Morgan Stanley has hired Alex Ehrlich as global head of prime brokerage, replacing Stu Hendel. According to an internal memo obtained by Reuters, Hendel plans to pursue other opportunities.
Ehrlich began his career at Goldman Sachs, becoming co-head of Global Securities Services. In 2003 he was hired by UBS as head of prime services in order to boost their prime-brokering arm, and take market share from Goldman Sachs and Morgan Stanley.
In a reverse of fortune, Morgan Stanley, once a dominant player in prime brokerage, suffered significant outflows during 2008, as counterparty risk became a key focus. In 2009 funds have begun to return, with client balances for the top 50 accounts up 10% in Q1.
More names may follow Ehrlich to Morgan Stanley. During his start of his tenure at UBS, Ehrlich brought Masataka Iwata, who ran the Japanese business, and Tamera Hodges, director of prime-brokerage sales, from his old employer. Ehrlich was also behind UBS’s incorporation of ABN Amro’s prime brokerage business, at the time numbering 300 hedge fund clients and 190 employees.