- Bank has been winding down proprietary investing operations
- Doster's firm plans to ``utilize existing relationships''
Thomas Doster, the head of Morgan Stanley’s principal investment business, is preparing to start a money management firm that will purchase assets from the bank.
The firm’s initial fund, Eight Bar Financial Partners I, will manage a portfolio of assets to be acquired from the bank, according to a regulatory filing. The firm, Eight Bar Partners LP, also plans to manage private funds that focus on distressed debt and make equity investments in private energy, health-care and “consumer-facing” companies.
The assets purchased from Morgan Stanley are “representative of the types of situations Eight Bar Partners will seek in the future,” the firm said in the filing. “We will utilize our existing relationships with consultants, investment bank trading desks, law firms and other investment advisors to locate the appropriate risk adjusted return opportunities.”
New York-based Morgan Stanley has been winding down its proprietary investing operations, in which the bank uses its own capital to make loans and equity investments. It’s one of several businesses, along with proprietary trading, that the federal government has curbed in the wake of the financial crisis. Morgan Stanley’s principal investments have declined by more than 80 percent since the end of 2010.
Doster didn’t return telephone calls seeking comment on Eight Bar, whose present address is listed as New Canaan, Connecticut. Mark Lake, a Morgan Stanley spokesman, declined to comment.
The filing doesn’t disclose the dollar value or the specific type of assets that Eight Bar plans to purchase from Morgan Stanley. The firm had no assets under under management as of late October. The filing didn’t say how it will fund the initial purchase of assets from Morgan Stanley.
At present, Eight Bar’s only other employee is Holly Neiweem, who began working at Morgan Stanley in 2007 and is currently an executive director in its principal investment group, according to her LinkedIn profile.
Morgan Stanley’s principal investments have declined to $661 million as of Sept. 30 from $3.9 billion at the end of 2010, reflecting market losses as well as efforts to wind down the business. The firm booked a $932 million loss in April 2010 on a $1.2 billion investment in Revel Entertainment Group LLC, the developer of a casino resort in Atlantic City, New Jersey.
Doster during the early 1990s worked for Goldman Sachs Group Inc., which had the most extensive principal investing unit on Wall Street. He joined Morgan Stanley in 1996, according to a broker database maintained by FINRA. In addition to leading Morgan Stanley’s principal investing effort, he also heads the firm’s global workout group, which focuses on restructuring commercial loans made by the bank that go bad.