Morgan Stanley facts for kids
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Headquarters at 1585 Broadway
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| Public | |
| Traded as |
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| Industry | Financial services |
| Founded |
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| Founder |
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| Headquarters | Morgan Stanley Building New York City, New York, U.S. |
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Area served
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International service |
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Key people
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| Products |
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| Revenue |  US$54.1 billion (2023) |
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Operating income
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 US$11.8 billion (2023) |
| US$9.1 billion (2023) |
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| AUM | US$1.46 trillion (2023) |
| Total assets | US$1.19 trillion (2023) |
| Total equity | US$100.0 billion (2023) |
| Owner | MUFG (21.6%) |
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Number of employees
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80,006 (2023) |
| Subsidiaries |
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| Capital ratio | 15.2% (2023) |
Morgan Stanley is an American multinational investment bank and financial services company headquartered at 1585 Broadway in Midtown Manhattan, New York City. With offices in 41 countries and more than 75,000 employees, the firm's clients include corporations, governments, institutions, and individuals. Morgan Stanley ranked No. 61 in the 2023 Fortune 500 list of the largest United States corporations by total revenue and in the same year ranked #30 in Forbes Global 2000.
The original Morgan Stanley, formed by J.P. Morgan & Co. partners Henry Sturgis Morgan (a grandson of J.P. Morgan), Harold Stanley, and others, came into existence on September 16, 1935, in response to the Glass–Steagall Act, which required the splitting of American commercial and investment banking businesses. In its first year, the company operated with a 24% market share (US$1.1 billion) in public offerings and private placements.
The current Morgan Stanley is the result of the merger of the original Morgan Stanley with Dean Witter Discover & Co. in 1997. Dean Witter's chairman and CEO, Philip J. Purcell, became the chairman and CEO of the newly merged "Morgan Stanley Dean Witter Discover & Co." The new firm changed its name back to "Morgan Stanley" in 2001. The main areas of business for the firm today are institutional securities, wealth management and investment management. The bank is considered systemically important by the Financial Stability Board.
Contents
Overview
Morgan Stanley is a financial services corporation that, through its affiliates and subsidiaries, advises, and originates, trades, manages, and distributes capital for institutions, governments, and individuals. The company operates in three business segments: Institutional Securities, Wealth Management, and Investment Management.
History
The original Morgan Stanley (1935–1997)
Morgan Stanley traces its roots to J.P. Morgan & Co. After the U.S. Congress passed the Glass–Steagall Act in 1933, it was no longer possible for a corporation to have investment banking and commercial banking businesses under a single holding entity. J.P. Morgan & Co. chose the commercial banking business over the investment banking business. As a result, some of the employees of J.P. Morgan & Co., most notably Henry S. Morgan and Harold Stanley, left J.P. Morgan & Co. and joined others from the Drexel partners to form Morgan Stanley. The firm formally opened its doors for business on September 16, 1935, at 2 Wall Street, New York City, just down the street from J.P. Morgan. The firm was involved with the distribution of 1938 US$100 million (~$1.53 billion in 2021) of debentures for the United States Steel Corporation as the lead underwriter. The firm also obtained the distinction of being the lead syndicate in the 1939 U.S. rail financing. The firm went through a reorganization in 1941 to allow for more activity in its securities business.
The firm was led by Perry Hall, the last founder to lead Morgan Stanley, from 1951 until 1961. During this period, the firm co-managed the World Bank's triple-A-rated bonds offering of 1952, as well as coming up with General Motors' US$300 million debt issue, US$231 million IBM stock offering, and the US$250 million AT&T's debt offering.
Morgan Stanley credits itself with having created the first viable computer model for financial analysis in 1962, thereby starting a new trend in the field of financial analysis. Future president and chairman Dick Fisher contributed to the computer model as a young employee, learning the Fortran and COBOL programming languages at IBM. In 1967, it established the Morgan & Cie, International in Paris in an attempt to enter the European securities market. The firm acquired Brooks, Harvey & Co., Inc. in 1967 and established a presence in the real estate business. The sales and trading business is believed to be the brainchild of Bob Baldwin.
In 1996, Morgan Stanley acquired Van Kampen American Capital.
Morgan Stanley after the merger (1997–present)
On February 5, 1997, the company merged with Dean Witter Discover & Co., the spun-off financial services business of Sears Roebuck. Dean Witter's chairman and CEO, Philip J. Purcell, continued to hold the same roles in the newly merged "Morgan Stanley Dean Witter Discover & Co." Morgan Stanley's president John J. Mack became the firm's president and chief operating officer. In 1998, the name of the firm was changed to "Morgan Stanley Dean Witter & Co." Originally, the name was chosen to be the combination of the two predecessor companies to avoid tension between the two firms. Eventually, in 2001 "Dean Witter" was further dropped and the name became "Morgan Stanley" for unrevealed reasons. The merged firm began expanding overseas operations: in 1999, Mack set up a joint venture in India with local partner JM Financial.
Morgan Stanley had offices located on 35 floors across buildings 1, 2, and 5 of the World Trade Center, and was the largest tenant of the WTC complex. Most of these offices had been inherited from Dean Witter which had occupied the space since the mid-1980s. The firm lost 13 employees during the September 11 attacks in 2001 (Thomas F. Swift, Wesley Mercer, Jennifer de Jesus, Joseph DiPilato, Nolbert Salomon, Godwin Forde, Steve R. Strauss, Lindsay C. Herkness, Albert Joseph, Jorge Velazquez, Titus Davidson, Charles Laurencin and Security Director Rick Rescorla) in the towers, while 2,687 were successfully evacuated by Rick Rescorla. The surviving employees moved to temporary headquarters in the vicinity. In 2005 Morgan Stanley moved 2,300 of its employees back to lower Manhattan, at that time the largest such move.
In 2003, New York–Presbyterian Hospital named the Morgan Stanley Children's Hospital in recognition of the firm's sponsorship of the hospital, which largely funded its construction through philanthropy. The initiative began under CEO Philip J. Purcell and was completed under John Mack. Employees at the firm have been involved with the hospital since the 1990s and personally donated to the construction of the current child-friendly building, which opened in November 2003.
The company found itself in the midst of a management crisis starting in March 2005 that resulted in a loss of the firm's staff. Purcell resigned as CEO of Morgan Stanley in June 2005 when a highly public campaign by former Morgan Stanley partners threatened to damage the firm and challenged his refusal to aggressively increase leverage, increase risk, enter the sub-prime mortgage business and make expensive acquisitions; the same strategies that forced Morgan Stanley into massive write-downs, related to the subprime mortgage crisis, by 2007.
On December 19, 2006, Morgan Stanley announced the spin-off of its Discover Card unit. The bank completed the spinoff of Discover Financial on June 30, 2007.
In February 2007, Morgan Stanley announced the end of its Indian joint venture: the bank acquired its local partner's stake in the institutional brokerage business, and sold its own stake in the other businesses. The bank then set up a wholly-owned subsidiary; the country head of Investment Management, Narayan Ramachandran, became CEO of the new subsidiary. Aisha de Sequeira, a managing director in the Mergers and Acquisitions group, was made Head of Investment Banking.
To cope with the write-downs during the subprime mortgage crisis, Morgan Stanley announced on December 19, 2007, that it would receive a US$5 billion capital infusion from the China Investment Corporation in exchange for securities that would be convertible to 9.9% of its shares in 2010.
The bank's Process Driven Trading unit was among several on Wall Street caught in a short squeeze, reportedly losing nearly $300 million in one day. The bubble's subsequent collapse was considered to be a central feature of the financial crisis of 2007–2010.
The bank was contracted by the United States Treasury in August 2008 to advise the government on potential rescue strategies for Fannie Mae and Freddie Mac. Within days, Morgan Stanley itself was at risk of failure, with rapidly changing prospects, regulatory model and ownership stakes over the course of four weeks from mid-September to mid-October 2008.
The bank Morgan Stanley was reported to have lost over 80% of its market value between 2007 and 2008 during the financial crisis. On September 17, 2008, the British evening-news analysis program Newsnight reported that Morgan Stanley was facing difficulties after a 42% slide in its share price in two days. CEO John J. Mack wrote in a memo to staff "we're in the midst of a market controlled by fear and rumours and short-sellers are driving our stock down." By September 19, 2008, the share price had slid 57% in four days, and the company was said to have explored merger possibilities with CITIC, Wachovia, HSBC, Standard Chartered, Banco Santander and Nomura. At one point, Hank Paulson offered Morgan Stanley to JPMorgan Chase at no cost, but JPMorgan's Jamie Dimon refused the offer.
Morgan Stanley and Goldman Sachs, the last two major investment banks in the US, both announced on September 22, 2008, that they would become traditional bank holding companies regulated by the Federal Reserve. The Federal Reserve's approval of their bid to become banks ended the ascendancy of securities firms, 75 years after Congress separated them from deposit-taking lenders, and capped weeks of chaos that sent Lehman Brothers Holdings Inc. into bankruptcy and led to the rushed sale of Merrill Lynch & Co. to Bank of America Corp.
MUFG Bank, Japan's largest bank, invested $9 billion in a direct purchase of a 21% ownership stake in Morgan Stanley on September 29, 2008. The payment from MUFG was supposed to be wired electronically; however, because it needed to be made on an emergency basis on Columbus Day when banks were closed in the US, MUFG cut a US$9 billion physical check, the largest amount written via physical check at the time. The physical check was accepted by Robert A. Kindler, Global Head of Mergers and Acquisitions and Vice Chairman of Morgan Stanley, at the offices of Wachtell Lipton. Concerns over the completion of the Mitsubishi deal during the October 2008 stock market volatility caused a dramatic fall in Morgan Stanley's stock price to levels last seen in 1994. It recovered once Mitsubishi UFJ's 21% stake in Morgan Stanley was completed on October 14, 2008.
Morgan Stanley borrowed $107.3 billion from the Fed during the 2008 crisis, the most of any bank, according to data compiled by Bloomberg News Service and published August 22, 2011.
In 2009, Morgan Stanley purchased Smith Barney from Citigroup and the new broker-dealer operates under the name Morgan Stanley Smith Barney, the largest wealth management business in the world.
In November 2013, Morgan Stanley announced that it would invest $1 billion (~$1.16 billion in 2021) to help improve affordable housing as part of a wider push to encourage investment in efforts that aid economic, social and environmental sustainability.
In July 2014, Morgan Stanley's Asian private equity arm announced it had raised around $1.7 billion (~$1.94 billion in 2021) for its fourth fund in the area.
In December 2015, it was reported that Morgan Stanley would be cutting around 25 percent of its fixed income jobs before month end. In January 2016, the company reported that it had offices in "more than" 43 countries.
In October 2020, the company completed its acquisition of E*Trade, a deal announced in February 2020 for $13 billion, the biggest acquisition by a U.S. bank since the global financial crisis.
In March 2021, Morgan Stanley completed its acquisition of Eaton Vance, a deal announced in October 2020. With the addition of Eaton Vance, Morgan Stanley now had $5.4 trillion of client assets across its Wealth Management and Investment Management segments.
The firm conducted layoffs in December 2022, and Bloomberg announced the firm expected more layoffs in mid-2023.
On May 2, 2023, an individual familiar with the matter reported that Morgan Stanley has outlined its intention to reduce approximately 3,000 positions by the end of June. The projected reduction constitutes roughly 5 percent of the bank's overall workforce, with financial advisors and support staff exempted from these staff cuts.
Organization
The company's 3 divisions are as follows:
Institutional Securities Group
| Business unit | share |
|---|---|
| Wealth Management | 48.5% |
| Institutional Securities | 42.6% |
| Investment Management | 9.9% |
| Intersegment Eliminations | -1.0% |
Morgan Stanley's Institutional Securities is the most profitable business segment. This business segment provides institutions with investment banking services such as capital raising and financial advisory services such as mergers and acquisitions advisory, restructurings, real estate and project finance, and corporate lending. The segment also encompasses the Equities and the Fixed Income divisions of the firm; trading is anticipated to maintain its position as the "engine room" of the company. Among the major U.S. banks, Morgan Stanley sources the highest portion of revenues from fixed-income underwriting, which was reported at 6.0% of total revenue in FY12.
Wealth Management
The Global Wealth Management Group provides stockbrokerage and investment advisory services. This segment provides financial and wealth planning services to its clients, who are primarily high-net-worth individuals.
On January 13, 2009, the Global Wealth Management Group was merged with Citi's Smith Barney to form Morgan Stanley Smith Barney. Morgan Stanley owned 51% of the entity, and Citi held 49%. On May 31, 2012, Morgan Stanley exercised its option to purchase an additional 14% of the joint venture from Citi. In June 2013, Morgan Stanley stated it had secured all regulatory approvals to buy Citigroup's remaining 35% stake in Smith Barney and would proceed to finalize the deal.
In February 2019, the company announced the acquisition of Solium Capital, a manager of employee stock plans, for $900 million (~$954 million in 2021).
In October 2020, the company completed its acquisition of E*Trade, a deal announced in February 2020 for $13 billion, the biggest acquisition by a U.S. bank since the global financial crisis.
Investment Management
Investment Management provides asset management products and services in equity, fixed income, alternative investments, real estate investment, and private equity to institutional and retail clients through third-party retail distribution channels, intermediaries and Morgan Stanley's institutional distribution channel. Morgan Stanley's asset management activities were principally conducted under the Morgan Stanley and Van Kampen brands until 2009.
On October 19, 2009, Morgan Stanley announced that it would sell Van Kampen to Invesco for $1.5 billion (~$1.87 billion in 2021), but would retain the Morgan Stanley brand. It provides asset management products and services to institutional investors worldwide, including pension plans, corporations, private funds, non-profit organizations, foundations, endowments, governmental agencies, insurance companies and banks.
On September 29, 2013, Morgan Stanley announced a partnership with Longchamp Asset Management, a French-based asset manager that specializes in the distribution of UCITS hedge funds, and La Française AM, a multi-specialist asset manager with a 10-year track record in alternative investments.
In March 2018, Morgan Stanley acquired Mesa West, a leading U.S. commercial real estate credit platform, adding to its existing investment strategies and product offerings across real assets and private credit.
In March 2021, Morgan Stanley completed its acquisition of Eaton Vance, a deal announced in October 2020. With the addition of Eaton Vance, Morgan Stanley now had $5.4 trillion of client assets across its Wealth Management and Investment Management segments.
Ownership
Morgan Stanley is mainly owned by institutional investors, who own around 60% of shares. The largest shareholders in December 2023 were:
- Mitsubishi UFJ Financial Group (23.06%)
- State Street Corporation (6.97%)
- The Vanguard Group (6.67%)
- BlackRock (5.53%)
- JP Morgan Chase (3.67%)
- Wellington Management Company (2.35%)
- Capital International Investors (1.50%)
- Geode Capital Management (1.46%)
- Bank of America (1.28%)
- Fisher Investments (1.24%)
Awards and honors
- In 2020 Morgan Stanley was named IFR's Bank of the Year, and in 2021 Morgan Stanley was named Euromoney's best investment bank in the world.
- Fast Company named Morgan Stanley in its list of Best Workplaces for Innovators in 2020 and 2021.
- Great Place to Work Institute Japan in 2007 ranked Morgan Stanley as the second best corporation to work in Japan, based on the opinions of the employees and the corporate culture.
- The Times listed Morgan Stanley 5th in its 20 Best Big Companies to Work For 2006.
- Morgan Stanley was named one of the 100 Best Companies for Working Mothers in 2004 by Working Mother.
- Family Digest named Morgan Stanley one of the "Best Companies for African Americans" in June 2004.
Current and former chief executives
The position of chief executive was known as president until 1991; the position was not in use between 1961 and 1970 as Morgan Stanley was a partnership during this period.
- Harold Stanley (1935–1951)
- Perry Hall (1951–1961)
- Samuel B. Payne (1970–1971)
- Chester H. Lasell (1971–1972)
- Robert H. B. Baldwin (1973–1982)
- S. Parker Gilbert (1983–1984)
- Richard B. Fisher (1984–1997)
- Phil Purcell (1997–2005)
- John Mack (2005–2009)
- James P. Gorman (2009–2023)
- Ted Pick (2024–present)
Global and other headquarters
The Morgan Stanley world headquarters are located in New York City, the European headquarters are in London, Asia Pacific headquarters are in both Hong Kong and Tokyo, and Canada headquarters in Toronto.
Notable alumni
- Dan Ammann, former General Motors President; chief executive officer, Cruise Automation
- Barton Biggs, author and hedge fund manager
- Erskine Bowles, Clinton White House Chief of Staff
- Richard A. Debs, Chairman of Carnegie Hall; Middle East power-broker
- Bob Diamond, former chief executive officer, Barclays
- Richard B. Fisher, chairman of the board, Rockefeller University and Bard College; member, Trilateral Commission
- William E. Ford, General Atlantic Chairman and CEO
- Bob Diamond, former chief executive officer, Barclays
- Eric Gleacher, Founder of Gleacher & Co.
- Nina Godiwalla, author of Suits: A Woman on Wall Street
- Robert F. Greenhill, founder of Greenhill & Co.
- David Grimaldi, Chief Administrative Officer, New Castle County Government
- John Havens, former president, Citigroup, Inc.
- Lindsay Goldberg, pioneering buy-out firm founded by alumni Alan Goldberg and Bob Lindsay in 2001
- Nigel MacEwan, former chief executive officer, Kleinwort Benson North America; former president, Merrill Lynch
- John J. Mack, chairman of the board of New York-Presbyterian Hospital
- Raymond J. McGuire, President, Lazard Ltd.
- Mary Meeker, Kleiner Perkins partner and founder, Bond Capital
- Mitchell M. Merin, financial executive
- Eileen Murray, co-president, Bridgewater Associates
- Fahad Al Mubarak,Governor, Saudi Central Bank
- Thomas R. Nides, United States Ambassador to Israel
- Dr. Ann Olivarius, chair, McAllister Olivarius, trans-Atlantic employment and discrimination lawyer
- Stephen A. Oxman, Assistant Secretary of State; chair, Princeton University Board of Trustees
- Vikram Pandit, former chief executive officer, Citigroup
- Joseph R. Perella, philanthropist; Founder of Perella Weinberg Partners
- Charles E. Phillips, former President of Oracle, Inc.; C.E.O. of Infor
- Ruth Porat, chief financial officer; Alphabet Inc.
- Frank Quattrone, Founder, Qatalyst Group
- Steven Rattner, private equity manager and commentator
- Stephen S. Roach, Yale University professor
- Benjamin M. Rosen, co-founder, Compaq Computer; chairman, California Institute of Technology
- David E. Shaw, hedge fund manager
- Chip Skowron, hedge fund portfolio manager convicted of insider trading
- Bjarne Stroustrup, developer of the C++ programming language
- Thomas O. Staggs, COO and CFO Disney
- Charles F. Stewart, Sotheby's CEO
- John J. Studzinski, CBE, American-British investment banker and philanthropist
- Sir David Walker, chairman, Barclays PLC
- Kevin Warsh, G.W. Bush economic advisor; Member, Federal Reserve Board of Governors
- Byron Wien, legendary investment strategist; Blackstone Inc.
See also
In Spanish: Morgan Stanley para niños
- Dean Witter Reynolds
- Discover Card
- MSCI
- Van Kampen Funds
- Metalmark Capital, formerly Morgan Stanley Capital Partners
- Morgan Stanley Smith Barney, a joint venture with Citigroup
