Morgan Stanley to sell its retail businesses to Invesco Ltd.
With the aim of focusing on institutional clients, Morgan Stanley has decided to sell its retail asset management business, including the Van Kampen division, to money manager Invesco Ltd. in a $1.5 billion deal which will include $500 million in cash and 44.1 million shares. The transaction is expected to close in mid- 2010.
“By taking a minority interest in Invesco, Morgan Stanley will be able to realize significant value in partnership with a world-class player,” said Morgan Stanley Co-President James Gorman. “In addition, this transaction will mitigate certain affiliated product sales restrictions faced by Van Kampen portfolio managers since the closing of the Morgan Stanley Smith Barney joint venture.”
Morgan Stanley also said its investment management group will include several institutional-focused businesses, including a long-only business (equity and fixed income), a direct hedge fund business, and a fund of funds business. It also will include a liquidity business and a merchant banking business, with the bank’s real estate, private equity and infrastructure units.
In Japan, Morgan Stanley Investment Management’s (MSIM) equity management operations will be sold to Invesco as part of the transaction, but the bank will retain its fixed income investment team and a sales and client service team to serve Japanese investors.
This is the latest addition to the array of deals which include money manager takeovers of bank assets. Bank of America Corp. last month sold the long-term asset management business of its Columbia Management unit to Ameriprise Financial Inc., a financial planning services firm based in Minneapolis, for up to $1.2 billion in cash. And in June, British bank Barclays PLC agreed to a $13.5 billion offer from U.S. investment manager BlackRock Inc. for its asset management arm, Barclays Global Investors.
Subscribe to the comments for this post