TWST: Please start with a historical snapshot of Invesco and an overview of your operations, brands and products today.

Mr. Starr: Invesco (IVZ)is a leading independent global investment manager, and we managed $616 billion in assets under management at the end of 2010. We have more than 600 investment professionals, each of whom work in specialized teams. These teams manage investments across a fairly significant array of asset classes and investment styles. Our clients benefit from our commitment to investment excellence, and the depth of these capabilities and our organizational strength.

Probably the most important element in terms of who we are is we have an "investors first" approach to almost everything we do, in terms of how we manage the firm and how we allocate resources. Again, the primary focus is investment excellence. We are strictly an investment company. We're not a bank, we're not an insurance company and we're not a distributor, and that is important. We have no conflicts. So this investment-centric culture that we have, why is that good? It minimizes the distractions of our investment professionals. We're able to focus our technology tools and platforms particularly on making them able to do what they need to do and navigate in the markets effectively.

The other thing we do as a global company is we share ideas, and we have a global challenge process that allows our professionals to debate topics on a global basis. I think that is a valuable element that many other firms that aren't global obviously cannot create. We have, for each of our investment teams, a very clearly articulated investment philosophy and process that has to be aligned with our clients' expectations, and these have to be consistent and work across multiple market cycles. Our CIOs in each of our investment centers are charged with managing these investment disciplines and developing the talent within these teams. The reason I'm talking a lot about these elements is that it is truly who we are, it is what Invesco is.

If you look at the history, the firm came out of a different model five years ago, where the focus was more of a holding company of separate asset managers, and we've become an integrated global investment firm over the last five years. You may also know there was a fairly significant merger between AIM Management Group and Invesco in 1997. It formed a company that was known as Amvescap, and the firm was rebranded as Invesco and moved its listing from London to the New York Stock Exchange in 2007. This was a significant change strategically in terms of the positioning of the firm, and one that I think has really allowed us to prosper relative to where we were just a few years ago.

Invesco is the primary brand name, and there has been a conscious effort over the last five years to move to a common brand and identification in terms of who we are. But we still have some brands that are well known: Invesco Perpetual is in the United Kingdom, Invesco Trimark in Canada. And it's pretty much Invesco through the rest of the world, although we do have a distressed investment affiliate, WL Ross & Co., and we also use the brand Invesco PowerShares, which is one of the leading providers of ETFs. Our private wealth management business is branded Atlantic Trust. So in summary, we're a global company and we're integrated in the sense of everything working together to meet our clients' needs and developing and delivering our capabilities across the globe to satisfy our clients' needs, wherever they may be.

TWST: Would you tell us a bit more about the company's reach and capabilities around the world?

Mr. Starr: We have about 66% of our assets domiciled in the United States, and that has gone up through the most recent acquisition. The rest is spread across the globe. We have about 13% of our assets in the U.K., we have 6% in Continental Europe, Japan is about 5%, Greater China is 3%, Canada is 4% and there is another 3% to 4% between the Middle East and Australia. Our acquisition in the U.S. was done not as a movement away from being a global asset manager. We still feel very much that a lot of our opportunities are going to be very strongly outside of the U.S. The acquisition done in U.S., which we can talk more about later, was really representing our need to satisfy our clients' needs more in the U.S. and become more relevant to the fund distributors in the U.S. So we have a good amount of diversification geographically, probably the most of all the global managers or close to their highest level. And then in terms of the product capabilities or the asset class capabilities, 48% of our assets are in equities. We have 21% in fixed income, 13% in alternatives, 11% in money market and the remaining 7% is in a category which we call asset allocation, which tends to move different categories based on markets. I think that level of diversification across capability is somewhat unique. Many shops define themselves by one particular capability or another. We have great strength in all of these capabilities, which we feel allows us to satisfy our clients' needs, depending on what market cycle we're in, where someone might want fixed income one day, and perhaps equities on another day.

TWST: How does Invesco view growth opportunities both within and outside of the U.S.? Are there particular areas of focus for growth?

Mr. Starr: I think, as a broadly diversified global business, we actually have opportunities to grow across all regions. It probably does make sense to highlight two that we think are particularly primed for growth for us. One I'd like to talk about is Asia. We've been in Asia since 1962. We have about $40 billion in assets in the region. We're physically located in 12 countries across the region, and with the recent acquisition that happened with Morgan Stanley and also AIG's real estate business in Asia, we're now the fifth-largest global manager in Japan and ranked eight out of all managers in Japanese equities. Greater China, more broadly, we have the first U.S. joint-venture asset management company that was established in the Chinese market, which occurred in 2003. The joint venture is known as Invesco Great Wall, and we have a leading position there in Chinese equities, with a strong investment performance and very strong positioning, which will allow us to benefit from China's growth, which we absolutely know is going to be forthcoming and has been a very dominant feature across the globe. We have a very robust momentum also in the Chinese institutional business, with about $2.5 billion in new institutional wins in Greater China over the past year. So we have both retail and institutional capabilities in China.

The other I would mention is in Continental Europe. We've also been in that region for quite some time. We have about $35 billion in assets in Continental Europe, and that excludes the U.K., where we are number one in the retail channel. But we think we're able to grow our large presence in the cross-border market in Continental Europe, and that's been a very important focus for us, and that's how we're going to grow in that region. We're typically ranked in the top 10 firms as measured by net sales in the cross-border market. And we think we can grow our presence over the forthcoming years, and our goal is to be in the top five in terms of our presence. In terms of the model of what we sell into Europe, we bring the best of our investment capabilities across the globe to bear in Continental Europe, and those are products that can be sold in any country within Europe, so it's very flexible and scalable.

TWST: You mentioned a couple of acquisitions that took place in 2010, the retail asset management business of Morgan Stanley, and the Asia fund and asset management business of AIG Global Real Estate. Would you tell us more about these acquisitions and how they were good strategic fits for Invesco?

Mr. Starr: Generally we have a philosophy around acquisitions, which was relevant to the ones you mentioned and will be relevant for future ones. We will only do an acquisition if we think it will fulfill a strategic purpose and will also meet very well-defined financial criteria. In terms of strategic purpose it could be to fill a product gap or a capability gap or possibly to obtain presence in a region where we have no presence. We won't do acquisitions in a passive way just from an investment perspective. We really want the business to the extent it is being acquired to connect with the rest of Invesco and be leveraged. And that would be true for each of the acquisitions that we have done. An example would be PowerShares, where we had no ETF capability at all in 2006. We purchased the PowerShares business, and we now have ETFs globally that have grown to $60 billion in size. So that's a perfect example. WL Ross & Co. is another example where we had a small private-equity capability and no distressed investment capability. They came onboard in 2006, and now the business has more than tripled in size and has been a very strong contributor in terms of our institutional pipeline and how we're perceived by consultants. So that's another example of how an acquisition can really transform a part of Invesco.

We purchased AIG's Asian real estate business in December 2010, and that acquisition has transformed our Asian real-estate operations, where we've been since 2006. We think that addition makes us one of the few truly global real estate investing companies which will be very helpful for us in terms of dealing with companies that are looking for global direct real estate as an investment strategy. Specifically to the acquisition of Morgan Stanley's retail business, or Van Kampen Investments, that was a case where we saw many trends occurring within the U.S. Specifically, we saw consolidation of distribution. Distributors were focused on, and are focused on, working with fewer so-called manufacturers than they have in the past, and that was one element. The other was our actual investment capabilities were somewhat limited - we didn't have as strong a U.S. value equity capability or muni bond capability as we felt we wanted, and that was what Morgan Stanley's retail business brought to us. And so this acquisition significantly enhanced our investment capabilities, and it also significantly enhanced our presence within the distribution channels in the U.S., where we're now clearly a top 10 player, whereas before we were not ranked.

TWST: How does the overall business break down in terms of retail, high net worth and institutional clients?

Mr. Starr: We have about 36% of our assets in the institutional area, 61% in retail and high net worth is about 3%. That's all as of the end of the year. It's not that we have a specific goal that we want to be this much retail, this much institutional - each part of the market will grow at different rates, and they're all very strongly complementary to each other, so we like having the mix.

TWST: Is there anything in particular the company has done or is doing to improve sales and distribution?

Mr. Starr: We have mentioned that some of the acquisitions were very helpful for us in terms of strengthening our capabilities within the U.S. retail side. Institutionally as well, we've been very focused on client engagement and working with consultants and clients so they understand our capabilities. It's really just a focus around the clients, and of course the number one element to being successful there is delivering strong investment performance, which we've been very pleased that we've been able to do.

TWST: How have fund flows and investment product performance been trending? Are there any particular areas you're focused on improving?

Mr. Starr: I think fund flows are very directly connected to investment performance, and to the extent that our investment performance has improved significantly it has really been very strongly positive for flows. As an example, if you look at our five-year record, 78% of our assets are beating peers on a five-year basis, which is very much improved relative to our track record in say 2005 when that similar number was 63%. People are focused on long-term performance. We think that's ultimately what's going to drive flows. We are seeing, and we have seen over the last five years, our flow picture steadily improving across all our different regions.

The other element which is relevant in terms of flows is the macro environment. We do have the majority of our assets in equities, and the demand for equities and particularly domestic U.S. equities has not been present recently. Fixed income has really been predominantly in demand, and we have very strong fixed income capabilities. But ultimately we do think that to the extent that people are looking for more equity-oriented products and particularly domestic equity products in the U.S., that we are extremely well positioned to meet that need. And that will help us in terms of flows.

TWST: How are you positioning yourselves to capture more opportunities in the institutional arena?

Mr. Starr: I think we're very well positioned in the institutional space. We have extremely strong capabilities institutionally, and particularly capabilities that are in demand right now, which would include direct real estate, as an example. We have private-equity capabilities, we have commodity-type products and asset-allocation-type products; stable value, which is a capability that almost every defined contribution plan is looking to have. We have seen these capabilities help us make great connections with institutional clients, and again it's not a push-type of approach. We basically listen to our clients and work with our clients to see what they need. I think we're very well aligned with those needs right now.

TWST: What are the highlights or key takeaways from the company's Q4 and year-end earnings?

Mr. Starr: I think we were generally pleased with the results. We saw earnings increase 55% versus prior year, and our operating margins expanded about 600 basis points to 34.5%. The quarterly results were even stronger in the sense that, just looking at the fourth quarter EPS grew 13% quarter over quarter and operating margin was almost 37%. When we look historically that's at a level that's very close to the highest levels of our performance.

TWST: To what do you attribute the more than 50% growth in earnings?

Mr. Starr: I think our investment performance was a very important part of it, which allowed us to grow organically. We successfully integrated the Morgan Stanley Van Kampen acquisition in June, and that also significantly helped our earnings and profitability year over year.

TWST: Do you see an opportunity to expand the company's profit margin? How would you accomplish that?

Mr. Starr: We absolutely do. There is certainly nothing structurally that would stop us from seeing margin expansion, and you've certainly seen the evidence of it in 2010. Essentially we are able to continue to grow organically if we continue to provide strong investment performance. Also with some amount of market appreciation, there is inherent operating leverage in our business model that will just naturally expand margins. We combine that with a very disciplined approach to managing our resources and a continuous improvement philosophy in how we use our resources. We feel we're very well positioned to see margin expansion going forward.

TWST: Have you and the rest of the senior management team set any goals for Invesco for the next 12 to 24 months?

Mr. Starr: Absolutely. Certainly in 2005 we had some very well-defined operating objectives that were put in place, and they continue on through today. Most of our focus is continuing to deliver on those objectives, and they are achieving strong investment performance over the long term for our clients, delivering our investment capabilities anywhere in the world to meet our clients' needs, harnessing the power of our global operating platform, and of course, perpetuating a high-performance organization. Our focus is very much aligned to those four pillars, and they have not shifted. Again, it's not about strategically doing something very fancy. It's really about executing the plan consistently and effectively, year in and year out.

TWST: Is there anything else you think investors should know about Invesco?

Mr. Starr: I think one of the things that really has helped us through the recent financial crisis, and in many ways put us in an even more competitive position today than we were at the beginning of crisis, has been our focus on clients, clearly, but also I would say our enterprise risk management. We have benefited greatly, and we continue to benefit, from the firm's overall focus on risk management, both on the enterprise basis and the portfolio basis. And you'll see that the firms that have prospered post-financial crisis have been those who have really invested deeply in developing comprehensive and effective enterprise risk management and portfolio risk management capabilities. Essentially in every decision that we make, we bring to bear the discussion of risk. When we think about a new product introduction or an acquisition or a change to operations and even around how we manage our people and our talent, it all is focused on risk management, and ultimately are we doing something that is going to put our clients at jeopardy in any possible way? If the answer is "yes," we don't do it. We think having a strong firm helps our clients. I think we have done a good job.

You can look at what has happened in the markets, and we have not had any of those things happen to us. For example, we had no credit blowups, we had no exposure to any of the fraud events that are well known - Madoff, Stanford - we've had no security lending losses, no interruption in operations from any natural disasters, no disruptions from M&A, no problems with counterparty relationships. We believe that our track record really does demonstrate how effectively and strong our ERM truly is. In the end I think that's very helpful. It has been recognized by Standard & Poor's, for example, which last year upgraded us to a "strong" risk rating, which puts us as one of only four listed asset managers with that rating. It was certainly nice to see that recognition, but it's not so much about the rating, it's about doing it every day.

TWST: Would you like to add any final thoughts?

Mr. Starr: We think that the firm is in a really strong position today to deliver value to our clients and shareholders. The firm - in terms of performance, in terms of having products that people want to own and our connection to our clients - has never been stronger, and so we do feel like the firm is very much poised to continue to prosper and succeed going forward.

TWST: Thank you. (MN)

Loren M. Starr, CTP

Senior Managing Director & CFO

Invesco Ltd.

Two Peachtree Pointe

1555 Peachtree St.

Atlanta, GA 30309

(404) 479-1095

(800) 959-4246 - TOLL FREE

(404) 439-4911 - FAX

www.invesco.com