Eaton CEO Says '03 Good in Sales, Share

Published November 20, 2003, 1:00 a.m. EST

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Eaton Vance continues to gain market share and predicts 2003 will be its best sales year ever, and the investment company still has the potential to gain assets withdrawn from some of its scandal-ridden competitors, its CEO said Tuesday.

Jim Hawkes, the head of the Boston asset management firm, spoke at the Merrill Lynch Banking and Financial Services Conference. He said Eaton Vance, with $75 billion of assets under management, has changed a lot in recent years, expanding into more equity products including managed accounts and exchange traded funds.

"If you look back to '96, we were a bit player in equities," with just over $4 billion of equity assets, Hawkes said, but at the end of the company's 2003 fiscal year in October, it had $43 billion.

The company is the 24th-largest mutual fund concern, he said, and has seen its market share, based on long-term fund assets, grow from about 0.7% in 1998 to more than 1% today, according to data from Strategic Insight.

Hawkes said market share is a key measure in an economy whose asset values have fluctuated. Eaton Vance's position has improved but still could grow.

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As for the current mutual fund scandals, Hawkes said, "I don't think it's going to really affect the public's enthusiasm for mutual funds, long term." The scandals could hurt the companies implicated in them and help those that have high ethical standards, he said.

Though some observers have suggested that other investment vehicles, like managed accounts, will see gains as investors pull away from mutual funds, Hawkes said his company has seen no such direct impact. "I can't say that we've seen a significant change in our managed account sales, but I do think that it's a bit early in the process," he said. "Hopefully we will see a pickup in our managed account business, but I can't say we've seen that today."

Mutual fund sales, however, have been rising, he said.