Invesco Ltd is in discussion to merge with State Street Corp.’s asset-management business, according to a report by The Wall Street Journal on Thursday.
An agreement is not close, and discussions might not lead to an agreement. It is unclear what the terms of a potential deal would look like, but it would likely be one of the industry’s biggest in recent history.
State Street is one of the world’s largest custody banks, providing accounting and administrative services to other investment managers.
The firm’s own investing unit, State Street Global Advisors, remains a leading seller of exchange-traded funds, the low-cost investing structure the firm started. Invesco oversees $1.5 trillion in assets and manages a large ETF business.
In an indicator of potential investor enthusiasm for such a merger, Invesco shares jumped over 8% after The Wall Street Journal reported on the discussions. States Street Shares were up over 1%.
Investors’ desire for lower-cost funds have contracted profit margins across the asset-management industry. IVZ down -2.58%, STT down -0.99%