Asset management giant Invesco eyes bid for $500m Source

(c) Sky News 2017: <a href="http://news.sky.com/story/asset-management-giant-invesco-eyes-bid-for-500m-source-10851816">Asset management giant Invesco eyes bid for $500m Source</a>
 

The asset management giant which operates in the UK under the Invesco Perpetual brand is plotting a $500m takeover of Source, a London-based funds provider.

Sky News understands that Invesco (Frankfurt: 3IW.F - news) is one of two remaining bidders for Source, which is jointly owned by the private equity firm Warburg Pincus and a group of investment banks including Goldman Sachs (NYSE: GS-PB - news) and JP Morgan.

Invesco and the other, unidentified, bidder are said to be in advanced talks with advisers to Source, and a deal could be struck within days.

Source is a specialist in providing exchange traded funds (ETFs (Shenzhen: 395013.SZ - news) ), which allow investors to hold exposure to shares, commodities and other asset classes by tracking their performance through a publicly listed entity.

ETFs have been one of the fastest-growing segments of the asset management sector, with relative outperformance in terms of growth relative to conventional active fund managers in recent months.

Research quoted by the Financial Times ten days ago suggested that investors globally put almost $200bn into ETFs in the first quarter of the year.

ETF providers such as Source charge investors lower fees, a factor in their growing attractiveness.

Despite the increase in assets under management, Source has struggled to turn a profit.

Invesco, which is listed in the US, has a significant presence in the ETF market through a unit called PowerShares.

Other big players in the market include Blackrock (Sao Paolo: BLAK34.SA - news) , the world's biggest fund manager, Charles Schwab and Vanguard.

A spokeswoman for Warburg Pincus, which invested in Source in 2014, declined to comment.

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