Asset managers gain as Morgan Stanley long bets on money management (NYSE:MS)

Christel Deskins

The market turns bullish as Morgan Stanley (NYSE:MS) goes on buying spree with the latest purchase of asset manager Eaton Vance (NYSE:EV) in a $7B cash-and-stock deal. Eaton Vance +48%. Most asset management firms rise, with 180 Degree Capital (NASDAQ:TURN) up 5.3%. By names, Sculptor Capital Management (SCU +5.8%), Waddell & Reed Financial […]

The market turns bullish as Morgan Stanley (NYSE:MS) goes on buying spree with the latest purchase of asset manager Eaton Vance (NYSE:EV) in a $7B cash-and-stock deal.

Eaton Vance +48%. Most asset management firms rise, with 180 Degree Capital (NASDAQ:TURN) up 5.3%. By names, Sculptor Capital Management (SCU +5.8%), Waddell & Reed Financial (WDR +8.1%), Artisan Partners Asset Management (APAM +6%), Federated Hermes (FHI +8.4%), Ameriprise Financial (AMP +2.05%), and Affiliated Managers Group (AMG +3.6%).

The deal comes just days after closing of $13B acquisition of online brokerage E*Trade, in a move to shift towards the safer businesses like money management.

Morgan Stanley could execute a “string of pearls-type acquisition” and scale-up its fixed-income platform but not by betting on one, said CEO James Gorman in earnings call.

“Eaton Vance is a perfect fit for Morgan Stanley,” he said.

Eaton Vance shareholders will receive $28.25/share in cash and 0.5833 share of Morgan Stanley, a total of about $56.50 per share.

The transaction is expected to close in Q2 2021 that will bring Morgan Stanley’s AUM to $4.4T.

Checking some other asset managers: WisdomTree (NASDAQ:WETF) +5.4%, Franklin Resources (NYSE:BEN) +3.1%, Invesco (NYSE:IVZ) +3.2%, AllianceBernstein (NYSE:AB) +5.8%, T. Rowe Price (NASDAQ:TROW) +1.8%, Janus (NYSE:JHG) +7.4%.

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