Morgan Stanley, one the largest U.S. banks, is selling its 6.7 percent stake in Atlanta-based asset manager Invesco just five months after it acquired it.
The sale of the estimated $700 million stake is an effort to “reallocate capital into the firm’s client-driven, flow businesses,” Morgan Stanley’s President and Chief Executive Officer James Gorman said in a press release.
Morgan Stanley first acquired the 30.9-million-share Invesco stake this summer in a transaction that also involved divesting its retail asset management business, which included Van Kampen Investments. Under the agreement, Morgan Stanley took a combination of cash and equity. Invesco’s shares have soared 28 percent since the deal closed.
The pending sale of Morgan Stanley’s Invesco stake won’t affect the long-term distribution agreement between Invesco and Morgan Stanley’s retail brokerage unit, according to Invesco spokesman Doug Kidd.
“We still have a close relationship with Morgan Stanley on the distribution side, and that remains unchanged,” Kidd said in telephone interview.
At the end of October, Invesco, which also manages PowerShares funds, had about $621.2 billion in assets under management.
PowerShares, the No. 4 U.S. ETF firm, had $54.12 billion in assets as of Nov. 9, according to data compiled by IndexUniverse.com.