Morgan Stanley Puts Kelleher in Charge of Institutional Business
November 6, 2012
Morgan Stanley said Paul J. Taubman, co-president of Institutional Securities, the bank's largest business, will retire at the end of the year.
Colm Kelleher, who is also a co-president of Institutional Securities with Taubman, will become sole president of the division in January, Morgan Stanley said.
The 51-year old Taubman, who has been at Morgan Stanley for 30 years, and the 55-year-old London-based Kelleher have been at odds since they were named to their present positions in December 2009.
Kelleher and Taubman disagreed over how aggressively to push clients for additional business on the back of capital markets deals, according to a 2011 Bloomberg News report.
Gorman met with the executives to try and reduce tensions, but apparently decided the division would win more such deals with Kelleher running the entire business.
With Taubman’s retirement, the Irish-born Kelleher will become head of the institutional securities unit which combines trading, sales and investment banking.
"Both are highly talented executives,'' said Brad Hintz, equity research analyst at Sanford C. Bernstein and a former partner and treasurer at Morgan Stanley. "But managing investment banking is relatively easy compared to dealing with rough and tumble traders. One needs a whip and a chair on the trading floor.''
As co-presidents, Kelleher ran trading while Taubman headed up investment banking and institutional sales. Both men were seen as potential successors to Gorman.
“We are intensely focused on improving returns for our shareholders,” Gorman said in a statement announcing the management changes. “I am confident that under Colm’s leadership, we will contuniue to align sales and trading more closely with investment banking and capital markets.”
In the third quarter, Morgan Stanley reported net revenues of $5.3 billion compared with $9.8 billion a year earlier. Institutional Securities net revenues were $3.6 billion compared with $3.0 billion a year ago.
Morgan Stanley also announced the appointment of Mark Eichorn and Franck Petitgas as Global Co-Heads of Investment Banking with day-to-day responsibility globally for client coverage, mergers and acquisitions and capital markets.
They will report to Kelleher and will both join the firm’s Operating Committee. Jeff Holzschuh has been appointed Chairman of Institutional Securities and will concentrate on the firm’s key client relationships globally, also reporting to Kelleher. Messrs. Eichorn and Holzschuh will also join Morgan Stanley’s Management Committee. Petitgas is already a member.
Of the departing Taubman, Gorman said: “Paul is an outstanding banker and business leader who has made exceptional contributions both to Morgan Stanley and to our Investment Banking franchise during his highly distinguished 30-year career here.''
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