning AUM	3.6		3.3		0.3			1.9		1.8		0.1
Net flows in money market funds	(16.1)		—		(16.1)			10.0		(1.0)		11.0
Total net flows	(9.9)		7.6		(17.5)			4.2		(10.8)		15.0
Reinvested distributions	1.1		1.0		0.1			0.9		0.8		0.1

Market gains and losses	(34.2)		(32.2)		(2.0)			(55.1)		(47.4)		(7.7)
Dispositions	(1.4)		—		(1.4)			—		—		—
Foreign currency translation	(6.5)		(2.5)		(4.0)			(17.1)		(7.4)		(9.7)
Ending Assets (September 30)	$	1,487.3	$	942.4	$	544.9		$	1,323.3	$	834.0	$	489.3


	Nine months ended September 30,
	2023						2022
(in billions)	Total		Retail		Institutional			Total		Retail		Institutional
Beginning Assets (December 31)	$	1,409.2	$	872.3	$	536.9		$	1,610.9	$	1,106.5	$	504.4
Long-term inflows	218.1		159.1		59.0			256.4		190.8		65.6
Long-term outflows	(214.6)		(158.3)		(56.3)			(253.7)		(200.3)		(53.4)
Net long-term flows	3.5		0.8		2.7			2.7		(9.5)		12.2
Net flows in non-management fee earning AUM	3.1		1.7		1.4			(1.1)		2.4		(3.5)
Net flows in money market funds	7.0		1.1		5.9			26.3		1.5		24.8
Total net flows	13.6		3.6		10.0			27.9		(5.6)		33.5
Reinvested distributions	3.1		2.8		0.3			3.5		3.2		0.3

Market gains and losses	74.2		67.1		7.1			(278.3)		(254.3)		(24.0)
Dispositions	(1.4)		—		(1.4)			—		—		—
Foreign currency translation	(11.4)		(3.4)		(8.0)			(40.7)		(15.8)		(24.9)
Ending Assets (September 30)	$	1,487.3	$	942.4	$	544.9		$	1,323.3	$	834.0	$	489.3

See accompanying notes immediately following these AUM tables.

Total AUM by Client Domicile (2)


	Three months ended September 30,
	2023								2022
(in billions)	Total		Americas		APAC		EMEA			Total		Americas		APAC		EMEA
Beginning Assets (June 30)	$	1,538.2	$	1,112.8	$	221.9	$	203.5		$	1,390.4	$	973.5	$	224.4	$	192.5
Long-term inflows	67.4		32.7		18.3		16.4			68.7		34.8		20.1		13.8
Long-term outflows	(64.8)		(33.9)		(15.5)		(15.4)			(76.4)		(44.7)		(15.0)		(16.7)
Net long-term flows	2.6		(1.2)		2.8		1.0			(7.7)		(9.9)		5.1		(2.9)
Net flows in non-management fee earning AUM	3.6		5.0		0.6		(2.0)			1.9		2.8		0.6		(1.5)
Net flows in money market funds	(16.1)		(15.1)		(1.0)		—			10.0		10.9		(0.4)		(0.5)
Total net flows	(9.9)		(11.3)		2.4		(1.0)			4.2		3.8		5.3		(4.9)
Reinvested distributions	1.1		1.0		—		0.1			0.9		0.8		—		0.1
Market gains and losses	(34.2)		(31.3)		(0.8)		(2.1)			(55.1)		(35.9)		(9.4)		(9.8)

Dispositions	(1.4)		(1.4)		—		—			—		—		—		—
Foreign currency translation	(6.5)		(0.6)		(3.0)		(2.9)			(17.1)		(1.4)		(10.0)		(5.7)
Ending Assets (September 30)	$	1,487.3	$	1,069.2	$	220.5	$	197.6		$	1,323.3	$	940.8	$	210.3	$	172.2


	Nine months ended September 30,
	2023								2022
(in billions)	Total		Americas		APAC		EMEA			Total		Americas		APAC		EMEA
Beginning Assets (December 31)	$	1,409.2	$	999.4	$	223.5	$	186.3		$	1,610.9	$	1,132.5	$	247.3	$	231.1
Long-term inflows	218.1		110.7		56.5		50.9			256.4		145.3		56.9		54.2
Long-term outflows	(214.6)		(114.2)		(52.2)		(48.2)			(253.7)		(151.2)		(46.1)		(56.4)
Net long-term flows	3.5		(3.5)		4.3		2.7			2.7		(5.9)		10.8		(2.2)
Net flows in non-management fee earning AUM	3.1		5.9		(0.4)		(2.4)			(1.1)		(1.9)		1.4		(0.6)
Net flows in money market funds	7.0		5.8		0.9		0.3			26.3		27.3		0.4		(1.4)
Total net flows	13.6		8.2		4.8		0.6			27.9		19.5		12.6		(4.2)
Reinvested distributions	3.1		3.0		—		0.1			3.5		3.3		—		0.2
Market gains and losses	74.2		60.0		4.4		9.8			(278.3)		(212.2)		(25.3)		(40.8)

Dispositions	(1.4)		(1.4)		—		—			—		—		—		—
Foreign currency translation	(11.4)		—		(12.2)		0.8			(40.7)		(2.3)		(24.3)		(14.1)
Ending Assets (September 30)	$	1,487.3	$	1,069.2	$	220.5	$	197.6		$	1,323.3	$	940.8	$	210.3	$	172.2

See accompanying notes immediately following these AUM tables.

Total AUM by Asset Class (3)


	Three months ended September 30,
	2023																		2022
(in billions)	Total			Equity			Fixed Income			Balanced			Money Market			Alternatives				Total			Equity			Fixed Income			Balanced			Money Market			Alternatives
Beginning Assets (June 30)	$	1,538.2		$	747.1		$	319.0		$	64.2		$	225.7		$	182.2			$	1,390.4		$	644.8		$	309.1		$	72.9		$	164.0		$	199.6
Long-term inflows	67.4			34.6			23.2			2.5			—			7.1				68.7			25.0			30.4			3.2			—			10.1
Long-term outflows	(64.8)			(27.2)			(24.5)			(3.6)			—			(9.5)				(76.4)			(32.4)			(23.9)			(4.7)			—			(15.4)
Net long-term flows	2.6			7.4			(1.3)			(1.1)			—			(2.4)				(7.7)			(7.4)			6.5			(1.5)			—			(5.3)
Net flows in non-management fee earning AUM	3.6			3.4			0.2			—			—			—				1.9			1.8			0.1			—			—			—
Net flows in money market funds	(16.1)			—			—			—			(16.1)			—				10.0			—			0.3			—			9.7			—
Total net flows	(9.9)			10.8			(1.1)			(1.1)			(16.1)			(2.4)				4.2			(5.6)			6.9			(1.5)			9.7			(5.3)
Reinvested distributions	1.1			0.2			0.5			0.1			0.1			0.2				0.9			0.2			0.4			0.1			—			0.2
Market gains and losses	(34.2)			(28.4)			(3.9)			(1.5)			0.4			(0.8)				(55.1)			(36.1)			(7.0)			(5.2)			0.2			(7.0)

Dispositions	(1.4)			—			—			—			—			(1.4)				—			—			—			—			—			—
Foreign currency translation	(6.5)			(3.0)			(1.9)			(0.5)			(0.3)			(0.8)				(17.1)			(5.8)			(5.1)			(2.7)			(1.8)			(1.7)
Ending Assets (September 30)	$	1,487.3		$	726.7		$	312.6		$	61.2		$	209.8		$	177.0			$	1,323.3		$	597.5		$	304.3		$	63.6		$	172.1		$	185.8
Average AUM	$	1,528.7		$	754.3		$	316.1		$	63.6		$	214.3		$	180.4			$	1,416.2		$	669.5		$	311.4		$	69.9		$	168.8		$	196.6
% of total average AUM	100.0		%	49.3		%	20.7		%	4.2		%	14.0		%	11.8		%		100.0		%	47.3		%	22.0		%	4.9		%	11.9		%	13.9		%


	Nine months ended September 30,
	2023																		2022
(in billions)	Total			Equity			Fixed Income			Balanced			Money Market			Alternatives				Total			Equity			Fixed Income			Balanced			Money Market			Alternatives
Beginning Assets (December 31)	$	1,409.2		$	637.0		$	313.7		$	67.1		$	203.5		$	187.9			$	1,610.9		$	841.6		$	334.8		$	88.6		$	148.8		$	197.1
Long-term inflows	218.1			110.2			77.1			9.7			—			21.1				256.4			111.5			88.9			11.8			—			44.2
Long-term outflows	(214.6)			(96.1)			(74.9)			(13.7)			—			(29.9)				(253.7)			(121.0)			(72.8)			(16.4)			—			(43.5)
Net long-term flows	3.5			14.1			2.2			(4.0)			—			(8.8)				2.7			(9.5)			16.1			(4.6)			—			0.7
Net flows in non-management fee earning AUM	3.1			1.9			1.2			—			—			—				(1.1)			2.4			(3.5)			—			—			—
Net flows in money market funds	7.0			—			—			—			7.0			—				26.3			—			0.3			—			26.0			—
Total net flows	13.6			16.0			3.4			(4.0)			7.0			(8.8)				27.9			(7.1)			12.9			(4.6)			26.0			0.7
Reinvested distributions	3.1			0.6			1.3			0.4			0.2			0.6				3.5			1.4			1.1			0.3			—			0.7
Market gains and losses	74.2			75.7			(0.2)			(0.9)			0.5			(0.9)				(278.3)			(224.5)			(31.3)			(15.3)			1.2			(8.4)

Dispositions	(1.4)			—			—			—			—			(1.4)				—			—			—			—			—			—
Foreign currency translation	(11.4)			(2.6)			(5.6)			(1.4)			(1.4)			(0.4)				(40.7)			(13.9)			(13.2)			(5.4)			(3.9)			(4.3)
Ending Assets (September 30)	$	1,487.3		$	726.7		$	312.6		$	61.2		$	209.8		$	177.0			$	1,323.3		$	597.5		$	304.3		$	63.6		$	172.1		$	185.8
Average AUM	$	1,495.5		$	711.7		$	318.4		$	66.0		$	215.3		$	184.1			$	1,472.8		$	716.0		$	317.5		$	75.8		$	161.0		$	202.5
% of total average AUM	100.0		%	47.6		%	21.3		%	4.4		%	14.4		%	12.3		%		100.0		%	48.6		%	21.6		%	5.2		%	10.9		%	13.7		%

See accompanying notes immediately following these AUM tables.

Active AUM by Channel (1)


	Three months ended September 30,
	2023						2022
(in billions)	Total		Retail		Institutional			Total		Retail		Institutional
Beginning Assets (June 30)	$	1,016.6	$	498.3	$	518.3		$	957.9	$	509.0	$	448.9
Long-term inflows	36.0		22.1		13.9			44.5		23.6		20.9
Long-term outflows	(46.9)		(29.5)		(17.4)			(51.8)		(35.8)		(16.0)
Net long-term flows	(10.9)		(7.4)		(3.5)			(7.3)		(12.2)		4.9

Net flows in money market funds	(16.1)		—		(16.1)			10.0		(1.0)		11.0
Total net flows	(27.0)		(7.4)		(19.6)			2.7		(13.2)		15.9
Reinvested distributions	1.1		1.0		0.1			0.9		0.8		0.1

Market gains and losses	(17.7)		(15.8)		(1.9)			(32.0)		(27.1)		(4.9)
Dispositions	(1.4)		—		(1.4)			—		—		—
Foreign currency translation	(5.5)		(2.1)		(3.4)			(15.4)		(6.7)		(8.7)
Ending Assets (September 30)	$	966.1	$	474.0	$	492.1		$	914.1	$	462.8	$	451.3


	Nine months ended September 30,
	2023						2022
(in billions)	Total		Retail		Institutional			Total		Retail		Institutional
Beginning Assets (December 31)	$	976.2	$	482.1	$	494.1		$	1,082.5	$	631.7	$	450.8
Long-term inflows	123.0		73.4		49.6			155.0		91.6		63.4
Long-term outflows	(144.8)		(93.4)		(51.4)			(172.8)		(123.0)		(49.8)
Net long-term flows	(21.8)		(20.0)		(1.8)			(17.8)		(31.4)		13.6

Net flows in money market funds	7.0		1.1		5.9			26.3		1.5		24.8
Total net flows	(14.8)		(18.9)		4.1			8.5		(29.9)		38.4
Reinvested distributions	3.1		2.8		0.3			3.5		3.2		0.3

Market gains and losses	13.1		11.1		2.0			(143.6)		(128.0)		(15.6)
Dispositions	(1.4)		—		(1.4)			—		—		—
Foreign currency translation	(10.1)		(3.1)		(7.0)			(36.8)		(14.2)		(22.6)
Ending Assets (September 30)	$	966.1	$	474.0	$	492.1		$	914.1	$	462.8	$	451.3

See accompanying notes immediately following these AUM tables.

Active AUM by Client Domicile (2)


	Three months ended September 30,
	2023								2022
(in billions)	Total		Americas		APAC		EMEA			Total		Americas		APAC		EMEA
Beginning Assets (June 30)	$	1,016.6	$	706.6	$	187.1	$	122.9		$	957.9	$	649.1	$	191.3	$	117.5
Long-term inflows	36.0		17.0		13.7		5.3			44.5		20.6		18.9		5.0
Long-term outflows	(46.9)		(25.9)		(12.6)		(8.4)			(51.8)		(31.1)		(13.3)		(7.4)
Net long-term flows	(10.9)		(8.9)		1.1		(3.1)			(7.3)		(10.5)		5.6		(2.4)
Net flows in non-management fee earning AUM	—		—		—		—			—		—		—		—
Net flows in money market funds	(16.1)		(15.1)		(1.0)		—			10.0		10.9		(0.4)		(0.5)
Total net flows	(27.0)		(24.0)		0.1		(3.1)			2.7		0.4		5.2		(2.9)
Reinvested distributions	1.1		1.0		—		0.1			0.9		0.8		—		0.1
Market gains and losses	(17.7)		(13.9)		(2.3)		(1.5)			(32.0)		(19.7)		(6.8)		(5.5)

Dispositions	(1.4)		(1.4)		—		—			—		—		—		—
Foreign currency translation	(5.5)		(0.6)		(2.4)		(2.5)			(15.4)		(1.3)		(8.8)		(5.3)
Ending Assets (September 30)	$	966.1	$	667.7	$	182.5	$	115.9		$	914.1	$	629.3	$	180.9	$	103.9


	Nine months ended September 30,
	2023								2022
(in billions)	Total		Americas		APAC		EMEA			Total		Americas		APAC		EMEA
Beginning Assets (December 31)	$	976.2	$	670.8	$	191.0	$	114.4		$	1,082.5	$	724.5	$	208.8	$	149.2
Long-term inflows	123.0		56.4		46.5		20.1			155.0		83.8		52.5		18.7
Long-term outflows	(144.8)		(79.8)		(43.4)		(21.6)			(172.8)		(102.9)		(41.2)		(28.7)
Net long-term flows	(21.8)		(23.4)		3.1		(1.5)			(17.8)		(19.1)		11.3		(10.0)
Net flows in non-management fee earning AUM	—		—		—		—			—		—		0.1		(0.1)
Net flows in money market funds	7.0		5.8		0.9		0.3			26.3		27.3		0.4		(1.4)
Total net flows	(14.8)		(17.6)		4.0		(1.2)			8.5		8.2		11.8		(11.5)
Reinvested distributions	3.1		3.0		—		0.1			3.5		3.3		—		0.2
Market gains and losses	13.1		12.9		(1.6)		1.8			(143.6)		(104.5)		(18.2)		(20.9)

Dispositions	(1.4)		(1.4)		—		—			—		—		—		—
Foreign currency translation	(10.1)		—		(10.9)		0.8			(36.8)		(2.2)		(21.5)		(13.1)
Ending Assets (September 30)	$	966.1	$	667.7	$	182.5	$	115.9		$	914.1	$	629.3	$	180.9	$	103.9

See accompanying notes immediately following these AUM tables.

Active AUM by Asset Class (3)


	Three months ended September 30,
	2023																		2022
(in billions)	Total			Equity			Fixed Income			Balanced			Money Market			Alternatives				Total			Equity			Fixed Income			Balanced			Money Market			Alternatives
Beginning Assets (June 30)	$	1,016.6		$	300.6		$	274.0		$	63.4		$	225.7		$	152.9			$	957.9		$	287.5		$	270.6		$	72.0		$	164.0		$	163.8
Long-term inflows	36.0			10.2			19.4			2.5			—			3.9				44.5			10.4			25.2			3.2			—			5.7
Long-term outflows	(46.9)			(14.9)			(21.4)			(3.6)			—			(7.0)				(51.8)			(16.9)			(21.5)			(4.7)			—			(8.7)
Net long-term flows	(10.9)			(4.7)			(2.0)			(1.1)			—			(3.1)				(7.3)			(6.5)			3.7			(1.5)			—			(3.0)
Net flows in non-management fee earning AUM	—			0.1			(0.1)			—			—			—				—			—			—			—			—			—
Net flows in money market funds	(16.1)			—			—			—			(16.1)			—				10.0			—			0.3			—			9.7			—
Total net flows	(27.0)			(4.6)			(2.1)			(1.1)			(16.1)			(3.1)				2.7			(6.5)			4.0			(1.5)			9.7			(3.0)
Reinvested distributions	1.1			0.2			0.5			0.1			0.1			0.2				0.9			0.2			0.4			0.1			—			0.2
Market gains and losses	(17.7)			(11.8)			(4.1)			(1.5)			0.4			(0.7)				(32.0)			(16.5)			(5.6)			(5.1)			0.2			(5.0)

Dispositions	(1.4)			—			—			—			—			(1.4)				—			—			—			—			—			—
Foreign currency translation	(5.5)			(2.3)			(1.7)			(0.5)			(0.3)			(0.7)				(15.4)			(4.7)			(4.7)			(2.7)			(1.8)			(1.5)
Ending Assets (September 30)	$	966.1		$	282.1		$	266.6		$	60.4		$	209.8		$	147.2			$	914.1		$	260.0		$	264.7		$	62.8		$	172.1		$	154.5
Average AUM	$	994.5		$	296.9		$	269.9		$	62.8		$	214.3		$	150.6			$	961.6		$	290.7		$	271.7		$	69.0		$	168.8		$	161.4
% of total average AUM	100.0		%	29.9		%	27.1		%	6.3		%	21.6		%	15.1		%		100.0		%	30.2		%	28.3		%	7.1		%	17.6		%	16.8		%


	Nine months ended September 30,
	2023																		2022
(in billions)	Total			Equity			Fixed Income			Balanced			Money Market			Alternatives				Total			Equity			Fixed Income			Balanced			Money Market			Alternatives
Beginning Assets (December 31)	$	976.2		$	277.5		$	273.0		$	66.3		$	203.5		$	155.9			$	1,082.5		$	389.6		$	293.1		$	87.4		$	148.8		$	163.6
Long-term inflows	123.0			37.6			63.2			9.7			—			12.5				155.0			43.2			73.5			11.8			—			26.5
Long-term outflows	(144.8)			(47.2)			(64.9)			(13.7)			—			(19.0)				(172.8)			(65.6)			(65.1)			(16.3)			—			(25.8)
Net long-term flows	(21.8)			(9.6)			(1.7)			(4.0)			—			(6.5)				(17.8)			(22.4)			8.4			(4.5)			—			0.7
Net flows in non-management fee earning AUM	—			—			—			—			—			—				—			—			—			—			—			—
Net flows in money market funds	7.0			—			—			—			7.0			—				26.3			—			0.3			—			26.0			—
Total net flows	(14.8)			(9.6)			(1.7)			(4.0)			7.0			(6.5)				8.5			(22.4)			8.7			(4.5)			26.0			0.7
Reinvested distributions	3.1			0.6			1.3			0.4			0.2			0.6				3.5			1.4			1.1			0.3			—			0.7
Market gains and losses	13.1			15.2			(0.5)			(0.9)			0.5			(1.2)				(143.6)			(97.2)			(25.9)			(15.0)			1.2			(6.7)

Dispositions	(1.4)			—			—			—			—			(1.4)				—			—			—			—			—			—
Foreign currency translation	(10.1)			(1.6)			(5.5)			(1.4)			(1.4)			(0.2)				(36.8)			(11.4)			(12.3)			(5.4)			(3.9)			(3.8)
Ending Assets (September 30)	$	966.1		$	282.1		$	266.6		$	60.4		$	209.8		$	147.2			$	914.1		$	260.0		$	264.7		$	62.8		$	172.1		$	154.5
Average AUM	$	1,000.9		$	293.7		$	273.4		$	65.2		$	215.3		$	153.3			$	1,000.3		$	320.8		$	277.7		$	75.0		$	161.0		$	165.8
% of total average AUM	100.0		%	29.4		%	27.3		%	6.5		%	21.5		%	15.3		%		100.0		%	32.1		%	27.8		%	7.4		%	16.1		%	16.6		%

See accompanying notes immediately following these AUM tables.

Passive AUM by Channel (1)


	Three months ended September 30,
	2023						2022
(in billions)	Total		Retail		Institutional			Total		Retail		Institutional
Beginning Assets (June 30)	$	521.6	$	470.2	$	51.4		$	432.5	$	389.8	$	42.7
Long-term inflows	31.4		27.8		3.6			24.2		23.7		0.5
Long-term outflows	(17.9)		(16.1)		(1.8)			(24.6)		(23.1)		(1.5)
Net long-term flows	13.5		11.7		1.8			(0.4)		0.6		(1.0)
Net flows in non-management fee earning AUM	3.6		3.3		0.3			1.9		1.8		0.1

Total net flows	17.1		15.0		2.1			1.5		2.4		(0.9)


Market gains and losses	(16.5)		(16.4)		(0.1)			(23.1)		(20.3)		(2.8)

Foreign currency translation	(1.0)		(0.4)		(0.6)			(1.7)		(0.7)		(1.0)
Ending Assets (September 30)	$	521.2	$	468.4	$	52.8		$	409.2	$	371.2	$	38.0


	Nine months ended September 30,
	2023						2022
(in billions)	Total		Retail		Institutional			Total		Retail		Institutional
Beginning Assets (December 31)	$	433.0	$	390.2	$	42.8		$	528.4	$	474.8	$	53.6
Long-term inflows	95.1		85.7		9.4			101.4		99.2		2.2
Long-term outflows	(69.8)		(64.9)		(4.9)			(80.9)		(77.3)		(3.6)
Net long-term flows	25.3		20.8		4.5			20.5		21.9		(1.4)
Net flows in non-management fee earning AUM	3.1		1.7		1.4			(1.1)		2.4		(3.5)

Total net flows	28.4		22.5		5.9			19.4		24.3		(4.9)


Market gains and losses	61.1		56.0		5.1			(134.7)		(126.3)		(8.4)

Foreign currency translation	(1.3)		(0.3)		(1.0)			(3.9)		(1.6)		(2.3)
Ending Assets (September 30)	$	521.2	$	468.4	$	52.8		$	409.2	$	371.2	$	38.0

Passive AUM by Client Domicile (2)


	Three months ended September 30,
	2023								2022
(in billions)	Total		Americas		APAC		EMEA			Total		Americas		APAC		EMEA
Beginning Assets (June 30)	$	521.6	$	406.2	$	34.8	$	80.6		$	432.5	$	324.4	$	33.1	$	75.0
Long-term inflows	31.4		15.7		4.6		11.1			24.2		14.2		1.2		8.8
Long-term outflows	(17.9)		(8.0)		(2.9)		(7.0)			(24.6)		(13.6)		(1.7)		(9.3)
Net long-term flows	13.5		7.7		1.7		4.1			(0.4)		0.6		(0.5)		(0.5)
Net flows in non-management fee earning AUM	3.6		5.0		0.6		(2.0)			1.9		2.8		0.6		(1.5)

Total net flows	17.1		12.7		2.3		2.1			1.5		3.4		0.1		(2.0)

Market gains and losses	(16.5)		(17.4)		1.5		(0.6)			(23.1)		(16.2)		(2.6)		(4.3)


Foreign currency translation	(1.0)		—		(0.6)		(0.4)			(1.7)		(0.1)		(1.2)		(0.4)
Ending Assets (September 30)	$	521.2	$	401.5	$	38.0	$	81.7		$	409.2	$	311.5	$	29.4	$	68.3


	Nine months ended September 30,
	2023								2022
(in billions)	Total		Americas		APAC		EMEA			Total		Americas		APAC		EMEA
Beginning Assets (December 31)	$	433.0	$	328.6	$	32.5	$	71.9		$	528.4	$	408.0	$	38.5	$	81.9
Long-term inflows	95.1		54.3		10.0		30.8			101.4		61.5		4.4		35.5
Long-term outflows	(69.8)		(34.4)		(8.8)		(26.6)			(80.9)		(48.3)		(4.9)		(27.7)
Net long-term flows	25.3		19.9		1.2		4.2			20.5		13.2		(0.5)		7.8
Net flows in non-management fee earning AUM	3.1		5.9		(0.4)		(2.4)			(1.1)		(1.9)		1.3		(0.5)

Total net flows	28.4		25.8		0.8		1.8			19.4		11.3		0.8		7.3

Market gains and losses	61.1		47.1		6.0		8.0			(134.7)		(107.7)		(7.1)		(19.9)


Foreign currency translation	(1.3)		—		(1.3)		—			(3.9)		(0.1)		(2.8)		(1.0)
Ending Assets (September 30)	$	521.2	$	401.5	$	38.0	$	81.7		$	409.2	$	311.5	$	29.4	$	68.3

See accompanying notes immediately following these AUM tables.

Passive AUM by Asset Class (3)


	Three months ended September 30,
	2023																		2022
(in billions)	Total			Equity			Fixed Income			Balanced			Money Market			Alternatives				Total			Equity			Fixed Income			Balanced			Money Market			Alternatives
Beginning Assets (June 30)	$	521.6		$	446.5		$	45.0		$	0.8		$	—		$	29.3			$	432.5		$	357.3		$	38.5		$	0.9		$	—		$	35.8
Long-term inflows	31.4			24.4			3.8			—			—			3.2				24.2			14.6			5.2			—			—			4.4
Long-term outflows	(17.9)			(12.3)			(3.1)			—			—			(2.5)				(24.6)			(15.5)			(2.4)			—			—			(6.7)
Net long-term flows	13.5			12.1			0.7			—			—			0.7				(0.4)			(0.9)			2.8			—			—			(2.3)
Net flows in non-management fee earning AUM	3.6			3.3			0.3			—			—			—				1.9			1.8			0.1			—			—			—
Net flows in money market funds	—			—			—			—			—			—				—			—			—			—			—			—
Total net flows	17.1			15.4			1.0			—			—			0.7				1.5			0.9			2.9			—			—			(2.3)
Reinvested distributions	—			—			—			—			—			—				—			—			—			—			—			—
Market gains and losses	(16.5)			(16.6)			0.2			—			—			(0.1)				(23.1)			(19.6)			(1.4)			(0.1)			—			(2.0)


Foreign currency translation	(1.0)			(0.7)			(0.2)			—			—			(0.1)				(1.7)			(1.1)			(0.4)			—			—			(0.2)
Ending Assets (September 30)	$	521.2		$	444.6		$	46.0		$	0.8		$	—		$	29.8			$	409.2		$	337.5		$	39.6		$	0.8		$	—		$	31.3
Average AUM	$	534.2		$	457.4		$	46.2		$	0.8		$	—		$	29.8			$	454.6		$	378.8		$	39.7		$	0.9		$	—		$	35.2
% of total average AUM	100.0		%	85.6		%	8.7		%	0.1		%	—		%	5.6		%		100.0		%	83.3		%	8.7		%	0.3		%	—		%	7.7		%


	Nine months ended September 30,
	2023																		2022
(in billions)	Total			Equity			Fixed Income			Balanced			Money Market			Alternatives				Total			Equity			Fixed Income			Balanced			Money Market			Alternatives
Beginning Assets (December 31)	$	433.0		$	359.5		$	40.7		$	0.8		$	—		$	32.0			$	528.4		$	452.0		$	41.7		$	1.2		$	—		$	33.5
Long-term inflows	95.1			72.6			13.9			—			—			8.6				101.4			68.3			15.4			—			—			17.7
Long-term outflows	(69.8)			(48.9)			(10.0)			—			—			(10.9)				(80.9)			(55.4)			(7.7)			(0.1)			—			(17.7)
Net long-term flows	25.3			23.7			3.9			—			—			(2.3)				20.5			12.9			7.7			(0.1)			—			—
Net flows in non-management fee earning AUM	3.1			1.9			1.2			—			—			—				(1.1)			2.4			(3.5)			—			—			—
Net flows in money market funds	—			—			—			—			—			—				—			—			—			—			—			—
Total net flows	28.4			25.6			5.1			—			—			(2.3)				19.4			15.3			4.2			(0.1)			—			—
Reinvested distributions	—			—			—			—			—			—				—			—			—			—			—			—
Market gains and losses	61.1			60.5			0.3			—			—			0.3				(134.7)			(127.3)			(5.4)			(0.3)			—			(1.7)


Foreign currency translation	(1.3)			(1.0)			(0.1)			—			—			(0.2)				(3.9)			(2.5)			(0.9)			—			—			(0.5)
Ending Assets (September 30)	$	521.2		$	444.6		$	46.0		$	0.8		$	—		$	29.8			$	409.2		$	337.5		$	39.6		$	0.8		$	—		$	31.3
Average AUM	$	494.7		$	418.1		$	45.0		$	0.8		$	—		$	30.8			$	472.5		$	395.2		$	39.8		$	0.9		$	—		$	36.6
% of total average AUM	100.0		%	84.5		%	9.1		%	0.2		%	—		%	6.2		%		100.0		%	83.6		%	8.4		%	0.2		%	—		%	7.8		%

(1) Channel refers to the internal distribution channel from which the AUM originated. Retail AUM represents AUM distributed by the company’s retail sales team. Institutional AUM represents AUM distributed by our institutional sales team. This aggregation is viewed as a proxy for presenting AUM in the retail and institutional markets in which the company operates.

(2) Client domicile groups AUM by the domicile of the underlying clients.

(3) Asset classes are descriptive groupings of AUM by common type of underlying investments.

Results of Operations for the three and nine months ended September 30, 2023 compared to the three and nine months ended September 30, 2022

The discussion below includes the use of non-GAAP financial measures. See “Schedule of Non-GAAP Information” for additional details and reconciliations of the most directly comparable U.S. GAAP measures to the non-GAAP measures.

Operating Revenues and Net Revenues

The main categories of revenues, and the dollar and percentage change between the periods, are as follows:


	Three months ended								Nine months ended
	September 30,				Variance				September 30,				Variance
(in millions)	2023		2022		$ Change		% Change		2023		2022		$ Change		% Change
Investment management fees	$	1,041.3	$	1,057.3	$	(16.0)	(1.5)	%	$	3,102.7	$	3,351.3	$	(248.6)	(7.4)	%
Service and distribution fees	353.5		340.2		13.3		3.9	%	1,030.0		1,073.0		(43.0)		(4.0)	%
Performance fees	2.0		3.0		(1.0)		(33.3)	%	27.2		13.2		14.0		106.1	%
Other	45.2		45.2		—		—	%	143.1		168.0		(24.9)		(14.8)	%
Total operating revenues	$	1,442.0	$	1,445.7	$	(3.7)	(0.3)	%	$	4,303.0	$	4,605.5	$	(302.5)	(6.6)	%


Revenue Adjustments:
Investment management fees	$	(193.7)	$	(185.5)	$	(8.2)	4.4	%	$	(578.9)	$	(584.5)	$	5.6	(1.0)	%
Service and distribution fees	(219.2)		(232.1)		12.9		(5.6)	%	(675.4)		(730.1)		54.7		(7.5)	%
Other	(35.3)		(33.7)		(1.6)		4.7	%	(111.5)		(124.3)		12.8		(10.3)	%
Total Revenue Adjustments (1)	(448.2)		(451.3)		3.1		(0.7)	%	(1,365.8)		(1,438.9)		73.1		(5.1)	%
Invesco Great Wall	90.7		104.6		(13.9)		(13.3)	%	288.8		334.8		(46.0)		(13.7)	%
CIP	13.7		11.6		2.1		18.1	%	38.8		35.5		3.3		9.3	%
Net revenues (2)	$	1,098.2	$	1,110.6	$	(12.4)	(1.1)	%	$	3,264.8	$	3,536.9	$	(272.1)	(7.7)	%

(1) Total revenue adjustments remove pass through investment management, service and distribution, and other revenues and equal the same amount as the Third-party distribution, service and advisory expenses.

(2) See “Schedule of Non-GAAP Information” for additional important disclosures regarding the use of net revenues.

Our revenues are directly influenced by the level and composition of our AUM. Therefore, movements in global capital market levels, net business inflows (or outflows), changes in the mix of investment products between asset classes and geographies may materially affect our revenues from period to period. See the company’s disclosures regarding the changes in AUM during the three and nine months ended September 30, 2023 and September 30, 2022 in the “Assets Under Management” section above for additional information.

Passive AUM generally earn a lower effective fee rate than active asset classes, and therefore, changes in the mix of AUM have an impact on revenues and net revenue yield. In addition, as fee rates differ across geographic locations, changes to exchange rates have an impact on revenues and net revenue yields.

Average AUM was $1,528.7 billion in the three months ended September 30, 2023 as compared to $1,416.2 billion in the three months ended September 30, 2022. The impact of the increase in AUM on our revenues was offset by changes in the mix of the AUM between the periods as investors continued to shift AUM toward lower yield products during the three months ended September 30, 2023. The impact of foreign exchange rate movements increased Operating revenues by $16.7 million during the three months ended September 30, 2023 as compared to the three months ended September 30, 2022.

Average AUM was $1,495.5 billion in the nine months ended September 30, 2023 as compared to $1,472.8 billion in the nine months ended September 30, 2022. The impact of the increase in AUM on our revenues was offset by changes in the mix of the AUM between the periods as investors continued to shift AUM toward lower yield products during the nine months ended September 30, 2023. The impact of foreign exchange rate movements decreased Operating revenues by $12.6 million during the nine months ended September 30, 2023 as compared to the nine months ended September 30, 2022.

Investment Management Fees

Investment management fees were $1,041.3 million for three months ended September 30, 2023 as compared to $1,057.3 million for three months ended September 30, 2022. The impact of foreign exchange rate movements increased Investment management fees by $13.6 million during the three months ended September 30, 2023 as compared to the three months ended September 30, 2022. After allowing for foreign exchange movements, Investment management fees decreased by $29.6 million. See discussion above on how AUM changes impact our Investment management fees.

Investment management fees were $3,102.7 million for nine months ended September 30, 2023 as compared to $3,351.3 million for nine months ended September 30, 2022. The impact of foreign exchange rate movements decreased Investment management fees by $12.7 million during the nine months ended September 30, 2023 as compared to the nine months ended September 30, 2022. After allowing for foreign exchange movements, Investment management fees decreased by $235.9 million. See discussion above on how AUM changes impact our Investment management fees.

Service and Distribution Fees

In the three months ended September 30, 2023, Service and distribution fees were $353.5 million as compared to $340.2 million for the three months ended September 30, 2022. The increase was a result of higher AUM to which these fees apply.

In the nine months ended September 30, 2023, Service and distribution fees were $1,030.0 million as compared to $1,073.0 million for the nine months ended September 30, 2022. The decrease was primarily due to lower AUM to which these fees apply.

Performance Fees

Performance fees were $2.0 million and $27.2 million for the three and nine months ended September 30, 2023, respectively. Performance fees for the nine months ended September 30, 2023 were primarily generated from real estate products.

Other Revenues

In the three months ended September 30, 2023, Other revenues were flat as compared to the three months ended September 30, 2022.

In the nine months ended September 30, 2023, Other revenues were $143.1 million as compared to $168.0 million for the nine months ended September 30, 2022. The decrease in Other revenues was primarily driven by lower real estate transaction fees and front end fees of $15.8 million and $13.9 million, respectively, partially offset by a $5.0 million increase in other transaction fees.

Invesco Great Wall

The company’s most significant joint venture is our 49% investment in IGW. Management reflects 100% of IGW's results in its Net revenues and Adjusted operating expenses because it is important to evaluate the contribution that IGW is making to the business. The company’s non-GAAP operating results reflect the economics of these holdings on a basis consistent with the underlying AUM and flows. Adjusted net income is reduced by the amount of earnings attributable to the 51% noncontrolling interests. See “Schedule of Non-GAAP Information” for additional disclosures regarding the use of Net revenues.

Net revenues from IGW were $90.7 million and average AUM was $86.1 billion for the three months ended September 30, 2023 (Net revenues were $104.6 million and average AUM was $93.1 billion for the three months ended September 30, 2022). The impact of foreign exchange rate movements during the three months ended September 30, 2023 decreased Net revenues by $5.4 million as compared to the three months ended September 30, 2022. After allowing for foreign exchange movements, Net revenues from IGW decreased $8.5 million. The decrease in IGW revenues is a result of lower average AUM.

Net revenues from IGW were $288.8 million and average AUM was $88.9 billion for the nine months ended September 30, 2023 (Net revenues were $334.8 million and average AUM was $95.4 billion for the nine months ended September 30, 2022). The impact of foreign exchange rate movements during the nine months ended September 30, 2023 decreased Net revenues by $19.2 million as compared to the nine months ended September 30, 2022. After allowing for foreign exchange movements, Net revenues from IGW decreased $26.8 million. The decrease in IGW revenues is a result of changes in the mix of AUM and lower performance fees.

Management, performance and other fees earned from CIP

Management believes that the consolidation of investment products may impact a reader's analysis of our underlying results of operations and could result in investor confusion or the production of information about the company by analysts or external credit rating agencies that is not reflective of the underlying results of operations and financial condition of the company. Accordingly, management believes that it is appropriate to adjust Operating revenues for the impact of CIP in calculating Net revenues. As Management and Performance fees earned by Invesco from the consolidated products are eliminated upon consolidation of the investment products, management believes that it is appropriate to add these fees into Operating revenues in the calculation of Net revenues. See “Schedule of Non-GAAP Information” for additional disclosures regarding the use of Net revenues.

Management and Performance fees earned from CIP were $13.7 million for the three months ended September 30, 2023 (three months ended September 30, 2022: $11.6 million).

Management and Performance fees earned from CIP were $38.8 million for the nine months ended September 30, 2023 (nine months ended September 30, 2022: $35.5 million).

Operating Expenses

The main categories of Operating expenses, and the dollar and percentage changes between periods, are as follows:


	Three months ended								Nine months ended
	September 30,				Variance				September 30,				Variance
(in millions)	2023		2022		$ Change		% Change		2023		2022		$ Change		% Change
Third-party distribution, service and advisory	$	448.2	$	451.3	$	(3.1)	(0.7)	%	$	1,365.8	$	1,438.9	$	(73.1)	(5.1)	%
Employee compensation	478.5		420.8		57.7		13.7	%	1,417.0		1,260.9		156.1		12.4	%
Marketing	23.7		27.6		(3.9)		(14.1)	%	77.7		83.1		(5.4)		(6.5)	%
Property, office and technology	135.4		133.2		2.2		1.7	%	406.9		400.2		6.7		1.7	%
General and administrative	117.2		48.7		68.5		140.7	%	314.5		270.6		43.9		16.2	%
Transaction, integration and restructuring	—		(0.6)		0.6		N/A		41.6		34.8		6.8		19.5	%
Amortization of intangibles	11.3		14.5		(3.2)		(22.1)	%	38.5		44.4		(5.9)		(13.3)	%
Total operating expenses	$	1,214.3	$	1,095.5	$	118.8	10.8	%	$	3,662.0	$	3,532.9	$	129.1	3.7	%

The table below sets forth these expense categories as a percentage of total Operating expenses and Operating revenues, which we believe provides useful information as to the relative significance of each type of expense.


(in millions)	Three months ended September 30, 2023		% of Total Operating Expenses		% of Operating Revenues		Three months ended September 30, 2022		% of Total Operating Expenses		% of Operating Revenues
Third-party distribution, service and advisory	$	448.2	36.9	%	31.1	%	$	451.3	41.2	%	31.2	%
Employee compensation	478.5		39.4	%	33.2	%	420.8		38.4	%	29.1	%
Marketing	23.7		2.0	%	1.6	%	27.6		2.5	%	1.9	%
Property, office and technology	135.4		11.2	%	9.4	%	133.2		12.2	%	9.2	%
General and administrative	117.2		9.6	%	8.1	%	48.7		4.4	%	3.4	%
Transaction, integration and restructuring	—		—	%	—	%	(0.6)		(0.1)	%	—	%
Amortization of intangibles	11.3		0.9	%	0.8	%	14.5		1.4	%	1.0	%
Total operating expenses	$	1,214.3	100.0	%	84.2	%	$	1,095.5	100.0	%	75.8	%


(in millions)	Nine months ended September 30, 2023		% of Total Operating Expenses		% of Operating Revenues		Nine months ended September 30, 2022		% of Total Operating Expenses		% of Operating Revenues
Third-party distribution, service and advisory	$	1,365.8	37.3	%	31.7	%	$	1,438.9	40.7	%	31.2	%
Employee compensation	1,417.0		38.7	%	32.9	%	1,260.9		35.7	%	27.4	%
Marketing	77.7		2.1	%	1.8	%	83.1		2.4	%	1.8	%
Property, office and technology	406.9		11.1	%	9.5	%	400.2		11.3	%	8.7	%
General and administrative	314.5		8.6	%	7.3	%	270.6		7.7	%	5.9	%
Transaction, integration and restructuring	41.6		1.1	%	1.0	%	34.8		1.0	%	0.8	%
Amortization of intangibles	38.5		1.1	%	0.9	%	44.4		1.2	%	1.0	%
Total operating expenses	$	3,662.0	100.0	%	85.1	%	$	3,532.9	100.0	%	76.8	%

During the three months ended September 30, 2023, Operating expenses increased by $118.8 million as compared to the three months ended September 30, 2022. The impact of foreign exchange rate movements increased Operating expenses by $14.9 million during the three months ended September 30, 2023 as compared to the three months ended September 30, 2022.

During the nine months ended September 30, 2023, Operating expenses increased by $129.1 million as compared to the nine months ended September 30, 2022. The impact of foreign exchange rate movements decreased Operating expenses by $13.0 million during the nine months ended September 30, 2023 as compared to the nine months ended September 30, 2022.

Third-Party Distribution, Service and Advisory

Third-party distribution, service and advisory expenses were $448.2 million for the three months ended September 30, 2023 as compared to $451.3 million for the three months ended September 30, 2022. The impact of foreign exchange rate movements increased third-party expenses by $5.2 million during the three months ended September 30, 2023 as compared to the three months ended September 30, 2022. After allowing for foreign exchange rate changes, the decrease in expenses was $8.3 million. The decrease is primarily due to a net decrease in pass-through service and distribution fees.

Third-party distribution, service and advisory expenses were $1,365.8 million for the nine months ended September 30, 2023 as compared to $1,438.9 million for the nine months ended September 30, 2022. The decrease is primarily due to a net decrease in pass-through service and distribution fees due to lower AUM to which these fees apply.

Employee Compensation

Employee compensation was $478.5 million for the three months ended September 30, 2023 as compared to $420.8 million for the three months ended September 30, 2022. The impact of foreign exchange rate movements increased Employee compensation by $5.5 million during the three months ended September 30, 2023 as compared to the three months ended September 30, 2022. After allowing for foreign exchange rate changes, there was an increase in Employee compensation of $52.2 million. This increase was primarily driven by costs related to organizational changes of $39.3 million and $14.8 million of higher staff and variable compensation costs.

Employee compensation was $1,417.0 million for the nine months ended September 30, 2023 as compared to $1,260.9 million for the nine months ended September 30, 2022. The impact of foreign exchange rate movements decreased Employee compensation by $9.7 million during the nine months ended September 30, 2023 as compared to the nine months ended September 30, 2022. After allowing for foreign exchange rate changes, there was an increase in Employee compensation of $165.8 million. This increase was primarily driven by $75.0 million in higher mark-to-market gains on deferred compensation liabilities and costs related to executive retirements and organizational changes of $79.6 million.

Headcount at September 30, 2023 was 8,603 (September 30, 2022: 8,621).

Marketing

Marketing expenses were $23.7 million for the three months ended September 30, 2023 as compared to $27.6 million for the three months ended September 30, 2022. The decrease in Marketing expenses was primarily driven by lower advertising spend.

Marketing expenses were $77.7 million for the nine months ended September 30, 2023 as compared to $83.1 million for the nine months ended September 30, 2022. The decrease in Marketing expenses was primarily driven by lower advertising spend.

Property, Office and Technology

Property, office and technology costs were $135.4 million for the three months ended September 30, 2023 as compared to $133.2 million for the three months ended September 30, 2022.

Property, office and technology costs were $406.9 million for the nine months ended September 30, 2023 as compared to $400.2 million for the nine months ended September 30, 2022. The increase was driven by higher technology costs, including software maintenance and outsourced administration costs, and higher property expenses including overlapping rent in the first quarter associated with the move to our new Atlanta headquarters.

General and Administrative

General and administrative expenses were $117.2 million for the three months ended September 30, 2023 as compared to $48.7 million for the three months ended September 30, 2022. The increase was primarily due to $60 million of insurance recoveries received during the three months ended September 30, 2022.

General and administrative expenses were $314.5 million for the nine months ended September 30, 2023 as compared to $270.6 million for the nine months ended September 30, 2022. The increase was primarily due to insurance recoveries of $60.0 million received during the nine months ended September 30, 2022 as compared to $20.0 million received during the nine months ended September 30, 2023. The increase also includes fees related to the Alpha platform of $14.3 million and costs associated with the move to the new Atlanta headquarters, partially offset by $14.8 million of indirect tax refunds received during the nine months ended September 30, 2023.

Transaction, Integration and Restructuring

For the three months ended September 30, 2023, Transaction, integration and restructuring costs were zero due to the completion of our strategic evaluation in the first quarter. Any costs related to on-going projects are classified in the income statement based on the nature of the expense.

For the nine months ended September 30, 2023, Transaction, integration and restructuring charges were $41.6 million as compared to $34.8 million for the nine months ended September 30, 2022. These costs are primarily comprised of compensation-related restructuring costs in connection with our strategic evaluation which we completed during the first quarter of 2023.

Other Income and Expenses

The main categories of Other income and expenses, and the dollar and percentage changes between periods, are as follows:


					Variance								Variance
	Three months ended September 30,				2023 vs 2022				Nine months ended September 30,				2023 vs 2022
(in millions)	2023		2022		$ Change		% Change		2023		2022		$ Change		% Change
Equity in earnings of unconsolidated affiliates	$	16.9	$	20.2	$	(3.3)	(16.3)	%	$	62.2	$	78.3	$	(16.1)	(20.6)	%
Interest and dividend income	10.8		3.3		7.5		227.3	%	26.5		6.6		19.9		301.5	%
Interest expense	(17.3)		(18.6)		1.3		(7.0)	%	(53.7)		(67.6)		13.9		(20.6)	%
Other gains/(losses), net	(23.3)		(34.6)		11.3		(32.7)	%	25.0		(170.1)		195.1		N/A
Other income/(expense) of CIP, net	15.2		(65.4)		80.6		N/A		(5.4)		(62.5)		57.1		(91.4)	%
Total other income and expenses	$	2.3	$	(95.1)	$	97.4	N/A		$	54.6	$	(215.3)	$	269.9	N/A

Equity in earnings of unconsolidated affiliates

Equity in earnings of unconsolidated affiliates decreased $3.3 million to $16.9 million for the three months ended September 30, 2023 as compared to $20.2 million for the three months ended September 30, 2022.

Equity in earnings of unconsolidated affiliates decreased $16.1 million to $62.2 million for the nine months ended September 30, 2023 as compared to $78.3 million for the nine months ended September 30, 2022. The decrease was primarily driven by decreases of $29.1 million in our income from our real estate investments and $11.8 million from our joint venture investment in IGW which were partially offset by increases of $24.8 million in our income from private equity and other investments.

Interest and dividend income

Interest and dividend income increased $7.5 million to $10.8 million for the three months ended September 30, 2023 as compared to $3.3 million for the three months ended September 30, 2022. The increase was due to higher levels of interest income from the company’s cash and cash equivalents.

Interest and dividend income increased 19.9 million to $26.5 million for the nine months ended September 30, 2023 as compared to $6.6 million for the nine months ended September 30, 2022. The increase was due to higher levels of interest income from the company’s cash and cash equivalents.

Interest expense

Interest expense was $17.3 million for the three months ended September 30, 2023 as compared to $18.6 million for the three months ended September 30, 2022.

Interest expense was $53.7 million for the nine months ended September 30, 2023 as compared to $67.6 million for the nine months ended September 30, 2022 as a result of a decrease in debt.

Other gains/(losses), net

Other gains/(losses), net was a loss of $23.3 million for the three months ended September 30, 2023 as compared to a $34.6 million loss for the three months ended September 30, 2022. Included in the net loss for the third quarter of 2023 were $23.2 million of net losses on investments and instruments held for our deferred compensation plans and $2.1 million in net losses related to the mark-to-market on seed capital investments. Included in the net loss for the three months ended September 30, 2022 were $29.7 million of net losses on investments and instruments held for our deferred compensation plans and $4.2 million of net losses related to the mark-to-market on seed capital investments.

Other gains/(losses), net was a gain of $25.0 million for the nine months ended September 30, 2023 as compared to a $170.1 million loss for the nine months ended September 30, 2022. Included in the net gain for the nine months ended September 30, 2023 were $13.8 million of net gains on investments and instruments held for our deferred compensation plans and $6.8 million of net gains related to the mark-to-market on seed capital investments. Included in the net loss for the nine months ended September 30, 2022 were $151.8 million of net losses on investments and instruments held for our deferred compensation plans and $26.3 million of net losses related to the mark-to-market on seed capital investments.

Other income/(expense) of CIP, net

For the three months ended September 30, 2023, Other income/(expense) of CIP, net was net income of $15.2 million for the three months ended September 30, 2023 (three months ended September 30, 2022: net expense of $65.4 million). Interest and dividend income of CIP increased $83.3 million to $181.2 million (three months ended September 30, 2022: $97.9 million). Interest expense of CIP increased $60.7 million to $118.1 million (three months ended September 30, 2022: $57.4 million). Unrealized gains/(losses) of CIP were net losses of $47.9 million (three months ended September 30, 2022: net losses of $105.9 million).

For the nine months ended September 30, 2023, Other income/(expense) of CIP, net was a net expense of $5.4 million for the nine months ended September 30, 2023 (nine months ended September 30, 2022: net expense of $62.5 million). Interest and dividend income of CIP increased $229.5 million to $484.5 million (nine months ended September 30, 2022: $255.0 million). Interest expense of CIP increased $177.2 million to $322.1 million (nine months ended September 30, 2022: $144.9 million). Unrealized gains/(losses) of CIP were net losses of $167.8 million (nine months ended September 30, 2022: net losses of $172.6 million). The net losses during the months ended September 30, 2023 and 2022 were attributable to market-driven losses on investments held by consolidated funds.

Net impact of CIP and related noncontrolling interests in consolidated entities

The consolidation of investment products did not have an impact on Net income attributable to Invesco for the three and nine months ended September 30, 2023 and September 30, 2022. The adjustment to net income for the Net income/(loss) attributable to noncontrolling interests in consolidated entities represents the profit or loss attributable to third-party investors. The impact of any realized or unrealized gains or losses attributable to the interests of third-parties, which is reflected in Other income/(expense) of CIP, net, is offset by this adjustment to arrive at Net income attributable to Invesco. Also, the net income or loss of CIP is taxed at the investor level, not at the product level; therefore, a tax provision is not reflected in the net impact of CIP.

Income Tax Expense

The company’s subsidiaries operate in numerous taxing jurisdictions around the world, each with its own statutory tax rate. As a result, the blended statutory tax rate will vary from year to year depending on the mix of the profits and losses from each jurisdiction.

Our effective tax rate decreased to 26.7% for the three months ended September 30, 2023 (three months ended September 30, 2022: 34.0%).The rate decrease was primarily due to the favorable impact of the change in the mix of income across tax jurisdictions.

Our effective tax rate increased to 28.3% for the nine months ended September 30, 2023 (nine months ended September 30, 2022: 27.1%).

Schedule of Non-GAAP Information

We utilize the following non-GAAP performance measures: Net revenue (and by calculation, Net revenue yield on AUM), Adjusted operating income, Adjusted operating margin, Adjusted net income attributable to Invesco and Adjusted diluted EPS. The company believes the adjusted measures provide valuable insight into the company’s ongoing operational performance and assist in comparisons to its competitors. These measures also assist the company’s management with the establishment of operational budgets and forecasts. The most directly comparable U.S. GAAP measures are Operating revenues (and by calculation, Gross revenue yield on AUM), Operating income, Operating margin, Net income attributable to Invesco and diluted EPS. Each of these measures is discussed more fully below.

The following are reconciliations of Operating revenues, Operating income (and by calculation, Operating margin) and Net income attributable to Invesco (and by calculation, Diluted EPS) on a U.S. GAAP basis to a non-GAAP basis of Net revenues, Adjusted operating income (and by calculation, Adjusted operating margin) and Adjusted net income attributable to Invesco (and by calculation, Adjusted diluted EPS). These non-GAAP measures should not be considered as substitutes for any U.S. GAAP measures and may not be comparable to other similarly titled measures of other companies. Additional reconciling items may be added in the future to these non-GAAP measures if deemed appropriate. The tax effects related to the reconciling items have been calculated based on the tax rate attributable to the jurisdiction to which the transaction relates. Notes to the reconciliations follow the tables.

Reconciliation of Operating revenues to Net revenues:


	Three months ended September 30,				Nine months ended September 30,
(in millions)	2023		2022		2023		2022
Operating revenues, U.S. GAAP basis	$	1,442.0	$	1,445.7	$	4,303.0	$	4,605.5

Revenue Adjustments (2)
Investment management fees	(193.7)		(185.5)		(578.9)		(584.5)
Service and distribution fees	(219.2)		(232.1)		(675.4)		(730.1)
Other	(35.3)		(33.7)		(111.5)		(124.3)
Total Revenue Adjustments	(448.2)		(451.3)		(1,365.8)		(1,438.9)
Invesco Great Wall (1)	90.7		104.6		288.8		334.8
CIP (3)	13.7		11.6		38.8		35.5
Net revenues	$	1,098.2	$	1,110.6	$	3,264.8	$	3,536.9

Reconciliation of Operating income to Adjusted operating income:


	Three months ended September 30,						Nine months ended September 30,
(in millions)	2023			2022			2023			2022
Operating income, U.S. GAAP basis	$	227.7		$	350.2		$	641.0		$	1,072.6
Invesco Great Wall (1)	52.1			61.8			160.3			197.7
CIP (3)	24.7			15.7			61.1			46.6
Transaction, integration and restructuring (4)	—			(0.6)			41.6			34.8
Amortization of intangible assets (8)	11.3			14.5			38.5			44.4
Compensation expense related to market valuation changes in deferred compensation plans (10)	(6.6)			(12.2)			15.6			(60.2)

General and administrative (7)	—			(60.0)			(20.0)			(60.0)
Adjusted operating income	$	309.2		$	369.4		$	938.1		$	1,275.9

Operating margin(5)	15.8		%	24.2		%	14.9		%	23.3		%
Adjusted operating margin(6)	28.2		%	33.3		%	28.7		%	36.1		%

Reconciliation of net income attributable to Invesco to Adjusted net income attributable to Invesco:


	Three months ended September 30,				Nine months ended September 30,
(in millions, except per common share data)	2023		2022		2023		2022
Net income attributable to Invesco Ltd., U.S. GAAP basis	$	131.4	$	177.4	$	408.6	$	496.1

Adjustments (excluding tax):
Transaction, integration and restructuring (4)	—		(0.6)		41.6		34.8
Amortization of intangible assets (8)	11.3		14.5		38.5		44.4
Deferred compensation plan market valuation changes and dividend income less compensation expense (10)	15.9		16.9		(0.6)		89.9
General and administrative (7)	—		(60.0)		(20.0)		(60.0)
Total adjustments excluding tax	$	27.2	$	(29.2)	$	59.5	$	109.1

Tax adjustment for amortization of intangible assets and goodwill (9)	$	4.4	$	3.8	$	12.2	$	11.3
Other tax effects of adjustments above	(3.8)		3.8		(3.3)		(21.1)
Adjusted net income attributable to Invesco Ltd. (11)	$	159.2	$	155.8	$	477.0	$	595.4

Average common shares outstanding - diluted	453.1		459.5		457.2		460.0
Diluted EPS	$	0.29	$	0.39	$	0.89	$	1.08
Adjusted diluted EPS(12)	$	0.35	$	0.34	$	1.04	$	1.29

(1) Invesco Great Wall: The company reflects 100% of IGW in its Net revenues and Adjusted operating income (and by calculation, Adjusted operating margin). The company’s non-GAAP operating results reflect the economics of these holdings on a basis consistent with the underlying AUM and flows. Adjusted net income is reduced by the amount of earnings attributable to the 51% noncontrolling interests.

(2) Revenue adjustments: The company calculates Net revenues by reducing Operating revenues to exclude fees that are passed through to external parties who perform functions on behalf of, and distribute, the company’s managed funds. The Net revenue presentation assists in identifying the revenue contribution generated by the company, removing distortions caused by the differing distribution channel fees and allowing for a fair comparison with U.S. peer investment managers and within Invesco’s own investment units. Additionally, management evaluates Net revenue yield on AUM, which is equal to Net revenues divided by Average AUM during the reporting period, as an indicator of the basis point Net revenues we receive for each dollar of AUM we manage.

Investment management fees are adjusted by renewal commissions and certain administrative fees. Service and distribution fees are primarily adjusted by distribution fees passed through to broker dealers for certain share classes and pass through fund-related costs. Other revenues are primarily adjusted by transaction fees passed through to third parties.

(3) CIP: See note 11, “Consolidated Investment Products,” for a detailed analysis of the impact to the company’s Condensed Consolidated Financial Statements from the consolidation of CIP. The company believes that the CIP may impact a reader’s analysis of our underlying results of operations and could result in investor confusion or the production of information about the company by analysts or external credit rating agencies that is not reflective of the underlying results of operations and financial condition of the company. Accordingly, the company believes that it is appropriate to adjust Operating revenues and Operating income for the impact of CIP in calculating the respective Net revenues and Adjusted operating income (and by calculation, Adjusted operating margin).

(4) Transaction, integration and restructuring: The company believes it is useful to adjust for the Transaction, integration and restructuring charges in arriving at Adjusted operating income, Adjusted operating margin, Adjusted net income, and Adjusted diluted EPS, as this will aid comparability of our results period to period, and aid comparability with peer companies that may not have similar acquisition and restructuring related charges. Transaction, integration and restructuring costs were zero for the third quarter 2023 due to the completion of our strategic evaluation in the first quarter.

(5) Operating margin is equal to Operating income divided by Operating revenues.

(6) Adjusted operating margin is equal to Adjusted operating income divided by Net revenues.

(7) General and administrative: The adjustment removes insurance recoveries related to fund-related losses incurred in prior periods.

(8) Amortization of intangible assets: The company removes amortization expense related to acquired assets in arriving at Adjusted operating income, Adjusted operating margin and Adjusted diluted EPS, as this will aid comparability of our results period to period, and aid comparability with peer companies that may not have similar acquisition-related charges.

(9) Tax adjustment for amortization of intangible assets and goodwill: The company reflects the tax benefit realized on the tax amortization of goodwill and intangibles in Adjusted net income. The company believes it is useful to include this tax benefit in arriving at the Adjusted diluted EPS measure.

(10) Market movement on deferred compensation plan liabilities: Certain deferred compensation plan awards involve a return to the employee linked to the appreciation (depreciation) of specified investments. The company hedges economically the exposure to market movements for these investments. Since these plans are hedged economically, the company believes it is useful to reflect the offset ultimately achieved from hedging the market exposure in the calculation of Adjusted operating income (and by calculation, Adjusted operating margin) and Adjusted net income (and by calculation, Adjusted diluted EPS) to produce results that will be more comparable period to period.

(11) The effective tax rate on Adjusted net income attributable to Invesco Ltd. for the three months and nine months ended September 30, 2023 is 23.6% and 24.1%, respectively (for the three months and nine months ended September 30, 2022, it was 28.7% and 25.7%, respectively).

(12) Adjusted diluted EPS is equal to Adjusted net income attributable to Invesco Ltd. divided by the weighted average number of common and restricted common shares outstanding.

Balance Sheet Discussion (1)

The following table represents a reconciliation of the balance sheet information presented on a U.S. GAAP basis to the balance sheet information excluding the impact of CIP and policyholder balances for the reasons outlined in footnote 1 to the table:


	As of September 30, 2023								As of December 31, 2022
Balance sheet information (in millions)	U.S. GAAP		Impact of CIP		Impact of Policyholders		As Adjusted		U.S. GAAP		Impact of CIP		Impact of Policyholders		As Adjusted
ASSETS
Cash and cash equivalents	$	1,241.5	$	—	$	—	$	1,241.5	$	1,234.7	$	—	$	—	$	1,234.7

Investments	932.6		528.8		—		1,461.4		996.6		376.8		—		1,373.4
Assets of CIP:
Investments and other assets of CIP	8,870.8		(8,870.8)		—		—		8,735.1		(8,735.1)		—		—
Cash and cash equivalents of CIP	313.6		(313.6)		—		—		199.4		(199.4)		—		—
Assets held for policyholders	408.4		—		(408.4)		—		668.7		—		(668.7)		—
Goodwill and intangible assets, net	15,668.9		—		—		15,668.9		15,698.9		—		—		15,698.9
Other assets (2)	1,995.7		14.8		—		2,010.5		2,223.4		9.8		—		2,233.2
Total assets	$	29,431.5	$	(8,640.8)	$	(408.4)	$	20,382.3	$	29,756.8	$	(8,547.9)	$	(668.7)	$	20,540.2
LIABILITIES
Liabilities of CIP:
Debt of CIP	$	6,981.5	$	(6,981.5)	$	—	$	—	$	6,590.4	$	(6,590.4)	$	—	$	—
Other liabilities of CIP	322.3		(322.3)		—		—		329.6		(329.6)		—		—
Policyholder payables	408.4		—		(408.4)		—		668.7		—		(668.7)		—

Debt	1,489.1		—		—		1,489.1		1,487.6		—		—		1,487.6
Other liabilities (3)	3,638.5		—		—		3,638.5		3,838.3		—		—		3,838.3
Total liabilities	$	12,839.8	$	(7,303.8)	$	(408.4)	$	5,127.6	$	12,914.6	$	(6,920.0)	$	(668.7)	$	5,325.9
EQUITY
Total equity attributable to Invesco Ltd.	$	15,253.9	$	0.1	$	—	$	15,254.0	$	15,213.6	$	0.1	$	—	$	15,213.7
Noncontrolling interests (4)	1,337.8		(1,337.1)		—		0.7		1,628.6		(1,628.0)		—		0.6
Total equity	16,591.7		(1,337.0)		—		15,254.7		16,842.2		(1,627.9)		—		15,214.3
Total liabilities and equity	$	29,431.5	$	(8,640.8)	$	(408.4)	$	20,382.3	$	29,756.8	$	(8,547.9)	$	(668.7)	$	20,540.2

(1) This table includes non-GAAP presentations. Assets of CIP are not available for use by Invesco. Additionally, there is no recourse to Invesco for CIP debt. Policyholder assets and liabilities are equal and offsetting and have no impact on Invesco’s shareholders’ equity.

(2) Amounts include Accounts receivable, Property, equipment and software, and Other assets.

(3) Amounts include Accrued compensation and benefits, Accounts payable and accrued expenses, and Deferred tax liabilities.

(4) Amounts include Redeemable noncontrolling interests in consolidated entities and Equity attributable to nonredeemable noncontrolling interests in consolidated entities.

Cash and cash equivalents

Cash and cash equivalents increased by $6.8 million from $1,234.7 million at December 31, 2022 to $1,241.5 million at September 30, 2023. See “Cash Flows Discussion” in the following section within this Management’s Discussion and Analysis for additional discussion regarding the movements in cash flows during the period.

Investments

Investments are comprised primarily of the equity method investment in IGW, seed capital and co-investments in affiliated funds, and investments related to the company’s deferred compensation plans.

As of September 30, 2023, the company had $1,001.4 million in seed capital and co-investments (December 31, 2022: $909.2 million), including direct investments in CIP. Total seed capital and co-investments is presented as a helpful measure for investors and represents our total net investment interest including our investment in CIP. The following table reconciles the investments balance to the total seed capital and co-investment balance.


	As of
(in millions)	September 30, 2023		December 31, 2022
Investments	$	932.6	$	996.6
Net investment in CIP	528.8		376.8
Less: Investments related to deferred compensation plans, joint ventures, and other investments	(460.0)		(464.2)
Total seed capital and co-investments (1)	$	1,001.4	$	909.2

(1) Included in the total seed capital and co-investments balance as of September 30, 2023 is $348.3 million of seed capital and $653.1 million of co-investments (December 31, 2022: $305.4 million of seed capital and $603.8 million of co-investments).

Goodwill and intangible assets, net

Goodwill and intangible assets, net decreased from $15,698.9 million at December 31, 2022, to $15,668.9 million at September 30, 2023. The decrease includes amortization of $39.0 million, partially offset by foreign exchange impacts of $9.0 million. If our revenue and operating income continue to be adversely impacted by our AUM mix or unfavorable market conditions, an impairment of goodwill and intangible assets may occur in future periods.

Liquidity and Capital Resources

Our capital structure, together with available cash balances, cash flows generated from operations, existing capacity under our credit facility and further capital market activities, if necessary, should provide us with sufficient resources to meet present and future cash needs, including operating expenses, debt and other obligations as they come due and anticipated future capital requirements.

Sources of Liquidity by Type


	As of
(in millions)	September 30, 2023		December 31, 2022
Cash and cash equivalents	$	1,241.5	$	1,234.7
Available revolver	2,000.0		1,500.0
Total sources of liquidity by type	$	3,241.5	$	2,734.7

Capital Management

Our capital management priorities have evolved with the growth and success of our business and include, in no particular order of priority: reinvestment in the business, maintaining a strong balance sheet and returning capital to shareholders longer term through a combination of modestly increasing dividends and share repurchases.

The company did not repurchase any of its shares in the open market during the three months ended September 30, 2023. During the nine months ended September 30, 2023, the company repurchased 9.6 million common shares for $150.0 million in the open market. As of September 30, 2023, approximately $382.2 million remained authorized under the company’s common share repurchase authorization approved by the Board on July 22, 2016.

Our capital process is executed in a manner consistent with our desire to maintain strong, investment grade credit ratings. As of the date of our filing, Invesco held credit ratings of BBB+/Stable, A3/Stable and A/Stable from Standard & Poor’s Ratings Service (S&P), Moody’s Investor Services and Fitch Ratings, respectively.

Other Items

Certain of our subsidiaries are required to maintain minimum levels of regulatory capital, liquidity, and working capital. Such requirements may change from time-to-time as additional guidance is released based on a variety of factors, including balance sheet composition, assessment of risk exposures and governance, and review from regulators. These and other similar provisions of applicable laws and regulations may have the effect of limiting withdrawals of capital, repayment of intercompany loans and payment of dividends by such entities. Our financial condition or liquidity could be adversely affected if certain of our subsidiaries are unable to distribute funds to us.

We are in compliance with all regulatory minimum net capital requirements. As of September 30, 2023, the company’s minimum regulatory capital requirement was $384.9 million (December 31, 2022: $639.8 million). The decrease was driven by a reduction in regulatory capital requirements as part of a transition into a new regulatory regime in the United Kingdom (Investment Firm Prudential Regime) during the second quarter of 2023. However, there has been no change to the related regulatory liquidity and working capital requirements, and as such, there has not been a material reduction in the level of cash and cash equivalents required outside of the US.

We meet the regulatory liquidity and working capital requirements by holding cash and cash equivalents in the European sub-group. This retained cash can be used for general business purposes in the European sub-group in the countries where it is located. Due to the liquidity and working capital requirements, the ability to transfer cash between certain jurisdictions may be limited. In addition, transfers of cash between international jurisdictions may have adverse tax consequences.

The consolidation of $9,184.4 million and $6,981.5 million of assets and debt of CIP as of September 30, 2023, respectively, did not impact the company’s liquidity and capital resources. See Part I, Item 1, Financial Statements - Note 11, “Consolidated Investment Products,” for additional details.

Cash Flows Discussion

The ability to consistently generate cash flows from operations in excess of dividend payments, common share repurchases, capital expenditures and ongoing operating expenses is one of our company’s fundamental financial strengths. Operations continue to be financed from current earnings and borrowings.

The following table represents a reconciliation of the cash flow information presented on a U.S. GAAP basis to the cash flows information excluding the impact of the cash flows of CIP for the reasons outlined in footnote 1 to the table:


Cash flows information (1)	Nine months ended September 30, 2023						Nine months ended September 30, 2022
(in millions)	U.S. GAAP		Impact of CIP		As Adjusted		U.S. GAAP		Impact of CIP		As Adjusted
Cash and cash equivalents, beginning of the period	$	1,434.1	$	(199.4)	$	1,234.7	$	2,147.1	$	(250.7)	$	1,896.4
Cash flows from operating activities	586.5		227.8		814.3		239.7		452.7		692.4
Cash flows from investing activities	17.3		(189.1)		(171.8)		(238.0)		53.6		(184.4)
Cash flows from financing activities	(475.1)		(153.3)		(628.4)		(798.8)		(468.0)		(1,266.8)
Increase/(decrease) in cash and cash equivalents	128.7		(114.6)		14.1		(797.1)		38.3		(758.8)
Foreign exchange movement on cash and cash equivalents	(7.7)		0.4		(7.3)		(124.0)		10.0		(114.0)
Cash and cash equivalents, end of the period	$	1,555.1	$	(313.6)	$	1,241.5	$	1,226.0	$	(202.4)	$	1,023.6

Cash and cash equivalents	$	1,241.5	$	—	$	1,241.5	$	1,023.6	$	—	$	1,023.6

Cash and cash equivalents of CIP	313.6		(313.6)		—		202.4		(202.4)		—
Total cash and cash equivalents per condensed consolidated statement of cash flows	$	1,555.1	$	(313.6)	$	1,241.5	$	1,226.0	$	(202.4)	$	1,023.6

(1) These tables include non-GAAP presentations. Cash held by CIP is not available for use by Invesco. Additionally, there is no recourse to Invesco for CIP debt. The cash flows of CIP do not form part of the company’s cash flow management processes, nor do they form part of the company’s significant liquidity evaluations and decisions.

Operating Activities

Operating cash flows include the receipt of Investment management and Other fees generated from AUM, offset by Operating expenses and Changes in operating assets and liabilities. After allowing for the change in cash held by CIP, investment activities, and seasonal payments such as bonus payments in the first quarter, our operating cash flows generally move in the same direction as our Operating income.

Cash inflows for the nine months ended September 30, 2023, excluding the impact of the consolidation of CIP, was primarily driven by net inflows from changes in payables and receivables due to timing of payments and receipts as compared to net outflows from changes in payables and receivables due to timing of payments and receipts for the nine months ended September 30, 2022 which were partially offset by a decrease of $431.6 million in Operating Income.

Investing Activities

Investing cash outflows for the nine months ended September 30, 2023, excluding the impact of the consolidation of CIP, included Purchase of investments of $118.0 million (nine months ended September 30, 2022: $191.1 million purchases), partially offset by proceeds of $70.2 million from sales and returns of capital of investments (nine months ended September 30, 2022: $126.5 million proceeds). In addition, the company had capital expenditures of $124.0 million for the nine months ended September 30, 2023 (nine months ended September 30, 2022: $119.8 million). Our capital expenditures related principally to technology initiatives related to investments in foundational technology projects as well as facilities costs related to our move to our new Atlanta headquarters.

Financing Activities

Financing cash outflows during the nine months ended September 30, 2023, excluding the impact of the consolidation of CIP, included $267.7 million of common dividend payments for the dividends declared in January, April and July (nine months ended September 30, 2022: common dividends paid of $249.1 million), $177.6 million of preferred dividend payments for dividends declared in January, April and July (nine months ended September 30, 2022: $177.6 million) and the payment of $33.1 million to meet employees’ withholding tax obligations on common share vestings (nine months ended September 30, 2022: $40.1 million). The nine months ended September 30, 2023 also included purchases of common shares through the open market of $150.0 million (nine months ended September 30, 2022 purchases of common shares through the open market of $200.0 million). Financing cash outflows for the nine months ended September 30, 2022 also included the $600.0 million redemption of senior notes.

Dividends

When declared, Invesco pays dividends on a quarterly basis in arrears. Holders of our preferred shares are eligible to receive dividends at an annual rate of 5.9% of the liquidation preference of $1,000 per share, or $59 per share per annum. The preferred stock dividend is payable quarterly on a non-cumulative basis when, if and as declared by our Board of Directors. However, if we have not declared and paid or set aside for payment full quarterly dividends on the preferred stock for a particular dividend period, we may not declare or pay dividends on, redeem, purchase or acquire, our common stock or other junior securities in the next succeeding dividend period. In addition, if we have not declared and paid or set aside for payment quarterly dividends on the preferred stock for six quarterly periods, whether or not consecutive, the number of directors of the company will be increased by two and the holders of the preferred shares shall have the right to elect such two additional members of the Board of Directors.

On October 24, 2023, the company announced a third quarter 2023 cash dividend of $0.20 per share, payable on December 4, 2023, to shareholders of record at the close of business on November 10, 2023 with an ex-dividend date of November 9, 2023.

On October 24, 2023, the company announced a preferred dividend of $14.75 per share to the holders of preferred shares, representing the period from September 1, 2023 through November 30, 2023. The preferred dividend is payable on December 1, 2023 to shareholders of record at close of business on November 15, 2023.

The declaration, payment and amount of any future dividends will depend upon, among other factors, our earnings, financial condition and capital requirements at the time such declaration and payment are considered. The company has a policy of managing dividends in a prudent fashion, with due consideration given to profit levels, overall debt levels and historical dividend payouts.

Debt

The carrying value of our debt at September 30, 2023 was $1,489.1 million (December 31, 2022: $1,487.6 million). See Part I, Item 1, Financial Statements - Note 4, “Debt,” for additional disclosures.

For the nine months ended September 30, 2023, the company’s weighted average cost of debt was 4.28% (nine months ended September 30, 2022: 4.10%).

Financial covenants under the credit facility agreement include: (i) the quarterly maintenance of an Adjusted debt/Earnings before income tax, depreciation, amortization, interest expense, common share-based compensation expense, unrealized (gains)/losses from investments, net, and unusual or otherwise non-recurring gains and losses (Covenant Adjusted EBITDA) leverage ratio, as defined in the credit facility agreement, of not greater than 3.25:1.00, (ii) an interest coverage ratio (Covenant Adjusted EBITDA/interest payable for the four consecutive fiscal quarters ended before the date of determination) of not less than 4.00:1.00. As of September 30, 2023, we were in compliance with our financial covenants. At September 30, 2023, our leverage ratio was 0.69:1.00 (December 31, 2022: 0.78:1.00), and our interest coverage ratio was 20.03:1.00 (December 31, 2022: 19.51:1.00).

The September 30, 2023 coverage ratio calculations are as follows:


(in millions)	Total		Q3 2023		Q2 2023		Q1 2023		Q4 2022
Net income attributable to Invesco Ltd.	$	596.4	$	131.4	$	132.2	$	145.0	$	187.8
Dividends on preferred shares	236.8		59.2		59.2		59.2		59.2

Tax expense	286.3		61.3		65.5		69.9		89.6
Amortization/depreciation	185.0		42.2		47.4		46.8		48.6
Interest expense	71.3		17.3		18.4		18.0		17.6
Common share-based compensation expense	116.9		24.0		32.0		37.8		23.1
Unrealized (gains)/losses from investments, net (1)	(39.5)		18.3		(8.6)		(17.1)		(32.1)
OppenheimerFunds acquisition-related matter recoveries (2)	(25.0)		—		—		—		(25.0)

Covenant Adjusted EBITDA (3)	$	1,428.2	$	353.7	$	346.1	$	359.6	$	368.8
Adjusted debt (3)	$	991.7

Leverage ratio as of September 30, 2023 (Adjusted debt/Covenant Adjusted EBITDA - maximum 3.25:1.00)	0.69
Interest coverage ratio as of September 30, 2023 (Covenant Adjusted EBITDA/Interest expense - minimum 4.00:1.00)	20.03

(1) Adjustments for unrealized gains and losses from investments, as defined in our credit facility, may also include non-cash gains and losses on investments to the extent that they do not represent anticipated future cash receipts or expenditures.

(2) Unusual or otherwise non-recurring gains and losses, as defined in our credit facility, are adjusted for in the determination of Covenant Adjusted EBITDA. The insurance recoveries related to the OppenheimerFunds acquisition-related matter are considered unusual and have been removed from the determination of Covenant Adjusted EBITDA.

(3) Covenant Adjusted EBITDA and Adjusted debt are non-GAAP financial measures that are used by management in connection with certain debt covenant calculations under our credit agreement. The calculation of Covenant Adjusted EBITDA above (a reconciliation from Net income attributable to Invesco Ltd.) is defined by our credit facility agreement, and therefore Net income attributable to Invesco Ltd. is the most appropriate GAAP measure from which to reconcile to Covenant Adjusted EBITDA. The calculation of Adjusted debt is defined in our credit facility and equals debt of $1,489.1 million plus $2.7 million in letters of credit less $500.0 million of excess unrestricted cash (cash and cash equivalents less the minimum regulatory capital requirement, not to exceed $500 million).

Credit and Liquidity Risk

The company manages its capital by reviewing annual and projected cash flow forecasts and by monitoring credit, liquidity and market risks, such as interest rate and foreign currency risks (as discussed in Part I, Item 3, Quantitative and Qualitative Disclosures About Market Risk), through measurement and analysis. The company is primarily exposed to credit risk through its cash and cash equivalent deposits, which are held by external firms. The company invests its cash balances in its own institutional money market products, as well as with external high credit-quality financial institutions. These arrangements create exposure to concentrations of credit risk.

Credit Risk

Credit risk is the risk that one party to a financial instrument will cause a financial loss for the other party by failing to meet an obligation. All cash and cash equivalent balances are subject to credit risk, as they represent deposits made by the company with external banks and other institutions. As of September 30, 2023, our maximum exposure to credit risk related to our cash and cash equivalent balances is $1,241.5 million, of which $711.3 million is invested in affiliated money market funds. No more than 10% of our cash and cash equivalent balances is held with any one third-party financial institution. See Part I, Item 1, Financial Statements - Note 2, "Fair Value of Assets and Liabilities," for information regarding cash and cash equivalents invested in affiliated money market funds.

Liquidity Risk

Liquidity risk is the risk that the company will encounter difficulty in meeting obligations associated with its financial liabilities as they become due. The company is exposed to liquidity risk through its $1,489.1 million in total debt. The company actively manages liquidity risk by preparing cash flow forecasts for future periods, reviewing them regularly with senior management, maintaining a committed credit facility, scheduling significant gaps between major debt maturities and engaging external financing sources in regular dialogue.

Effects of Inflation

Inflation can impact our organization primarily in two ways. First, inflationary pressures can result in increases in our cost structure, especially to the extent that large expense components such as compensation are impacted. To the degree that these expense increases are not recoverable or cannot be counterbalanced through pricing increases due to the competitive environment, our profitability could be negatively impacted. Secondly, the value of the assets that we manage may be negatively impacted when inflationary expectations result in a rising interest rate environment. A decline in the values of AUM could lead to reduced revenues as management fees are generally calculated based upon the size of AUM.

Common Share Repurchase Plan

The company did not purchase shares in the open market during the three months ended September 30, 2023. During the nine months ended September 30, 2023, the company repurchased 9.6 million common shares for $150.0 million in the open market (three months ended September 30, 2022: none; nine months ended September 30, 2022: 8.9 million common shares for $200.0 million). At September 30, 2023, approximately $382.2 million remains available under the share repurchase authorizations approved by the Board on July 22, 2016.

Off Balance Sheet Commitments

See Part I, Item 1, Financial Statements - Note 10, “Commitments and Contingencies - Legal Contingencies”, for more information regarding undrawn capital commitments.

Critical Accounting Policies and Estimates

There have been no changes to the critical accounting policies disclosed in our most recent Forms 10-K and 10-Q for the year ended December 31, 2022 and the three months ended June 30, 2023, respectively. Critical accounting policies are those that require management’s most difficult, subjective or complex judgments and would therefore be deemed the most critical to an understanding of our results of operations and financial condition.

Recent Accounting Standards

See Part I, Item 1, Financial Statements - Note 1, "Accounting Policies - Accounting Pronouncements Recently Adopted.”

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