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Morgan Stanley’s Dominant Position in Investment Banking and Lending

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Investment banking

Morgan Stanley (MS) provides investment banking services classified under its Institutional Securities segment. The company advises on the following services:

  • equity and fixed-income underwriting
  • advisory services for restructuring
  • joint ventures
  • private placements

Investment banking revenues made up 15% of the company’s total revenues in 2014, compared to 13.6% in 2010. Morgan Stanley competes with investing banking firms like:

  • Goldman Sachs Group (GS)
  • Jefferies (JEF)
  • Deutsche Bank (DBK)
  • Citigroup (C)
  • Bank of America Corporation (BAC)

Together, with other diversified financial services firms, these companies make up ~28% of the Financial Select Sector SPDR (XLF).

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Capital raising

Morgan Stanley has positioned itself strongly over the years in investment banking activities. The company is engaged in market-making and manages public stock and instruments offerings, as well as private placements of debt, equity, and other instruments worldwide.

Morgan Stanley also engages in the underwriting of:

  • common stock
  • preferred stock
  • convertible securities, ADRs (American Depositary Receipts), and other equity-related securities

The company also provides underwriting services for:

  • fixed-income securities
  • mortgage-related securities and other asset-backed securities
  • tax-exempt securities
  • commercial paper and other short-term securities
  • financial advisory services

Morgan Stanely’s financial advisory is highly correlated with the performance of an overall economy. The company advises clients on:

  • key strategic matters
  • mergers, acquisitions, and joint ventures
  • spin-offs and divestitures
  • corporate restructuring and recapitalizations
  • exchange offers
  • leveraged buyouts and takeover defenses
  • shareholder relations

It also provides advisory on valuations, foreign exchange exposure, rights offerings, financial risk management strategies, and financial planning.

The company’s real estate advisory includes project financings and provides advisory services related to the purchase, sale, leasing, and financing of real estate.

Corporate lending

Through its subsidiary Morgan Stanley Private Bank, NA (National Association), Morgan Stanley provides the following corporate clients:

  • structured finance
  • lending commitments
  • syndicated loans
  • bridge financing

The company has offerings for senior and subordinated debt, contingent upon warranties, representations, and contractual conditions.

For more details about Morgan Stanley’s sales and trading activities, check out the next part of this series.

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