Invesco Solutions

What is Invesco Investment Solutions? How do you help clients?

Invesco Investment Solutions is an independent multi asset team whose purpose is to help clients get the best out of Invesco. We’re a team of investment practitioners from around the world. And our job is to really understand the client's needs, whether that's fees and liquidity requirements, ESG constraints or regulatory considerations.

We receive a number of tasks. It can be from asking to do portfolio analytics through our proprietary software, Invesco vision, or it can be to design customised solutions. And that can be anything from target risk and target date strategies, dynamic multi-factor solutions, or multi-alternative solutions.

What barriers do clients face when trying to invest in alternatives? How can you help?

The market landscape for alternatives has grown in scale but also in complexity.

So there are new emerging strategies coming to market every day and it can be quite time consuming to understand these asset classes and whether they fit within your portfolio.

Even if you know what you want to invest in, there can be serious implementation considerations. So first of all, you may need significant AUM to be able to invest in the first instance. You also may need internal resources to be able to look at cashflow modelling, monitoring your portfolio and be able to report on performance. So this is where the Solutions team comes in.

We're able to act as an extension of staff and help you navigate these markets through our capital market assumptions. We can also help with implementation – so dealing with onboarding and reporting.

Tell us a bit more about your private markets platform. How does that work?

The alternative solutions platform provides streamlined access to private market capabilities, both at Invesco and through our third-party managers.

Through this open architecture approach, we're able to design diversified private market solutions with a greater choice. And through this, we can reduce AUM requirements and ensure fees are kept to a minimum.

Being a part of the Solutions team, we're able to combine private and public asset classes to produce truly bespoke and diversified alternative solutions, taking into consideration return targets, fee constraints, and every other investment criteria that the client needs.

What kind of private market assets can you access through your platform?

Through our trillion dollar open architecture platform, we have access to a variety of private asset classes across real estate, real assets, private equity, and private credit. The beauty of an open architecture approach is that we have a greater choice, and we're not wedded to one particular investment manager, meaning that we can ensure that our client has a solution that's fit for purpose.

So every potential manager and fund, whether they're Invesco or otherwise, is assessed using a rigorous due diligence process, ensuring that every underlying strategy we select is fit for purpose for our clients.

What kind of clients do you help?

The Solutions team caters to a variety of clients from sovereign wealth funds, central banks, insurers, pensions and private wealth.

Because of our nature, we are very flexible in the way that we implement strategies. So if you're looking for a co-mingled solution, a customised isolation or simply advice, we're here to help. But the main thing is for us to understand exactly what your needs are before offering anything.

Can you walk us through the full client journey, from the moment a client first comes to you?

The first thing we do is truly understand our clients’ objectives. So that's looking at things such as return requirements, liquidity constraints, fee targets, and any ESG considerations. Through that, we take each client's existing portfolio and conduct analysis using Invesco Vision. This is a proprietary analytical software that we use to understand the client's portfolio and help them make investments decisions through our capital market assumptions. We can develop proposals for an asset allocation that we think fits the client's needs.

The second step is manager selection. Through our open architecture platform, we're able to thoroughly assess managers from both Invesco and third-party managers, which leads on to implementation. We're able to be very flexible in the way that we implement our strategies, whether it's through advice or through custom solutions. We can help the client overcome any challenges that they have faced when investing in alternatives.

Tell us about your capital market assumptions. What are the key themes at the moment? Do alternatives look attractive?

Invesco Investment Solutions develops over 170 capital market assumptions.

These are long-term ten-year assumptions that help us construct our strategic asset allocation. In the public space, we're seeing that fixed income capital market assumptions are expected to exceed previous ten-year returns. In equities, we're seeing the reverse. This is due to higher valuations from a Q1 market repricing. In the alternative space, we're seeing higher expected returns due to strong illiquidity premiums.

But we'd say in this current macroeconomic environment, it's better to be a lender than a direct equity holder. This is because of the floating rate nature of private credit strategies. Also, in the equity space, we're seeing that there is a decrease in valuations, but that's offset by an increase in cost of financing, not making it any particularly more attractive. In real estate debt, we're seeing high single digit to low double digit return expectations due to that floating rate nature of these strategies, as well as the fact there are conservative lending standards and modest loan to values.