The bank is looking to sell its 19 percent stake in hedge fund firm Lansdowne Partners, according to The Wall Street Journal.
Lansdowne, which manages $17.5 billion, is based in London and is among the largest hedge funds in Europe.
Potential buyers, according to the report, include Affiliated Managers Group, Foundation Capital Partners, and Neuberger Berman's Dyal Capital.
A spokesman for Morgan Stanley declined to comment on the report.
Hedge funds overall saw their highest inflows in seven years during 2014, despite badly underperforming the broader stock market.
The funds took in $76.4 billion, bringing total assets to $2.85 trillion, according to data from tracking firm HFR, whose composite index measuring the industry's performance rose just 3.3 percent.
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