Morgan Stanley will assume $4.8 billion (€3.16bn) in taxable US fixed-income assets from Robeco Investment Management as a result of a definitive agreement between the two, marking the exit of Robeco from the US fixed-income business.
Officials from Morgan Stanley Investment Management and Robeco have confirmed that the Morgan Stanley takeover of the funds—subject to client consent—will start as soon as they close the deal, which they expect will happen in May.
Financial terms of the deal were not disclosed.
Robeco’s clients in US fixed income are primarily institutions, including insurance companies and Taft-Hartley schemes, which are funds overseen jointly by multiple employers to provide health care benefits to employees. The US fixed-income assets are currently managed by Robeco Weiss, Peck and Greer.
Robeco Investment Management, the US asset manager of the Netherlands-based Robeco Groep, is leaving the US fixed-income market because "sufficient scale was not achieved to provide a platform for significant long-term growth," according to a press release from the company. Robeco Groep is owned by Rabobank.
Robeco will focus its fixed-income efforts on Europe, where it has fixed-income portfolios totaling $60 billion.
The transaction will also pave the way for Robeco to move forward with plans to focus its US business exclusively on investments in equities and alternative assets, which Robeco officials said represents $18 billion in client assets.
Robeco has also entered into final negotiations to sell its US municipal, or tax-free, fixed-income business to an unnamed party, according to Robeco officials. This second deal is expected to close during the first half of this year. Robeco’s municipal business manages about $3bn, a Robeco spokesman said.
Putnam Lovell is serving as Robeco’s financial advisor on both sales. Robeco is getting legal advice from Moses & Singer. Davis Polk & Wardell provided legal advice for Morgan Stanley.
In addition to its US asset management arm, Robeco oversees about $200bn in assets globally from its headquarters in Rotterdam in The Netherlands.
Morgan Stanley's investment management division is responsible for $600bn in assets worldwide, as of last November
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