Invesco Ltd., the parent company of Canadian-based Invesco Trimark, signed a huge deal yesterday to acquire Morgan Stanley’s retail asset management business, including Van Kampen Investments. Through this transaction, Invesco acquires a diversified business with $119 billion in assets under management (AUM).

The transaction is valued at $1.5 billion, including cash and stock that provides Morgan Stanley a 9.4% equity interest in Invesco.

The new assets, which are across a range of asset classes and instruments, including equity, fixed income, alternatives (including mutual funds and separate accounts) and unit investment trusts, will put Invesco’s total asset total firmly over $500 billion. That’s an entity nearly five times larger than any single Canadian investment firm.

Furthermore, Invesco’s organization will expand by approximately 650 investment, distribution and operations support professionals, globally. The company says the deal will position Invesco among the leading U.S. asset managers by AUM, diversity of investment teams and client profile.

“We are excited to expand the depth and breadth of our investment strategies, which will enable us to offer our clients a truly comprehensive range of investment capabilities through an expanded set of investment vehicles,” says Martin Flanagan, Invesco president and CEO. “This combination of talented teams from both organizations will enhance Invesco’s ability to deliver meaningful solutions to our retail and institutional clients around the world, and better position Invesco for long-term success.”

Canadian investors will likely see spillover from the deal, since Invesco’s subsidiary, Invesco Trimark, manages nearly $30 billion in assets for Canadian investors.

In a memo to Invesco Trimark employees, Peter Intraligi pointed out that about $1.3 billion of the new assets are held by Canadian investors.

He expects the acquisition to “demonstrate the strength” of Invesco’s global capabilities and to add scale to the company’s global operating platform, which should result in improved operating efficiencies.

“Canadian investors can expect Invesco Trimark to continue bringing the best of Invesco to them. Combined, Morgan Stanley and Van Kampen’s product offerings have delivered strong long-term investment results for their clients,” Intraligi says. “When the transaction is finalized in mid-2010, our plan is to asses which of their offerings are most relevant and attractive to investors here in Canada.”

(10/20/09)