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Eaton Vance Deal Presages More Money-Manager M&A

October 9, 2020

James Gorman, chief executive officer of Morgan Stanley

Michael Nagle/Bloomberg

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More consolidation and more reliance on fees. Those two Wall Street trends took the spotlight this past Thursday when

Morgan Stanley

said that it would pay $7 billion for

Eaton Vance.

The deal, coming on the heels of the Wall Street giant’s purchase of discount broker E*Trade, marks another step in its retreat from its somewhat swashbuckling pre-financial-crisis persona, when it made much of its money from risky trading. And it fits in with a wave of consolidation reshaping the money-management industry.

Combined, Morgan Stanley (ticker: MS) and Eaton Vance (EV) would generate $26 billion in annual pro forma net revenue, much of it from steady fee income for overseeing $1.2 trillion in assets and providing associated services.

Eaton Vance has a strong lineup of mutual funds offered under its own name, many focused on fixed income.

Morgan Stanley to buy Eaton Vance for $7 billion in investment-management push

October 9, 2020

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By Niket Nishant and Matt Scuffham

(Reuters) – Morgan Stanley <MS.N> has agreed to buy Eaton Vance Corp <EV.N> for about $7 billion in a cash-and-stock deal that can quickly expand its investment-management business and add more offerings for retail investors, the bank said on Thursday.

The transaction is the latest move by Chief Executive James Gorman to reshape Morgan Stanley into one of the biggest global money managers through a series of acquisitions that began just before he took over more than a decade ago.

Morgan Stanley’s wealth and investment management businesses already account for 40-50% of the bank’s revenue. Adding Eaton Vance would nearly double assets under management within the investment management division compared with June 30 and boost the business’s annual revenue by about one-third. “Eaton Vance is a perfect fit,” Gorman said.

Eaton Vance shareholders will receive $28.25 per share in cash and 0.5833 Morgan Stanley

Morgan Stanley to Buy Eaton Vance for $7 Billion

October 8, 2020

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Morgan Stanley

MS 0.60%

said it is buying fund manager

Eaton Vance Corp.

EV 48.14%

for $7 billion, continuing the Wall Street firm’s shift toward safer businesses like money management.

Its pivot mirrors a broader shift in power and profits on Wall Street. The trading profits of the 2000s are long gone, sapped by new regulations and shifting investor preferences. Asset management, which produces steady fees and requires little capital to run, has become a priority for banks including

Goldman Sachs Group Inc.

and

JPMorgan Chase

& Co.

Morgan Stanley is a midsize player in that space, too small to reap the cost savings of being a giant like

BlackRock Inc.

but too big to credibly style itself a boutique. By acquiring Eaton Vance, it will join the club of $1 trillion money managers and bulk up in specific products where it is weaker, such as municipal bonds and sustainable

Morgan Stanley buying Eaton Vance in deal valued at $7B

October 8, 2020

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Morgan Stanley is buying Eaton Vance in a deal valued at about $7 billion

October 8, 2020, 1:01 PM

2 min read

NEW YORK — Morgan Stanley will buy the investment management firm Eaton Vance in a deal valued at about $7 billion.

Morgan Stanley has actively gone after potential targets this year. The prosed acquisition Thursday comes just days after it closed on one of the biggest deals on Wall Street since the 2008 financial crisis, the $13 billion takeover of E-Trade Financial.

Eaton Vance, based in Boston, has over $500 billion in assets under management.

Morgan Stanley Chairman and CEO James P. Gorman said in a prepared statement Thursday that Eaton Vance will add more fee-based revenues to its investment banking and institutional securities franchise. The deal will give Morgan Stanley’s investment management arm approximately $1.2 trillion of

ESG Investing Will Aid BlackRock, Eaton Vance, Analyst Says

October 1, 2020

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Signage is displayed at the entrance to BlackRock Inc. headquarters in New York

Jeenah Moon/Bloomberg

Deutsche Bank

upgraded BlackRock and Eaton Vance shares to a Buy, citing “powerful” demand for sustainable investing that could bring a tide of cash to the asset-management companies,

Asset growth at both firms can average “5% or better,” beating their peers, the bank said. That would allow both stocks to trade at premiums to the asset-management group, according to Deutsche analysts led by Brian Bedell.

Asset managers “have an opportunity to substantially enhance organic growth” by developing products focused on offering a positive impact in terms of ESG, or environmental, social and governance factors, Deutsche Bank wrote. Many asset managers have been embedding ESG into their investment processes, it said, but strategies specifically focused on ESG are doing far better at attracting assets.

That trend is expected to continue “given rising awareness of

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James Gorman, chief executive officer of Morgan Stanley

Morgan Stanley is buying Eaton Vance in a deal valued at about $7 billion

Signage is displayed at the entrance to BlackRock Inc. headquarters in New York