You are given a text that consists of multiple sentences. Your task is to perform abstractive summarization on this text. Use your understanding of the content to express the main ideas and crucial details in a shorter, coherent, and natural sounding text. 
Text: I appreciate it very much.
And hoping everybody is staying safe and healthy as we continue to return to normalcy.
And I know we're all looking for that pace to continue in the months ahead.
We continue to have a high level of engagement with our clients, which is even more important as we navigate the market uncertainty brought about by the end of economic and market upside surprises we experienced from the depths of COVID.
Helping our clients by providing insights and solutions, utilizing our broad range of capabilities.
This approach has helped us deliver strong, consistent growth over the past five quarters.
And as you can see on slide three, if you're following along on the deck, net long-term flows were $13.3 billion during the quarter.
This represents over 4% annualized long-term organic growth for the quarter.
Growth was driven by continued strength in a number of our key capabilities, including ETFs, fixed income, China solutions, alternatives and global equities.
Strategically, we continue to invest in areas where we see client demand were a competitive strength.
And since the third quarter of last year, we generated $86 billion of long-term inflows and an average quarterly organic growth rate of 6%.
Five consecutive quarters of strong growth have the direct result of the investments we've made over time to enhance and evolve our business to meet client needs.
ETFs, excluding the Qs, generated long-term inflows of $3.7 billion in the quarter with strong market share gains in our EMEA ETF range.
In private markets, we generated net long-term inflows in our direct real estate business, $1.2 billion, and robust bank loan product demand resulted in net long-term inflows of $2 billion during the quarter.
This included the launch of a new CLO.
We generated net long-term inflows of $11 billion within active fixed income across the platform.
And within active global equities, the developing markets fund a key capability that came over when we combined with Oppenheimer, continue to see net long-term inflows of $700 million during the quarter.
That said, we remain focused and continue to work on areas where there's opportunity for improvement.
In addition, our solutions-enabled institutional pipeline, accounts for 38% of the pipeline at quarter end.
Third quarter flows included net long-term inflows of $6.8 billion from Greater China.
Our China business continues to be a source of strength and differentiation for Invesco.
We continue to expect the Chinese investment management industry to be the fastest growing market in the world for the foreseeable future.
We were an early entrant 20 years ago, and we are benefiting from that commitment and investment, and we expect to see continued growth in the years ahead.
The strong cash flow being generated from our business improved our cash position and helping build a stronger balance sheet and improving our financial flexibility for the future.
Invesco's depth and breadth of capabilities and competitive strengths position us well as we look forward.
We continue to focus our efforts on delivering positive outcomes for our clients while driving future growth.
Moving to slide four.
Our investment performance was strong in the third quarter with 72% and 74% of actively managed funds in the top half of peers for being benchmarked on a five-year and a 10-year basis.
This reflected continued strength in fixed income, global equities, including emerging market equities and Asian equities, all areas where we continue to see demand from clients globally.
Moving to slide five.
We ended the quarter with $1.529 trillion in AUM, a net increase of $3.6 billion.
As Marty noted earlier, our diversified platform generated net long-term inflows in the third quarter of $13.3 billion, representing a 4.4% annualized organic growth rate.
Active AUM net long-term inflows were $6.8 billion and passive AUM net long-term inflows were $6.5 billion.
Market declines in FX rate changes led to a decrease in AUM of $18.6 billion in the quarter.
The retail channel generated net long-term inflows of $1.8 billion, driven by positive ETF flows and inflows in Greater China.
The institutional channel demonstrated the breadth of our platform and generated net long-term inflows of $11.5 billion in the quarter, with diverse mandates, both regionally and by capabilities funding in the period.
Regarding retail net inflows, our ETF, excluding the QQQ, generated net long-term inflows of $3.7 billion.
Year-to-date, we have captured global ETF market share.
Our global ETF platform, again, excluding the QQQ, captured a 3.8% market share of flows, which exceeded our 2.7% market share of AUM.
We have also captured a higher share of the global ETF revenue pool over this period.
Our market share of the revenue pool was 5.6%.
Net ETF inflows in the United States does include net long-term inflows of $900 million into our QQQ innovation suite, which crossed $3 billion in AUM, one year after its launch.
Our EMEA-based ETF range generated $2.5 billion of net long-term inflows in the quarter, with particular strength from the IBC's S&P 500 UCITS ETF and the gold exchange traded commodity fund.
Looking at flows by geography on slide six, you'll note that the Americas had net long-term inflows of $4.8 billion in the quarter driven by net inflows into ETF, as mentioned, as well as our institutional flows.
Asia Pacific, again, delivered another strong quarter with net long-term inflows of $9.3 billion.
Net inflows were diversified across the region, reflecting $6.8 billion of net long-term inflows from Greater China, most of which arose in our JV and $3.1 billion from Japan.
Turning to flows across asset classes.
We continue to see broad strength in fixed income in the third quarter with net long-term flows of $11 billion.
Drivers of fixed income flows include institutional net flows into various fixed income strategies through our China JV, global investment grade, stable value and municipal strategies.
Our alternative asset class holds many different capabilities, and this is reflected in the flows that we saw in the third quarter.
Net long-term flows and alternatives were $2.3 billion, driven primarily by our private markets business through a combination of inflows from direct real estate, the newly launched CLO that Marty mentioned and senior loan capabilities.
When excluding global GTR net outflows of $1.7 billion, alternative net long-term inflows were $4 billion.
The strength of our alternatives platform can be seen through the flow that is generated over the past five quarters with net long-term flows totaling $12 billion and organic's growth rate that's averaging nearly 6% per quarter over this time when excluding the impact of the GTR net outflows over this period.
Turning to slide seven.
I wanted to spend a few minutes on our business in China, particularly given the level of flows we have seen from the region over the last several quarters and the high level of interest in our business there.
Invesco launched the first Sino U.S. JV in China in 2003 as Invesco Great Wall.
We've been in the market for almost two decades with a unique JV structure and relationship with our partner.
How we operate in China is differentiated from others that have joint ventures.
While we have 49% ownership of the JV, our partner is a Chinese government-backed power company and has been a good partner.
We've been leading the management of the JV, leveraging our global asset management expertise since the inception of this partnership.
We run the business in China with Chinese management, and our clients are Chinese investors.
China's fund management industry is a very significant opportunity.
In 20 years, it has grown from almost nothing to around $3.5 trillion.
It's expected to become the second largest fund management market in the world by 2025 with assets of over $6 trillion.
Also, China is estimated to account for over 40% of global net flows through 2024.
Invesco, as an early entrant in China, has developed a strong and comprehensive platform covering all business activities, including robust domestic investment capabilities with good long-term performance track records.
We have very strong relationships with banks and insurance companies and digital distribution has been a major contributor in recent years in terms of bringing in new onshore business.
Key opportunities for Invesco in China include mutual funds, institutional clients and sovereign wealth funds.
As China continues to open up and improve its capital markets, we also expect opportunities in pension reform, global investors increasing interest in investing in Chinese investments and cross-border investment opportunities.
The relationships, the unique business model we established with our JV partner and the amount of AUM we have sourced from Chinese onshore investors really sets us apart from other global asset managers who are newer entrants in the Chinese market.
Moving to slide eight.
We have built a diversified business in China with over $99 billion in AUM at the end of September.
60% of the AUM is from retail clients and 40% is institutional.
We manage AUM in all asset classes and distribution is unique.
Digital distribution to retail investors have become a mainstream channel, along with the traditional bank distribution channels, and this is not just for money market funds.
With our market position in tenure in China, we are beneficiaries of this trend.
Our long-term commitment and strong track record have put Invesco in an advantageous position and our strategic position and continued investment in China has resulted in a 42% annual growth rate over the last three years to date.
In recognition of the strength of the business, Invesco was ranked the number one China onshore business and the number three for an asset management firm in overall China in 2020.
Before we wrap up this discussion on China, in light of the recent developments around Evergrande, I want to note that our overall exposure of a direct equity or fixed income holding across the complex, including within our JV is de minimis.
Market volatility in offshore markets, of course, doesn't impact AUM levels and the market has been and could be volatile for future real estate developments.
We remain positive toward the fundamentals of China's economy, and most of the flows in our China business come from domestic onshore clients.
So if anything, we've seen a flight to quality as investors look to NAV-based products like the ones IGW offers.
Now moving to slide nine to look at the institutional pipeline, which was $32 billion at the end of September.
The pipeline remains relatively consistent to prior quarter levels in terms of both asset and fee composition.
Overall, the pipeline is well diversified across asset classes and geographies.
Our solutions capability enabled 38% of the global institutional pipeline and created wins and customized mandates.
This has contributed to meaningful growth across our institutional network.
Turning to slide 10.
You'll note that net revenues increased $31 million, or 2.3%, from the second quarter as a result of higher average AUM in the third quarter.
The net revenue yield, excluding performance fees, was 34.4 basis points, a decrease of 0.4 on the basis points from the second quarter yield level.
The decrease was mainly driven by asset mix shift, including higher QQQ and money market average balances.
The incremental impact from higher discretionary money market fee waivers was minimal relative to the second quarter and the full impact on the net revenue yield for the third quarter was 0.6 of a basis point.
Looking forward, we expect the dynamics impacting net revenue yield will continue, the degree of which will be influenced by market direction, especially if we see a divergence in performance in areas such as developing or emerging markets where fees tend to be higher than our firm average.
We do expect the discretionary money market fee waivers to remain in place for the foreseeable future until rates begin to recover to more normalized levels.
One other area I want to note before moving to expenses are performance fees.
Historically, we have realized meaningfully higher performance fees in the fourth quarter.
These have been driven typically by a few funds each year that have reached the point in their life cycle where they generate performance fees usually in the fourth quarter.
This year, we do not expect to see performance fee increase in the fourth quarter.
We expect performance fees in the quarter will be more in line with our experience across the first three quarters of the year.
This is due to vintages in our portfolio not being at the life cycle stage of recognizing performance fees, which is typically near the end of the life of the fund and is in no way related to the performance of the funds.
Total adjusted operating expenses increased 1.2% in the third quarter.
The $10 million increase in operating expenses was mainly driven by variable compensation and property, office and technology expense.
Higher variable compensation was driven by the revenue increase in the quarter, partially offset by savings resulting from our strategic evaluation.
The increase in property, office and technology expenses was largely driven by changes to the pricing of transfer agency services that we provide to our funds as we noted last quarter.
This change went into effect in the third quarter and resulted in a $6 million expense increase, which was offset by a corresponding increase in service and distribution revenue.
As a reminder, we anticipate that our outsourced administration costs, which we reflect in property, office and technology expense, will increase by approximately $25 million on an annual basis or approximately $6 million per quarter.
And offsetting this will be a corresponding increase in service and distribution revenues, resulting in a minimal impact to operating income.
Operating expenses remained at lower-than-historic activity levels due to pandemic-driven impact to discretionary spending, travel and other business operations.
However, we did see a modest increase in client activity and business travel in the third quarter, which is reflected in both marketing and G&A expense.
As we look ahead to the fourth quarter, our expectations are for fourth quarter operating expenses to be relatively flat compared to the third quarter, assuming no change in markets and FX levels from September 30.
Consistent with prior years, we expect a modest seasonal increase in marketing-related expenses in the fourth quarter.
And 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.
We are engaging in more domestic travel and in-person client activity, and we do expect to see continued modest resumption of these activities in the fourth quarter.
Moving to slide 11, we update you on the progress we have made with our strategic evaluation.
In the third quarter, we realized $5.8 million in cost savings.
$4 million of these savings is related to compensation expense associated with reorganization and $2 million was related to property expense.
A $5.8 million in cost savings, or $23 million annualized, combined with $125 million in annualized savings realized for the second in quarter 2021 brings us to $148 million in total, or 74%, of our $200 million net savings expectation.
As it relates to timing, we expect to modestly exceed the $150 million target we have set for 2021, with the remainder realized by the end of 2022.
We expect the total program savings of $200 million through 2022 would be roughly 65% from compensation and 35% spread across the other categories.
In the third quarter, we incurred $18 million of restructuring costs.
In total, we recognized nearly $190 million of our estimated $250 million to $275 million in restructuring costs that were associated with the program.
We expect the remaining restructuring costs for the realization of this program to be in the range of $60 million to $85 million through the end of next year.
As a reminder, the costs associated with the strategic evaluation are not reflected in our non-GAAP results.
Now going to slide 12.
Adjusted operating income improved $21 million to $562 million for the quarter, driven by the factors we just reviewed.
Adjusted operating margin improved 60 basis points, 42.1% as compared to the second quarter.
Most importantly, our degree of positive operating leverage reflected in our non-GAAP results was 1.7 times for the quarter, underscoring our focus on driving scale and profitability across our diversified platform.
Nonoperating income was $29 million, driven primarily by unrealized gains in our co-investment portfolio.
The effective tax rate for the third quarter was 24.4% compared to 22.8% in the second quarter.
The rate increase is primarily due to an increase in the reserve for uncertain tax positions.
We estimate our non-GAAP effective tax rate to be between 23% and 24% for the fourth quarter.
The actual effective tax rate may vary from this estimate due to the impact of nonrecurring items on pre-tax income and discrete tax items.
Looking at slide 13.
We illustrate our ability to drive adjusted operating margin performance against the backdrop of the client demand-driven change in our AUM mix and the resulting impact on our net revenue yield, excluding performance fees.
Our operating margin in the third quarter of 2019, which was the first full quarter following the acquisition of Oppenheimer, was 40.9%.
At that time, we reported a net revenue yield of 40.7 basis points.
In the third quarter of 2021, our net revenue yield had declined over six basis points to 34.4 basis points, yet our operating margin has improved to 42.1%.
This chart starts at the third quarter of 2019, but in fact, our third quarter 2021 operating margin is the highest since Invesco became a U.S.-listed company in 2007.
This is against the backdrop of a mix-driven decline in net revenue yield.
We've been building out our product suite to meet client demand and client demand has been tilted toward lower fee products.
In fact, the growth of the QQQ over this period is remarkable, almost tripling in size and going from 6% of our AUM mix in the third quarter of 2019 to 12% at the end of this quarter.
Even though we do not earn a management fee, as a sponsor of the QQQ, we managed the over $100 million annual marketing budget generated by the product.
The marketing budget has allowed Invesco to further raise awareness about the QQQ.
That increased awareness has resulted in its ability to significantly increase our market share in the ETF space.
Invesco is today the fourth largest ETF provider in the world.
Growth in the QQQ accounts for two basis points of the net revenue yield decline over the period shown on this chart.
And then as I noted earlier, discretionary money market fee waivers account for a six basis point decline in the net revenue yield.
These two factors alone account for over 40% of the decline in the net revenue yield over this period.
Realizing our business mix is shifting, we continue to be focused on aligning our expense base with the changes in our business mix, which has enabled the firm to generate positive operating leverage and operating margin improvements.
Now a few comments on slide 14.
Our balance sheet cash position was $1.8 billion on September 30 and approximately $725 million of this cash was held for regulatory requirements.
The cash position has improved meaningfully over the past year, increasing by nearly $700 million, largely driven by the improvement in our operating income.
Our debt profile has improved considerably as well with no draws on our revolver at quarter end.
As a result, we have substantially improved our net leverage position as shown in the top right chart on this slide.
Our leverage ratio, as defined under our credit facility agreement, declined from 1.43 times a year ago to under one times at 0.86 turns at the end of the third quarter.
If you choose to include the preferred stock, the leverage ratio has declined from just over four times to 2.67 times at the end of the third quarter.
Regarding future cash requirements, we recorded an additional downward adjustment to the MLP liability in the third quarter, reducing the liability from our previous estimate of nearly $300 million down to $254 million.
We anticipate funding the liability this quarter, and we have ample cash resources to do so.
While we anticipate a degree of insurance recovery related to this, the insurance claims process is inherently complex, and we do not have an update at this stage as to the exact timing or size of the recovery.
Regarding 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 look toward 2022 and beyond, we will be building toward a 30% to 50% total payout ratio over the next several years as we continue to modestly increase dividends and reinstate a share buyback program in the future.
Overall, we believe we're making solid progress in our efforts to improve liquidity and build financial flexibility.
In summary, we continue to see growth in our key capabilities.
We remain focused on executing the strategy that aligns with these areas while completing our strategic evaluation and reallocating our resources to position us for growth.
And finally, we remain prudent in our approach to capital management.
We're in a very strong position to meet client needs, run a disciplined business and to continue to invest in and grow our franchise over the long term.
And with that, I'll ask the operator to open up the line for Q&A.

user
$1,528.6 billion in ending aum, an increase of 0.2% over prior quarter.
qtrly operating revenue $1,750 million versus $1,721.4 million in q2 2021.

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