Morgan Stanley Rethinks Hedge Fund Stakes

Feb 3 2010 | 7:45pm ET

Morgan Stanley is considering its options regarding its stake in several hedge fund firms, its CEO said.

James Gorman told investors at a conference in New York that the Wall Street giant was “evaluating” its stakes in Avenue Capital Group, Lansdowne Partners and Traxis Partners, as well as its ownership of FrontPoint Partners. Gorman, who succeeded John Mack as CEO last month, did not specify what options the firm was evaluating.

Gorman’s comments follow his announcement last month that incoming Morgan Stanley Investment Management chief Greg Fleming would examine the firm’s ownership of the hedge fund managers.

Last month, President Barack Obama unveiled a plan to bar bank holding companies from owning, investing in or sponsoring hedge funds and private equity funds. Morgan Stanley, which became a bank holding company in 2008 to become eligible for federal bailout funding, is the sixth-largest bank in the U.S. by assets, and owns minority stakes in six hedge fund managers, in addition to FrontPoint, which it bought in 2006.

Last month, The Wall Street Journal reported that FrontPoint’s leaders were mulling a management buyout of the Connecticut firm.


In Depth

Humble in Hofstra...One Debate an Election Can Make

Sep 26 2016 | 10:20am ET

Tonight's U.S. Presidential debate, infamously coined the “Humbling in Hofstra...

Lifestyle

Quattrex Sports AG Debuts Soccer-Focused UCITS Fund

Sep 9 2016 | 9:54pm ET

Innovative alternative investment company Quattrex Sports has unveiled a new UCITS...

Guest Contributor

Malik: The Ever-Changing Middle Market and The Entering Class of 2016

Sep 2 2016 | 5:01pm ET

Deal sourcing and origination is only going to get more competitive given current...