Morgan Stanley is likely to slow its pace of acquisitions
Morgan Stanley is set to slow its pace of acquisitions, the company's head of wealth management, Andy Saperstein, said during an event Tuesday.
Why it matters: Saperstein's comments show that the bank's M&A appetite, after years of bulking up its wealth management unit with mega deals, has waned.
- The downshift comes as industry pros and dealmakers say a host of fintech companies, whacked by the market drop, are prime takeover targets.
Of note: "That may not be at the same pace going forward," said Saperstein at a Morgan Stanley Wealth Management media event, when asked about his unit's M&A going forward. The bank is now focusing on digesting a series of mega acquisitions from years past, he added.
- That includes the $900 million acquisition of Solium, $7 billion buy of Eaton Vance, and $13 billion purchase of E*Trade.
Context: Morgan Stanley's has steadily built up its wealth management division since CEO James Gorman took over in 2010, a move that eventually shot the bank's market valuation past its banking and trading arch rival, Goldman Sachs.
- Morgan Stanley wealth management arm last year posted net revenues of $24.2 billion — making up 40% of the bank's total.
Yes, but: The bank will continue to seek M&A opportunities.
- That still leaves the door open for smaller fintech acquisitions and partnerships, Saperstein notes.
- The bank is currently weighing how to build out its capabilities in the nonqualified deferred compensation space, for example — a kind of compensation that largely affects executives.
Editor’s note: The headline on this story has been corrected to show that Morgan Stanley is likely to slow the pace of its acquisitions, not investment.