Report: Invesco Out Front with Van Kampen Bid

Invesco has emerged in the lead to acquire the mutual fund business from Morgan Stanley’s Van Kampen, according to The Wall Street Journal.

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 the examples of Barclays PLC’s decision to sell Barclays Global Investors to BlackRock Inc. (see “Barclays Formally Accepts BlackRock’s Offer for BGI”), and Bank of America’s move to offload most of its asset-management business to Ameriprise Financial (see “BofA Sells Columbia to Ameriprise for $1B”).

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, according to the news report.