The all-stock deal will add OppenheimerFunds’ emerging market and international equity investment strategies to Invesco’s PowerShares exchange traded fund business.
Morgan Stanley analysts argued that the deal would reinforce Invesco’s position and scale against competitors and it would provide the asset manager a new branch to better hold up against the escalating fee war in the industry.
“The transaction adds significant international, emerging market and global equity capabilities which are [a]small part of the Invesco franchise today yet represent strategies where active management tends to [perform]better versus benchmarks,” Michael Cyprys, an analyst with Morgan Stanley, said.
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