Just six days after Morgan Stanley closed on its all-stock E-Trade acquisition, the Wall Street bank said this week that it will buy Eaton Vance in a deal valued at $7 billion.
Rebecca Ungarino took a look at why Morgan Stanley’s bid for the storied asset manager gives it a leg up on rivals and signals more deals to come across the industry. She and Bradley Saacks also mapped out 4 asset-management firms that could be the next target as consolidation pressures mount and other banks likewise look for steady businesses to counterbalance more volatile activities like trading.
If you’re not yet a newsletter subscriber, you can sign up here to get your daily dose of the stories dominating banking, business, and big deals.
More below, including a performance roundup for big-name hedge funds, a deep dive on D1 Capital’s Dan Sundheim, and the latest on Wall Street job cuts.
Enjoy the rest of the weekend!
Hedge fund winners and losers
After three quarters of chaos from the pandemic and upcoming election, hedge funds — on average — are where they started the year: flat. But individual performance is all over the map.
Stock-picking billionaires like Bill Ackman and Lee Ainslie are soaring while quants like Renaissance and Winton struggle. Bradley Saacks gave us a breakdown of how 13 big-name hedge funds are faring.
A day in the life of @MrsDowJones
Haley Sacks, 29, is an Instagram “finfluencer” who runs the @MrsDowJones account on Instagram (162,000 followers and counting.)
From debuting a clothing line to planning to roll out her own financial e-course, Sacks has developed a unique place for herself among the Wall Street and personal finance communities. She walked Business Insider’s Reed Alexander through a typical workday.
The rise of Dan Sundheim
Alastair Grant/AP Photo; Streeter Lecka/Getty Images; Brendan McDermid/Reuters; Scott Olson/Getty Images; Samantha Lee/Business Insider
Dan Sundheim has quickly become an investor to follow since launching his fund D1 Capital after working as the chief investment officer at Andreas Halvorsen’s Viking Global.
Bradley Saacks and Alex Morrell talked with a dozen of Sundheim’s college classmates, coworkers, and people who’ve invested with him. Here’s how a Wharton whiz kid became the LeBron James of investing, launched one of the hottest hedge funds on earth, and minted a billion-dollar fortune in the process.
Top law firms have been taking VC-style stakes in their own clients including Peloton and Snowflake
Venture-capital-style investments by law firms and their partners go back decades. Investing in clients has always been somewhat fraught, with some legal-ethics professionals saying it can cloud a lawyer’s professional judgment and lead to conflicts. That’s why firms that do take a stake in clients often take a relatively small one and often just for part of the fees that they charge, with the rest paid in cash.
As Silicon Valley’s growth has continued, recent public disclosures have made clear that the practice hasn’t died down. Jack Newsham dug through SEC filings to map out dozens of these kinds of bets.
Private-equity giants are racing to sell assets before year-end because they’re worried about a bigger tax hit
Large private-equity firms are feeling pressure to sell assets before year-end to take advantage of a business-friendly tax regime they fear could change in 2021.
The thinking is that if Joe Biden is elected president and there is a Democratic majority in Congress, it will unleash a wave of larger taxes on corporations and wealthy individuals who manage them. And if Donald Trump remains in office, experts said that taxes may very well increase so that the government could fund COVID relief efforts.
One private-equity insider told Casey Sullivan that, in some deals, “it’s just time” to sell. But he noted that selling on Dec. 31 versus Jan. 1 “would be a big delta in tax leakage if you believe rates are going up.”