UPDATE 3-Invesco profit plunges 80 pct; shares tumble

* Operating revenue down 40 percent

* Investment management fees fall 41 percent

* Net inflows $9.3 billion in quarter

* Says very interested in U.S. government's PPIP plan

* Shares down 7.8 percent (Adds analysts, updates share decline)

NEW YORK, April 23 (Reuters) - U.S. money manager Invesco Ltd (IVZ.N: Quote, Profile, Research) said first-quarter earnings plunged 80 percent, falling short of expectations and pushing its shares down 7.8 percent, as slumping markets pinched its assets and fees.

Fees earned from investment management tumbled 41 percent as the worst financial crisis in decades weighed on Invesco's key equity assets. The company's shares touched a three-week low.

"The first quarter was one of the most volatile and difficult markets that we have all operated in," said Martin Flanagan, chief executive of the money manager, which owns investment firms including AIM, Invesco, PowerShares and WL Ross.

There is "an enormous amount of money sitting on the sidelines," Flanagan said on a conference call, adding that clients are "intensely interested in the stability of the firms they're working with."