Morgan Stanley will sell its stake in money management firm Invesco, according to a Dow Jones report Tuesday.
The announcement, which sent Invesco shares tumbling in extended trading, comes as the money manager recently finalized its acquistion of Morgan Stanley's retail asset management firm, including the Van Kampen fund.
Morgan Stanley holds 30.9 million shares of the firm.
Executives from both firms said the sale, worth over $700 million at Tuesday's prices, was not meant to signal a change in the relationship between the fund manager and the brokerage.
"This share sale is part of Morgan Stanley's strategy to reallocate capital into the firm's client driven, flow businesses," James Gorman, President and CEO of Morgan Stanley, said in a statement. "Invesco has become one of our key global partners across retail, asset management and institutional securities and we look forward to continuing to work closely together."
"Morgan Stanley is an important strategic partner to Invesco, and we look forward to continuing to grow our productive relationship," Martin Flanagan, Invesco President and CEO, said in the statement.
Flanagan has repeatedly told investors that the deal would lead to better distribution for all of Invesco's funds at Morgan Stanley and other firms.
The 30.9 million shares would have a total value of about $717 million at Invesco's closing price of $23.20 on the New York Stock Exchange on Tuesday. Shares of Invesco have risen 25 percent since June 1 when the deal closed.
Invesco paid about $1.5 billion in cash and stock for Morgan Stanley's $115 billion retail funds, including the Van Kampen line of mutual
funds. The deal included $800 million in cash and 30.9 million shares.Also Tuesday, Invesco said its preliminary month-end assets under management rose to $621.2 billion in October, up nearly 3 percent from $604.5 billion in September.
The company did not provide a year-over-year comparison.
Money market fund assets, which include both retail and institutional money market assets, slipped to $69.6 billion in October, from $69.9 billion in the prior month. Equity, fixed income, balanced fund and alternative investments all rose for the month.
Invesco said the strengthening of foreign currency against the U.S. dollar added $3 billion of assets under management in the month.
Shares of Invesco , which closed at $23.20 in regular trade, were down about 1 percent in after-hours trading. Shares of Morgan Stanley were fractionally higher. Get after-hours quotes for Invesco, Morgan here.
--The Associated Press and Reuters contributed to this report.