BOSTON — Eaton Vance Management, a mutual fund success story, is all dressed up and ready to go in the institutional marketplace as well, executives there say.
In a recent interview, Executive Vice President and Chief Investment Officer Thomas E. Faust Jr. said "the time is right," after five or six years of laying the groundwork, for Eaton Vance to push its institutional effort into high gear. Two decades of spectacular mutual fund growth has slashed the institutional business from more than a third of its $3.8 billion in assets under management at that time to just under 5% of its $78.5 billion in assets today. (That total doesn't include another $20 billion in assets run by three money management subsidiaries.)
Industry watchers say retail-focused firms, especially listed firms like Eaton Vance that have to answer to shareholders, can face difficulties sustaining a costly institutional sales effort for the three to five years needed to get on clients' radar screens. Cultural issues, such as getting mutual fund portfolio managers to warm to the prospect of flying cross-country to pitch business to pension fund clients, are another obstacle.
While conceding those concerns, Mr. Faust said Eaton Vance could overcome them. The firm's capital structure, which puts shares with voting rights in the hands of management, gives Eaton Vance room to build the business without being "a slave" to quarterly earnings, and cultural issues can be addressed by organizing "to do the business the right way," with the right people in place to service clients, he said.