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Eaton Vance Limited Duration Income Fund
The Eaton Vance Limited Duration Income Fund (EVV) launched in 2003 as a closed-end interval fund under the Eaton Vance management complex, now part of...
Eaton Vance Limited Duration Income Fund
The Eaton Vance Limited Duration Income Fund (EVV) launched in 2003 as a closed-end interval fund under the Eaton Vance management complex, now part of Morgan Stanley Investment Management. Portfolio managers R. Kelly Williams Jr. and Eric Stein oversee the strategy, which was designed to offer a liquidity sleeve within private credit by concentrating holdings in floating-rate senior loans, shorter-duration high-yield bonds, and asset-backed securities. The vehicle's interval structure limits quarterly redemptions, allowing the managers to hold less liquid credits that open-end mutual funds typically avoid. The fund deploys capital across three primary sleeves: senior secured loans, which historically form the largest allocation; high-yield corporate bonds concentrated in BB and B rated tranches; and structured credit including collateralized loan obligations (CLOs) and commercial mortgage-backed securities. Geographic exposure tilts heavily toward US issuers, with selective allocations to developed-market European credits. The managers run a bottom-up credit selection process, focusing on free-cash-flow generation and asset coverage rather than benchmark-relative positioning. During the 2020 drawdown, the fund drew on its credit facility to meet redemption requests without forced selling — a structural feature that preserved portfolio integrity through the dislocation. Assets are reported via quarterly filings rather than continuous AUM disclosures. Eaton Vance does not break out individual fund-level AUM on a daily basis. The vehicle operates alongside Eaton Vance's broader $500 billion-plus platform, which Morgan Stanley acquired in 2021, though the fund maintains a separate board and distinct shareholder base. Eric Stein also serves as co-head of the firm's global income team, while Williams brings structured-credit expertise from his tenure at Eaton Vance Management. The interval-fund structure is the fund's structural differentiator. Unlike daily-liquid open-end funds, EVV can hold up to 25% of assets in illiquid investments while offering 5% quarterly tender offers to shareholders. This hybrid architecture, rare when the fund launched but now adopted by rivals like Griffin Capital and Apollo, allows the portfolio to harvest an illiquidity premium in middle-market direct lending and structured credit without locking investors into a traditional drawdown partnership.
General information
Firm type
Asset Manager
Year founded
2003
AUM
Undisclosed
Location
Region
North America
Country
United States
City
Boston
Corporate office
Boston, MA, United States
Principals
R. Kelly Williams Jr.
Portfolio Manager
Eric A. Stein
Portfolio Manager
Sector focus
Frequently asked questions
Who runs investment decisions at the Eaton Vance Limited Duration Income Fund?
Portfolio managers R. Kelly Williams Jr. and Eric Stein share responsibility for day-to-day investment decisions. Stein also serves as co-head of Eaton Vance's global income team. Williams has led the fund's structured credit allocations through multiple credit cycles.
What is an interval fund, and how does it affect liquidity?
An interval fund is a closed-end vehicle that offers limited quarterly redemptions rather than daily liquidity. EVV typically offers to repurchase 5% of outstanding shares each quarter, a structure that allows the portfolio to hold less liquid assets such as senior loans and structured credit without facing forced selling during market dislocations.
What types of debt instruments does the fund hold?
The fund invests primarily in floating-rate senior secured loans, below-investment-grade corporate bonds, and structured credit instruments including collateralized loan obligations and commercial mortgage-backed securities. The average duration is intentionally kept short to reduce interest-rate sensitivity.
How does the fund's ownership structure work after the Morgan Stanley acquisition?
Morgan Stanley completed its acquisition of Eaton Vance Corp. in March 2021. The fund operates as a distinct legal entity with its own board of trustees. Morgan Stanley Investment Management serves as the parent organization, but the fund's portfolio management team and investment process remained intact post-acquisition.
What is the fund's known posture on co-investments alongside external GPs?
EVV does not operate as a co-investment vehicle alongside private equity GPs. It accesses credit markets via syndicated loans, public and 144A bond offerings, and structured product markets. The interval structure enables participation in privately negotiated direct-lending tranches, but this is not a co-investment program in the private-equity sense.
How does the fund manage redemption pressure during credit dislocations?
During the March 2020 market dislocation, the fund used its credit facility to satisfy quarterly redemption requests without becoming a forced seller of illiquid positions. This buffer — made possible by the interval structure — allowed the portfolio managers to hold assets through the volatility rather than liquidating at distressed prices.
Which sectors does the fund explicitly avoid?
The fund does not publish an explicit exclusion list. However, its credit-underwriting process emphasizes free-cash-flow generation and asset coverage, which effectively screens out pre-revenue companies, deeply distressed names with uncertain recovery prospects, and credits lacking hard-asset backing.
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