Invesco has granted board seats to Trian Partners’ Nelson Peltz and Ed Garden in a key concession to the activist hedge fund that is pushing for changes at the struggling asset manager.
Mr Peltz, Trian’s chief executive, and Mr Garden, its chief investment officer, will join Invesco’s board with immediate effect, according to a filing submitted on Thursday.
Invesco also said that Tom Finke, chief executive of $354bn fund group Barings, would join its board as a director when he steps down from his current position at the end of this month. Barings is a subsidiary of MassMutual, the US insurance company that is Invesco’s largest shareholder.
The appointments, which involve Invesco expanding its board from nine directors to 12, show that the $1.2tn asset manager is yielding to pressure to turn around its troubled business.
Trian disclosed an almost 10 per cent stake in Invesco last month and signalled it would push the group to consider deals to help it withstand the relentless fee pressure facing the asset management sector.
Invesco has been hard hit as investors have abandoned active asset managers, which charge high fees for picking stocks, for passive funds that simply track an index. It ranked as the worst-selling fund manager globally in 2019 and its long-term funds have lost a net $33.1bn since the start of this year.
“We are pleased to have Trian as a significant shareholder,” said Richard Wagoner, chair of Invesco’s board. He pointed to Mr Peltz and Mr Garden’s “impressive” record as long-term investors and experience in asset management, which gives them “a deep understanding of the significant growth opportunities of this industry”.
Mr Wagoner said that the expanded board would work with Invesco’s strong leadership team to drive sustainable growth and enhance long-term value for shareholders.
Credit Suisse analyst Craig Siegenthaler said that the changes to Invesco’s board increased the likelihood of the asset manager making a large-scale acquisition over the next six months, adding that Janus Henderson was viewed as one of the potential candidates.
At the same time as it bought into Invesco, Trian took a similar-sized stake in rival active manager Janus Henderson, which manages $336.7bn, and said it intended to discuss “strategic combinations” with both groups.
Trian added that only asset managers with “significant scale and product breadth, streamlined and efficient non-investment functions, and the ability to invest in technology, growth and innovation” were best placed to succeed.
The fund indicated in regulatory filings that it could encourage the company to pursue deals with other asset managers in which Trian currently holds a stake. Trian declined to comment.
The New York-based hedge fund has a dedicated long-term fund that is aimed at spurring consolidation in the asset management industry. It previously owned a stake in Legg Mason, which was acquired by Franklin Templeton in July.
Mr Wagoner added Mr Finke’s presence on Invesco’s board would serve to strengthen the asset manager’s relationship with MassMutual, which he described as “a committed, long-term partner to our business”. MassMutual took a stake in Invesco as part of the $5.7bn sale of OppenheimerFunds to the larger asset manager in 2018.
MassMutual could not be reached for comment.