Morgan Stanley to combine institutional, brokerage muni desks

Move is part of CEO Gorman's effort to partner brokerage, investment bank, drive ROE

Mar 12, 2014 @ 5:05 pm

Morgan Stanley, owner of the world's largest brokerage, said it will combine the municipal bond trading desks of its institutional business and wealth-management units.

The joint venture will be run by Patrick Haskell, head of municipal securities for the firm's fixed-income unit, and Eric Benedict, who leads capital markets for the brokerage, the New Wednesday in an internal memo, which was obtained by Bloomberg News.

Jim Wiggins, a Morgan Stanley spokesman, confirmed the memo's contents.

Chief executive James Gorman has said partnerships between the investment bank and brokerage will help the firm double return on equity by this year. In 2013, Morgan Stanley bought the remaining stake in the brokerage, which has more than 16,000 advisers and $1.91 trillion of client assets.

(Don't miss: Morgan Stanley shuffles top leadership)

“For institutional and retail investors, the joint venture will provide the broadest possible inventory and unmatched purchasing power,” according to the memo, written by Andy Saperstein, who oversees the brokerage's investment products and services unit, and fixed-income co-heads Michael Heaney and Robert Rooney. “Combining our municipal inventory in a single balance sheet will enable us to enhance our risk-management discipline across the organization.”

MARKET REBOUNDS

The bank said in January 2013 that it had 35 initiatives to combine efforts between the institutional and brokerage units. In 2012, Morgan Stanley created a fixed-income sales group for middle-market clients under Benedict and transferred some customers from its investment bank to its wealth-management division.

The $3.7 trillion municipal market has rebounded after posting negative returns in 2013 for the first time since 2008. State and local debt has gained 3.25 percent this year, outpacing the 1.38 percent return on U.S. Treasuries and 2.27 percent on corporate securities, Bank of America Merrill Lynch data show.

Morgan Stanley was one of the underwriters of Puerto Rico's record $3.5 billion sale of junk-rated municipal debt Tuesday.

(Bloomberg News)

0
Comments

What do you think?

View comments

Recommended for you

Latest news & opinion

Supreme Court decision likely to prevent brokers from filing class-action lawsuits

However, it likely won't bar employees from filing 401(k) lawsuits against their employers.

5th Circuit denies states' second attempt to defend DOL fiduciary rule

The three-judge panel split again, 2-1, in deciding not to take another look at the motion to intervene by California, New York and Oregon.

Pass-through tax strategies for business-owner clients

Shifting business structure, changing filing status and spinning off equipment are examples of ways business owners can take advantage of the deduction.

Finra anticipates oversight role for SEC advice rule

CEO Robert Cook says one area for examination could be the proposed requirement that brokers act in the best interests of their clients.

IBDs with the most CFPs

Here are the 10 independent broker-dealers that employ the most certified financial planner professionals.

X

Hi! Glad you're here and we hope you like all the great work we do here at InvestmentNews. But what we do is expensive and is funded in part by our sponsors. So won't you show our sponsors a little love by whitelisting investmentnews.com? It'll help us continue to serve you.

Yes, show me how to whitelist investmentnews.com

Ad blocker detected. Please whitelist us or give premium a try.

X

Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print