Morgan Stanley: Two strategic deals bring Gorman’s vision closer
The investment bank profited in markets and capital raising, as acquisitions set it up for the future
Ever since the great financial crisis, management at Morgan Stanley has laid out a vision to marry its fabled global investment bank to world-class wealth management and investment management businesses.
The aim is to reduce exposure to tail risks and draw more revenue and profit from low-capital consuming and stable fee-earning activities.
The first big push came in 2009 with the purchase from Citi of a majority stake in Smith Barney and its army of financial advisers. That led to a full takeover in 2012.
In 2020, the firm put on a second shove with two big strategic deals. In February, it announced the acquisition of E*Trade, an electronic brokerage that brings over 5.2 million self-directed customers. It completed that deal in October.
The firm then announced the acquisition of investment manager Eaton Vance, which adds another $500 billion of assets under management (AuM) to the $715 billion already at Morgan Stanley Investment Management (MSIM).