Morgan Stanley will acquire asset management firm Eaton Vance in a deal valued at $7 billion, the two firms announced Thursday.
The deal will make Morgan Stanley Investment Management a $1.2 trillion asset manager, nearly doubling its current assets under management. Morgan Stanley’s investment management division managed $665 billion at mid-year, while Eaton Vance had assets under management of $507 billion at the end of July.
Including wealth management, Morgan Stanley will oversee $4.4 trillion of client assets, according to the announcement.
Morgan Stanley chairman and chief executive James Gorman said the transaction is part of the bank’s strategy to focus on more fee-based businesses like asset management.
“Eaton Vance is a perfect fit for Morgan Stanley,” he said in a statement.
According to Morgan Stanley, Eaton Vance’s acquisition “fills product gaps” at Morgan Stanley Investment Management, including “value-add fixed income.” Eaton Vance offers fundamental active management, responsible investing, systematic investing, and customized products through its affiliate firms Eaton Vance Management, Parametric, Atlantic Capital, Calvert, and Hexavest.
“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,” Dan Simkowkitz, head of Morgan Stanley Investment Management, said in a statement. “These two businesses have limited overlap and are combining from positions of strength to create one of the leading asset managers in the world.”
Eaton Vance chief executive Thomas Faust said that he believed the sale will further accelerate his firm’s growth.
“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,” he said in a statement.
The firms expect the transaction to close in the second quarter of 2021.
