Morgan Stanley rewarded Ted Pick for taking the firm’s equity-trading business to the top spot globally and put Dan Simkowitz in charge of spurring growth in its investment-management unit.
Pick, 46, was promoted to global head of sales and trading, reporting to Colm Kelleher, the New York-based company said Thursday in an internal memo written by Kelleher, Chief Executive Officer James Gorman and Greg Fleming, president of the brokerage. Simkowitz, 50, who was co-head of the unit that underwrites stocks and bonds, will report to Gorman as head of investment management and will join the operating committee.
Pick and Simkowitz, both more than 20-year veterans of Morgan Stanley, are taking over businesses struggling to meet their financial targets. Pick adds a fixed-income unit that’s been reducing assets and cutting costs to achieve a 10 percent return on equity. Simkowitz’s investment-management group used to be run by Fleming, who had set a goal of $500 billion of assets by the end of next year, about a quarter more than it has now.
“We always need to look to our future while managing the present,” Gorman, Kelleher and Fleming said in the memo. “Our future includes developing strong executives to serve at the most senior levels of the firm, ensuring we regularly bring new energy and intensity to areas where we can move the needle over the next five years.”
Gorman, 57, has been moving executives to different parts of the firm to encourage collaboration. Raj Dhanda, Simkowitz’s former co-head, was moved to a role in the bank’s wealth-management division in March. Mo Assomull, who replaced Dhanda, will now be sole head of global capital markets, according to a separate memo on Thursday.
The Wall Street Journal reported Morgan Stanley’s management changes earlier Thursday.
Pick has long been seen as a rising star as he revitalized the equities business, which suffered a flood of departures from its prime brokerage during the financial crisis. The firm’s share of equity-trading revenue among the nine largest global investment banks climbed to 17 percent last year, from 11 percent in 2009, when Pick took over, according to data from Bloomberg Intelligence.
He will now also oversee a fixed-income business, run by Michael Heaney and Rob Rooney, that has shown signs of an uptick after years of scaling back. The unit’s revenue jumped 19 percent in the first half of this year, the only increase among the five-largest Wall Street banks. The division’s capital is less than half what it was four years ago as Kelleher, 58, sold commodity units and wound down derivative businesses. JPMorgan Chase & Co.’s fixed-income revenue was more than triple Morgan Stanley’s last year.
Simkowitz, who joined Morgan Stanley in 1991, ran equity underwriting and leveraged-finance groups as he rose through the capital-markets business. He will lead a division with the lowest revenue and highest profitability at Morgan Stanley.
Fleming, 52, joined in 2010 and helped stabilize that unit after losses and outflows. Then he set his sights on expanding a business that is still less than half the size of similar units at Goldman Sachs Group Inc. and JPMorgan. Eighteen months after he set a three-year goal of boosting assets by $127 billion, the firm had added just $30 billion.
Morgan Stanley, which was the best-performing stock among the 10 largest U.S. banks last year, is the worst performer so far this year, dropping 19 percent.