Back in October 2020, which in pandemic time feels like an eternity ago, Morgan Stanley Investment Management (MSIM) announced it was acquiring Eaton Vance. If you didn’t already know, Eaton Vance was Parametric’s parent company, and so the news meant that we too were part of the acquisition.
A large part, in fact: At the time of the announcement, Parametric’s assets under management of $316 billion represented 62% of Eaton Vance and its affiliates’ total AUM of $507 billion. Parametric’s market position and capabilities were clearly among the leading reasons MSIM pursued the deal.
That deal has now officially closed, and while much has already been written about the acquisition in the financial press, I wanted to take a moment to share my thoughts directly with you on what the new combined entity will mean for our clients, for Parametric, and for the industry in general.
What will change for our clients?
Very little. Crucially, the high levels of service, partnership, innovation, and customization you’re accustomed to getting from Parametric aren’t going anywhere—not now and not in the future. MSIM has been explicit in its commitment to Parametric’s brand, independence, and operating model. Our investment teams won’t change, and the groups that support them and our clients will continue to have the same core missions. This foundational independence has been a constant throughout our nearly 35-year history, regardless of corporate affiliation.
For our clients—private clients, wealth managers, and institutions—the most meaningful part of the transaction is that an MSIM-owned Parametric is a Parametric with greater resources. MSIM’s scale and backing help us strengthen an already strong recruiting effort and continue to hire the best possible people. They help us further invest in our technology, operations, and new product development, all in the service of providing you with the best possible experience, whether that’s investment performance, portfolio reporting, or digital tools that support our interactions with you. We were already well along the path for these things. Now we’ll accelerate the journey.
What will change for Parametric?
Once the dust settles, the new MSIM will be a different firm in size and scope. What was a $715 billion company in AUM at the end of 2020 will be a $1.2 trillion entity in AUM as of the second quarter of 2021. Parametric is and will continue to be a large part of this new business.
The corporate functions at MSIM and Eaton Vance now have important work to do to reorganize in support of the newly combined firms. In the past we’ve relied on Eaton Vance for many crucial business support services, including legal, audit, employee benefits, and aspects of IT infrastructure. Now we’ll rely on MSIM for these services in similar but retooled ways.