Morgan Stanley to buy Eaton Vance in huge deal

Wow, looks like MSIM will try to compete with Vanguard and BlackRock and they were willing to pay quite a premium to do so. This pushes AUM to over $1Tn. Thoughts on this deal? Where does this place MSIM in the AM space? Will this have any effect on new hires/internships?

Comments (15)

 
  • Incoming Analyst in AM - Equities
Oct 8, 2020 - 11:32am

As an incoming 1st year analyst for MS Investment Management, could this affect my offer status? Or is this a good thing?

 
  • Associate 1 in AM - Equities
Oct 8, 2020 - 11:59am

It likely won't affect you in any way. Even if the Eaton Vance brand is rolled in to MS and ceases to exist, your offer should stand. I'm not familiar with their structure so fund management may be team specific (each fund has PM and analysts), or could be analysts supporting many funds. In any case, redundancies would occur within the Eaton Vance staff.

 
  • Incoming Analyst in AM - Equities
Oct 8, 2020 - 12:19pm

Awesome, thanks for the quick answer

 
Oct 9, 2020 - 8:15am

Acquisition makes sense for MS as it keeps on diversifying their biz from trading which gets them dinged in stress tests.

It will be interesting to see if / when there is an integration of investment teams. There have been good and bad investment team integrations over the past few years as large asset managers combine.

We are definitely going to see more consolidation in the AM space. fee compression and the low interest rate environment are shrinking asset manager margins. Additionally, many products offered by large AM are beta + or really undifferentiated. The push in SMAs which EV is very strong in is going to be a theme for the next few years.

I think AM strategy is moving toward more consolidation of investment teams. We have seen it with other AM shops where it doesn't make sense having 2 or 3 teams managing Large Cap Value equity mutual funds.

 
  • Incoming Analyst in AM - Equities
Oct 9, 2020 - 8:52am

Any specific examples of good/bad integrations over the years? Would love to do some more research. The press releases have stressed that there is "limited overlap" between strategies... does that make the integration of investment teams is less likely? Or is that mostly a bullshit PR move? 

 
Oct 9, 2020 - 10:42am

So the standard life/ Aberdeen merger has been pretty bumpy.

Nuveen / TIAA had been merging their investment teams in equity and FI and there had been fund rationalization and cuts on both tiaa and Nuveen teams. Have generally heard good things from folks working at Nuveen however.

Invesco / Oppenheimerfunds has been tougher lots of Oppenheimerfunds people were cut in the merger.

 
  • Quant in AM - Equities
Oct 9, 2020 - 10:02am

This actually pushes the AUM to $4.4 Trillion.  It is effectively a way for MS to always have a base to sell in-house products to. Basically institutional securities business will account for less than 50% of revenue in the future, which is a healthy mix given the technology impact on those businesses. It seems like MS is becoming a more and more of a technology firm, and wouldn't be surprised to see them packing E*Trade and Eaton Vance into a Robinhood-like product.

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