Among all the fund managers and marketing people there are a lot of press and representatives of some of the UK's largest pension funds - the sort of clients Morgan Stanley would love to have on board.
Along with the drinks and canapés, to amuse its guests the firm has brought in Rory Bremner, one of the UK's leading entertainers, who does scarily accurate impressions of Bill Clinton and Tony Blair, among others. Now with a new president in the White House, he is bringing his George W Bush up to speed as well and the recent election gives him an easy opportunity for a gag.
"Are there any Americans here? Let's have a quick count," he says.
A few Morgan Stanley executives put their hands in the air.
"OK, let's have a quick recount," he follows up, to much laughter, showing that there is nothing the rest of the world likes more than to have a good laugh at the US's expense - even among its closest allies in the UK.
Indeed, for one of those pension fund heads that Morgan Stanley is hoping to impress, the comedy makes his attendance at the launch worthwhile. "No I'm not here to look at the product, I've only come to see Rory Bremner," he says, only half joking.
Bremner continues his jibes against the US democratic system. "Americans come over here and they say: 'What is it with this game of cricket? You play for five days and then you still don't get a result." He pauses. "I say to Americans, what is it with your elections? They last for five weeks and then you still don't get a result."
Although Morgan Stanley's US contingent takes the jokes in good part, they serve as a reminder that outside the US the firm is seen very much as a US player - not a UK house, let alone a European one.
It is something that other US investment houses, Merrill Lynch, Fidelity and Goldman Sachs among them, realized long ago. Making your mark in Europe, and perhaps even more so in Asia, takes special skills in diplomacy. As one marketing man at another US operation in London says: "The trouble is that Americans can come across as a little bit full of themselves. You may have the best products and the best numbers but you need to be able to sell them subtly. It certainly helps to have natives on the ground - Germans in Germany, French in France but you need real commitment, advertising, all those things as well."
He continues: "The thing is that first of all you have to overcome the natural reticence to foreigners before you can even start to try to put the message over."
In the UK, Merrill Lynch overcame this hurdle with the Mercury acquisition while Goldman Sachs bought CINMan, the fund manager for British Coal's pension fund, to gain its foothold. Morgan Stanley has somewhere in the region of £1 billion ($1.4 billion) of UK institutional funds, while its Sicav pooled funds in Europe have brought in nearly $8 billion in five years. Nevertheless, its charm offensive still has a long way to go.
"There is still a sense of Morgan-who? about them," says an investment consultant in London. "Not among people familiar with financial services but in the wider world."
This may seem odd given that the group has had an office in London for 15 years and has since added outposts in Amsterdam, Frankfurt, Paris and Milan, together with its Spanish acquisition of AB Asesores. In Asia it has operations in Japan, Singapore and Mumbai.
Robert Sargent, head of the European institutional business, concedes that historically the overseas offices were geared to servicing existing US clients rather than winning business from international customers. That meant the firm did not attend to putting the right products in place to win new clients.
The London consultant says this has undoubtedly held it back. "Their research is very strong but they need a much broader product range," he says, adding that on top of this it has yet to make a real effort in distribution and marketing.
In the past this has led to some red faces in the firm. In 1998 it made a push for the UK retail market with the launch of no-load funds. Subsequently, because of lack of interest, they had to be shut down.
Around the same time the fledgling SocGen Asset Management, under high-profile UK manager Nicola Horlick, announced that it was looking to bring in £5 billion of assets in its first five years. SocGen saturated London underground stations and the press with advertising and used the fame of its investment head to good effect. Recently it was able to tell the world it had brought in £6 billion in its first three years.
Mitchell Merin says he has not heard of Horlick, and while his mind may be occupied with higher concerns, this offers some indication of the US-centric nature of the firm's senior management. That may have to change if it is to make serious inroads into the international markets.
Sargent contends that the satellite operations are given the freedom to follow their own strategies. "It is very much our policy that we run our own business," he says. "Mitch Merin is clear on that."
Competing nicely with foreign houses
For his part, Merin says he is paying close attention to the international markets and watches Morgan Stanley's progress relative to its US peer group. "We haven't invested the kind of money that, say, Fidelity has in brand name building, advertising, or facilities, either in Japan or in the UK," he says. "But when you look at it in terms of product capability, performance, talent, we think we can compete very nicely with them, just as we do in the US."
He says international markets are following the same life cycle the US has already seen. "Countries are changing the rules at different speeds so it's happening in a more fractured way," he says. "But what's happening is what happened in the US. People competed first on capability: some had product and some didn't. Then they competed on brand. Then, as information became more readily available to investors they started competing on performance."
Eventually, he argues, products became commoditized and performance was all that mattered. At that point, those companies with a very solid brand would have a certain advantage. "Foreign markets are going the same way. We have a superior brand and we will compete with the other superior brands," he says.
Yet on the marketing side Powers, the global sales head, says there is still work to be done. "We have to develop a strategy for each country because each one is different," he says.
Part of the problem for the group, says a former Morgan Stanley source, is that Dean Witter, which has come to play a leading role in the new operation, was historically a very US-focused operation. "They are struggling to really make themselves international because of where they've come from," he says.
At least now the company is making concerted efforts to build its overseas client base. Gaps in its products are being plugged and it is looking to beef up distribution channels. The Quilter acquisition in the UK is being made with that in mind, as the AB Asesores purchase was before. In Japan it has a deal with Sanwa Bank.
Horacio Valeiras, European head of asset allocation, who is leading the new multi-asset product launch in the UK has spent the last two years developing the right products for Europe.
He says the firm has researched the market and come up with products that stick closer to benchmarks. There is less appetite for risk in Europe than in the US.
"We want to deliver what clients want, not to frighten them," he says. "We have beefed up our risk management and integrated it into the management of all these new products for the European markets. We think we're in good shape now."
Meanwhile in Japan, John Alkire, managing director of the Tokyo operation, believes deregulation is on the horizon and the firm, which has been building its presence since 1987, is set to capitalize on this, along with other international managers. "We think our main competition is going to come from the likes of Fidelity, Merrill Lynch and Schroders but we're right up there with them," he says.
Will the optimism and enthusiasm for meeting the challenge of international expansion shown by the foot soldiers in London and Tokyo be matched by the generals in New York? It remains to be seen.