Morgan Stanley to Buy Eaton Vance for $7 Billion – WSJ

Written by Liz Hoffman

Morgan Stanley MS +0.00% said it is buying fund manager Eaton Vance Corp. EV -0.28% for $7 billion, continuing the Wall Street firm’s shift toward safer businesses like money management.

The deal comes just days after Morgan Stanley completed its $11 billion takeover of E*Trade Financial Corp., and is another leg in a decadelong turnaround project for Chief Executive James Gorman, who has closed risky trading operations and doubled down on wealth and asset 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 investing.

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By Jessica Yap-Chung
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