Good morning, and thank you all for joining us. As a reminder, this conference call and the related presentation may include forward-looking statements which reflect management's expectation about future events and overall operating plans and performance. These forward-looking statements are made as of today and are not guarantees. They involve risks, uncertainties, and assumptions, and there can be no assurance that actual results will not differ materially from our expectations. For a discussion of these risks and uncertainties, please see the risks described in our most recent Form 10-K and subsequent filings with the SEC. Invesco makes no obligation to update any forward-looking statement. We may also discuss non-GAAP financial measures during today's call. Reconciliations of these non-GAAP financial measures may be found at the end of our earnings presentation. Welcome to Invesco's fourth quarter earnings results conference call. All participants will be in a listen-only mode until the question and answer session. At that time, to ask a question, press star one. This call will last one hour. To allow more participants to ask questions, only one question and a follow-up can be submitted per participant. Today's conference is being recorded. If you have any objections, you may disconnect at this time. Now, I would like to turn the call over to your speakers for today, Marty Flanagan, President and CEO of Invesco, and Allison Dukes, Chief Financial Officer. Mr. Flanagan, you may begin. Thank you, operator, and thank you everybody for joining us and happy New Year. We did end up 2021 with a strong fourth quarter and momentum going into 2022. We'll spend a few minutes looking back at the fourth quarter and also take a quick look at 2021 because it really sets the context as we go into the new year. Our focus has been and will continue to be on clients and employees as we execute in this COVID operating environment. We've embedded new ways of working together to deliver outcomes for our clients. We've maintained our focus in six key capability areas, ETFs, factors, index, private markets, active fixed income, active global equity, Greater China, and solutions. This approach has helped us generate consistent, strong, and broad organic growth at the end of the year, crossing over $1.6 trillion in assets under management. As you can see on slide three, our net long-term inflows of $12.5 billion represents organic, annualized, long-term growth of 4% despite the market volatility in the fourth quarter. This is the sixth consecutive quarter of strong growth and is a direct result of the investments we've made over time to enhance and evolve our business to meet the needs of our clients. It also speaks to the broad diversification of our business. Growth was driven by continued strength in our key capability areas as we strategically invest in areas where we see client demand and have competitive strengths. For the year, Invesco delivered the strongest organic growth in our history. We generated over $81 billion of net long-term inflows, representing 7% organic growth rate, which is one of the best in the industry. Looking at our specific capabilities, our global ETF platform closed out the year very strong. ETFs generated net inflows of nearly $22 billion in the fourth quarter, including our flagship QQQ product. The QQQ product had an exceptional quarter, generating $13 billion net inflows. For the year, ETFs globally generated a record $62 billion net inflows, and we increased our market share in both assets under management and revenue. The Q's had an outstanding year with over $21 billion net inflows, growing to $215 billion at year-end. QQQ product has become the fifth-largest ETF globally. Its popularity has spurred growth in the rest of our global ETF platform and laid the groundwork for the launch of the adjacent fee-generating products such as the QQQ Innovation Suite. We launched the suite in October 2020, and it has been highly successful, growing to $5 billion in assets under management by the end of 2021. We continue to see clients increasing their allocation to alternative strategies as they search for diversification and higher return. Invesco has built a broad platform across real estate to meet client demands. We are confident in our ability to accelerate the growth as we look to the future. In the private real estate business, long-term net inflows were $2.4 billion in 2021, comprised of new acquisition activity of $12.4 billion and investment realizations of $9 billion. Our direct real estate assets under management grew by 12%. Our private credit business saw robust bank loan product demand resulted in net long-term inflows of $7.5 billion for the year, including the launch of several new CLOs. Our active fixed income business remained strong, generating net inflows of $9.3 billion in the fourth quarter, including $7.1 billion from Greater China and $35 billion for the year, representing organic growth of 13% over the prior year. Within active global equities, although our $45 billion developing markets fund saw net outflows in the quarter, the fund generated net long-term inflows in 2021 of $1.2 billion, an improvement of $4.3 billion over 2020. On the institutional side, we finished a strong year with solutions-enabled opportunities accounting for 35% of our institutional pipeline. The business in Greater China closed out an exceptional year of growth, with fourth quarter net long-term inflows of $9.5 billion. For the year, net long-term inflows were $28.7 billion, representing organic growth of 32%. Business in China continues to be a source of strength and differentiation, and we expect strong growth in the years ahead. On slide four, we highlight a very strong set of results for 2021. In addition to reporting net long-term inflows in 2021, we generated record gross inflows of $427 billion, a 37% increase compared to 2020. Net revenues grew 17% over the prior year, helping drive adjusted operating income to nearly $2.2 billion, a 31% increase over 2020. Revenue growth, coupled with strong expense discipline, led to a 450 basis point increase in our net operating margin to 41.5%. In the second half of the year, we reported the second highest net operating margin since the company became U.S. listed in 2007. These factors drove a 60% increase in our full year EPS to $3.09. Strength in our business has generated strong cash flows, improving our cash position to a point where we are resuming our share buybacks. We intend to purchase up to $200 million in common shares during the first quarter. We remain focused on continuing to build a stronger balance sheet and improving our financial flexibility for the future. I'm pleased with the progress we've made over the last year, and even more confident that Invesco is on the right path to sustainable organic growth. As we look to the future, we're determined to continue delivering consistent organic growth. Together with our disciplined approach to expense management should enable us to generate positive operating leverage while at the same time continuing to invest in growth, the growth of our business and the efficiency of our business. I do wanna take a moment to thank our employees for their continued resilience, hard work and dedication through this COVID operating environment. Their efforts are delivering the strong results you're seeing from Invesco. The breadth of our capabilities and our competitive strengths position us well as we look forward. We will continue to focus our efforts on delivering positive outcomes for clients while driving future growth and delivering value over the long run for our stakeholders. With that, I'll turn it over to Allison. Thanks, Marty, and good morning, everyone. I'll start with slide five. Our investment performance was strong in the fourth quarter, with 64% and 75% of actively managed funds in the top half of peers or beating benchmark on a five-year and a 10-year basis. These results reflect continued strength in fixed income and foreign equities, most notably emerging markets and Asian equities, all areas where we continue to see demand from clients globally. Turning to slide six, we ended the year with over $1.6 trillion in AUM, a 19% increase over year-end 2020. As Marty noted earlier, our diversified platform generated net long-term inflows in the fourth quarter of $12.5 billion, representing a 4.1% annualized organic growth rate. Active AUM net long-term inflows were $1.8 billion, and passive AUM net long-term inflows were $10.7 billion. Net market gains led to an increase in AUM of $18.4 billion in the quarter. The retail channel generated net long-term inflows of $3 billion in the quarter, driven by inflows in the global ETF products and Greater China. The institutional channel demonstrated the breadth of our platform and generated net long-term inflows of $9.5 billion in the quarter, with diverse mandates, both regionally and by capability, funding in the period. Inflows in the Asia Pacific region were particularly strong. Regarding retail net inflows, our ETF capabilities generated net inflows of $21.7 billion. Excluding the QQQ, our net long-term inflows were $8.8 billion. As Marty noted, in 2021, our global ETF business generated record net inflows of $62 billion, which was more than two and a half times net inflows in 2020. Our global ETF platform captured 5.6% of net new flows in 2021, increasing our market share of ETF AUM to 4.9% at the end of 2021. Our share capture of incremental ETF revenues was also above market share at 5.2%, excluding the QQQ. Looking at flows by geography on slide seven, you'll note that the Americas had net long-term outflows of $4.3 billion in the quarter. While we saw strength in ETFs and our institutional business, we did see pressure from select active equity strategies, including developing markets and diversified dividends. Our BulletShares suite also experienced year-end maturity activity, which is expected. Asia Pacific delivered another strong quarter with net long-term inflows of $12.9 billion. Net inflows were diversified across the region, including a record $9.7 billion of net long-term inflows from our joint venture in China, Invesco Great Wall, and $3.2 billion from other countries, including Australia, with $1.8 billion, and India at $800 million. EMEA, excluding the U.K., also delivered a strong quarter of net long-term inflows totaling $4.7 billion, representing organic growth of 12%. This was driven by strength in ETFs, sales of senior loan products, and institutional mandates in investment-grade fixed income. From an asset class perspective, we continued to see broad strength in fixed income in the fourth quarter, with net long-term inflows of $9.1 billion. Drivers of fixed income flows include institutional net flows into various fixed income strategies through our China JV and EMEA, global investment grade, stable value, and municipal strategies. Our alternatives asset class holds many different capabilities, and this is reflected in the flows we saw in the fourth quarter. Net long-term flows in alternatives were $3.1 billion, driven primarily by our private markets business, which included direct real estate property acquisitions, a newly launched CLO, and senior loan capabilities. When excluding global GTR net outflows of $700 million, alternatives net long-term inflows were $3.8 billion. The strength of our alternatives platform can be seen through the flows it has generated over the past four quarters, with net long-term flows totaling over $17 billion, representing a 10% organic growth rate over this time, excluding the impact of GTR net outflows over the period. Moving to slide eight. Our institutional pipeline was $26 billion at year-end. The decline in the pipeline from the prior quarter was due to closes for the quarter. While the size of the pipeline will fluctuate quarter to quarter, it remains consistently strong, typically running in the $25 billion-$35 billion range and also remains relatively consistent to prior quarter levels in terms of fee composition. Overall, the pipeline is diversified across asset classes and geographies. Our solutions capability enabled 35% of the global institutional pipeline. Turning to slide nine, you'll note that net revenues increased $40 million as a result of higher than expected performance fees, as well as higher average AUM in the fourth quarter. The net revenue yield ex performance fees was 33.4 basis points, a decrease of and money market average balances. The incremental impact from higher discretionary money market fee waivers was minimal relative to the third quarter, and the full impact on the net revenue yield for the fourth quarter was 0.6 of a basis point. Looking forward, we expect most of the dynamics impacting net revenue yield will continue. In addition, the first quarter contains 2 fewer days than the fourth quarter, which always impacts net revenue yield. Regarding discretionary money market fee waivers, given the current prospects for higher rates in the near term, we anticipate that 75%-90% of these waivers would cease within the first 60-90 days after the first 25 basis point increase in the Fed funds rate. That would result in a recovery of about 0.4-0.5 of the negative impact waivers have had on our annualized net revenue yield. Performance fees for the fourth quarter were $53 million, higher than our expectations, and were driven by certain portfolios that have annual absolute return performance hurdles, including approximately $20 million from our JV in China. Given the strong influence of the market on these portfolios, these performance fees are clearly difficult to forecast. Total adjusted operating expenses increased 3.1% in the fourth quarter. The increase was mainly driven by the typical seasonal increase we see in marketing and higher G&A expense, which were partially offset by a decrease in compensation expense. Also impacting marketing and G&A expense was an increase in client events and travel in the fourth quarter before we saw the impact of the new Omicron variant. With the impact of the new variant, we have seen a slowdown of travel and in-person client activity in January, and we would not expect first quarter activity to be as high as fourth quarter. G&A expense in the fourth quarter also included a non-recurring $10 million charitable contribution to the Invesco Foundation. The Invesco Foundation exists to support our communities and further progress in pillars of education and financial literacy. We're pleased with the ability to make this contribution at the conclusion of a very strong year. As we look ahead to the first quarter of 2022, consistent with prior years, we expect an increase in compensation expenses related to the seasonal increase in payroll taxes and the reset of other benefits such as our 401(k) plan match. Typically, this is about $25 million-$30 million higher in the first quarter relative to the fourth quarter. As noted, one area that's still more difficult to forecast at this point is when COVID impacted travel and entertainment expense levels will begin to normalize. Moving to slide 10. We update you on the progress we have made with our strategic evaluation. In the fourth quarter, we realized $5 million in savings as we continue to right-size our facilities portfolio. The $5 million in cost savings or $19 million annualized, combined with $148 million in the third quarter in 2021, brings us to $167 million in total, or 84% of our $200 million net savings expectation. As it relates to timing, the remainder of our net savings will be realized by the end of 2022 as planned. We expect the total program savings of $200 million through 2022 would be roughly 65% from compensation and 35% office technology and G&A expense. In the fourth quarter, we incurred $32 million initiative. In total, we recognized nearly $220 million of our estimated $250 million-$275 million in restructuring costs associated. We expect the remaining restructuring costs for the year of $30 million-$55 million in 2022. Strategic evaluation is not reflected in our non-GAAP results. Going to slide 11. Adjusted operating income improved $16 million- $578 million for the quarter, driven by the factors we have reviewed. Adjusted operating margin was relatively stable at 42%. Excluding the non-recurring contribution to the foundation, we generated positive operating leverage in the fourth quarter. For the year, the degree of positive operating leverage was 1.8 x, underscoring our focus on driving scale and profitability across the company's diversified platform. Non-operating income was $51 million, driven primarily by recognition of gains from funds that are in liquidation. The effective tax rate was 21.9% in the fourth quarter compared to 24.4% in the third quarter. The decrease in the effective tax rate was primarily due to a decrease in the valuation allowance recorded against net operating losses and a decrease in the expense for uncertain tax positions in the fourth quarter. We estimate our non-GAAP effective tax rate to be between 23% and 24% for the first quarter of 2022. The actual effective tax rate may vary from this estimate due to the impact of non-recurring items on pre-tax income and discrete tax items. Slide 12 illustrates our ability to drive adjusted operating margin improvement against the backdrop of the client demand-driven change in our AUM, excluding performance fees. We also illustrate the impact the exceptional growth of our QQQ product, which does not earn a management fee, have had on our net revenue yield. Our operating margin two years ago in the fourth quarter of 2019 was 39.9%. At that time, we reported a net revenue yield of 40.5 basis points. In the fourth quarter of 2021, our net revenue yield declined a little over seven basis points to 33.4, yet our operating margin improved to 42%. As Marty noted earlier, the operating margins we have generated in the third and fourth quarters of 2021 are the highest since Invesco became a U.S.-listed company in 2007. This is against the backdrop of a mix-driven declining net revenue yield. We have been building out our product suite to meet client demand, and client demand has been skewed towards lower fee products, including the highly successful QQQ product. The growth of the QQQ product over this period is remarkable, growing from 7% of our AUM mix in the fourth quarter of 2019 to 13% in the fourth quarter of 2021. Even though we do not earn a management fee as sponsor of the QQQ, we manage the over $100 million annual marketing budget generated by this product. Growth in the QQQ accounts for two basis points of the net revenue yield decline over this period shown on this chart. As I noted earlier, discretionary money market fee waivers account for 0.6 basis point decline in the net revenue yield. The combination of the extraordinary growth in the QQQ, combined with the temporary drag from money market fee waivers, account for over one-third of the decline in net revenue yield over this time period. Realizing our business mix is shifting, we continue to focus on aligning our expense base with these changes. This has enabled the firm to generate positive operating leverage and operating margin improvement despite the decline in the net revenue yield. Now turning to slide 13, a few comments here. Our balance sheet cash position was $1.9 billion on December 31st, and approximately $725 million of this cash is held for regulatory requirements. The cash position has improved meaningfully over the past year, increasing by nearly $500 million. We were able to drive improvement in our cash position while also funding the resolution of the remaining contingent liabilities in 2021. These included $294 million in forward repurchase liabilities that we funded earlier in the year, and the $254 million in fund shareholder reimbursements to complete the remediation of the MLP matter in the fourth quarter. We also received an insurance recovery of $100 million related to that matter in the fourth quarter. Our debt profile has improved considerably as well. As a result, we've substantially improved our leverage position with the leverage ratio as defined under our credit facility agreement at 0.79x at year-end, as compared to 1.37x a year ago. If you choose to include the preferred stock, leverage has declined from almost 4 x- 2.47 x. With respect to our capital strategy, we are committed to a sustainable dividend and to returning capital to shareholders through a combination of modestly increasing dividends and share repurchases. As we've stated, we intend to build towards a 30%-50% total payout ratio over the next several years by steadily increasing our dividend and resuming a share buyback program. As Marty noted earlier, given our strong and growing cash position, combined with continued opportunity in our valuation, we expect to repurchase $200 million in common shares during the first quarter. Overall, we believe we're making solid progress in our efforts to improve liquidity and build financial flexibility, and our 2021 results demonstrate that progress. In summary, 2021 was a very strong year for Invesco. We remain focused on executing the strategy that aligns with our key areas of focus, and we continue to invest ahead of client demand in these areas. At the same time, we're focused on optimizing our organizational model and disciplined expense management. This approach has resulted in strong organic growth, driving positive operating leverage and operating margin improvement. This has also facilitated stronger cash flows, further strengthening our balance sheet and driving the improvement in our leverage profile. As we look towards the future, Invesco is in a very strong position to deliver value over the long run to all of our stakeholders. With that, operator, I'd ask you to open up the line for Q&A. At this time, if you would like to ask a question, please press star one. You will be announced prior to asking your question. Please pick up your handset when asking your question. To withdraw your request, please press star two. One moment for the first question. Our first question comes from Brennan Hawken with UBS. Your line is open. Good morning. Thanks for taking my questions. I just was curious, Allison, thanks for all that color on the expenses and whatnot. If we think about the 2022 is not really off to such a great start here in the equity markets. If we think about where we stand here year to date, do you have any sense about what kind of impact that could have on net revenue yield and how what kind of position are you in to maintain the operating margin level even if we see adverse equity market conditions? Thanks. Good question. I mean, I think let me start with net revenue yield. The biggest source of pressure is really the mix shift. The market doesn't help either. Even in rising markets, as we continue to see really strong demand for our passive capabilities, and I think that's evidenced by some of the organic growth rates we just walked through, we continue to see little pressure on the overall net revenue yield. If I look at net revenue yield of our active AUM, it's actually held up pretty nicely over the last year or two years. It's really that strong demand for our passive AUM that's creating this pressure. We do expect there to continue to be downward pressure on net revenue yield overall as we continue to see that demand and the shift of our business mix, and hopefully some of the detail and the color we provided on the pressure that we also see just from money market fee waivers and the Qs, one of which is temporary, and maybe, you know, an opportunity if we do see rates increase over the course of this year. As it relates to then what does that mean for our operating margin? Look, yes, the volatility we're experiencing so far in January, I mean, it does put pressure on it, and it will require us to be incredibly disciplined from an expense management standpoint. I think we've made terrific progress. When I look at 450 basis points of operating and margin improvement year-over-year, we've got ourselves to a new place, a new position that we can operate within. It might not be as high as what we experienced in the last quarter or two, but I don't think we get anywhere near back to where we were a couple of years ago. We're being very disciplined and very thoughtful about that exact issue as we look at the, you know, our budget for the year and how we think about a pretty significant expense base. Yeah. No, the progress on the profitability has been really great. Agree on that. Shifting gears a bit to follow up, there's the $200 million buyback that you announced for the first quarter, but as you flagged, there was a $100 million insurance settlement. If we're thinking about calibrating to the run rate, you know, if we shift to your comments around the payout, it would suggest that the 1Q probably has a little bit of excess from that insurance recovery. Backing that out is probably the right way to think about a run rate. Is that fair? Is there the potential for more insurance recoveries behind this one, or is that this $100 million probably the end that we should expect? Thanks. I think, yes. A couple things to point out. That $100 million recovery is actually in our non-GAAP results and our transaction integration expense. It really doesn't, in our adjusted net income, you don't see it there. It's really not a factor. I do think it's important to note the resolution of that MLP matter and that it was fully resolved in the fourth quarter with the $254 million. Getting that liability behind us is really terrific progress after a couple of years. I don't want that to go unnoticed because we've really cleared out all these contingent liabilities. The $100 million recovery, again, that's somewhat irrelevant to our payout ratio targets of 30%-50%. Oh, no, I just meant in the $200 million balance, like it was clearly some extra capital that you now received. Did that support the $200 million pace in the first quarter? That's all I meant by that, not the payout ratio. Yeah. Fair enough. You know, look, it adds to the $1.9 billion cash balance. I would think about it from a cash perspective, and the fact that our cash did grow about $500 million over the year after resolution of all of those contingent liabilities. $100 million insurance recovery was a positive there. It does somewhat factor into the timing of moving forward with this in the first quarter. Also our valuation, and these rather attractive prices factor into the timing as well. If not now, when, is in our thinking as well. Yeah, that's fair enough. Thanks very much. Our next question comes from Brian Bedell with Deutsche Bank. Your line is open. Great. Thanks. Good morning, folks. Just again, thanks for all the color, Allison, on the expenses. I just wanted to come back to the operating margin and in the context of the Great Wall JV. Obviously seeing really good success there continuing on the organic growth side. Do you view that as a more scalable part of the model? If you continue to have this type of success there, that could be a positive contributor to the operating margin dynamic? Yes, absolutely. I mean, you know, as we said before, if you take a macro picture, you know, the opportunity in China for asset managers is phenomenal. It's, and you pick your estimate out there, but, you know, there's various assessments of if you look over the next three-five years, 50% of the organic growth in flows could be coming from China. Being very, very strong in China is an enormous opportunity. It's strength as we look forward. That's a color. Just maybe on organic growth, if you can give some color on traction in sustainable products, ESG products on both the active and ETF side and where you stand in terms of integrating ESG across the investment process, if that's completely done now. Just is that helping or do you expect that to help inflows in Europe, both I guess on the institutional side and also you know your traction in gaining ETF share in Europe on that sustainable side as well? Yeah. Let me make a couple comments, and Allison can chime in, too. Right now, if you look at our assets under management, it's now 96% of our assets under management are ESG. That's up this quarter almost $45 million. Where you're going there, it was converted 69 funds of $45 billion to Article 8 in the fourth quarter. Let's stay on Europe for a second. You know, ESG is as fundamental to any money manager's success there. Whether it's retail or institutional, you really have to have ESG integration at a minimum. That's really our effort with Article eight, and you're gonna continue to see that. It's not just a business opportunity, it's a business imperative, you know, in the U.K., and on the continent right now, and it's continuing, you know, through the rest of the world. You know, our commitment is to have ESG integration across all of our investment teams. Right now, we are at 75%, so we've made very good progress. Again, from my perspective, you're gonna be out, you know, three years out, you're really not gonna probably be talking about ESG as sort of a separate category. The integration piece, at least, sustainability could be and the like, but it's just a reality of, you know, money management right now. Let me just clean up one thing. It's not 96% of our AUM, it's $96 billion of our AUM would be ESG qualified. Then as Marty said, 75% of our funds are now what we would consider kind of minimal but systematic ESG integration. Yep. Just the flows in the fourth quarter on sustainable products? Flows, we had modest outflows in the fourth quarter. Continue to see a little bit of pressure there. A lot of our ESG capabilities are somewhat, I think, thematic in nature as we continue to build them out and so they could come in and out of favor. Definitely continuing to see demand overall in terms of institutional mandates for these ESG capabilities. Flows, I would say, were relatively soft on the flattish in the quarter. One thing I would note in particular is we see some outflows that are related to our GTR capabilities. We've talked about GTR quite a bit. GTR was about $800 million of outflows. That also contributes to what we would consider ESG outflows as well. You know, there are places where we see positive flows. There are other places of pressure for very specific reasons. Overall, continue to see this as just an important component of our portfolio. I think as Marty said, in a few years, we don't think we'll really be talking about ESG as its own separate kind of category, but rather a standard that we hold ourselves to across the board. Yep. No. That's great color. I appreciate it. Thank you. Our next question comes from Glenn Schorr with Evercore. Your line is open. Wanna first follow up on growth in China, if I could. You talked about the six new funds capturing $2.5 billion in long-term flows, $7.2 billion from existing products. On a base of $106 billion ending the quarter, that's a really high growth rate, and some of that is ramping. I know you talked about the big opportunity, but maybe we could talk about, you know, the next, I don't know, two years, 2022 and 2023. On, are there new products in the pipeline? This growth rate is probably not sustainable, but could be in the early years as new funds are ramping. Just talk about how product is moving there? Thanks. Yeah. A couple comments, and Allison will chime in also. Look, you know, the year-over-year organic growth, it was 32%. I mean, it's quite phenomenal. If you look back, you know, we've really maintained that over the last three years. As you say, it's, you know, decades later, overnight success. You know, a number of things have come together and, you know, we anticipate strong growth in the next year or two years. You know, recognizing, you know, every market will have its volatile moments. What we are seeing last year is very, very strong launches at the beginning of the year, new product, you know, and you were talking about some of the more recent ones. We are starting to see greater flows into existing products, too. It'll be... Yeah, I think that would be a sign of a market developing where you get ongoing flows into existing products as opposed to sort of a constant launch. It'll be both as we look forward. We're anticipating continued strong growth in China, both at a retail level and institutional level as we look forward. One thing I'd add to that is I do think in the very near term, you know, China's experiencing some pretty new dynamics with COVID that they have not experienced in the last couple of years. While they've been in a bit of a lockdown state, they've been operating normally within the region. Now with case counts increasing, I do think sentiment's softening a bit domestically there, and we're seeing that a little bit as we go into the Chinese New Year here soon. I'd say it's uncertain what impact some of the measures will have on just sentiment overall within the region. As a counterpoint to that, however, where we see real strength and continued demand in our capabilities within our JV is specifically for our fixed income and our balanced products. As we continue to see, perhaps, a flight to safety and some conservatism, if we see some softening of sentiment, we're very well positioned with our capabilities through our JV. We're seeing that so far this year. I appreciate that, and that's a perfect lead into the follow-up. I was curious, And alluded to the market drop, so punishing the volatility. It's early, it's a couple of weeks, but just curious if you'd give us insight into both institutional and retail client behavior as the markets get a little wacky here? Yeah, I think we try to stay away from really slow updates inter-quarter or inter-month. I will say this. I think you could see with some of the publicly available data that, with what we can control in terms of sales and redemption rates and the like, we feel very good about where we are so far in the year. One of the benefits of having a very broad and diversified platform is we have that breadth of capabilities as people look to rebalance and shift some of their allocations. We're able to capture a lot of the flows, even in a risk-off environment. At the same time, there's a lot of pressure in the market and a significant amount of volatility as we all experienced yesterday in particular. I think the next couple of days with the Fed meeting and the minutes coming out of that are going to be quite informative as well. With what we can control, we feel very good about it. I'd say the conversations with clients continue to be very constructive and very positive and we're where we need to be. This is an interesting market. Appreciate that. Thanks, all. Our next question comes from Craig Siegenthaler with Bank of America Securities. Your line is open. Good morning, Marty, Allison. Hope you're both doing well, and congrats on the 7% organic growth this past year. Thanks, Craig. I'm sorry about this, but I have another one on China. I just wanted an update on your effort to increase your equity stake in the joint venture because I don't think you've done that yet, but you're working on that. You previously disclosed the percentage of flows that come from digital platforms like Ant Financial. I think it was trending around 50% before 4Q. I don't know if you have an update on that number either? Yeah, hope you're doing well, too, and hope you had a good New Year's. So, just on the, you know, we continue to be in dialogue with our joint venture partner to, you know, increase our stake over 50%. Still a positive conversation. We've not accomplished that. That said, I'll come back to the most important element is that, which differentiates us, even though we have 49% of the ownership. We have management control, and we have had since the beginning, and that is really what has allowed us to be so effective and successful in China. So that's the main point to look at. But, you know, we do feel in time that, you know, we will be able to end up with a majority stake in our joint venture. It has not impeded progress at all. Secondly, with regard to the digital platforms, they continue to be, you know, sort of really very, very important part of, you know, the market dynamic there. You know, the number really hasn't changed. It's still about 50%, but again, it's a very strong part of the future success that we'll see in China. Just for my follow-up on the private REIT business, you have the U.S. business, and then you have the global distribution partnership with UBS. It looked like the U.S. vehicle only raised about $16 million through month-end November. I don't have the December number yet, but I was wondering if you could update us on the progress of those two products and any kind of flow or AUM detail? Yeah, I'll make a couple of comments. Just, you know, the, we're still in the process of onboarding various institutions, and I don't want to get too specific, but it is now being onboarded in the United States, and it'll probably take, you know, into the second quarter of this year before we would get to a level where we feel that it's sufficiently onboarded at, you know, the various places that you would hope it would be. It's an area of great opportunity for us. The reception's been very, very strong. It's just literally, you know, the due diligence process of working through those types of things. Thank you, Marty. Yeah. Thank you. Thanks, Craig. Our next question comes from Robert Lee with KBW. Your line is open. Hi, Robert, please hit your mute button. Oh, sorry about that. Thank you. Thanks for taking my questions and happy belated New Year to everyone. Hope you're both doing well. You know, maybe my first question, like to just go back to, you know, maybe digging into flows a little bit. I mean, obviously, you know, the strong organic flow growth for the year, I mean, that's great. Can you maybe dig in a little bit since there's, you know, such a focus on fee realization rates and whatnot, you know, help us better maybe get a sense of the economic impact of the inflows. I mean, I don't know if you have, for example, you know, the net revenue, net organic revenue or EBITDA growth. You know, maybe that'd be a better metric? Anything that could help us get a better sense of, you know, the economic impact you're seeing from inflows. Guess that'd be my first question. Yeah. We don't disclose it in that way, in the way that, I think, where you're going. I mean, I'd point to a couple of things, which is with the strong organic growth rate and we're generating positive organic revenue throughout the year on the flows. There are points of strength and points of, you know, challenges against that. As I noted, the net revenue yield inside of our active capabilities has actually held up pretty strong. It's barely moved in the last couple of years, and it's really just the challenges we have there with just the demand is not as strong as it is for our passive capabilities. What I would point you to is, and I always talked about this a few times as well, in our passive capabilities in our ETFs, in particular, I'll point that out. Our operating margin that we generate from that is, you know, consistent with or a little better than the firm average operating margin. It takes a higher volume. It's more of a scale play for us. As we continue to really see the positive demand for those capabilities, we're able to not only generate positive organic revenue growth, but also, really contribute both to absolute operating profit and sustain our operating margins at the same time. Great. Thank you. Maybe as a follow-up, going back to expenses, I mean, could you just remind us, you know, given the difficult start to the year, you know, with the market so far, can you just remind us kinda how much flex or variability, you know, you feel like you may have in the expense basis, you know, that may be linked to, you know, whether it's pre-tax operating income or asset levels or flows. Just trying to get a sense of what's kind of the natural built-in flex you could have to respond to more difficult revenue to start the year? Sure. You know, a couple of things. One. We would expect that to flex up with stronger revenue and flex down if we don't see it. You know, that's point one. The two-thirds of our expense base that is more fixed in nature, that's really some of where we continue to look at our expense discipline and where we can look at opportunities to unlock cost, in some cases allowing that to fall to the bottom line, in other cases, reinvest. We do feel like we have continued opportunity there. We've made good progress. We talked about we're at $167 million there. We still got a little ways to go. Our real estate properties, however, we continue to look. That's an element of a fixed expense, but the environment not only continues to evolve, and we're like everybody else right now to unlock some of the fixed costs there. Great. Thanks for taking my questions. Our next question comes from Dan Fannon with Jefferies. Your line is open. Thanks. Good morning. Just to follow up, one more for you on expenses. When we think about the sequential change from 4Q- 1Q, and you highlighted the normal seasonal stuff. Curious about this past fourth quarter where you had elevated performance fees, what we should normalize for compensation within that and any other maybe one-time or items to think about there, kinda 4Q- 1Q FX, kind of the market impact? Yeah. Compensation expense, let me just speak to it sort of broadly. It tends to run somewhere between 38% and 42% of our revenues. If you just look at that on an annualized basis, that's been the range in which we've operated for quite some time. In 2021, it was at 38%. It was on the low end of that range, which is what you would expect in a really strong year. I think that is still a very reasonable range to be thinking about, as you think about just our overall compensation expense, regardless of, you know, revenue, whether it's coming from performance fees or management fees, that range is the right range to think about. Looking towards expenses in the first quarter overall, I would say a couple of things. You know, look, marketing tends to be seasonally high in the fourth quarter. You certainly saw that in the fourth quarter of this year. We've got the $25 million-$30 million increase that is the seasonality and compensation expense. The other point that we're trying to get our own arms around is we did start to see something that looked like a return to normal in the fourth quarter. The Omicron variant really didn't impact in-person activity and travel until we were almost on the holidays. We were pretty active right up until that, and then things changed just as the holidays would have brought a natural sort of closure to things for a few weeks. We obviously haven't seen any travel or engagement really pick back up just yet. I do think we'll start to see some return of that later in February. We're certainly hopeful. You know, I think that's an area that we hope continues to grow throughout the year. We've said that now for a while, and we just haven't seen it. But fourth quarter was the first time we started to feel like it was close to normal. Hard to guide as to whether or not, you know, we as to when we see the pickup, but I do expect it comes down a bit in the first quarter relative to fourth quarter. Great. That's helpful. Then just looking at slide 12, appreciating obviously what you've been highlighting around the margin expansion versus the fee, you know, mix shift that's happening. If we assume flat markets for the next couple of years and the trends hold, is margin expansion for you still part of the story or? If markets hold, so if AUM levels sort of markets hold, is operating margin expansion a possibility? Was that your question? With the same underlying mix shift of flows? Yes. Take markets out. Yeah, I would be thinking about flat to modest expansion in a market where, in an environment where markets hold and we continue to see this mix shift. It's really just the pace of the mix shift. If it's quite fast, I think we're looking at flat. If it continues at the pace we've seen, you know, we could get some modest expansion out of that. We've said before, we don't intend to run our business with an ever-increasing operating margin, and I'll reiterate that. We do feel like we're in a pretty nice operating range. We would be happy to see it improve some, but we're not going to starve the business in order to allow it to grow. We've got some key investments we want to continue to make ahead of where we see demand. You know, I think that in a flat market with real mix shift could get us to a flat operating margin. Yeah. I do just want to reiterate, you know, it's really important for us to continue to invest in the business, and we're going to continue to do it along the way that we've been, you know, continue to look at areas of opportunity and, you know, look at our expense base. Can we reallocate and invest? It's going to be in those areas of client demand where there's growth. It's going to continue to be, you know, ETFs, et cetera, and also the investment in technology that we need to do. It's, you know, as you know, it's a really, really competitive marketplace. One of the things that's really important is, as we drive results for shareholders, we're also investing in the business for shareholders and for clients, focused on that path as we go forward. Great. Thank you. Operator, do we have any other questions? Yes. Our next question comes from Ken Worthington with JP Morgan. Your line is open. Hi. Good morning. Marty, I wanted to step back and think bigger picture. It's a new year, so maybe first Happy New Year. Invesco had a great year in 2021. For a period of time, the stock price is at about the same level as it was a decade ago. It seems like Invesco has executed well on a value creation roadmap that resulted in size and scale and better positioning, but one that hasn't been reflected by the stock price. You have an activist investor that continues to build a position in the company. I guess, are you thinking about things differently in terms of how you're approaching shareholder value creation when you're making investment and capital allocation decisions? As you think about driving improved results for shareholders, what is sort of top of mind for you as you think about, you know, 2022 and beyond? Yeah, look, it's a great question, and that doesn't go beyond us either. I think what's really important is to get the result that you're talking about and share price. You know, from our perspective, you really have to deliver results for clients, and you have to do it in a very thoughtful and meaningful way in ensuring that we're hitting, you know, what all the constituents need. I think, you know, if again, you just look at where the business has evolved, we think we've evolved it very strongly to meet those needs, and it's been reflected in the operating results. Our perspective is to continue to be very focused on that and also not just clients, but with shareholders in mind. You know, in time, the share price should reflect that. You know, just today as we talked about, you know, looking to buy back our stock, we think it's very, very attractive for all the reasons that you laid out. I mean, I would only add to the valuation's frustrating to us. What we focus on is what we can control and where we can influence. I think as Marty said, really making sure we're delivering for clients and building out our capabilities so that we are capturing client demand. I think 2021 results would point to our success, and that's one of the highest growth rates in the industry. We're certainly winning vis-à-vis the competition there. We've also made meaningful progress with 450 basis point improvement in our operating leverage. It was important. We had some work to do there, and we needed to get ourselves back into the right operating range. There was a lot of hard work that went into that, and we feel very good about the work that we've done there. That falls to the bottom line. The balance sheet needed some work, and we've made tremendous progress in strengthening the balance sheet, and continue to work on that and put ourselves in a position to do further work on the balance sheet as the year unfolds. As we look at, you know, what should influence that return to shareholders, you know, we think we're making real progress against each one of those. It's not a quarter-to-quarter game, and it is a long-term game, and we're going to stick to this plan because we think it's actually really yielding the results that investors are looking for and certainly has the support of our board as well. Great. Well, I know it's a tough question, but it's great to hear your comments. Thank you again. I'm glad you asked. Yes. Thank you. Our next question comes from Patrick Davitt with Autonomous Research. Your line is open. Hey, good morning, everyone. I have a quick follow-up on Brennan's repurchase question. Just eyeballing it looks like the $200 million in 1Q would already get you to the 35%-50% payout. Should we assume that's more of a one-off or when we're modeling this or assume a resumption of more regular repurchases in every quarter beyond that? Hard to say just yet. You're right. That does get us into that range. We did feel like the timing was right to actually move rather aggressively on it for all the reasons that we talked about earlier and feel good about that. Whether or not we will continue to do more as the year unfolds, I think we'll just have to address that as the year unfolds and results will dictate that. Fair enough. MassMutual recently announced a new reinsurance platform with Centerbridge and Barings acting as the asset managers. Just curious how you think that news fits with your relationship with them, and does it change your thinking on the opportunity for managing more of their assets at all? Yeah, no, it does not. You know, as we said, it's a very strong relationship. You know, obviously, two board members on our board, you know, they own 60% of the company. They've been very helpful in supporting our alternative business. They'll continue to do that. We couldn't have a better relationship. Thank you. Yeah. Our next question comes from Bill Katz with Citigroup. Your line is open. Okay. Yeah, thank you very much for taking the question this morning. Marty, I think you mentioned that you hope to deliver some operating leverage going forward, you know, you just spent your opening remarks, and then Allison, you sort of qualified that, you know, you're not here with infinite margin improvements. As we look into maybe 2023, can you unpack maybe your gross spending rate and then the net spending rate, just trying to see as you get through the final part of your total expense growth into 2023? I certainly appreciate we're sitting here January 2022, of course. Yes. I can go ahead and tell you we're not gonna give guidance into 2023. I think, you know, we've tried to give some color to what we expect in the first quarter and the operating margin within which we intend to operate. Bill, I think you're asking a good question that's connected to some of the other kind of questions that were asked. You know, you're trying to do many things here, right? You're trying to invest for the future and be competitive to drive results for clients and ultimately shareholders. You know, we think we've done that, right? If you look at the business today, look at where it was five years ago, you know, it's a very attractive business investing in China, ETFs, private markets, et cetera. You know, that just was not where Invesco was five years ago, 10 years ago. At the same time, we talked about the margin expansion year-over-year. With that expansion, we've also been able to invest in the business to improve our competitive, you know, positioning. You're really trying to do any number of things all at once, and, you know, we're showing that we can do that. Okay. Thank you. Then just one last one from me, and thanks to both of them. Mm-hmm. A couple of your competitors have been spending pretty aggressively to build out their platforms, particularly alts bucket. I think, you know, you guys are probably a little bit further along strategically. M&A incrementally fit into the discussion from here? Yeah. You're gonna get tired with the answer 'cause it's gonna be the same one. Look, you know, we look at the business, you know, very strategically, and we look at, you know, where client demand is coming from and can we meet our clients' needs. You know, we're always gonna look internally first, to develop, what we can. When we come up short there, that's when we'll start to look to the market. It has to be a capability that, you know, there is, you know, client demand for it. It's, you know, additives to our capability set, and it's something that, you know, we think also can fit, you know, very nicely within the business from a cultural point of view. Again, our first focus is internally, but we, you know, we will continue to pay attention to the market when it makes sense. Thank you. Thanks, Bill. Our last question comes from Michael Cyprys with Morgan Stanley. Your line is open. Hey, Marty, Allison. Thanks for squeezing me in here. Just wanna circle back on expenses. You mentioned one-third of the expense base is variable, about two-thirds, fixed or so. I guess, where would you like to see that mix over time, and how do you see that evolving? When you think about the margin, more medium to longer term, where do you see that operating margin? Is mid-forties achievable? Does that make sense for the business? How do you think about that? In terms of the variable fixed mix, you know, I think it's actually probably accurate where it is. I don't necessarily see it evolving to be terribly more variable over time. You know, I think one of the things we focus on quite a bit is just driving scale over that fixed expense cost is actually where we deliver that operating margin growth. In terms of where we could be, 450 basis points of improvement one year was pretty extraordinary. I don't expect to replicate that year after year after year. We had work to do to get it back into the range where we are. The strategic review that we have been in is, you know, not easy, but looking at those opportunities, they gave us, you know, it gave us the chance to look at a lot of good opportunities that made sense for us. In terms of where could you be mid-forties over time? That's a longer term comment I couldn't tell you by when or how. Certainly we'd need some very supportive market dynamics behind that as well. I'll never say never, but I can tell you it certainly won't be in 2022 and probably not in 2023, because we really are focused on investing in the business. Getting to a margin of that level in the next couple of years would require us to do things as I think Marty noted a few times, that just really aren't tenable because it would not position us well in terms of investments that we need to build the platform for the future. You know, I think in the short term, the low 40s% is a really good operating range for us to be in. Great. I'll leave it there. Thanks so much for taking the questions. Sure. Thank you. That was our operator. I think that brings us to the end. Yep. Thank you for your participation today. You may disconnect at this time.