Consolidated Investment Products (Tables)

3 Months Ended

Mar. 31, 2017

Consolidated Investment Products [Abstract]

The following table presents the balances related to CIP that are included on the Condensed Consolidated Balance Sheets as well as Invesco's net interest in the CIP for each period presented. At March 31, 2017 all CIP are VIEs.



	As of
$ in millions	March 31, 2017		December 31, 2016
Cash and cash equivalents of CIP	535.7		742.2
Accounts receivable and other assets of CIP	137.6		106.2
Investments of CIP	4,890.5		5,116.1
Less: Debt of CIP	(4,272.9	)	(4,403.1	)
Less: Other liabilities of CIP	(490.9	)	(673.4	)
Less: Retained earnings	13.2		19.0
Less: Accumulated other comprehensive income, net of tax	(12.3	)	(18.0	)
Less: Equity attributable to redeemable noncontrolling interests	(207.7	)	(283.7	)
Less: Equity attributable to nonredeemable noncontrolling interests	(169.1	)	(107.2	)
Invesco's net interests in CIP	424.1		498.1

Condensed Consolidating Statement Of Income Line Items Reflecting Impact Of Consolidation Of Investment Products Into The Condensed Consolidated Statements Of Income

The following tables reflect the impact of consolidation of investment products into the Condensed Consolidated Statements of Income for the three months ended March 31, 2017 and 2016:



	Three months ended March 31,
$ in millions	2017		2016
Total operating revenues	(13.2	)	(5.5	)
Total operating expenses	(1.2	)	1.8
Operating income	(12.0	)	(7.3	)
Equity in earnings of unconsolidated affiliates	1.5		3.5
Interest and dividend income	—		(0.1	)
Other gains and losses, net	(10.1	)	(0.2	)
Interest and dividend income of CIP	53.8		44.4
Interest expense of CIP	(36.2	)	(27.3	)
Other gains/(losses) of CIP, net	10.9		(24.6	)
Income before income taxes	7.9		(11.6	)
Income tax provision	—		—
Net income	7.9		(11.6	)
Net (income)/loss attributable to noncontrolling interests in consolidated entities	(2.2	)	3.2
Net income attributable to Invesco Ltd.	5.7		(8.4	)

VIE Balance Sheets Consolidated In Period



	For the three months ended March 31, 2017	For the three months ended March 31, 2016
$ in millions	VIEs	VIEs
Cash and cash equivalents of CIP	8.2	14.4
Accounts receivable and other assets of CIP	1.3	—
Investments of CIP	45.8	10.9
Total assets	55.3	25.3

Debt of CIP	15.1	—
Other liabilities of CIP	13.7	0.7
Total liabilities	28.8	0.7
Total equity	26.5	24.6
Total liabilities and equity	55.3	25.3

During the three months ended March 31, 2017, the company determined that it was no longer the primary beneficiary of two VIEs and one voting rights entity (VOE) (March 31, 2016: the company determined that it was no longer the primary beneficiary of one VIE). The amounts deconsolidated from the Condensed Consolidated Balance Sheets are illustrated in the table below. There was no net impact to the Condensed Consolidated Statements of Income for the three months ended March 31, 2017 and March 31, 2016 from the deconsolidation of these investment products.



	For the three months ended March 31, 2017		Three months ended March 31, 2016
$ in millions	VIEs	VOEs	VIEs
Cash and cash equivalents of CIP	10.9	—	17.7
Accounts receivable and other assets of CIP	3.2	0.2	1.1
Investments of CIP	139.9	49.8	77.4
Total assets	154.0	50.0	96.2

Other liabilities of CIP	1.9	—	2.3
Total liabilities	1.9	—	2.3
Total equity	152.1	50.0	93.9
Total liabilities and equity	154.0	50.0	96.2

Fair Value Hierarchy Levels Of Investments Held And Notes Issued By Consolidated Investment Products

The following tables present the fair value hierarchy levels of certain CIP balances which are measured at fair value as of March 31, 2017 and December 31, 2016:



	As of March 31, 2017
$ in millions	Fair Value Measurements	Quoted Prices in Active Markets for Identical Assets (Level 1)	Significant Other Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)	Investments Measured at NAV as a practical expedient
Assets:
Bank loans	4,286.7	—	4,286.7	—	—
Bonds	244.7	14.3	230.4	—	—
Equity securities	159.3	157.6	1.7	—	—
Equity and fixed income mutual funds	15.2	15.2	—	—	—
Investments in other private equity funds	70.7	—	—	—	70.7
Real estate investments	54.8	—	—	54.8	—
Investments in fixed income fund of funds	59.1	—	—	—	59.1
Total assets at fair value	4,890.5	187.1	4,518.8	54.8	129.8



	As of December 31, 2016
$ in millions	Fair Value Measurements	Quoted Prices in Active Markets for Identical Assets (Level 1)	Significant Other Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)	Investments Measured at NAV as a practical expedient
Assets:
Bank loans	4,397.8	—	4,397.8	—	—
Bonds	370.9	—	370.9	—	—
Equity securities	167.4	166.0	1.4	—	—
Equity and fixed income mutual funds	13.0	13.0	—	—	—
Investments in other private equity funds	68.6	—	—		68.6
Real estate investments	40.7	—	—	40.7	—
Investments in fixed income fund of funds	57.7	—	—	—	57.7
Total assets at fair value	5,116.1	179.0	4,770.1	40.7	126.3

Beginning And Ending Fair Value Measurements For Level 3 Assets And Liabilities

The following tables show a reconciliation of the beginning and ending fair value measurements for level 3 assets and liabilities using significant unobservable inputs:



	Three months ended March 31, 2017		Three months ended March 31, 2016
$ in millions	Level 3 Assets		Level 3 Assets
Beginning balance	40.7		388.6
Adjustment for adoption of ASU 2015-02	—		(388.6	)
Purchases	15.1		—
Gains and losses included in the Condensed Consolidated Statements of Income*	(1.0	)	—
Ending balance	54.8		—

____________


*	Included in gains/(losses) of CIP, net in the Condensed Consolidated Statements of Income for the three months ended March 31, 2017 are $1.0 million in net unrealized losses attributable to investments still held at March 31, 2017 by CIP.

Fair Value Inputs, Assets and Liabilities, Quantitative Information, Consolidated Investment Products

Quantitative Information about Level 3 Fair Value Measurements

The following table shows significant unobservable inputs used in the fair value measurement of level 3 assets at March 31, 2017:



Assets and Liabilities	Fair Value at March 31, 2017 ($ in millions)	Valuation Technique	Unobservable Inputs	Range		Weighted Average (by fair value)
Real Estate Investments	$54.8	Discounted Cash Flow	Discount rate	7% - 33%		29.0	%
			Terminal capitalization rate	5.3	%	5.3	%
			Average rent growth rate	2% - 3%		2.5	%

At December 31, 2016, $40.7 million of investments held by consolidated real estate funds were valued using recent private market transactions.

The following narrative will indicate the sensitivity of inputs illustrating the impact of significant increases to the inputs. A directionally opposite impact would apply for significant decreases in these inputs:

•

For real estate investments, a change in the average rent growth rate would result in a directionally-opposite change in the assumptions for discount rate and terminal capitalization rate. Significant increases in the average growth rate would result in significantly higher fair values. Significant increases in the assumptions for discount rate and terminal capitalization rate in isolation would result in significantly lower fair value measurements.

The table below summarizes as of March 31, 2017 and December 31, 2016, the nature of investments that are valued using the NAV as a practical expedient and any related liquidation restrictions or other factors which may impact the ultimate value realized.

March 31, 2017

December 31, 2016

in millions, except term data

Fair Value

Total Unfunded Commitments

Weighted Average Remaining Term ⁽²⁾

Fair Value

Total Unfunded Commitments

Weighted Average Remaining Term ⁽²⁾

Private equity funds ⁽¹⁾

$70.7

$45.3

7.1 years

$68.6

$41.9

7.0 years

Investments in fixed income fund of funds ⁽³⁾

$59.1

—

n/a

$57.7

—

n/a

____________


(1)	These investments are not subject to redemption; however, for certain funds, the investors may sell or transfer their interest, which may require approval by the general partner of the underlying funds.


(2)	These investments are expected to be returned through distributions as a result of liquidations of the funds' underlying assets over the weighted average periods indicated.


(3)	Investment may be redeemed on a monthly basis.