Invesco Ltd. is likely to keep intact most of the Morgan Stanley/ Van Kampen operations, which it said last week that it would acquire for $1.5 billion — although some changes are expected in the $119 billion retail money management business it's buying.
Invesco Ltd. is likely to keep intact most of the Morgan Stanley/ Van Kampen operations, which it said last week that it would acquire for $1.5 billion — although some changes are expected in the $119 billion retail money management business it's buying.
It's unlikely that there will be massive layoffs when the two money management operations are brought together, Invesco president and chief executive Martin Flanagan said in an interview.
While the exact details have yet to be worked out, many of the 675 people at Van Kampen will be needed to help the operation grow, he noted.
“We don't see a lot of job loss,” Mr. Flanagan said. “To the contrary, this is a real story about growth and opportunity.”
Back-office operations would be one area where job losses would normally be expected, but much of the infrastructure that supports Van Kampen is remaining with Morgan Stanley, which will continue to offer asset management services to its institutional clients, he said.
While Van Kampen's investment management teams are expected to remain intact, there is the possibility of one notable change: the unit's name.
While he sees “value” in the Van Kampen brand, Mr. Flanagan did not commit to retaining it.
“We're going to take a step back and from a client point of view get feedback,” he said.
Whatever the outcome, the acquisition of Van Kampen presents Invesco with new sales opportunities, Mr. Flanagan said.
Not only will Invesco have greater access to Morgan Stanley's massive brokerage network, but it will also be able to leverage the strong relationship Van Kampen has with LPL Financial and Raymond James Financial Services Inc., he said.
“We almost couldn't have planned it better,” Mr. Flanagan said.
As part of the deal, Morgan Stanley will receive a 9.4% equity stake in Invesco and $500 million in cash.
Morgan Stanley will still manage more than $267 billion in institutional assets.
But the deal, as Morgan Stanley noted in its announcement last Monday, will “mitigate certain affiliated product sales restrictions faced by Van Kampen portfolio managers since the [deal] closing of the Morgan Stanley Smith Barney venture,” according to Morgan Stanley co-president James Gorman.
The Invesco-Morgan Stanley transaction is expected to close in mid-2010.
Morgan Stanley agreed to sell Van Kampen to Invesco last month, as InvestmentNews reported, and had started informing its clients of the deal over the past few weeks.
E-mail David Hoffman at dhoffman@investmentnews.com.
