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Sustainability Matters

Eaton Vance Makes Move Into Sustainable Investing

Acquisition of Calvert reflects heightened interest in ESG among conventional asset managers.

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It was just a matter of time before a large asset manager gobbled up Calvert Investment Management. A small firm with a lineup of 25 sustainable and responsible mutual funds and $14 billion in assets under management, Calvert was widely thought to be getting readied for sale under CEO John Streur, who came to the firm in 2014. Eaton Vance announced last week it was acquiring Calvert, which had been an indirect subsidiary of Ameritas.

The acquisition reflects the ongoing mainstreaming of sustainable and responsible investing in the United States. Having been the province of a few deeply committed boutique firms, the field is becoming increasingly attractive to conventional asset managers who see it as a way to engage the next generation of investors. Making matters more urgent, firms dependent on active management are under intense pressure created by the tide of money flowing to low-cost index funds and exchange-traded funds. One response for larger firms is to increase scale, in this case, by adding new expertise in an investment area that seems poised for growth. And one response for smaller firms is to be acquired. Thus, Eaton Vance has joined firms like BlackRock, John Hancock, Nuveen, and SSgA by getting involved in this space, with more firms likely to come.

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Jon Hale does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.