First Morgan Stanley completed its $11 billion takeover of E*Trade Financial Corp., then days later turned around and purchased Eaton Vance for $7 Billion. The to purchases are just a couple in a 10 year plus project for Chief Executive James Gorman focusing on converting Morgan Stanley from riskier trades to wealth and asset management. Asset management, produces steady fees and requires little capital to run. Morgan Stanley is paying $56.50 per Eaton Vance share in cash and stock, roughly 40% above the company’s closing price Wednesday. Gorman said Eaton Vance’s CEO, Tom Fraust, approached him a few months ago and found a receptive buyer.

“People who hang around trying to buy great companies cheaply never get anything done,” Mr. Gorman said Thursday.

With the purchase of Eaton Morgan will surpass the $1 trillion money under management and increase the holding of specific products such as municipal bonds and sustainable investing. Prior to the purchase Morgan Stanley’s asset-management arm was the smallest of the firm’s four businesses, contributing less than 10% of its revenue last year. Eaton Vance, started in the 1920s, brings about $500 billion in assets. The combined new money manager would have about $1.2 trillion in assets and $5 billion in annual revenue.

“Marty, if you’re listening, I wish we’d never sold,” Mr. Gorman said on a conference call with analysts, a shout-out to Marty Flanagan, Invesco’s CEO. “Things evolve.”

The purchase may make things more complicated for Morgan Stanley as it will have to systematically navigate its 15,000 financial advisers through a conflict maze that ensures they don’t improperly steer retail clients toward in-house funds over those run by rivals. (JPMorgan Chase paid a $300 million regulatory fine in 2015 for doing so.)

Morgan Stanley already is the largest distributor of Eaton Vance funds, Mr. Gorman said. Eaton Vance’s funds are mostly sold in the U.S., while Morgan Stanley does a bulk of its sales abroad. “It was sort of obvious,” Mr. Gorman said in an interview. “If we didn’t do this, someone else would have.”

The deal is expected to be completed in the second quarter of 2021.

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