James Gorman, co-president of Morgan Stanley, said the bank is looking to expand its global wealth management business through acquisitions but had not yet found any suitable deals.
Gorman said at the UBS 2008 Global Financial Services Conference: “We want to grow through acquisitions and are looking for appropriate deals in Swiss private banking as well as domestic options but have not found any.”
In asset management, Gorman said the bank had built out an alternatives platform from zero two years ago through its investments in hedge funds, has reentered private equity and closed an infrastructure fund.
This week Morgan Stanley closed a $4 billion (€2.6 billion) infrastructure fund which had an initial target of $2.5 billion.
Gorman said: “We have some performance issues in some of our largest equity funds, which are dragging down three- and five-year results, and there is also room for improvement in fixed income.”
In institutional securities, Colm Kelleher, chief financial officer, said the bank is reallocating capital and talent to areas of growth such as emerging markets, equity derivatives, prime brokerage and commodities.
He said: “We will re-size where appropriate and reallocate resources as necessary.”
Kelleher said the most important strategic aim of institutional securities was to continue expansion in emerging markets such as Russia, China and the Middle East and the bank has new initiatives in Africa and Brazil.
He said: “Emerging markets will provide the engine for growth for some time in the same way as structured credit did in the last few years.”
Kelleher expects further writedowns to emerge from the regional banks and insurance sector and for regulatory oversight to increase for broker-dealers.