FYI: Invesco confirmed on Thursday that it would buy active asset manager OppenheimerFunds, a subsidiary of Massachusetts Mutual Life Insurance, in a $5.7 billion deal that CEO Martin Flanagan says gives the company the heft and all of the pieces it needs to weather a trying period in the fund industry.
Asset management firms have been grappling with the shift to cheaper exchange-traded and index funds and away from active funds, which have lagged behind during much of the nine-year bull market. That has sparked a fee war that is steadily eroding margins. Meanwhile, the way funds are sold is also changing as the advice industry moves from commissions-based to fee-based services, adding yet another challenge for fund firms.
“We are in a once-in-a-generational change, and it’s happening at a faster pace than I ever imagined. Every single day, the strong are getting stronger and the weak are getting weaker,” Flanagan tells Barron’s. “Scale matters more than ever. I wouldn’t have said that four years ago.”
Regards,
Ted
https://www.barrons.com/articles/invesco-will-buy-oppenheimerfunds-1539860950?refsec=funds
