Morgan Stanley Quickly Turns It Round

There have been plenty of stories in the media that Morgan Stanley's investment banking franchise could be permanently damaged. The fact that, only a few weeks ago, the firm was languishing a lowly 6th in the M&A league tables prompted some sceptics to describe Morgan Stanley as a M&A 'also-ran'. But that was then, and this is now. And things currently don't look too bad for the firm.

As Reuters reports, after advising on the $47bn Bank of America/Fleet deal, Morgan Stanley is back up to second slot, although still some way behind Goldman. Intent on regaining its M&A crown, Morgan Stanley boss Philip Purcell is said to be spending more time with clients and the firm is even believed to be more prepared to lend more money to clients, something it has traditionally backed away from, in order to compete with the likes of JP Morgan and Citigroup.

Stephan Newhouse, the firm's new President, is also getting in on the act. He will be spending most of his time travelling the globe, trying to drum up business. Newhouse said in a recent interview: 'With the consolidation of the industry, there's no question there's more competition. The questions become, what breaks a tie, what gets you the first phone call, and what get you the last phone call.....We all know that it's relationships'.

And Newhouse is not bad on the relationship front. Vladimir Putin called him in a few days back to reassure him that, despite recent political and industrial unrest, all is well on the investment front in Russia. Just the week previously Newhouse is said to have been 'networking' with Tony Blair.

So, Morgan Stanley is fighting back. And the firm will not accept even second-best for long.

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