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Rating:Faust Makes a $12.3B SRI Acquisition Not Rated 0.0 Email Routing List Email & Route  Print Print
Friday, October 21, 2016

Faust Makes a $12.3B SRI Acquisition

Reported by Neil Anderson, Managing Editor

Tom Faust just unveiled a cash deal to acquire an SRI mutual fund shop with $12.3 billion in mutual fund and separate account AUM.

John Streur
Calvert Investments, Inc.
President and Chief Executive Officer
This morning Faust, CEO of Eaton Vance [profile], confirms that his Boston-based, publicly-traded mutual fund shop is buying the business assets of Bethesda, Maryland-based Calvert Investment Management [profile] from the insurer Ameritas. The deal is expected to close on December 31.

Calvert, which was founded in 1976, had $12.3 billion in AUM as of September 30, 2016. And Eaton Vance, whose history goes back to 1924, had $343.0 billion in AUM as of September 30, 2016.

"The price is not being disclosed," Eaton Vance spokeswoman Robyn Tice tells MFWire. "Eaton Vance is purchasing the business assets of Calvert for a price equal to a specified multiple of pro-forma earnings before interest and taxes at the time of the closing. Eaton Vance is not disclosing the purchase multiple or the price."

"As part of Eaton Vance, we see tremendous potential for Calvert to extend its leadership position among responsible investment managers ... by applying our management and distribution resources and oversight," Faust states.

Calvert already has a longstanding connection with one of Eaton Vance's subisidiaries, Alpha Capital, which subadvises Calvert's $2.2-billion flagship mutual fund, the Calvert Equity Fund.

In today's deal announcement, Calvert president and CEO John Streur praises Eaton Vance as "the ideal partner to help Calvert fulfill its mission."

This is Eaton Vance's first deal since 2012, when they bought 49 percent of Hexavest, a Canadian asset manager. And this is Eaton Vance's first majority acquisition since buying 80 percent of Parametric Portfolio Associates in 2003.

The deal announcement comes three days after the SEC unveiled a $3.9-million settlement with Calvert over valuation issues that Calvert tried to fix with $27 million in payments to its mutual funds and shareholders. Calvert neither admitted nor denied the SEC's findings, though Streur publicly apologized for "the mistakes made in the past." 

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