Invesco Ltd. is having a tough year, even by 2020 standards.

The Covid-19 pandemic delivered a blow to the $1.1 trillion asset manager, among the top publicly traded fund firms. A record rally in stocks off their March lows didn’t help much: investors continued to yank money from Invesco’s funds in the second quarter, bringing total first-half net outflows to about $31.6 billion, according to a statement Tuesday.

The health crisis compounded broader industry forces weighing on Invesco, including pressure on fees and withdrawals from actively managed funds. While the firm made a series of bets to keep pace in a changing industry, some have yet to pay off, spooking clients and investors.

“Everyone’s been hit by Covid,” Chief Executive Officer Martin Flanagan said in a phone interview. “It slowed us down. It’s a disappointment.”

Shares of Atlanta-based Invesco have tumbled 40% this year, compared with an 8.5% drop for an S&P 500 sub-index of asset managers and custody banks.

The firm reported adjusted earnings of 35 cents a share for the second quarter, short of the average estimate of 43 cents by analysts in a Bloomberg survey.

A struggle to stem two years of outflows put Invesco in a compromised position compared with peers as it headed into 2020, even before Covid-19 spread, said Bloomberg Intelligence analyst Alison Williams.

“They came into this downturn more vulnerable,” she said.

Invesco has aggressively pursued acquisitions ever since Flanagan, 60, joined from Franklin Resources Inc. in 2005, helping its asset base more than triple during his tenure. It struck several deals in the past three years, led by its $5.7 billion takeover of Oppenheimer Funds -- a wager on the future of active management that expanded its presence in international equities.

‘Crystal Ball’
The company spent much of last year stitching together the two businesses, sowing uncertainty with some clients: withdrawals from its long-term funds, a category excluding cash, topped $34 billion in 2019. While he didn’t have a “crystal ball” to see what the future had in store, Flanagan said the deal was necessary for the firm as clients look for bigger fund managers with more investment options.

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