Invesco and MassMutual Announce Repurchase of $1 billion of Invesco Preferred Stock and New Strategic Product and Distribution Partnership with Barings

Rhea-AI Summary

Invesco (NYSE: IVZ) has announced a significant financial restructuring and strategic partnership deal. The company will repurchase $1 billion of its $4 billion Series A Preferred Stock from MassMutual, with potential future repurchases of the remaining $3 billion. The all-cash transaction, funded through debt financing, is set to close in May 2025 and is expected to be earnings accretive.

The company also increased its quarterly dividend from $0.205 to $0.210 per common share. Additionally, Invesco formed a new strategic product and distribution partnership with Barings, MassMutual's $442 billion asset management subsidiary, focusing on private markets capabilities in U.S. Wealth channels. MassMutual will support this initiative with $650 million in initial funding to accelerate growth.

MassMutual maintains an 18.2% ownership of Invesco's common shares and continues as a strategic partner with previous commitments exceeding $3 billion and approximately $9 billion of Invesco managed assets through various platforms.

Positive

• Repurchase of $1B preferred stock to be earnings accretive from H2 2025
• Quarterly dividend increase to $0.210 per share
• New strategic partnership with Barings backed by $650M initial funding
• Potential for future repurchases of remaining $3B preferred stock
• Maintains strong relationship with MassMutual ($9B in managed assets)

Negative

• Repurchase to be funded through debt financing, potentially increasing leverage
• Significant preferred stock obligation ($3B) still remains outstanding

Insights

Financial Analyst

Invesco's $1B preferred stock repurchase strengthens balance sheet, increases dividend, and creates strategic growth opportunities while being earnings accretive.

Invesco's announcement of a $1 billion repurchase of preferred stock from MassMutual represents a significant financial restructuring with substantial positive implications. This transaction is particularly noteworthy as it involves repurchasing shares that were otherwise non-callable until May 2040, indicating Invesco negotiated favorable terms to enhance its capital structure.

The repurchase will be funded through debt financing but is expected to be earnings accretive beginning in the second half of 2025. This suggests the cost of new debt will be lower than the dividend requirements on the preferred shares, creating immediate financial benefits. The transaction also provides Invesco with additional balance sheet flexibility while maintaining its ability to invest in growth initiatives and return capital to shareholders.

In a complementary move, Invesco increased its quarterly dividend from $0.205 to $0.210 per common share, a 2.4% increase. While modest, this dividend boost signals management's confidence in the company's financial health and commitment to shareholder returns.

The agreement also establishes a framework for potential future repurchases of the remaining $3 billion of preferred stock, creating a valuable option for Invesco to further optimize its capital structure over time. Despite the repurchase, MassMutual maintains a significant 18.2% ownership stake in Invesco common shares, ensuring continued alignment between the two organizations.

This transaction effectively improves Invesco's capital allocation flexibility while reducing capital costs, allowing the company to maintain its growth investments, share repurchase program, and dividend increases simultaneously - a difficult balance that few companies can achieve during capital structure optimization.

Investment Strategist

Strategic partnership with Barings expands Invesco's private markets capabilities, backed by $650M seed capital to accelerate growth in high-margin wealth products.

The new strategic partnership between Invesco and Barings (MassMutual's $442 billion asset management subsidiary) represents a calculated move to capitalize on growing investor demand for private market investments. This alliance strategically combines Invesco's established distribution strength in U.S. wealth channels with Barings' sophisticated private markets expertise.

The $650 million seed capital commitment from MassMutual provides substantial funding to accelerate the development and scaling of innovative product offerings. The partnership's initial focus on private credit solutions is well-timed, as wealth investors increasingly seek income alternatives in this persistent low-yield environment.

This collaboration creates a powerful combination of complementary capabilities: Invesco contributes its extensive client relationships and distribution network, while Barings brings its specialized expertise in private markets, particularly credit investments. Together, they can develop sophisticated investment solutions previously available primarily to institutional investors and now make them accessible to a broader wealth management clientele.

From a strategic perspective, this partnership enables Invesco to diversify its product lineup and potentially capture higher fee revenue, as private market strategies typically command premium pricing compared to traditional investment products. The multi-strategy credit approach mentioned positions the firm to address various client income needs across market cycles.

The partnership demonstrates Invesco's commitment to innovation and adaptation to evolving investor preferences, particularly the growing retail appetite for private market investments. By combining forces with Barings, Invesco gains immediate credibility and capabilities in this high-growth segment without having to build these specialized resources entirely from scratch.

MassMutual also to Provide Seed Capital Investment to Support Scale of Both Firms' Private Wealth Offerings

ATLANTA, April 22, 2025 /PRNewswire/ -- Invesco Ltd. (NYSE: IVZ) and MassMutual announced today an agreement for Invesco to repurchase $1 billion of its $4 billion of outstanding Invesco, Ltd Series A Preferred Stock otherwise noncallable until May 2040 at the price and on terms described in the agreement. The all-cash repurchase, which will be funded through debt financing, is expected to close in May 2025. Further, the repurchase agreement between Invesco Ltd. and MassMutual provides for the possibility of future repurchases of the remaining $3 billion of outstanding Preferred Stock in a way that would be beneficial for both parties. The announced repurchase is expected to be earnings accretive to Invesco beginning in the second half of 2025, enabling further deleveraging and improving balance sheet flexibility while retaining the ability to both invest in growth initiatives and return capital to shareholders. Invesco also announced today an increase in its quarterly dividend from $0.205 to $0.210 per common share. MassMutual remains a significant Invesco shareholder with approximately 18.2% ownership of common shares outstanding and is a longstanding strategic partner to Invesco with previous seed and co-investment capital commitments exceeding $3 billion in total and approximately $9 billion of Invesco managed assets sold through MassMutual's broker-dealer, variable annuity and sub-advisory platforms.

Additionally, Invesco and Barings, MassMutual's $442 billion global asset management subsidiary, announced today a new strategic product and distribution partnership agreement for U.S. Wealth channels, bringing together their unique private markets capabilities. MassMutual intends to support this initiative with $650 million initially to accelerate the growth and scale of the partnership's innovative U.S. wealth management product offerings.

The immediate focus of this partnership will be on differentiated and industry-leading private credit solutions for our clients, building on Invesco's deep client relationships in the U.S. wealth channel. Investment capabilities will leverage both firms' global private credit and public fixed income expertise, extensive product structuring and sophisticated asset allocation capabilities, as well as Barings' and Invesco's expertise creating unique products for complex institutional portfolios.

Over the longer term, the partnership will leverage both firms' deep product innovation expertise to meet clients' income needs across the multi-strategy credit spectrum and across a wide range of investment vehicles in the U.S. Wealth market.

"We are excited about this evolution in our strategic relationship with MassMutual. Given our long history together, we are pleased to form this partnership with Barings. We believe our complementary capabilities will create a formidable combination helping us deliver unique income solutions for the U.S. Wealth segment, and we look forward to continuing to find unique combinations and partners that allow us to address needs of our clients across all segments and market cycles. This partnership is special because it also allows us to further strengthen our balance sheet, delivers new solutions to clients, enhances flexibility and ultimately gives us the opportunity to meaningfully improve our overall leverage profile while also being earnings accretive. Importantly, this transaction does not preclude continued investments in our business to support growth nor our ability to maintain a regular program of share repurchases and modest increases in the common stock dividend, both of which we expect to continue to execute," stated Andrew Schlossberg, President and CEO of Invesco Ltd.

"MassMutual's partnership with Invesco and their collaboration with Barings only further strengthens the value MassMutual delivers to our policyowners through our portfolio of strategic businesses and investments, one of our key competitive differentiators," said MassMutual Chairman, President and CEO Roger Crandall. "This mutually beneficial relationship also enhances our global asset management capabilities by expanding Barings' product and distribution opportunities. Importantly, this transaction gives us additional financial flexibility to strategically reinvest in our business and accelerate progress on our long-term strategy."

"With the majority of our platform spanning alternative assets, scaling those capabilities in the U.S. wealth market continues to be a long-term growth objective for Barings. We are excited to partner with Invesco to expand wealth investors' access to private markets by leveraging our long history of delivering solutions to institutional investors," said Mike Freno, Chairman and CEO of Barings.

Additional details can be found in Invesco's first quarter 2025 earnings presentation on Invesco's website at invesco.com/corporate.

About Invesco

Invesco is a global independent investment management firm dedicated to delivering an investment experience that helps people get more out of life. Our distinctive investment teams deliver a comprehensive range of active, passive and alternative investment capabilities. With offices in more than 20 countries, Invesco managed $1.84 trillion in assets on behalf of clients worldwide as of March 31, 2025. For more information, visit www.invesco.com/corporate.

About MassMutual (Massachusetts Mutual Life Insurance Company)

MassMutual is a leading mutual life insurance company that is run for the benefit of its members and participating policyowners. Founded in 1851, the company has been continually guided by one consistent purpose: we help people secure their future and protect the ones they love. With a focus on delivering long-term value, MassMutual offers a wide range of protection, accumulation, wealth management, and retirement products and services. For more information, visit www.massmutual.com.

About Barings

Barings is a $442+ billion* global asset management firm that partners with institutional, insurance, and intermediary clients, and supports leading businesses with flexible financing solutions. The firm, a subsidiary of MassMutual, seeks to deliver excess returns by leveraging its global scale and capabilities across public and private markets in fixed income, real assets and capital solutions. Learn more at www.Barings.com.

*Assets under management as of March 31, 2025

Investor Relations Contacts:	Greg Ketron	404-724-4299
	Jennifer Church	404-439-3428
Media Relations Contact:	Andrea Raphael	212-323-4202
MassMutual Contact:	chelseaharaty@massmutual.com
Barings Contact:	MediaRelations@barings.com

 

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SOURCE Invesco Ltd.

FAQ

What is the impact of Invesco's (IVZ) $1 billion preferred stock repurchase on earnings?

The repurchase is expected to be earnings accretive starting in the second half of 2025, improving balance sheet flexibility and enabling further deleveraging while maintaining growth investments and shareholder returns.

How much did Invesco (IVZ) increase its quarterly dividend in 2025?

Invesco increased its quarterly dividend from $0.205 to $0.210 per common share.

What is the size of MassMutual's ownership stake in Invesco (IVZ)?

MassMutual maintains approximately 18.2% ownership of Invesco's common shares outstanding.

How much initial funding is MassMutual providing for the new Invesco-Barings partnership?

MassMutual is providing $650 million in initial funding to support the growth and scale of the partnership's U.S. wealth management product offerings.

What is the focus of the new strategic partnership between Invesco (IVZ) and Barings?

The partnership focuses on private credit solutions for U.S. wealth channels, leveraging both firms' global private credit expertise, product structuring, and asset allocation capabilities.