Morgan Stanley is selling its retail asset management business, including Van Kampen Investments, to Invesco; The aim is to allow the vendor to focus on its institutional client base. 

Invesco will acquire Morgan Stanley's retail asset management business, operating under both the Morgan Stanley and Van Kampen brands, in a stock and cash transaction valued at $1.5 billion. Morgan Stanley will receive a 9.4 per cent minority interest in Invesco. 

The transaction, which has been approved by the boards of both companies, is expected to close in mid-2010, subject to customary closing conditions and regulatory approvals. 

James Gorman, co-president of Morgan Stanley, said: "This transaction will mitigate certain affiliated product sales restrictions faced by Van Kampen portfolio managers since the closing of the Morgan Stanley Smith Barney joint venture." 

Going forward, Morgan Stanley Investment Management will comprise of several distinct institutional-focused businesses.  These include a long-only institutional business (including equity and fixed income), a direct hedge fund business, a fund of funds business, a liquidity business, and a merchant banking business, including the firm's real estate, private equity and infrastructure units. 

In Japan, MSIM's equity management businesses will be sold to Invesco as part of the transaction, but MSIM will retain its fixed income investment team and a sales and client service team to serve Japanese investors.  The restructured MSIM would have had approximately $267 billion in assets under management on a pro forma basis at 30 September 2009.