The Great Asset Management Purge of 2025
The numbers from the December 05 close tell a bifurcated story. While Invesco Ltd (IVZ) stock sits at $26.24, buoyed by a 53 percent year to date rally, the investors inside its active international equity funds are facing a far colder reality. The June 23 purge, often whispered about in Atlanta and London as the Red Wedding of asset management, saw the immediate removal of heavyweight managers like Justin Leverenz from Invesco Developing Markets (ODMAX). This was not a routine transition; it was a desperate attempt to stop the bleeding in a fund that once defined the emerging markets category but was eventually crippled by missteps in Russia and China.
Management Turmoil and the AIEVX Performance Gap
Investors in the Invesco EQV International Equity Fund (AIEVX) have seen their returns lag the broader market by a staggering margin. As of the latest Morningstar performance reports from early December, AIEVX delivered a trailing one year return of roughly 11.37 percent. In isolation, a double digit return looks acceptable to the untrained eye. However, when measured against the MSCI ACWI ex USA Index, which surged 24.93 percent over the same period, the alpha is not just missing; it is deeply negative. The catch for long term holders is the persistent high expense ratio relative to the underperformance, a dynamic that remains unchanged even as the firm shuffles leadership.
The Strategy Shift and Operational Risks
CEO Andrew Schlossberg oversaw a restructuring that replaced management teams on six international equity funds simultaneously. This includes the transformation of the EQV European Equity Fund into the Invesco International Value Fund (AEDAX). The firm installed Steve Smith in the UK and Zach Sacks in New York to lead this new mandate. There is a glaring operational risk here: these two managers have no historical track record of working together on the same team. According to SEC EDGAR filings, the mandate also shifted from a moderate growth, all cap approach to a rigid large cap value strategy. This is a complete restart rather than a refinement, leaving current shareholders as the subjects of a live experiment in team chemistry.
Divestment and the Passive Pivot
The firm’s decision to sell its majority interest in its India based asset management business in October 2025 further signals a retreat from complex, locally managed active strategies. Invesco is increasingly reliant on its passive arm, particularly the QQQ franchise, to sustain its corporate valuation. The November 30 AUM report shows that while total assets hit $2,154.3 billion, active equity AUM continues to face headwinds from market volatility and net outflows. The stock price of IVZ is thriving because of the QQQ reclassification from a unit investment trust to an open end ETF, which allows Invesco to finally capture management fees on the product. This creates a conflict of interest for retail investors: the company is succeeding by pivotting to passive tools, while its active international funds, where fees are highest, are being gutted and combined in a search for scale over performance.
Hard Data on the 2025 Underperformance
| Fund Ticker | 2025 Performance (YTD) | Category Rank | Management Status |
|---|---|---|---|
| ODMAX | 9.42% | Bottom Quartile | New Team (June 2025) |
| AIEVX | 11.37% | 3rd Quartile | Legacy EQV Team |
| AEDAX | 8.15% | Bottom Decile | New Mandate/New Team |
| MSCI ACWI ex USA | 24.93% | Benchmark | N/A |
Institutional knowledge has walked out the door with the 20 analysts and managers dismissed during the summer. The risk of institutional decay is high when such a large volume of personnel is removed in a single fiscal year. For those still holding Invesco international funds, the hope is that the new British and American management duos can find synergy before the next market correction. However, with the India divestment complete and the QQQ conversion providing a financial cushion for the parent company, there is less internal pressure to fix the performance of these specific active funds than there is to simply reduce their operational costs.
Investors should look toward the March 2026 13F filings for the first clear signal of whether major institutional holders are following Leverenz out the door. The primary data point to watch will be the institutional ownership percentage of ODMAX; if it falls below the 40 percent threshold in the first quarter of next year, it will confirm that the so called streamlining was, in fact, an exit signal for the smartest money in the room.
