Daniel C. Cataldo - Treasurer & Head-Investor Relations Thomas E. Faust - Chairman, President & Chief Executive Officer Laurie G. Hylton - Chief Financial & Accounting Officer, VP.

Daniel Thomas Fannon - Jefferies LLC Patrick Davitt - Autonomous Research US LP Andrew McLaughlin - Keefe, Bruyette & Woods, Inc. Michael S. Kim - Sandler O'Neill & Partners LP Adam Q. Beatty - Bank of America Merrill Lynch William V. Cuddy - JPMorgan Securities LLC Andrew Nicholas - William Blair & Co. LLC.

Good morning. My name is Chris and I'll be your conference operator today. At this time, I would like to welcome everyone to the Eaton Vance Corp First Fiscal Quarter Earnings Conference Call and Webcast. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session.

Thank you. Dan Cataldo, Treasurer. You may begin your conference..

Thank you and good morning and welcome to our 2016 fiscal first quarter earnings call and webcast. Joining me this morning are Tom Faust, Chairman and CEO of Eaton Vance; and Laurie Hylton, our CFO. We will first comment on the quarter and then we will take your questions.

The full earnings release and charts we will refer to during the call are available on our website, eatonvance.com, under the heading Press Releases. Today's presentation contains forward-looking statements about our business and financial results.

The actual results may differ materially from those projected due to risks and uncertainties in our business, including but not limited to those discussed in our SEC filings. These filings, including our 2015 Annual Report and 10-K, are available on our website or on request at no charge. I'll now turn the call over to Tom..

wirehouse, independent, and RIA. One of the objectives of the staged rollout of NextShares is to demonstrate to broker-dealers that NextShares are straightforward to implement and trade and perform consistent with expectations.

If we are successful in gaining broad distribution access, we continue to believe that NextShares have a very bright future with a potential to transform the delivery of active investment strategies to U.S. fund investors. Stay tuned as we expect continued positive developments with our NextShares initiative over the coming months.

As we look forward to the remainder of the fiscal year, we see both significant opportunity and significant uncertainty. If macro headwinds and a difficult market environment continue to take their toll on our managed assets and revenue, we will be prepared to adjust our discretionary spending accordingly.

However, we seek to avoid making decisions based on short-term market moves that could impede our ability to grow over the long term. In fact, the most opportune time to invest in our business is very often during periods of market disruption.

Wherever the markets take us, we believe our line-up of high performing and value-added strategies, innovative new product offerings, and strong financial characteristics position Eaton Vance very well versus competitors. That concludes my prepared remarks. I will now turn the call over to Laurie..

Thank you, Tom and good morning. We are reporting adjusted earnings per diluted share of $0.51 for the first quarter of fiscal 2016 compared to $0.61 for the first quarter fiscal 2015 and $0.53 for the fourth quarter fiscal 2015.

On a GAAP basis, we earned $0.50 per diluted share in the first quarter of fiscal 2016, $0.24 in the first quarter fiscal 2015, and $0.53 in the fourth quarter of last fiscal year.

As you can see in Attachment 2 to our press release, adjustments from reported GAAP earnings in the first quarter fiscal 2016 reflect changes in the estimated redemption value of non-controlling interest in our affiliates that are redeemable at other than fair value.

Adjustments from reported GAAP earnings in the first quarter of fiscal 2015 primarily reflect the payment of $73 million or approximately $0.37 per diluted share to end service and additional compensation arrangements for certain Eaton Vance closed-end funds.

Although average managed assets of $308.3 billion for the quarter were up slightly from the $306.4 billion reported in the prior quarter and up 3.6% over the year-ago quarter, first quarter revenue decreased 3% sequentially and 7% year-over-year, reflecting shifts in asset mix in a down market.

The shifts in managed asset mix reflects strong net inflows and lower fee strategies, such as portfolio implementation, exposure management and bond ladders, in a quarter when higher fee strategies, such as floating rate and emerging markets, were net outflows.

Performance fees, which contributed approximately $2 million in the prior fiscal quarter, were negligible this quarter, creating an incremental headwind in terms of our sequential quarterly revenue comparison.

As Tom noted earlier, market losses this quarter reduced assets under management by just over $14 billion, more than offsetting the $5.3 billion in net inflows. And the assets under management were $5.8 billion lower than average assets under management for the quarter, which will put additional pressure on revenue in the second quarter.

Product mix continues to be the most significant determinant of our overall effective investment advisory and administrative fee rate.

As you can see in Attachment 10 to our press release, our average annualized effective investment advisory and administrative fee rate, excluding performance fees, declined to 36.7 basis points in the fourth quarter of fiscal 2016 from 37.7 basis points in the fourth quarter fiscal 2015 and 40.6 basis points in the first quarter of fiscal 2015.

Although mandate level annualized effective fee rates were relatively stable, we did see some downward pressure on our effective equity and fixed income fee rates this quarter, primarily reflecting the loss of higher fee emerging market equity assets and the growth of lower-fee bond ladder managed assets, respectively.

While our asset base remains highly diversified, we anticipate additional downward pressure on our overall average effective investment advisory and administrative fee rate, if growth in our custom core, exposure management, and bond ladder franchises continues to outpace that of our active equity and income franchises.

As said, even if average fee rates continue to trend downward, we can achieve organic revenue growth by reducing outflows from higher fee strategies, which appears to be happening.

Our operating margin decreased to 30.3% this quarter from 32.5% last quarter and 34.8% in the first quarter of fiscal 2015, reflecting the impact of lower revenue in a period when total expenses were held largely flat in both sequential and year-over-year comparison after adjusting for the $73 million charge in the first quarter of last year to terminate certain closed-end fund service and additional compensation arrangements.

Although variable expenses, such as distribution and service fee expenses, declined with the decrease in related distribution service fee revenue, compensation expense ticked up both sequentially and year-over-year.

Sequentially, compensation expense increased 3%, largely due to seasonal compensation factors including fiscal year-end merit increases, as well as calendar employee benefit and payroll tax clock resets, partially offset by lower operating income-based bonus accruals and lower sales-based incentives.

Year-over-year, compensation expense increased 2%, driven primarily by increases in head count at Parametric to support growth, adds to staff in our London office to support the build out of our global equity capabilities and incremental adds to staff to support our NextShares initiative.

Year-over-year increases in base, benefit, stock-based comp, and other compensation expense to support these initiatives were partially offset by lower operating income-based accruals and sales-based incentives.

Compensation as a percentage of revenue ticked up to 37% in the first quarter fiscal 2016, compared to 35% in the prior sequential quarter and 34% in the first quarter fiscal 2015. Given current market headwinds, second quarter compensation as a percent of revenue is forecasted to stay in the 37% range.

Other operating expenses were up 12% in the first quarter versus the same period a year ago, primarily reflecting increases in information technology, certain professional services, and other corporate expenses. Other operating expenses declined modestly on a sequential basis.

Expenses related to our NextShares initiative, which are included in multiple expense categories, including compensation expense and other operating expenses, totaled approximately $1.8 million for the first quarter fiscal 2016, compared to $1.3 million in the first quarter of fiscal 2015, and $2.3 million in the fourth quarter fiscal 2015.

As Tom highlighted earlier, fiscal discipline around both hiring and other discretionary spending will remain top of mind in fiscal 2016.

Given the revenue headwinds we are facing, we remain committed to investing for growth despite these headwinds, but are certainly mindful of the current market environment and the associated profitability pressures we face. While we will be very careful with our spending going forward, we have no plans for staff cuts.

That said, we are certainly aware of the levers that we can pull in terms of the timing of project launches and the hiring to support those markets remain unsettled.

Net income and gains on seed capital investments contributed roughly $0.01 to earnings per diluted share in the first quarters of fiscal 2016 and 2015, and reduced earnings by $0.01 per diluted share in the fourth quarter fiscal 2015.

When quantifying the impact of our seed capital investments on earnings each quarter, we take into consideration pro-rata share of the gains, losses and other investment income earned on investments and sponsored products, whether accounted for as consolidated funds, separate accounts or equity method investments, as well as the gains and losses recognized on derivatives used to hedge these investments.

We then report the per share impact of net non-controlling interest expense and income taxes. We continue to hedge our seed capital exposure to the extent we reasonably can, which allowed us to avoid significant investment losses this quarter in volatile markets.

Changes in quarterly equity and net income of affiliates, both year-over-year and sequentially, primarily reflect changes in the company's position in 49% owned Hexavest.

Our 49% interest in Hexavest, which is reported net of tax and the amortization of intangibles and equity and net income of affiliates, contributed approximately $0.02 per diluted share for all quarterly periods presented.

Excluding the effect of CLO entity earnings and losses, our effective tax rate for the first quarter of fiscal 2016 was 38.4% as compared to 36.4% in the first quarter of fiscal 2015, and 38.6% in the fourth quarter fiscal 2015.

We currently anticipate that our effective tax rates adjusted for CLO earnings and losses will be approximately 38.5% for fiscal 2016 as a whole. It terms of capital management, we repurchased 2.3 million shares of Non-Voting Common Stock for approximately $73.3 million in the first quarter fiscal 2016.

When combined with repurchases over the preceding three quarters, average diluted shares outstanding decreased 4% compared to the first quarter fiscal 2015. Shares outstanding of 115.2 million at the end of this quarter are down 3% from the 118.4 million reported a year ago, and down 1% from the 115.9 million reported on October 31, 2015.

We finished the first fiscal quarter holding $419.1 million of cash and short-term debt securities and approximately $268.4 million in seed capital investment. Our outstanding debt consists of $250 million of 6.5% senior notes due in 2017, and $325 million of 3.625% senior notes due in 2023.

We also have a $300 million five-year line of credit which is currently undrawn. Given our strong cash flow, liquidity, and overall financial condition, we believe we are well positioned to continue to return capital to shareholders through dividends and share repurchases. This concludes our prepared comments.

At this point, we'd like to take any questions you may have..

The first question is from Dan Fannon with Jefferies. Your line is open..

Thanks. Good morning. I guess, Laurie, I'd be first just on the expenses.

I get the 37% comp for 2Q, just want to clarify that that represents like a mark of AUM as of yesterday or how that represents the current AUM? And then how you're thinking about maybe the NextShares spending into next year or into this year?.

Yeah. In terms of the comp, we are looking at that in relation to the assets that we came out of at the end of the quarter assuming flat market. Now, obviously, if markets continue to be volatile, that could ratchet up. But approximately in terms of our compensation, about 40% of it is variable, 60% fixed.

So, I think the 37% as it looks today, looks like a pretty good number for the second quarter, but, again, things might change. In terms of our NextShares spend, we were a little bit lighter this quarter. I would anticipate in the first quarter and the second quarter, we may be ramping up a little bit.

I think we had given previous guidance that we anticipated our overall spend in 2016 would probably be in the $8 million to $10 million range. I don't think that we're moving off of that at this point. I'm looking at Tom, just making sure he's nodding his head..

Yeah. I would say, yes. If there's any change of significance from the current run rate level, it would likely reflect significant progress with a distribution partner where we're contributing or helping them in their implementation cost.

So that would be the only driver, but even there we don't see a major change from that, or we don't see a significant risk of change from the indicated guidance..

Great. And I guess as a follow-up just on that, can you talk about the conversations with the broker-dealer community? I assume the macro environment is not helping with that.

But is there interest but just a matter of the dollar amount in expense or timing, I guess? Can you talk about what some of the pushback might be you're hearing from that segment?.

It's primarily priorities, resources, uncertainty, particularly related to the DOL initiative. We argue and I think this is right that, on balance, a world that is more tilted towards advisory solutions than brokerage solutions, which is likely the direction of the DOL initiative, is clearly favorable for NextShares.

The uncertainty as to the effect of that and certainly as to the technology requirements of that is a somewhat chilling factor in NextShares.

So, we've had major broker-dealers that say we find this interesting, but we really need to get our hands around this DOL initiative, what's going to be required both in terms of the rules themselves as well as the perhaps systems and business modifications that will flow from that.

We need to get our hands around that before we do something that we view as discretionary. The DOL affects their core business every day. Arguably, this is an add-on. This is something new that they don't necessarily need to do.

I would say in terms of our – more broadly, the conversations, I think there's a significant change that we expect to happen when we have a product in the market. I think my view was that that would not be all that significant. We've known this was going to happen. We don't expect any surprises.

But there are significant constituencies out there in the broker-dealer world that where this is a big deal.

The fact that we will have funds that are demonstrated to trade and to perform and they can watch those and see how they perform every day, a lot of the questions, a lot of the mystery of NextShares get taken out by when we're in the marketplace, which starts at the end of this week.

So, we're not hearing objections, people that say this is a bad idea, I don't want to do this. What we're hearing overwhelmingly is, interesting concept, let's see how this develops, let's see how this fits into our timeframe.

But we are – while saying that, I do want to reemphasize, we are making significant progress with major broker-dealers from all three major channels. And our view, which I think is right, is that you get one major in each category, it makes it much easier for others in that category to want to follow.

They'll have business reasons, maybe even a business imperative to want to come in if one of their closest competitors is seeing any kind of movement in their business toward NextShares..

Great. Thank you..

The next question is from Patrick Davitt with Autonomous. Your line is open..

Hi. Thanks for taking the question. That was most of mine, actually. But the – I'm curious on the repurchase, looks like it ticked down a little bit and the price has obviously come down quite a bit.

If you feel like there are any cash needs be it seeding NextShares or other seeding needs that could keep it at a lower rate against a much lower share price?.

No. At this point, I think that we're very comfortable with our cash position and with our ability to continue to generate cash from operations. We don't generally give any guidance on what our intention is in terms of repurchases for the quarter outside of saying that we intend to be in the marketplace.

So we're watching the markets like everyone else is. But at this point, we don't see any particular cash constraints that would keep us out of the market..

Great. Thanks..

The next question is from Robert Lee with KBW. Your line is open..

Hi. This is actually Andy McLaughlin for Rob Lee. Thanks for taking my question.

I know you guys said you were going to expand the London office and we just wanted to kind of get some idea around timing and amount of those expenses going forward?.

Those are pretty well reflected in the first quarter. The big hiring initiative there was in connection with our equity team that's now based in London, then we have one person in Tokyo and there are a handful of people in Boston connected to that team as well. That's done.

The people there that were hired in that group, I think the last ones came first week of November, something like that. So, think of those numbers as effectively baked in. I did mention that we're taking some new space – expanded space in London, but that's a relatively small item. I think I said we're expanding by two-thirds.

That means we're going to stay in the same building. We're going from half a floor or thereabouts to or two-thirds of a floor to a full floor. So, it's not enough to be meaningful.

But it's a significant initiative for us that we are optimistic that we're going to be in a position to bring in international assets that will produce revenues to offset that incremental spending. I was over there last week and quite encouraged by the pipeline and the level of activity.

Primarily, today, on the fixed income side, I'd say particularly high yield, but also we're starting to see some interest in equity products also as well. But, I would say, the hope would be that over the coming quarters that we'll see significant flows of international income assets and the beginning of flows on international equity assets..

Okay. Great. Thanks for that color. And if I could just ask one follow-up question, kind of around flows, around floating rate and bank loan. Are you seeing institutional appetite there? And kind of as of late, given the environment outflows, are you seeing them improve or kind of slipping from last year? Just any insight you can provide on that..

So, January was a significant – while still negative on an overall basis, January was an improvement from November and December. We would attribute that primarily to year-end effects, tax-lot selling or anything else that might be happening around the end of the year. I would say the flows have – they moderated a bit.

It still befuddles us that we are seeing net outflows, we see bank loans as an incredibly attractive asset class today, really offering a compelling risk reward opportunity with floating rate income but from current levels, the opportunity for capital appreciation unless this credit cycle proves to be an unusually weak one.

We're staring into the phase of a recession and recovery rates on defaulted loans or the rate of default itself is significantly worse than historical norms. People can – we'll have some credit effects. But we – from our point of view, those are more than priced in to current bank loan prices.

So, my theory is that we saw a big growth in both our business and the mutual fund assets and bank loans going back to 2013, 2014, what was the big growth year?.

2013..

2013. And to some degree, we're still working through those assets. These are people that perhaps didn't really understand the asset class and what they were buying. At that point, there was – you might remember there was a significant fear that interest rates were going to go up sharply. That's the short end as well as the long end.

And, obviously, that hasn't happened. And as that hasn't happened, we've been seeing as, again, this is my theory, a lot of those relatively new players in the asset class come out of the asset class. Demand on the institutional side remains solid. I wouldn't say it's spectacular, but it's certainly solid.

People get – they've been through this asset class get that it's a significant diversifier. It has potentially no exposure to interest rate risk. These are dollar based loans. So, for a U.S. investor, there's essentially no exposure to currency risk, but it does have exposure to credit risk.

But we've been doing this for many years going back to the late 1980s, more than 25 years, and we had experienced in knowing what a typical experience through a credit cycle is in terms of losses to credit events. All of that experience tells us that the asset class is compellingly attractive today.

And we're certainly doing what we can to make that case to both current clients and potential clients..

Okay. Great. Thanks a lot..

The next question is from Michael Kim with Sandler O'Neill. Your line is open..

Hey, guys. Good morning. First, maybe just to come back to the rollout for NextShares. Just wondering if you could maybe give us an update as it relates to seed capital needs going forward as you bring new funds to market? Any color there would be helpful..

We're – couple of answers. One answer from an exchange perspective, the amount of capital is quite minimum.

Is it 2 – what is it, $1 million or something?.

Two Creation Units..

Two Creation Units, which is $1 million, so not significant.

We do expect to have larger positions than that but from where we sit today, we don't see the need to build materially large positions in NextShares compared to our current seed capital portfolio which is – how much?.

$268 million..

Yeah..

$268 million. So we don't think it will likely that it will move the needle on that. Sometimes a driver of seed capital needs is minimum investment requirements that a particular broker-dealer may impose on a new strategy.

For the most part, we would expect and hope that those requirements wouldn't apply to NextShares because these are not new strategies.

In all cases, these are established strategies where we're just applying that same strategy in a lower cost more efficient vehicle, and we would expect in our work with broker-dealers that we should be able to convince them that there should be no requirement for significant Eaton Vance Investment in NextShares to validate those strategies.

So, bottom line, we don't expect it to be a major factor, a major use of cash over the next year based on everything we know today..

Got it. That's helpful. And then as a follow-up.

Just more broadly curious to hear in terms of what you're seeing for real-time demand trends across the institutional channel and how the pipeline looks in terms of the level of wins as well as the underlying mix of strategies beyond sort of the bank loan demand that you cited earlier?.

Yeah. The opportunity for us is really to take advantage of the strong performance record that a lot of our strategies have today. I mentioned high yield as an area of significant activity.

Honestly, I don't think that's reflective of a huge demand incrementally for new allocations to high yield more than the fact that more so it reflects the fact that there are other managers who have disappointed a client and there are searches that are driven by replacements and because we have one of the top track records and certainly a compelling story related to the size and strength and longevity of our team, we're in a position to compete very effectively for those transfers.

When I was in London, I did meet actually with a potential new client who is attracted to the risk/reward characteristics of high yield today. They look at spreads in the marketplace and historical levels of the market and historical returns from current spread levels and they're looking at potentially adding to the asset class.

I think that's probably the exception rather than the rule today. I mentioned Hexavest has had very strong performance of late that really, in many ways, validates their approach which has been one of general caution on the markets.

They made up a lot of ground in the fourth quarter and now have very compelling performance and also particularly attractive performance on a risk-adjusted basis. We expect to see increased activity of Hexavest in searches. Atlanta Capital, again, another very high performing manager and are stable. They have a relatively new strategy.

It's been offered institutionally for the last three or four years. It's called Select Equity that had some meaningful wins.

That's approaching $500 million in assets, and the strategy that potentially if things go right, that is we have another quarter or two of favorable performance and we can get over that $500 million threshold that we put ourselves in a position to compete effectively for new business there.

So, I would say those are three areas I would highlight away from bank loans and away from the more implementation and exposure-oriented parts of our business which continue to see very strong demand.

But, again, our key charge to our sales organization currently is we need to figure out ways to translate high-performing investment strategies into strong business performance, and that applies both retail and institutional..

Got it. Okay. Thanks for taking my questions..

The next question is from Michael Carrier with Bank of America. Your line is open..

Thank you and good morning. This is Adam Beatty, in for Mike. We wanted to get your thoughts on regulatory attention to fund composition and derivative exposure, particularly, I guess with respect to some of the overlay and factor-based strategies. Do you expect some additional scrutiny in those areas? And how would you manage that? Thanks..

one is we have primarily on the closed-end fund side, we have equity funds that write call options in some cases in single stock options, in other cases it's index options, in some cases, they write options in connection with also selling or in some cases buying put options.

So we have strategies that are primarily equity funds that have an options overlay. That's sort of one category of derivative intensive product that we offer in a registered investment fund format.

The other broad category of products we have is in our Global Macro area where often the most efficient way to gain a desired market exposure is through the derivatives market. So a credit default swap or a forward position in a currency would probably be the two most typical ways of gaining exposure.

How those – how this affects those businesses – how these proposed regulations affect these businesses is still up in the air. These regulations are being proposed. Eaton Vance is part of the ICI or Fund Industry Association and is participating in the development of the comment letter to be submitted by the ICI.

We also expect to submit our own comment letter on this. We expect our comment letter to focus on, as you would expect, the areas of how we use derivatives.

We believe the intent of that initiative is primarily to limit the use of derivatives for leverage purposes, which primarily is not how we use leverages; we're using in the case of writing call option that doesn't add market exposure to a fund arguably it takes away market exposure.

And similarly with our derivative strategies on the Global Income side, often these could be replicated in a very similar way by operating in the cash markets. So, I guess, bottom line, we're monitoring this quite closely. We expect to have a comment submitted to the SEC. We're participating in industry comments.

Depending on how things go, there could be changes in the implementation of some of our strategies that at the margin could increase fund cost, lower fund return.

But there's nothing that would cause us to say that something we're doing today likely we couldn't do if these proposed regulations are implemented, rather, they may require us to do things in a somewhat different way..

Got it. Thank you, Tom. I appreciate the detail. And then, in particular on the factor-based strategies, it's interesting, if I hear you right, that they're not only customized but somewhat dynamic in terms of the allocation or exposure.

The question is how close to the end use or retail investor would you see those types of dynamic decisions being made? Is it something that should always be intermediated by an FA or others, or would you see it being suitable in perhaps a robo-advisor context? Thank you..

Yeah. So, we're not in the robo-advisor business. We do offer these custom beta strategies on a retail basis through relationships we have with broker/dealers, financial advisors generally with a minimum investment of about $250,000 in the strategy.

So, we're not today placing these tools in the hands directly of retail investors that not necessarily would be a bad thing, but that's not our focus today. The range of customization that we offer down to the client or advisor level does vary by firm.

In some cases, a firm, even some that use these strategies quite actively, give a limited ability for a financial advisor to choose a custom solution. While these are customizable, sometimes that customization sort of stops at the firm level.

In other cases, the firm will allow customization down to the advisor group level within agreed upon constraints. But in no case currently do we provide customization down to the individual client level, at least in terms of retail clients..

Interesting. Thank you for taking our questions..

The next question is from Ken Worthington with JPMorgan. Your line is open..

Good morning. This is Will Cuddy standing in for Ken. Thank you for taking our questions. So, a top topic in the news is a potential British exit from the EU. And you've mentioned the growth in your London office.

How could like a British exit from the EU potentially affect your International businesses?.

I guess, first, I would say not materially. We don't have a big International business. I was in London last week, and this is certainly a topic of discussion. I can pass on what I heard though the impact on our business rounds to zero because we don't have a big base of operations in the UK.

We are moving from two-thirds of a floor to a full floor in a building there. But I think the concern there in the financial sector is that London could lose its status as a financial center of Europe, which is maybe somewhat arguable today, but probably not something that the French or the Germans are happy about.

And my guess is that, if Britain is not part of the EU going forward that that could change with implications not only for markets but also for how and where investment managers like Eaton Vance staff to serve clients and meet market opportunities in Europe.

Because we're really at the beginning stage of our development, we don't have a particular commitment to UK. If the new center of Europe is in Frankfurt or Paris or wherever, it wouldn't be a significant disruption to our business to pick up and move effectively.

I think the bigger concern – the more likely concern, the most significant concern for Eaton Vance is just what does it do to the markets. We're in the business where our revenues go up or down with the markets.

And to the extent that the possibility of a British exit from the EU is weighing on markets, the primary financial impact of that on Eaton Vance is that if that weighing on the markets cause the market prices to go down, our revenues go down. That's the way it works in the asset management business.

So I would put it in the same category as other things that are bringing uncertainty and adding risk to global financial markets today is much more significant to us than the specifics of how we address markets in Europe..

Okay. Thank you. So tying into Adam's question earlier with the custom beta and robo-advisors. A big pitch from robo-advisors have been the ability to tax manage assets.

Do you see that as a potential threat or opportunity for you? And would you see a potential for partnering with one of these platforms?.

Certainly something we're interested in. I don't believe it's accurate that today a core offering of most robo-advisors is individual holdings of securities and lot level tax management.

I believe the – my understanding is the predominant model is that they invest in ETFs primarily and perhaps other pool vehicles as their primary way of gaining market exposure. I'm familiar that Wealthfront has an offering with individual securities.

So I believe with that exception, the robo-advisor world is essentially a world of investing in ETFs and other fund vehicles as opposed to holding direct investments in securities primarily. Clearly, there's an interest here and a potential overlap with our capabilities.

I don't think there's great market data on this, but we believe it's highly likely that our affiliate, Parametric, is today the largest player in what I'll call the tax-managed separate account business. We have the most – the largest account base.

I'm sure we would claim that the most sophisticated technology and potentially could consider ramping that up to potentially bring down minimum investments and service clients through robo-advisors or other means on a broader basis than we're doing today. So I don't see it as a threat to our business, but I do see it as potentially an opportunity.

And we're certainly open to discussions on additional ways to gain access for this product suite, which, as we've talked about in previous quarters and as I emphasized in my remarks today, continues to be a growing part of our business and something that really sets us apart from what I'll call other traditional active managers..

Great. Thank you for taking our questions..

The next question is from Chris Shutler with William Blair. Your line is open..

Hi. Thanks for taking my questions. This is actually Andrew Nicholas filling in for Chris. Just one question. You referred to additional NextShares product launches in March. I just want to confirm first that those would all be Eaton Vance products. And then, in any case, if there is an updated timeline for the rollout of other licensee funds..

Yeah. So to-date the only fund sponsor that has approved fund registration statements is Eaton Vance. So, any near-term launches would be of Eaton Vance sponsored products.

A key milestone for other licensees, the other 11 fund sponsors that have exemptive relief to offer NextShares and have entered into preliminary agreements with our affiliate to permit that, a key milestone for them was when Eaton Vance got our registration statement approvals in December.

Because, by design, and I would say, by design from our end as well as from the SEC, that was intended to be a template that other fund sponsors could use. So, in other words, the language that was agreed to and negotiated by us and the SEC, that essentially can be plugged into registration statements for other fund sponsors.

Certainly, one of our objectives including 18 registration statements in that initial filing was to make sure that we essentially covered all the bases in terms of asset classes and issues that might arise to make it easier for follow-on managers to expedite the process of their own – getting their own registration statement approval.

We are certainly in contact with other fund companies. We understand that they are making progress towards filing registration statements relatively soon, but we can't – we obviously can't control the timing of that.

But I would say here again, as with our conversations with broker-dealers and other fund companies, the fact that we have a product live with the market is a stimulus for action by the fund companies that have already entered into agreements with us and are trying to make decisions about the timing of their own launches (57:10).

But again, also important to them is what does the distribution landscape look like. They're happy for the test phase of the development of NextShares to be dominated by Eaton Vance. They likely are primarily interested in the commercial development, which requires a broader range of distribution outlets than we have today.

But we expect to see registrations filed by – for NextShares Fund by other sponsors in the coming weeks..

Thank you very much. That's all I had..

Ladies and gentlemen, we have reached our time limit for any further questions, and I will now turn the call back over the Mr. Cataldo for any closing remarks..

Great. Thank you for joining us and thank you for your continued interest in Eaton Vance and we look forward to reporting back to you in a few months for our second fiscal quarter end. Good-bye..

This concludes today's conference call. You may now disconnect..