Morgan Stanley Hires Fleming to Oversee Investment Managementby
Morgan Stanley's (MS) James Gorman continued to put his stamp on the firm's executive ranks by hiring his former Merrill Lynch & Co. colleague Greg Fleming to oversee investment management and global research.
Fleming, 46, starts in February as president of Morgan Stanley Investment Management and will report to Gorman, who becomes chief executive officer on Jan. 1, according to a statement today from the New York-based firm. Fleming, who worked at Merrill from 1992 until January after the takeover by Bank of America Corp., will become a member of Morgan Stanley's management and operating committees.
"It's a real coup because I think Greg could have been a CEO at any number of places," said Blackstone Group LP (BX) President Tony James in an interview today, adding that he's been trying to hire Fleming himself for five years. "The fact that Morgan Stanley got him was almost completely because of the regard he has for James Gorman."
The firm is reshaping its management team before Gorman, Morgan Stanley's 51-year-old co-president, succeeds John Mack as CEO at the end of the year. Mack, 65, the chairman and CEO since 2005, is remaining as chairman. Morgan Stanley was the second-biggest U.S. securities firm behind Goldman Sachs Group Inc. (GS) last year when both converted to banks.
Last week, Morgan Stanley said Chief Financial Officer Colm Kelleher, 52, and Investment Banking Chief Paul Taubman, 48, will become co-presidents of the institutions securities business. Ruth Porat, 52, head of the banking team that advises financial institutions, was named to replace Kelleher as CFO, while Mitch Petrick, 47, was ousted as the firm's sales and trading chief.
Fleming, who was president and chief operating officer at Merrill, left within days after Bank of America (BAC) completed its Jan. 1 takeover of the New York-based securities firm. Fleming had helped negotiate the sale, which rescued Merrill Lynch even as Lehman Brothers Holdings Inc. was collapsing into bankruptcy.
Takeover Fallout"Greg showed great judgment in the way he handled the sale of Merrill Lynch to Bank of America—he was the one who really pushed it and I think he did a fantastic job for shareholders," James said.
While Merrill Lynch investors benefited, Bank of America had to take a second round of U.S. bailout funds to complete the takeover after Merrill's fourth-quarter losses soared past $15 billion. Fleming became part of an exodus of senior Merrill executives that triggered speculation about whether Bank of America, based in Charlotte, North Carolina, would lose business as its managers departed. He has since served as a senior research scholar and lecturer at Yale Law School in New Haven, Connecticut, where he earned his law degree.
"I am fortunate to have previously worked with Greg for many years," Gorman said today in the statement. "Greg is ideally suited to help us continue building on the progress we have made in our asset management and merchant banking businesses."
New ManagementOwen Thomas will report to Fleming in his role as CEO of Morgan Stanley real estate investing. Thomas, who also serves as CEO of Morgan Stanley Asia, reports to Walid Chammah in that role.
"I am looking forward to joining the firm and doing whatever I can to help my new colleagues build on their current momentum," Fleming said in the statement.
Fleming earned an undergraduate degree from Colgate University. He started his Merrill Lynch career as an investment banker and specialized in advising financial institutions. He was promoted by Chief Executive Officer Stanley O'Neal to co-president in June 2007 and stayed after O'Neal was ousted in October 2007.
"It's a great hire," said Douglas Ciocca, a managing director at Renaissance Financial Corp. in Leawood, Kansas, which has $1.9 billion under management including Morgan Stanley stock. "It expands the intellectual capital of the firm."