Plan sponsors may wish to consider whether this investment news has any implications for the investment options available within their plans. Sun Life Assurance Company of Canada purchases units of the fund listed below. It is established as a segregated fund under the Insurance Companies Act (Canada).
Ownership Change
Hexavest Inc. (Hexavest) announced the end of their partnership with Eaton Vance Corp. (Eaton Vance). Eaton Vance owned 49% of Hexavest’s shares since 2012. They also acted as the distribution representative for Hexavest’s investment strategies outside Canada. Hexavest repurchased the shares held by Eaton Vance on February 26, 2021. Employees own 100% of Hexavest.
Morgan Stanley, a large US-based financial company, acquired Eaton Vance in October 2020. This transaction precipitated discussions of whether Hexavest would be a part of Morgan Stanley’s future plans. Finally, all parties decided it was in their best interests to part ways.
Hexavest has stated that the transaction will not change their culture or investment approach. They stay focused on a top-down, defensive investment approach.
Our View
These latest changes deepen our conviction that Hexavest is in turmoil. We designated the Hexavest World fund as “Suggested for Removal” on our Watch List in Q1 2021. This was due to the significant and rapid decline in strategy and firm assets under management. Client redemptions related to recent performance issues appear to be driving the asset declines. The asset outflows have increased in recent quarters and raise concerns about the continuing viability of the firm. We expect governance activities to end at a date to be determined over the next year.
Questions?
Please contact your Sun Life Group Retirement Services representative.
