I saw this on Dealbreaker, and I've been following it for a while now. Morgan Stanley completed their acquisition of MSSB from Citi after long talks of a deal. Perella Weinberg Partners LP was hired to provide the independent fixed value of Citi's stake in MSSB, and they came up with $13.5 billion, which was far below what Citigroup had thought they could get.
The arrows are a bit superfluous, but take a look at these net revenues from 2007- Aug2012. I think after this acquisition, it's going to get a lot worse for S&T and IBD within the next few years. Is Morgan Stanley the new Merrill Lynch?
They should hope so. Standalone IB on a global scale is a tough business. Despite the prestige among 19 year olds...the deals don't bring in the revs like trading and a wealth management.
What's your opinion on IB versus wealth management for a college kid going to a non targeted school for most of the BB's, interested in finance and seeking a stable and well compensated career? Granted that I am interested in both portfolio management and in the deal process?
WM is not portfolio management, WM is more client facing where you meet with clients decide which of the 4 mutual funds they would be good for and throw their money in.
IB you will get training and experience that will allow you to move onto other areas of finance more easily than WM. Of Course, IB is a lot more difficult to break in to than WM.
I think this graphic is pretty useless without absolute numbers. You can't get a picture of what is really happening. Is IBD and ST actually declining or just declining as a percentage relative to the fast growing GWM/AM? If its the former than there is reason for hesitation, if its the later than I don't see it being a big deal.
Good for them. If Merrill Lynch was just the "Thundering Herd" before the crash they would have been much better off. That is a very valuable franchise.
seems legit
Is this really a surprise? UBS is basically doing the same as well. Wealth Management is extremely profitable and a lot less risky compared to other types of IB/Trading
Are you talking about the profit margin or in terms of gross revenues? WM seems to focus much more on client acquisition than portfolio advancement due to the 1-2% charge on the entire portfolio value - adding a 20M client to a 100M portfolio equals a 20% year on end appreciation of the portfolio except for the fact that getting clients (who are fine with 6-7% per year) is a lot easier than raising a large portfolio by 20%
EDIT: misread part of original post.
WM/AM is a great business from the banks pov but people have told me trading is (was?) way better for you as an individual (in terms of comp and upward mobility)
MS just did the biggest IPO in memory and despite the events that occurred after it, many insist the bankers did their job and have gotten IPO bids since. ML has not had any IBD activity like that, so although the IB is not as large as it once was for MS, they are still a top presence on Wall Street unlike ML.
Vitae maiores culpa repellat ex quas. Provident dolor sit dicta necessitatibus dolore. Nemo aut veniam sequi beatae. Id iste deserunt ut quidem voluptatibus possimus.
Cum debitis suscipit saepe rerum vero et non. Commodi sunt consequuntur laudantium fugiat. Dolores quia magni delectus ut aspernatur in molestias. Est sit a est quibusdam. Ut doloremque soluta quasi earum ducimus quia. Voluptatibus culpa voluptates tempore praesentium impedit.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...