Toronto-based CI Financial and Pathstone are each buying parts of Eaton Vance WaterOak Advisors from Morgan Stanley, which is shedding the RIA it acquired when it bought asset manager Eaton Vance last March.
The RIA, WaterOak, advises on approximately $3 billion in assets. It was acquired by a unit of Eaton Vance in November 2020.
One purchase is being made by Pathstone. It brings Pathstone’s assets under advisement to more than $35 billion and will expand the firm's footprint in Florida, where WaterOak is based.
"We are very excited to welcome WaterOak to our family," Pathstone President Matthew Fleissig said in a statement. "They, like Pathstone, are driven by innovation and believe that unique technology and process will keep us a generation ahead of the industry."
CI entered the U.S. RIA business in January 2020. It is buying Eaton Vance Investment Counsel from Morgan Stanley, with $11.4 billion in assets. This and other pending deals will give it $133 billion in assets in the U.S.
“This is one of our largest U.S. acquisitions by assets to date and aligns us with a growing firm with a rich history, an exceptional team, industry-leading wealth management capabilities and loyal, sophisticated clients,” CI CEO Kurt MacAlpine said in a statement.
John Furey, managing partner of Advisor Growth Strategies in Phoenix, said the RIA involved here was not a strategic fit for a wirehouse like Morgan Stanley.
“Eaton Vance bought WaterOak less than two years ago. Clearly the Morgan Stanley acquisition of Eaton Vance created either friction or (would have created) a change of strategic direction,” he said. “An asset manager bought an RIA, likely for a distribution play, then Morgan Stanley bought the asset manager and inherited an RIA not consistent with its strategy. So Pathstone just bought (some of) the RIA assets of Eaton Vance, carved it out.”
Furey said there is far greater alignment for WaterOak with Pathstone. He said the deal also is positive for CI. “They acquired significant assets and a very strong team.”
Last year Morgan Stanley executed a similar transaction,
