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Morgan Stanley is likely to slow its pace of acquisitions

Jun 15, 2022

Illustration: Rebecca Zisser/Axios

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.

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