Morgan Stanley's Kellie-Smith to Run Bond Unit; Heaney Exits

  • Unit co-chief Rooney will oversee the firm's European business
  • Equity-trading unit's operating chief Berke gets expanded role

Ted Pick, head of Morgan Stanley’s trading division since October, shuffled key lieutenants as he seeks to turn around the firm’s struggling bond business.

Sam Kellie-Smith, global head of equities trading under Pick, will run the fixed-income unit, the bank said Thursday in a memo to staff. He replaces Michael Heaney, who’s leaving, and Rob Rooney, who will oversee the company’s business in Europe, the Middle East and Africa. Matt Berke, currently chief operating officer for the equities business, will expand that role to cover all of sales and trading.

“Sam’s leadership and risk acumen have been key ingredients in establishing our leadership position in global equities,” Pick said in the memo.

Morgan Stanley is trying to overhaul its fixed-income operations -- a capital-intensive business that several firms, especially European banks, have been shrinking in the face of stiffer rules and a years-long trading slump. The New York-based bank is cutting about a quarter of its staff in that division, a person briefed on the matter told Bloomberg last month. Chief Executive Officer James Gorman, 57, probably will update investors on changes there next week after posting fourth-quarter results.

The bank has struggled since the financial crisis to turn around its fixed-income trading business, which produces half as much revenue as its average U.S. rival and has failed to reach Gorman’s goal of a 10 percent return. Kellie-Smith, 49, becomes the sixth executive to lead the unit in the past seven years.

Kellie-Smith joined Morgan Stanley in 1997 as a derivatives trader in London, where he would later run equity derivatives before moving to Hong Kong to head Asia equity trading. He’s been global equity head for seven years, a period in which Morgan Stanley ascended to Wall Street’s top stock-trading firm by revenue. He’ll run fixed-income from New York.

Heaney, a three-decade Morgan Stanley veteran, joined the firm as a credit research associate in 1986. After heading global credit sales and trading from 2009 to 2013, he was made co-head of fixed income to help restructure the division. Rooney, who’s spent 25 years at the firm, has held roles in fixed income and global capital markets.

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