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Morgan Stanley - Investment Banking -
Category Directory
(212)
761-4000
1585
Broadway
New York, NY 10036
www.morganstanley.com
Sales
$35
billion
Business Description
Morgan Stanley is a global financial services firm that maintains leading
market positions in each of its business segments—Institutional Securities,
Individual Investor Group, Investment Management and Credit Services.
Morgan Stanley’s institutional securities business segment (“Institutional
Securities”) includes:
• Investment banking, including securities underwriting and distribution and
financial advisory services, including advice on mergers and acquisitions,
restructurings, real estate and project finance.
• Sales, trading, financing and market-making activities in equity
securities and related products and fixed income securities and related
products, including foreign exchange and commodities.
• Other activities, such as aircraft financing, principal investing and real
estate investment management, and research.
Morgan Stanley’s individual investor group business segment (“Individual
Investor Group”) includes:
• Comprehensive financial planning and investment advisory services designed
to accommodate individual investment goals and risk profiles.
Morgan Stanley’s investment management business segment (“Investment
Management”) includes:
• Global asset management products and services for individual and
institutional investors, through three principal distribution channels: a
proprietary channel consisting of Morgan Stanley’s financial advisors and
investment representatives; a non-proprietary channel consisting of
third-party broker-dealers, banks, financial planners and other
intermediaries; and Morgan Stanley’s institutional channel.
• Private equity activities.
Morgan Stanley’s credit services business segment (“Credit Services”)
includes:
• Discover Financial Services (“DFS”), which includes Discover®-branded
cards and other consumer finance products and services.
• Discover Business Services, a network of merchant and cash access
locations primarily in the U.S.
• Consumer Banking Group International, which includes Morgan
Stanley-branded cards and personal loan products in the U.K.
Morgan Stanley is a holding company that provides its products and services
to a large and diversified group of clients and customers, including
corporations, governments, financial institutions and individuals, through
its subsidiaries and affiliates. Morgan Stanley conducts its business from
its headquarters in New York City, its regional offices and branches
throughout the U.S. and its principal offices in London, Tokyo, Hong Kong
and other world financial centers. Morgan Stanley was originally
incorporated under the laws of the State of Delaware in 1981, and its
predecessor companies date back to 1924.
Institutional Securities.
Morgan Stanley provides worldwide financial advisory and capital-raising
services to a diverse group of corporate and other institutional clients
globally, primarily through wholly-owned subsidiaries, including Morgan
Stanley & Co. Incorporated (“MS&Co.”), Morgan Stanley & Co. International
Limited, Morgan Stanley Japan Limited and Morgan Stanley Dean Witter Asia
Limited. These subsidiaries also conduct sales and trading activities
worldwide, as principal and agent, and provide related financing services,
on behalf of institutional investors and on a proprietary basis.
Investment Banking.
Underwriting. Morgan Stanley manages and participates in public offerings
and private placements of debt, equity and other securities worldwide.
Morgan Stanley is a leading underwriter of common stock, preferred stock and
other equity-related securities, including convertible securities and
American Depositary Receipts (“ADRs”). Morgan Stanley is a leading
underwriter of fixed income securities, including investment grade debt,
non-investment grade instruments, mortgage-related and other asset-backed
securities, tax-exempt securities and commercial paper and other short-term
securities.
Financial Advisory Services. Morgan Stanley provides corporate and other
institutional clients globally with advisory services on key strategic
matters, such as mergers and acquisitions, divestitures, corporate defense
strategies, joint ventures, privatizations, spin-offs, restructurings, proxy
and consent solicitations, tender offers, exchange offers and leveraged
buyouts. Morgan Stanley provides advice concerning recapitalizations, rights
offerings, dividend policy, valuations, foreign exchange exposure, financial
risk management strategies and financial planning. Morgan Stanley furnishes
advice and services regarding project financings and provides advisory
services in connection with the purchase, sale, leasing and financing of
real estate.
Corporate Lending. Morgan Stanley provides to corporate clients, on a
selective basis, through subsidiaries (including Morgan Stanley Bank) loans
or lending commitments, including bridge financing. The borrowers may be
rated investment grade or non-investment grade (as determined by Morgan
Stanley’s Credit Department using methodologies generally consistent with
those employed by external rating agencies). These loans and commitments
have varying terms, may be senior or subordinated, are generally contingent
upon representations, warranties and contractual conditions applicable to
the borrower, and may be syndicated or traded by Morgan Stanley.*
Sales, Trading, Financing and Market-Making Activities.
Morgan Stanley conducts its sales, trading and market-making activities on
exchanges and in over-the-counter (“OTC”) markets around the world.
Equity Securities and Related Products. Morgan Stanley’s equity sales,
trading and market-making activities cover equity and equity-related
products globally, including common stock, ADRs, restricted/control stock,
convertible securities, preferred securities and exchange-traded funds and
warrants, equity index products, equity swaps, futures, options and other
structured products.
Morgan Stanley issues equity-linked products to institutional and individual
investors, including BRIDGESSM, Stock Participation Accreting Redemption
Quarterly-pay Securities® (“SPARQS®”) and Market Participation SecuritiesSM
(“MPSSM”). Morgan Stanley advises clients and executes transactions globally
in connection with, among other things, block trades and program trading,
equity repurchase strategies and other trading strategies. Morgan Stanley
engages in proprietary trading and arbitrage activities in equity securities
and equity-related products.
Morgan Stanley provides equity financing services, including prime
brokerage, which offers consolidated clearance and settlement of securities
trades, custody, financing and portfolio reporting services. Morgan Stanley
also acts as principal and agent in stock borrowing and stock lending
transactions in support of its global trading and brokerage, investment
management and clearing activities and as an intermediary between
broker-dealers.
Fixed Income Securities and Related Products. Morgan Stanley trades and
makes markets in fixed income securities and related products globally,
including investment grade corporate debt, non-investment grade instruments,
bank loans, U.S. and non-U.S. government securities, municipal securities,
emerging market securities, preferred stock and commercial paper, money
market and other short-term securities. Morgan Stanley trades and makes
markets in, and acts as principal with respect to, mortgage-related and
other asset-backed securities and real estate loan products. Morgan Stanley
is a primary dealer of U.S. government securities and a member of the
selling groups that distribute various U.S. agency and other debt
securities. Morgan Stanley is a primary dealer of government securities in
several European countries and is a member of the syndicates that underwrite
German and Japanese government bonds. Morgan Stanley is a dealer in interest
rate and currency swaps and other related derivative products, credit
derivatives (including credit default swaps), OTC options on U.S. and non-U.S.
government bonds and mortgage-backed forward agreements, options and swaps.
Morgan Stanley also trades fixed income futures. Through its triple-A rated
subsidiary, Morgan Stanley Derivative Products Inc., Morgan Stanley enters
into swaps and related derivative transactions with counterparties seeking a
triple-A rated counterparty. Morgan Stanley engages in proprietary trading
in fixed income securities and fixed income-related products.
Morgan Stanley advises clients globally on investment and liability
strategies and assists corporations in their debt repurchases and tax
planning. Morgan Stanley structures debt securities and derivatives with
risk/return factors designed to suit client objectives, including using
repackaged asset vehicles through which clients can restructure asset
portfolios to provide liquidity or recharacterize risk profiles. Through the
use of repurchase and reverse repurchase agreements, Morgan Stanley acts as
an intermediary between borrowers and lenders of short-term funds and
provides funding for various inventory positions. Morgan Stanley also
provides financing to customers for commercial and residential real estate
loan products.
Morgan Stanley is a market-maker in foreign currencies. Most of Morgan
Stanley’s foreign exchange business relates to major foreign currencies such
as yen, euro, sterling, Swiss francs and Canadian dollars. Morgan Stanley
trades on a principal basis in the spot, forward and currency option markets
and takes proprietary positions in such currencies. Morgan Stanley trades
currency futures at the International Monetary Market division of the
Chicago Mercantile Exchange.
Morgan Stanley trades as principal and maintains proprietary trading
positions in the spot, forward and futures markets in several commodities,
including precious metals, base metals, crude oil, oil products, natural
gas, electric power, emissions and related energy products. Morgan Stanley
is a market-maker in exchange-traded and OTC options and swaps on
commodities, such as metals, crude oil, oil products, natural gas and
electricity, and offers clients hedging programs relating to production,
consumption, reserve/inventory management and energy-contract
securitizations. Morgan Stanley trades many of these products through the
IntercontinentalExchange, Inc., an electronic trading system in which Morgan
Stanley maintains an ownership interest. Morgan Stanley is an electricity
power marketer in the U.S. and owns equity interests in three exempt
wholesale generators (as defined in the Public Utility Holding Company Act
of 1935) from which Morgan Stanley (solely or acting with a joint venture
partner) is the exclusive purchaser of electric power.
From time to time, Morgan Stanley has organized, advised and managed certain
funds that invest and trade in particular debt securities, foreign
currencies, real estate or commodities and may continue to do so in the
future. In connection with such activities, Morgan Stanley has made and may
continue to make investments for its own account in one or more of such
funds.
Other Activities.
Aircraft Financing. Morgan Stanley engages in aircraft financing activities.
Morgan Stanley also owns Ansett Worldwide Aviation Services, one of the
world’s leading aircraft leasing groups, leasing commercial jet aircraft to
airlines around the world.
MSCI. Morgan Stanley’s majority-owned subsidiary, Morgan Stanley Capital
International Inc. (“MSCI®”), calculates and distributes over 25,000
international and U.S. equity benchmark indices (including the MSCI World
and EAFE® Indices) covering 50 countries, and has a 35-year historical
database that includes fundamental and valuation data on thousands of equity
securities in developed and emerging market countries. MSCI also calculates
and distributes over 7,500 fixed income and 190 hedge fund indices.
Investment professionals around the world use MSCI data for many purposes,
including performance measurement.
Principal Investing and Real Estate Investment Management. Morgan Stanley
invests for its own account and for the account of clients seeking exposure
to private equity, real estate-related and other alternative investments.
These investments may, among other things, be in connection with the
investments made by the private equity funds, real estate funds and separate
accounts for which Morgan Stanley generally acts as general partner or
investment advisor or in connection with Morgan Stanley’s investment banking
and sales and trading activities. Such investments may include purchases of
equity or debt securities of companies that may have strategic value for
Morgan Stanley, such as alternative trading systems, electronic trading
systems and other strategic businesses and technologies. See also
“Investment Management—Private Equity Activities.”
Research. Morgan Stanley’s global research departments (“Research”),
comprised of economists, strategists, and industry analysts, engage in
equity and fixed income research activities and produce reports and studies
on the economy, financial markets, portfolio strategy, technical market
analyses, individual companies and industry developments. Research examines
worldwide trends covering numerous industries and approximately 2,200
individual companies, approximately half of which are located outside of the
U.S. Research provides analysis and forecasts relating to economic and
monetary developments that affect matters such as interest rates, foreign
currencies, securities, derivatives and economic trends. Research provides
analytical support and publishes reports on asset-backed securities and the
markets in which such securities are traded. Research reports and data are
disseminated to investors through third-party distributors, proprietary
internet sites such as Client Link, and Morgan Stanley’s sales forces.
Individual Investor Group.
The Individual Investor Group provides comprehensive financial services to
individual investors globally. Through its financial advisors, Morgan
Stanley is committed to delivering advice to its clients with a focus on
affluent and high net worth investors. Morgan Stanley offers securities and
investment products supported by its investment banking, research,
investment management, execution and operational resources. Morgan Stanley
has one of the largest financial advisor networks in the U.S. with
approximately 11,000 financial advisors located in nearly 450 branches and
conducts this business in the U.S. primarily through its wholly-owned
subsidiary Morgan Stanley DW Inc. (“MSDWI”). Morgan Stanley had $565 billion
in client assets at November 30, 2003.
Client Coverage. In the U.S., Morgan Stanley provides services to multiple
client segments spanning the wealth spectrum through a single sales
organization. Morgan Stanley’s network of financial advisors, wealth
advisors and investment representatives provide clients with financial
planning and investment advisory services through a flexible platform
designed to accommodate individual investment goals and risk profiles.
Morgan Stanley works with clients to understand their financial needs and
objectives through comprehensive financial planning, including education,
retirement and estate planning. Morgan Stanley offers tailored financial
solutions to high net worth investors, including individuals, families and
foundations controlling significant pools of wealth. Dedicated teams of
investment representatives draw upon Morgan Stanley’s resources and those of
leading third-party providers to establish investment portfolios and global
asset allocation strategies to address these clients’ objectives.
Morgan Stanley also offers financial advisory services outside the U.S. to
serve the needs of high net worth clients in Europe, Asia and Latin America.
Morgan Stanley’s international operations include Morgan Stanley Quilter, a
U.K.-based private client investment management business that provides
segregated account management and advisory services to individuals, pension
funds and trusts in the U.K., and Morgan Stanley, S.V., S.A., which provides
asset management and brokerage services to individual investors in Spain.
Clients Solutions. Morgan Stanley provides various products and services to
execute financial plans and position clients to attain their financial
goals, including mutual funds, stocks, bonds and professional money
management. Morgan Stanley also offers mortgage products and acts as a
national general agency for leading insurance carriers to meet the insurance
and annuity needs of individual clients. Morgan Stanley offers trust and
fiduciary services to individual and corporate clients, including trustee
services for personal trusts and tax-qualified retirement plans. Morgan
Stanley offers financial solutions to businesses through BusinesScapeSM, a
program that offers qualified business clients enhanced check writing
privileges, cash management and a commercial line of credit. Morgan Stanley
also provides defined contribution plan services for businesses of all
sizes, including 401(k) plans and stock plan administration.
Morgan Stanley offers various account options for individual clients. The
Active Assets Account® offers clients brokerage and banking services in one
account. With this account, clients’ uninvested cash is consolidated into
various money market options or an FDIC-insured account. For clients who
prefer fee-based pricing, it offers the Morgan Stanley ChoiceSM account,
which charges a percentage of assets rather than a per-transaction fee.
Clients can also choose to have a fee-based separately managed account.
Client Support. Morgan Stanley executes and clears its transactions
(delivery of securities sold, receipt of securities purchased and transfer
of related funds) through its own facilities and memberships in various
clearing corporations. Systems at computer centers operated by an
unaffiliated services provider also support the Individual Investor Group’s
operations. Client coverage and solutions are supported by Morgan Stanley’s
infrastructure and technology platform.
Investment Management.
Morgan Stanley has one of the largest global asset management organizations
of any full-service securities firm, with $462 billion of assets under
management or supervision at November 30, 2003*. Morgan Stanley’s investment
management activities are principally conducted under the Morgan Stanley and
Van Kampen brands. Portfolio managers located in the U.S., Europe, Japan,
Singapore, and India manage investment products, ranging from money market
funds to equity, taxable and tax-exempt fixed income funds and alternative
investments in developed and emerging markets. Through service companies,
distribution subsidiaries and investment advisors, Morgan Stanley offers
clients various investment styles, such as value, growth, core, fixed income
and asset allocation; global investments; active and passive management; and
diversified and concentrated portfolios.
Individual Investors. Morgan Stanley provides investment products and
services including proprietary open- and closed-end mutual funds and
separately managed accounts to individual investors. Morgan Stanley also
provides investment products through intermediary platforms, such as 401(k)
plans and variable annuities. Morgan Stanley serves individual investors
through its proprietary network of financial advisors who offer, among other
things, Morgan Stanley- and Van Kampen-branded products. Morgan Stanley
offers Van Kampen-branded products through affiliated and unaffiliated
broker-dealers, commercial banks and thrifts, insurance companies and
financial planners. A small number of these distributors account for a
substantial portion of Van Kampen sales in those intermediary channels.
Morgan Stanley distributes investment products to individuals outside the
U.S. through international non-proprietary distributors.
Institutional Investors. Morgan Stanley provides investment products and
services to institutional investors worldwide, including pension plans,
corporations, private funds, non-profit organizations, foundations,
endowments, governmental agencies, insurance companies and banks. Products
are available to institutional investors primarily through separate
accounts, U.S. and non-U.S. mutual funds and other pooled vehicles. Morgan
Stanley sub-advises funds for various financial institutions and
intermediaries. A global proprietary sales force and a team dedicated to
covering the investment consultant industry serve institutional investors.
Morgan Stanley offers clients alternative investment opportunities primarily
through Alternative Investment Partners, a joint venture that utilizes a
fund-of-funds strategy to invest in private funds.
Private Equity Activities. Morgan Stanley’s private equity funds invest in
companies in a range of industries worldwide. Morgan Stanley generally acts
as general partner of its private equity funds and typically commits to
invest a minority of the capital of such funds with subscribing limited
partners contributing the remainder.
Credit Services.
Based on its approximately 46.1 million general purpose credit card accounts
at November 30, 2003, Morgan Stanley, through its Credit Services business,
is one of the largest single issuers of general purpose credit cards in the
U.S. Morgan Stanley’s Credit Services business includes DFS, which operates
Credit Services’ general purpose credit card business; Discover Business
Services, which operates Morgan Stanley’s merchant and cash access network;
its Consumer Banking Group International in the UK; and other consumer
finance products and services.
Credit Cards and Services. DFS offers several general purpose credit cards
designed to appeal to different market segments of consumers for use through
Discover Business Services, including the Discover Classic Card, the
Discover Platinum Card, the Discover Gold Card, the Discover Titanium Card,
the Miles Card from Discover as well as affinity cards. DFS offers other
consumer finance products and services, including home loans and credit
protection products. DFS offers cardmembers certificates of deposit and
money market accounts and the ability to transfer balances from other
accounts or credit sources. In the U.K., Consumer Banking Group
International offers the Morgan StanleyCardSM on the MasterCard® network and
personal loan products.
DFS offers cardmembers numerous customer services. Cardmembers may register
their accounts online with the Discover Card Account Center, which offers a
menu of free e-mail notifications that inform cardmembers about the status
of their accounts, including reminders that a cardmember’s credit limit is
approaching or that a minimum payment is due. Cardmembers may view detailed
account information and receive exclusive discounts and special Cashback
Bonus® awards by shopping at the online ShopCenterSM. In addition, the
Discover Deskshop® virtual credit card enables cardmembers to use a
single-use credit card number (a unique credit card number used for
purchases at a single web site) for online purchases so that the cardmembers
never have to reveal their actual card number. At November 30, 2003, DFS had
over 12 million cardmembers registered on the Discover Card Account Center.
Merchants. Only merchants that are members of the Discover Business Services
network accept DFS’s general purpose credit cards. Since its establishment
in 1986, the Discover Business Services network has become the largest
proprietary credit card network in the U.S.
DFS operates the issuing, network and acquiring businesses primarily in the
U.S., provides customized programs to its merchants in such areas as
processing and otherwise tailors program terms to meet merchant needs. DFS
utilizes its own national sales and support force, independent sales agents
and telemarketing force to maintain and increase its merchant base.
Marketing. DFS promotes its general purpose credit cards using distinctive
features that are designed to appeal to different consumer bases. For
instance, pursuant to the Cashback Bonus award program, DFS provides certain
cardmembers awards based upon their level and types of purchases.
Operations. DFS performs the functions required to service and operate its
card accounts either by itself or through agreements with third parties.
These functions include new account solicitation, application processing,
new account fulfillment, transaction authorization and processing,
cardmember billing, payment processing, fraud prevention and investigation,
cardmember services and collection of delinquent accounts. DFS maintains
several operations centers throughout the U.S. and the Consumer Banking
Group International maintains one in Scotland. Systems at computer centers
operated by an unaffiliated services provider also support DFS’s operations.
Competition.
All of Morgan Stanley’s businesses are highly competitive and we expect them
to remain so. Morgan Stanley competes in the U.S. and globally for clients,
market share and human talent in all of its business segments.
Institutional Securities and Individual Investor Group. Morgan Stanley
competes directly in the U.S. and globally with other securities and
financial services firms. Morgan Stanley’s competitive position depends on
its reputation, the quality of its professionals and other personnel, its
products, services and advice, ability to make capital commitments, relative
pricing and innovation. Morgan Stanley’s ability to sustain or improve its
competitive position also depends substantially on its ability to continue
to attract and retain qualified employees while managing compensation costs.
Morgan Stanley’s ability to access capital at competitive rates (which is
generally dependent on Morgan Stanley’s credit ratings) and to commit
capital efficiently, particularly in its capital-intensive investment
banking and sales, trading, financing and market-making activities, also
affects its competitive position. Corporate clients continue to request that
Morgan Stanley provide loans or lending commitments in connection with
certain investment banking activities and this activity will continue in the
future.
Besides competition from firms traditionally engaged in the financial
services business, Morgan Stanley competes with commercial banks, insurance
companies, sponsors of mutual funds, energy companies and other companies
offering financial services in the U.S., globally and through the internet.
The financial services industry has experienced consolidation and
convergence, as financial institutions involved in a broad range of
financial services industries have merged. Such convergence has continued
and could result in the Company’s competitors gaining greater capital and
other resources, such as a broader range of products and services and
geographic diversity. The complementary trends in the financial services
industry of consolidation and globalization present, among other things,
technological, risk management and other infrastructure challenges that
require effective resource allocation in order for Morgan Stanley to remain
competitive.
Investment Management. Competition in the asset management industry is
affected by several factors, including relative performance of investment
products, investment objectives, advertising and sales promotion efforts,
fee levels, distribution channels and types and quality of services offered.
Besides fund products offered by other broker-dealers, the funds Morgan
Stanley offers compete with the funds of other asset management firms and
other investment alternatives.
Credit Services. DFS competes directly with other bank-issued credit cards
(the vast majority of which bear the MasterCard or Visa servicemark), charge
cards, credit cards that travel and financial advisory companies issue and,
to a certain extent, debit cards. Competition centers on merchant acceptance
of credit cards, account acquisition and customer utilization. Merchant
acceptance is based on competitive transaction pricing and the volume and
usage of cards in circulation. Account acquisition and customer utilization
are driven by competitive and appealing credit card features, such as no
annual fees, low introductory interest rates and other customized features
targeting specific consumer groups. Credit card industry participants have
increasingly used advertising, targeted marketing, account acquisitions and
pricing competition in interest rates, annual fees, reward programs and
low-priced balance transfer programs to compete and grow.
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