The transaction is expected to combine Eaton Vance’s US retail distribution with MSIM’s international distribution

Morgan Stanley

Morgan Stanley Times Sqaure 1585 Broadway headquarters. (Credit: Morgan Stanley.)

Morgan Stanley, an American financial services giant, has agreed to acquire Eaton Vance, an advanced investment strategies and wealth management solutions provider, for about $7bn.

As per Morgan Stanley, the acquisition will help in positioning itself as a provider of three businesses at scale including institutional securities, wealth management and investment management.

Eaton Vance is a Boston, Massachusetts-based investment management firm with over $500bn of assets under management.

The company offers diversified investment approaches that encompass bottom-up and top-down fundamental active management, responsible investing, systematic investing and customized implementation of client-specified portfolios.

It offers these services through its affiliates including Eaton Vance Management, Parametric, Atlanta Capital, Calvert and Hexavest.

Morgan Stanley chairman and CEO James Gorman said: “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.”

MSIM will have $1.2 trillion AUM with the acquisition

With the acquisition of Eaton Vance, Morgan Stanley Investment Management (MSIM) is expected to become one of the leading asset management companies with nearly $1.2 trillion in assets under management and over $5bn in combined revenues.

MSIM and Eaton Vance complement each other with limited overlap in investment and distribution capabilities.

As a major provider of value-add fixed income solutions, Eaton Vance is expected to fill product gaps and deliver quality scale to the MSIM franchise.

The transaction is expected to combine Eaton Vance’s US retail distribution with MSIM’s international distribution to offer enhanced opportunities for clients.

Subject to customary closing conditions, the deal is expected to be closed in the second quarter of next year.

Eaton Vance CEO Thomas Faust, Jr., said: “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.”

Recently, Morgan Stanley secured regulatory approval from the Federal Reserve to acquire E*TRADE Financial Corporation (E*TRADE).