Invesco Reported to Be Out Front with Van Kampen Bid

October 5, 2009 ( - Invesco has emerged in the lead to acquire the mutual fund business from Morgan Stanley's Van Kampen, according to a Wall Street Journal report.

The Journal, citing anonymous sources, said the deal would likely increase Invesco’s assets under management to about $550 billion and leave Morgan Stanley with a minority stake in the Atlanta-based Invesco. The deal is estimated to be worth $1 billion to $2 billion. Morgan Stanley would also likely receive some cash

Morgan Stanley started pursuing a buyer because its executives felt the Van Kampen business was not big enough to compete in the mutual fund marketplace where some players run $1 trillion or more, according to the report.

If a deal happens, it would be part of a trend of banks and insurers to shed their money-management units to raise capital and focus more on core businesses, the Journal said, citing as examples Barclays PLC’s decision to sell Barclays Global Investors to BlackRock Inc. (see BlackRock-Barclays Deal for BGI Formally Accepted ), and Bank of America’s move to offload most of its asset-management business to Ameriprise Financial (see Ameriprise Buys Asset Management Unit from BofA ).

Morgan Stanley in recent regulatory filings said its Van Kampen funds manage about $86 billion and Morgan Stanley-branded funds manage about $44 billion. Those would likely be added to Invesco’s assets, pushing assets under management to about $544 billion, the Journal said.