Morgan Stanley has entered into a definitive agreement to buy asset manager Eaton Vance for an equity value of approximately $7 billion. The manager has over $500 billion in assets under management and will be folded into an expanded Morgan Stanley Investment Management (MSIM), which will have over $1.2 trillion in AUM and over $5 billion in combined revenues.
The bank says that MSIM and Eaton Vance are “highly complementary” with limited overlap in investment and distribution capabilities, with the asset manager focused on key secular growth areas, including in individual separate accounts, customised investment solutions through Parametric, and responsible ESG investing through Calvert. The bank adds this fills product gaps and delivers scale to the MSIM franchise.
“Eaton Vance is a perfect fit for Morgan Stanley,” says James Gorman, chairman and chief executive officer of Morgan Stanley. “This transaction further advances our strategic transformation by continuing to add more fee-based revenues to complement our world-class investment banking and institutional securities franchise. With the addition of Eaton Vance, Morgan Stanley will oversee $4.4 trillion of client assets and AUM across its Wealth Management and Investment Management segments.”
Thomas Faust, Jr., chief executive officer of Eaton Vance, adds, “Over many years, Eaton Vance has delivered above-market growth by aligning our business with leading trends in asset management. By joining Morgan Stanley, we will be able to further accelerate our growth by building upon our common values and strengths, which are focused on our commitment to investment excellence, innovation and client service. Bringing Eaton Vance’s leading brands and capabilities under Morgan Stanley creates a uniquely powerful set of investment solutions to serve both institutional and retail clients in the US and internationally.”
Meanwhile, Dan Simkowitz, head of MSIM, says, “Eaton Vance brings strong brand recognition and high-quality complementary platforms in key secular growth areas, providing numerous incremental opportunities to increase the reach of our asset management franchise and our value proposition for clients. These two businesses have limited overlap and are combining from positions of strength to create one of the leading asset managers in the world. We look forward to this partnership.”