Morgan Stanley Essay ⋆ Business Essay Examples ⋆ EssayEmpire

Morgan Stanley is a U.S. investment banking and global financial services provider. Its clients and customers include corporations, governments, financial institutions, and individuals. The corporation’s headquarters is in New York City. Morgan Stanley has about 600 offices in 33 countries and approximately 45,000 employees around the world (2008). The company manages assets worth about US$749 billion (2008).

Morgan Stanley has three main business. First, the institutional securities segment provides services such as capital raising; financial advisory services on mergers and acquisitions, leveraged buyouts, real estate and project finance; corporate lending; sales, trading, financing on securities, and futures exchanges; equity and proprietary trading; benchmark indices and risk management; research; and investment. Second, the global wealth management group provides brokerage and investment advisory services such as financial and wealth planning services; banking and cash management services; retirement services; and trust and fiduciary services. This segment targets high–net worth individuals and hedge funds. Third, the asset management segment provides products and services in equity, fixed income, and alternative investments, such as hedge funds, real estate, private equity, and infrastructure to institutional and retail clients. This segment targets institutional investors.

Morgan Stanley originated from J. P. Morgan & Co. In 1933, according to the Glass-Steagall Act, J. P. Morgan & Co. could not have investment banking and retail banking businesses under a single holding entity. J. P. Morgan & Co. decided to continue its retail banking business. Two former J. P. Morgan & Co. employees—Henry S. Morgan and Harold Stanley— and some others from the Drexel partners founded Morgan Stanley. The firm began its business on September 16, 1935, on Wall Street in New York City. In 1936, Morgan Stanley managed public offerings and private placement with US$1.1 billion—equal to 24 percent market share at that time. In 1942 Morgan Stanley joined the New York Stock Exchange.

During 1951–61, the last founder, Parry Hall, led Morgan Stanley in steady growth. The firm also led the General Motors US$300-million debt issue, US$231million IBM stock offering, and the US$250-million AT&T debt offering in the 1950s.

In 1962 Morgan Stanley created the first viable computer model for financial analysis. In 1967 it set up Morgan & Cie, International in Paris to enter the European securities market. It acquired Brooks, Harvey & Co., Inc., in 1967 and established a presence in the real estate business.

In 1971, Bob Baldwin helped Morgan Stanley to establish the sales and trading business. In 1970 Morgan Stanley set up its first representative office in Tokyo. Four years later Morgan Stanley International, Inc., was established in London. In 1977 Morgan Stanley added Morgan Stanley Realty, Inc., and the private wealth management department into its business. At the same time, Morgan Stanley merged with Shuman, Agnew & Co. to enter the retail stock brokerage business.

On December 12, 1980, Morgan Stanley led the US$110-million Apple common stock initial public offering (IPO), the largest IPO since 1964. In 1986, Morgan Stanley Group, Inc., became a publicly listed company on the New York Stock Exchange. By the end of 1989, Morgan Stanley not only had set up regional offices in Frankfurt, Hong Kong, Luxembourg, Melbourne, Milan, Sydney, and Zurich but also had regional headquarters in London and Tokyo.

On February 5, 1997, merging with Dean Witter Reynolds and Discover & Co., Morgan Stanley Group, Inc., became Morgan Stanley Dean Witter Discover & Co., which is a global market leader in securities, asset management, and credit services. During the 1990s, Morgan Stanley expanded internationally and had offices in Amsterdam, Beijing, Buenos Aires, Geneva, Glasgow, Johannesburg, Madrid, Mexico City, Moscow, Mumbai, Paris, São Paulo, Seoul, Shanghai, Singapore, Stockholm, and Taipei. In 2001 the firm dropped Dean Witter from its name and became Morgan Stanley again.

In 2004 Morgan Stanley comanaged the US$19-billion Google IPO—the largest internet IPO and largest auction-based IPO in the United States. In 2005 Morgan Stanley advised the largest Chinese IPO— China Construction Bank—with US$9.2 billion. In July 2006 Morgan Stanley helped the largest IPO in the firm’s history—Russia’s largest oil and gas company OJSC OC Rosneft with US$10.4 billion. To cope with the subprime mortgage crisis, Morgan Stanley announced on December 19, 2007, that China Investment Corporation would infuse US$5 billion capital for exchanging those securities, convertible to 9.9 percent of its shares in 2010.

Bibliography:

Google, “Morgan Stanley Summary,” finance. google.com (cited March 2009);
Morgan Stanley, “Corporation History,” www.morganstanley.com (cited March 2009).

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