Morgan Stanley to acquire Eaton Vance for $7 bn
By Pavithra R
Morgan Stanley has announced that the firm has entered into a definitive agreement to acquire Eaton Vance, a leading provider of advanced investment strategies and wealth management solutions with over $500B in assets under management (AUM), for an equity value of approx. $7B.
The acquisition advances Morgan Stanley’s strategic transformation with 3 world-class businesses of scale: Institutional Securities, Wealth Management and Investment Management. Morgan Stanley Investment Management and Eaton Vance are complementary to each other with limited overlap in investment and distribution capabilities.
Eaton Vance is leading in critical secular growth areas, including customized investment solutions through Parametric, individual separate accounts, and responsible ESG investing through Calvert. The company, being a leading value-add fixed income solutions, fills product gaps and delivers quality scale to the MSIM franchise. The combination is also expected to enhance client opportunities by bringing Eaton Vance’s U.S. retail distribution together with MSIM’s international distribution.
“Eaton Vance is a perfect fit for 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,” said James P. Gorman, Chairman and Chief Executive Officer of Morgan Stanley.
The transaction is attractive for shareholders and is expected to deliver long-term financial benefits. The acquisition is will better position Morgan Stanley to generate financial returns through increased scale, improved distribution, cost savings of $150MM or 4% of MSIM and Eaton Vance expenses and revenue opportunities. The acquisition is subject to customary closing conditions and is expected to complete in the second quarter of 2021.
“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 U.S. and internationally,” said Thomas E. Faust, Jr., Chief Executive Officer of Eaton Vance.
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