London-based money manager Amvescap, which controls the naming rights to Invesco Field, has agreed to acquire PowerShares Capital Management LLC, a small but fast-growing provider of exchange-traded funds.
Amvescap agreed to pay $60 million plus future incentives worth several times that for the Wheaton, Ill., company, which manages $3.5 billion in assets.
Does the pending purchase mean Denverites can expect PowerShares Field at Mile High in the near future? The stadium’s name remains “status quo,” spokesman Ivy McLemore said.
But Amvescap, which has 14 years to go on a 20-year naming-rights agreement, discussed a potential name swap with the stadium’s board last summer. And PowerShares is an emerging retail brand that could benefit from the exposure.
Amvescap folded Invesco Funds Group, the namesake of the home turf of the Denver Broncos, into its Houston-based mutual-fund group AIM Investments in 2004. AIM continues to employ 200 in Colorado, and Amvescap runs pension operations under the Invesco brand.
PowerShares president Bruce Bond said teaming with a large mutual-fund group offered a way to reach the retail investing public as quickly as possible.
Amvescap, with the marketing muscle of 90 wholesalers and 450 representatives to distribute products, offered a good fit.
“This is a very, very big deal for the ETF industry,” Bond said.
Exchange-traded funds commanded $894 billion as of November, according to the Investment Company Institute, an industry trade group.
“Mutual funds are losing assets as ETFs are gaining,” said Paul Dickey, president of Denver-based INS Capital Management, which specializes in investment strategies based on ETFs.
ETFs trade like single stocks but spread risk across a basket of investments, typically based on some index. Their management fees are half to one-third of the typical fees of an actively managed mutual fund, and they are also more tax-efficient.
PowerShares has been an innovator in the ETF sphere, going beyond the standard indexes and sector groups to track less common benchmarks, Dickey said.
Staff writer Aldo Svaldi can be reached at 303-820-1410 or asvaldi@denverpost.com.
