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What’s Driving the Rumored Sale of Oppenheimer to Invesco?

Less than 60 days after beginning to shop its OppenheimerFunds unit, MassMutual has reportedly agreed to sell the predominantly active fund manager to Invesco.

Citing unidentified sources, several news outlets reported late last week that a deal was in the works between the two firms, with Ignites reporting Sept. 21 that the $5 billion-plus transaction is expected to be announced in October. Representatives of both firms have declined to comment on the reports.

With $248 billion in assets under management, Oppenheimer currently ranks as the 12th largest mutual fund firm in the U.S.; Invesco ranks 14th.

Both firms are facing narrowing margins caused by falling fees and rising regulatory costs. Additionally, firms like Oppenheimer that focus on actively managed funds are losing business to firms that offer passive vehicles like index funds.

In recent years, both firms have turned to exchange-traded funds as a way to diversify. In 2015, Oppenheimer acquired RevenueShares, which offers smart-beta ETFs. Invesco acquired British ETF specialist Source last year, followed by its acquisition of Guggenheim’s ETF group in April.

Drawing upon Morningstar’s Analyst Ratings, Bridget Hughes, the firm’s Director of Parent Research, finds that apart from their shared focus on smart-beta ETFs, Oppenheimer and Invesco are strong in similar areas and weak in similar areas:


  • both look strongest in foreign equities;

  • both fare poorly with their allocation funds;

  • both look about the same in U.S. equities; and

  • neither looks strong in municipal bonds.


The only stark difference is in taxable bonds, Hughes finds.

“What’s most interesting about this potential combination is what happens to the international funds, where the two firms are strongest,” Hughes suggests.

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