Morgan Stanley Hedge Funds, Prime Brokerage Post Declines

Dec 18 2008 | 2:56am ET

Morgan Stanley posted a whopping $2.36 billion loss in the fourth quarter, driven in part by poor performances and drawdowns in its asset management business.

The firm’s asset management business, posted a $1.81 billion pre-tax loss for the fiscal year. Net revenue at the core business—which includes hedge funds and funds of hedge funds—fell 49% to $1.6 billion. The firm said the decline was primarily due to $470 million in losses on structured investment vehicles in its portfolios.

Morgan Stanley’s prime brokerage, which was hit hard by investor skittishness following the Lehman Brothers bankruptcy, has recovered somewhat, according to CFO Colm Kelleher. Morgan Stanley’s prime brokerage assets were 37% lower on average in the fourth quarter than in the third, although it lost 65% of its assets during the quarter.

“What we're seeing is hedge funds wanting to move balances back now,'” he said. “We feel pretty encouraged about it. What we're not too encouraged about is the overall state of the hedge fund industry.”


In Depth

Q&A: Open Season For Closed-End Funds

Aug 29 2014 | 10:00am ET

When Maury Fertig and Bob Huffman, former Salomon Brothers coworkers, launched...

Lifestyle

Och Funds Women In Finance Initiative At U-M

Aug 28 2014 | 3:01pm ET

Och-Ziff Capital founder Daniel Och and his wife have made a "generous donation"...

Guest Contributor

Looking Ahead: What’s In Store For Managed Futures?

Aug 22 2014 | 12:52pm ET

The last five years were phenomenal for investors in equity indices. Will the next...

 

Editor's Note

    Get A Sneak Peak Of The Alpha Pages

    Aug 25 2014 | 11:21am ET

    As many of you know, FINalternatives was recently acquired by the owners of Futures magazine, a firm called The Alpha Pages LLC. Today marks the soft-launch of a new sister site for both publications. As its name suggests, The Alpha Pages will cover all types of alternative investments, going far beyond the more well-known ones such as hedge funds and private equity. Read more…

 

Futures Magazine

July/August 2014 Cover

The time was right

Commodities/Futures magazine launched at the precipice of a revolution in the futures industry—really a revolution in the idea of risk management—that would move it from a small niche industry to ...

The Alpha Pages

TAP July/August 2014 Cover

The Alpha Pages Interview: Senator Rand Paul

Senator Paul sat down in the debut series of the Alpha Pages Interview to discuss the broken tax code, regulation surrounding Bitcoin, and his plans for the 2016 Presidential election.