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A sign marks the Morgan Stanley offices in downtown Manhattan in New York City.
(AFP) | Rival investment banks are exploiting
the upheaval at Morgan Stanley
by trying to poach staff and clients.
The expected approaches follow the departure of three top executives
after a management shake-up that involved replacing president Stephan
Newhouse with two co-presidents.
Vikram Pandit, former
president of the institutional securities business, and John Havens,
former head of equities, resigned on Tuesday. On Wednesday, Guru
Ramakrishnan, global head of trading technology, also quit.
Mr
Newhouse, who is considering his options, would be a particular prize,
rivals said: he has a record of winning mandates.
Mr Pandit, who
has declined to comment, was said by people close to him to be waiting to
see if Mr Purcell survives before making a decision on his next move.
According to the chief executive of one Wall Street firm, other
likely targets include Morgan Stanley's US equities team as well as
disgruntled merger advisers.
The head of investment banking at
another bank said: "As a banker, all you have is a handful of key
relationships with chief executives. They need to trust you, and you need
to trust your firm to deliver for you. So when you introduce your most
important clients to someone like Vikram [Panjit] and say, 'This is the
future of our firm', and he is ousted the next day, you look like a
shmuck."
Wall Street's keen interest in hiring staff from Morgan
Stanley appears to confirm a warning by eight of the bank's advisory
directors, who told the board this month that the Morgan Stanley was "at
great risk of losing more key professionals".
Mr Purcell this week
acknowledged that completing the shake-up without losing talent would have
been ideal. But he said he was obliged to take a chance.
The
dissident advisory directors disagree and have launched a public campaign
to oust Mr Purcell.
Mr Purcell has called the dissident advisory
directors "senior citizens".
Nevertheless, his critics are
experienced at boardroom intrigue and dead set on removing him by
persuading shareholders that talented staff were prepared to leave.
But Guy Moskowski, an equity analyst at Merrill Lynch, said the
fear of "brain-drain" was overblown. "The core franchise remains solid,"
he said.
Mr Purcell has taken steps to rally the troops, including
convening a managing director meeting where Joseph Perella, a rainmaker promoted to vice-chairman on Tuesday,
gave a rousing speech, according to some present.
(BBC) |
Updated: 2005-03-31 15:08
