INVESTMENT

B AN K I N G
(MORGAN STANLEY)

Ratan NRO 000000

INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA

Delhi BRANCH
(March Morning Batch)

TABLE OF CONTENTS
I.

Introduction
Definition
3
Origin
4
Features

Of

Indian

Investment

Banking

5
Structural

Representation

With

The

Help

Of

Diagram

Investment

Banking

II.

Organizational Structure
7

III.

Business Portfolio Of Investment Banks

10

IV.

Services Provided By Investment Banking

11

V.

History

And

Development

Of

15
VI.

Recent

Trends

In

Investment

Banking

19
VII.

Investment Banker
Introduction

to

Investment

21
Roles and Functions
23

Banker

Need
24
Important aspects to be considered while appointing
an Investment Banker
25

VIII.

Morgan Stanley as Investment Banking Corporate

Introduction
26
Industry Coverage
32
Regional Coverage
33
Services Provided
34
History(Mergers, Acquisitions, Divestitures, employees and awards

35
Real Estate View
36

IX.

Conclusion
37

DEFINITION:
An individual or institution which acts as an underwriter or agent for corporations and
municipalities issuing securities. Most also maintain broker/dealer operations, maintain
markets for previously issued securities, and offer advisory services to the investors.
Investment Banks also have a large role in facilitating mergers and acquisition, private equity
placements and corporate restructuring. Unlike traditional banks, investment banks do not
accept deposits from and provide loans to individuals also called as investment banker.

WHAT ARE INVESTMENT BANKS

3

Investment banks help companies and governments and their agencies to raise money
by issuing and selling securities in the primary market. They assist public and private
corporations in raising funds in the capital markets (both equity and debt), as well as in
providing strategic advisory services for mergers, acquisitions and other types of
financial transactions. Investment banks also act as intermediaries in trading for clients.
Investment banks differ from commercial banks, which take deposits and make commercial
and retail loans. In recent years, however, the lines between the two types of structures have
blurred, especially as commercial banks have offered more investment banking services.
In the US, the Glass-Steagall Act initially created in the wake of the Stock Market Crash of
1929, prohibited banks from both accepting deposits and underwriting securities; GlassSteagall was repealed by the Gramm-Leach-Bliley Act in 1999. Investment banks may also
differ from brokerages, which in general assist in the purchase and sale of stocks, bonds, and
mutual funds. However some firms operate as both brokerages and investment banks; this
includes some of the best known financial services firms in the world. In the strictest
definition investment banking is the raising of funds; both in debt and equity, and the
division handling this in an investment bank is often called the "Investment Banking
Division" (IBD).
However, only a few small firms solely provide this service. Almost all investment banks are
heavily involved in providing additional financial services for clients, such as the trading of
fixed income, foreign exchange, commodity, and equity securities.
It is therefore acceptable to refer to both the "Investment Banking Division" and other
'front office' divisions such as "Fixed Income" as part of "investment banking," and
any employee involved in either side as an "investment banker."
Furthermore, one who engages in these activities in-house at a non-investment bank is
also considered an investment banker. More commonly used today to characterize what
was traditionally termed "investment banking is sells side." This is trading securities
for cash or securities (i.e., facilitating transactions, market-making), or the promotion of
securities (i.e. underwriting, research, etc.).
The "buy side" constitutes the pension funds, mutual funds, hedge funds, and the investing
public who consume the products and services of the sell-side in order to maximize their
return on investment. Many firms have both buy and sell side components.

ORIGIN
4

In India, though the existence of this branch of financial services can be traced to over
three decades, investment banking was largely confined to merchant banking services.
The forerunners of merchant banking in India were the foreign banks. Grindlays Bank
(now merged with Standard Chartered Bank in India) began merchant banking
operations in 1967 with a license obtained from the RBI followed by the Citibank in
1970. These two banks were providing services for syndication of loans and rising of equity
apart from other advisory services. It was in 1972, that the Banking Commission Report
asserted the need for merchant banking services in India by the public sector banks Based on
the American experience which led to the passing of the Glass Steagall Act, the Commission
recommended a separate structure for merchant banks so as to distinct them from commercial
banks and financial institutions. Merchant banks were meant to manage investments and
provide advisory services. Following the above recommendation, the SBI set up its merchant
banking division in 1972. Other banks such as the-Bank of India, Central Bank of India,
Bank of Baroda, Syndicate Bank, Punjab National Bank, and Canara Bank also followed suit
to set up their merchant banking outfits. ICICI was the first financial institution to set up its
merchant banking division in 1973. The later entrants were IFCI and IDBI with the latter
setting up its merchant banking division in 1992. However, by the mid eighties and early
nineties, most of the merchants banking divisions of public sector banks were spun off as
separate subsidiaries. SBI set up SBI Capital Markets Ltd. in 1986, other such banks
such as-Canara Bank, BOB, PNB, Indian Bank and ICICI created separate merchant
banking entities.

FEATURES

OF

INDIAN

INVESTMENT

BANKING

Investment banking in India has evolved in its own characteristics structure over the
years both due to business realities and the regulatory regime. On the regulatory front,
the Indian regulatory regime does not allow all investment banking functions to be
performed under one entity for two reasons- (a) to prescribe and monitor capital
adequacy and risk mitigation mechanisms. (b) To prevent excessive exposure to business

risk under one entity. Therefore bankruptcy remoteness is a key feature in structuring the
business lines of an investment bank so that risks and rewards are defined for the investors
who provides resources to the investment banks. In addition, to the capital adequacy
requirements and leveraging capability for each business line have been prescribed differently
under relevant provisions of law.
Therefore, Indian investment banks structure their business segments in different
corporate entities to be able to meet regulatory norms. Merchant bankers other than banks
and financial institutions are also prohibited from undertaking any other business than that in
security market.
However, since banks are subject to the Banking Regulation. Act, they cannot perform
investment banking to a large extent on the same balance sheet.

Asset management

business in the form of a mutual fund requires three-tire structure under the SEBI
regulations. Investment banking in India has also been influenced by business realities
to a large extent. The financial services industry in India till the early 1980s was driven
largely by debt services in the form of term financing from financial institutions and working
capital financing by commercial banks and non-banking financial companies (NBFCs).

The development that has taken place is that due to the gradual regulatory developments in
the capital markets, investment banking activities have come under regulations which require
separate registration, licensing and capital controls. Due to this development investment
banking industry has a heterogeneous structure.

STRUCTURAL

REPRESENTATION

THE HELP OF DIAGRAM

WITH

ORGANIZATIONAL STRUCTURE
The Main Activities and Units:

The primary function of an investment bank is buying and selling products both on
behalf of the bank's clients and also for the bank itself. Banks undertake risk through
proprietary trading, done by a special set of traders who do not interface with clients and
through Principal Risk, risk undertaken by a trader after he or she buys or sells a product to a
client and does not hedge his or her total exposure. Banks seek to maximize profitability for
a given amount of risk on their balance sheet. An investment bank is split into the so-called
Front Office, Middle Office and Back Office. The individual activities are described
below:

Front Office

Investment Banking is the traditional aspect of investment banks which involves

helping customers raise funds in the Capital Markets and advising on mergers
and acquisitions. Investment bankers prepare idea pitches that they bring to meetings
with their clients, with the expectation that their effort will be rewarded with a
mandate when the client is ready to undertake a transaction. Once mandated, an
investment bank is responsible for preparing all materials necessary for the
transaction as well as the execution of the deal, which may involve subscribing
investors to a security issuance, coordinating with bidders, or negotiating with a
merger target.

Other terms for the Investment Banking Division include Mergers & Acquisitions
(M&A) and Corporate Finance (often pronounced "corpfin").

Investment management is the professional management of various securities (shares,

bonds etc) and other assets (e.g. real estate), to meet specified investment goals for the
benefit of the investors. Investors may be institutions (insurance companies, pension
funds, corporations etc.) or private investors (both directly via investment contracts
and more commonly via collective investment schemes e.g. mutual funds).

Financial Markets is split into four key divisions: Sales, Trading, Research and
Structuring.

Sales and Trading is often the most profitable area of an investment bank,
responsible for the majority of revenue of most investment banks . In the
process of market making traders will buy and sell financial products with the
goal of making an incremental amount of money on each trade. Sales is the
term for the investment banks sales force, whose primary job is to call on
institutional and high-net-worth investors to suggest trading ideas and take
orders.

Research is the division which reviews companies and writes reports about
their prospects, often with "buy" or "sell" ratings. While the research division
generates no revenue, its resources are used to assist traders in trading, the
sales force in suggesting ideas to customers, and investment bankers by
covering their clients.

In recent years the relationship between investment banking and research has
become highly regulated, reducing its importance to the investment bank.

Structuring has been a relatively recent division as derivatives have come into
play, with highly technical and numerate employees working on creating
complex structured products which typically offer much greater margins and
returns than underlying cash securities.

Middle Office

Risk Management involves analyzing the market and credit risk that
traders are taking onto the balance sheet in conducting their daily trades,
and setting limits on the amount of capital that they are able to trade in
order to prevent 'bad' trades having a detrimental effect to a desk overall. Another
key Middle Office role is to ensure that the above mentioned economic risks are
captured accurately (as per agreement of commercial terms with the
counterparty) correctly and on time (typically within 30 minutes of trade
execution).

In recent years the risk of errors has become known as "operational risk and the
assurance Middle Offices provide now include measures to address this risk.
When this assurance is not in place, market and credit risk analysis can be unreliable
and open to deliberate manipulation.

Back Office

Operations involve data-checking trades that have been conducted, ensuring that they
are not erroneous, and transacting the required transfers. While it provides the greatest
job security of the divisions within an investment bank, it is a critical part of the bank
that involves managing the financial information of the bank and ensures efficient
capital markets through the financial reporting function. The staff in these areas are
often highly qualified and need to understand in depth the deals and transactions that
occur across all the divisions of the bank.

10

BUSINESS PORTFOLIO

OF INVESTMENT

BANKS
Globally, investment banks handle significant fund-based business of their own in the
capital market along with their non-fund service portfolio which is offered to
clients. However, these distinct segments are handled either on the same balance
sheet or through subsidiaries and affiliates depending upon the regulatory
requirements in the operating environment of each country. All these activities
are segmented across three broad platforms-equity market activity, debt market
activity and merger and acquisitions (M&A) activity.
In addition, given the structure of the market, there is also a segmentation based on
whether a particular investment bank belongs to a banking parent or is a stand-alone
pure investment bank. Investment banking encompasses a wide area of capital
market based businesses and services and has a significant financial exposure to
the capital market. Though investment banks also earn a significant component of
their income from non-fund based activity, it is their capacity to support clients with
fund-based services, which distinguishes from pure merchant banks.

Besides, being such a large financial power houses themselves, the global investment
banks play a major role as institutional investors in trading and having large portfolio
holdings of capital market securities. They hold large inventories and therefore
influence the direction of the market.

Goldman Sachs, Salomon Brothers, Merrill Lynch, Schroeders, Rothschild and

other significant Market Investors both on their accounts and on behalf of the
billions of dollars of funds under their management. An investment bank plays a
lead role in this booming segment of Financial Advisory business. Some investment
banks in overseas market also specializes in niche segments such as management

11

of hedge funds, bullion trade, commodity hedges, real estate and other exotic
markets.

SERVICES

PROVIDED BY INVESTMENT

BANKING
A) CORE SERVICES:
MERCHANT BANKING, UNDERWRITING AND BOOK
BULDING

The primary market which was quite small in India was revitalized with the abolition of the
Capital Issues (control) Act 1947 and the passing of
The Securities and Exchange Board of India Act, 1992. The SEBI functions as the
regulator for the capital markets similar to its counterparts, the SEC in USA. SEBI vide
its guidelines dated June 11, 1992 introduced free pricing of securities in public offer for
the first time in India.
Over the last ten years there has been two distinct phases of primary market boom- the
first between 1992-1996 and the second between 1198-2001. In the past few years though
public offers have been few, the private placement market especially in the debt segment has
been very active and has served as an important source of funds for prime rated corporates.
Notable among such offerings are privately placed debentures issued by public sector
corporations and leading private companies. Financial institutions have been raising funds via
the public offer of unsecured bonds. Investment banks have been managing the public offers
of unsecured bonds. Investment banks have been managing public offers and hand holdings
them in the private placements as well.

MERGERS AND ACQUISITIONS ADVISORY

12

The mergers and acquisitions industry was pretty nascent in India prior to 1994 and
continues to be tiny compared to the global scale of such transaction. However, two
main factors that have given a big push to the industry are:

The forces of liberalization and globalization that have forced the Indian
industry to consolidate.

The institutionalization of corporate acquisition by SEBI through its

guidelines popularly known as the Takeover Code.

One of the cream activities of investment banks has always been M&A advisory. The
large investment banks specialize in M&A as a core activity.

CORPORATE ADVISORY
Investment banks in India also have a large practice in corporate advisory services
relating to project financing, corporate structuring, capital restructuring through
equity repurchases (including management of buyback offers under section 77A of the
Companies Act, 1956), raising private equity, structuring joint-ventures and strategic
partnerships and other such value added specialized areas.

B) SUPPORT

SERVICES

AND

BUSINESSES

SECONDARY MARKET ACTIVITIES

Most of the universal banks such as ICICI, IDBI and KOTAK MAHINDRA have their
broking and distribution firms in both the equity and debt market. In addition several other
13

investment banks such as the IL&FS and pure investment banks such as JM Morgan
Stanley have a strong presence in this activity. In the past few years the derivative market has
been introduced in Indian Capital Market and this provides an additional avenue of
specialization for investment banks. Derivative trading, risk management and structured
product offerings are the new segments that are fast becoming the areas of future
potential for Indian Investment banks.

ASSET MANAGEMENT SERVICES

Most of the top financial groups in India which have investment banking businesses such as
the-ICICI, the IDBI, KOTAK MAHINDRA, DSP MERRILL LYNCH, JM MORGAN
STANLEY, SBI AND IL&FS also have their presence in the asset management business
through separate entities. As per the three layers structure propounded by SEBI the parent
organization acts as the sponsor of the fund and the fund itself is constituted as a trust.

WEALTH

MANAGEMENT

SERVICES

(PRIVATE

BANKING)

Many reputed investment banks nurture a separate service segment to manage the
portfolio of high networth individuals, households, trusts and other types of noninstitutional investors. This can be structured either as a pure advisory service wherein the
investment manager does not have any access to the fund or as a fund management service
wherein the investment manager is given charge of the funds. Wealth management may be
restricted to a research based activity wherein the investor is provided good investment
recommendations from time to time.

14

SIZE OF INDUSTRY
Global investment banking revenue increased for the third year running in 2005, to
$52.8bn. This was up 14% on the previous year, but 7% below the 2000 peak. The
recovery in the global economy and capital markets resulted in an increase in M&A
activity, which has been the primary source of investment banking revenue in recent
years. Credit spreads are tightening and intense competition within the field has ensured that
the banking industry is on its toes. The US was the primary source of investment banking
income in 2005, with 51% of the total, a proportion which has fallen somewhat during the
past decade. Europe (with Middle East and Africa) generated 31% of the total, slightly
up on its 30% share a decade ago. Asian countries generated the remaining 18%. Between
2002 and 2005, fee income from Asia increased by 98%. This compares with a 55%
increase in Europe, and a 46% increase in the US, during this time period.

POSSIBLE CONFLICTS OF INTEREST

Potential conflicts of interest may arise between different parts of a bank, creating the
potential for financial movements that could be market manipulation. Authorities that
regulate investment banking (the FSA in the United Kingdom and the SEC in the
United States) require that banks impose a Chinese wall which prohibits
communication between investment banking on one side and research and equities on
the other. Some of the conflicts of interest that can be found in investment banking are
listed here:
Historically, equity research firms were founded and owned by investment banks. One
common practice is for equity analysts to initiate coverage on a company in order to develop
relationships that lead to highly profitable investment banking business. In the 1990s, many
equity researchers allegedly traded positive stock ratings directly for investment

15

banking business. On the flip side of the coin: companies would threaten to divert
investment banking business to competitors unless their stock was rated favorably.
Politicians acted to pass laws to criminalize such acts. Increased pressure from regulators
and a series of lawsuits, settlements, and prosecutions curbed this business to a large extent
following the 2001 stock market thumb. Many investment banks also own retail brokerages.
Also during the 1990s, some retail brokerages sold consumers securities which did not
meet their stated risk profile. This behavior may have led to investment banking
business or even sales of surplus shares during a public offering to keep public
perception of the stock favorable. Since investment banks engage heavily in trading for
their own account, there is always the temptation or possibility that they might engage in
some form of front running.

16

HISTORY

AND
EVELOPMENT
INVESTMENT BANKING

OF

Investment banking began in the United States around the middle of the 19th century.
Prior to this period, auctioneers and merchantsparticularly those of Europe
provided the majority of the financial services. The mid-1800s were marked by the
country's greatest economic growth. To fund this growth, U.S. companies looked to
Europe and U.S. banks became the intermediaries that secured capital from European
investors for U.S. companies.
Up until World War I, the United States was a debtor nation and U.S. investment bankers had
to rely on European investment bankers and investors to share risk and underwrite U.S.
securities. For example, investment bankers such as John Pierpont (J. P.) Morgan (18371913) of the United States would buy U.S. securities and resell them in London for a
higher price. During this period, U.S. investment banks were linked to European banks.
These connections included J.P. Morgan & Co. and George Peabody & Co. (based in
London); Kidder, Peabody & Co. and Barling Brothers (based in London); and Kuhn,
Loeb, & Co. and the Warburgs (based in Germany).
In addition, this period saw the development of two basic components of investment
banking: underwriting and syndication. Because some of the companies seeking to sell
securities during this period, such as railroad and utility companies, required substantial
amounts of capital, investment bankers began under-writing the securities, thereby
guaranteeing a specific price for them. If the shares failed to fetch the set price, the
investments banks covered the difference. Underwriting allowed companies to raise the
funds they needed by issuing a sufficient amount of shares without inundating the
market so that the value of the shares dropped. Because the value of the securities they
underwrote frequently surpassed their financial limits, investment banks introduced
syndication, which involved sharing risk with other investment banks. Further, syndication
enabled investment banks to establish larger networks to distribute their shares and

17

hence investment banks began to develop relationships with each other in the form of
syndicates.
The syndicate structure typically included three to five tiers, which handled varying
degrees of shares and responsibilities. The structure is often thought of as a pyramid
with a few large, influential investment banks at the apex and smaller banks below. In
the first tier, the "originating broker" or "house of issue" (now referred to as the
manager) investigated companies, determined how much capital would be raised, set
the price and number of shares to be issued, and decided when the shares would be
issued.
The originating broker often handled the largest volume of shares and eventually began
charging fees for its services. In the second tier, the purchase syndicate took a smaller number
of shares, often at a slightly higher price such as 1 percent or 0.5 percent higher. Investment
banks in these tiers of the syndicate would just sell shares, but would not agree to sell a
specific amount. Hence, they functioned as brokers who bought and sold shares on
commission from their customers.
From the mid-i800s to the early 1900s, J. P. Morgan was the most influential investment
banker. Morgan could sell U.S. bonds overseas that the U.S. Department of the Treasury
failed to sell and he led the financing of the railroad. He also raised funds for General Electric
and United States Steel. Nevertheless, Morgan's control and influence helped cause a number
of stock panics, including the panic of 1901.
Beginning about the time World War I broke out, the United States became a creditor nation
and the roles of Europe and the United States switched to some extent. Companies in other
countries now turned to the United States for investment banking.

During the 1920s, the number and value of securities offerings increased when investment
banks began raising money for a variety of emerging industries: automotive, aviation, and
radio. Prior to World War 1, securities issues peaked at about $ 1 million, but afterwards
issues of more than $20 million were frequent. The banks, however, became mired in
speculation during this period as over 1 million investors bought stocks on margin, that
is, with money borrowed from the banks.
18

The stock market crashed on October 29, 1929, and commercial and investment banks
lost $30 billion by mid-November. While the crash only affected bankers, brokers, and some
investors and while most people still had their jobs, the crash brought about a credit crunch.
Credit became so scarce that by 1931 more than 500 U.S. banks folded, as the Great
Depression continued.
As a result, investment banking all but frittered away. Securities issues no longer took place
for the most part and few people could afford to invest or would be willing to invest in the
stock market, which kept sinking.
The last major effort to clean up the investment banking industry came with the U.S. v.
Morgan case in 1953. This case was a government antitrust investigation into the practices
of 17 of the top investment banks. The court, however, sided with the defendant investment
banks, concluding that they had not conspired to monopolize the U.S. securities industry and
to prevent new entrants beginning around 1915, as the government prosecutors argued.
By the 1950s, investment banking began to pick up as the economy continued to
prosper. This growth surpassed that of the 1920s. Consequently, major corporations sought
new financing during this period. General Motors, for example, made a stock offering of
$325 million in 1955, which was the largest stock offering to that time. In addition, airlines,
shopping malls, and governments began raising money by selling securities around this time.
During the 1960s, high-tech electronics companies spurred on investment banking.
Companies such as Texas Instruments and Electronic Data Systems led the way in
securities offerings. Established investment houses such as Morgan Stanley did not
handle these issues; rather, Wall Street newcomers such as Charles Plohn & Co. did.
The established houses, however, participated in the conglomeration trend of the 1950s and
1960s by helping consolidating companies negotiate deals. The stock market collapse of
1969 ushered in a new era of economic problems which continued through the 1970s,
stifling banks and investment houses. The recession of the 1970s brought about a wave
of mergers among investment brokers. Investment banks began to expand their services
during this period, by setting up retail operations, expanding into international
markets, investing in venture capital, and working with insurance companies. While
investment bankers once worked for fixed commissions, they have been negotiating fees with
19

investors since 1975, when the SEC opted to deregulate investment banker fees. This
deregulation also gave rise to discount brokers, who undercut the prices of established firms.
In addition, investment banks started to implement computer technology in the 1970s
and 1980s in order to automate and expedite operations. Furthermore, investment
banking became much more competitive as investment bankers could no longer wait for
clients to come to them, but had to endeavor to win new clients and retain old ones.

CONSTRAINTS OR DIFICULTIES IN
INVESTMENT BANKING
Due to the over-dependence on issue management activity in the initial years, most merchant
banks perished in the primary market downturn that followed later. In order to stabilize their
business, several merchant banks diversified to offer a broader spectrum of capital market
services. However, other than a few industry leaders, the other merchant banks have not been
able to transform themselves into full service investment banks. Going by the service
portfolio of the leading full service investment banks in India, it may be said that the industry
in India has been more or less similar development as its western counterparts, though the
breadth available in the overseas capital market is still not present in the Indian capital
market. Secondly, due to the lack of institutional financing in a big way to fund capital
market activity, it is only the bigger industry players who are in investment banking. The
third major deterrent has been the lack of depth in the secondary market, especially in the
corporate debt segment.

20

RECENT TRENDS

IN

INVESTMENT

BANKING
In the early 1980s, the SEC introduced and made law a rule that permits well-known
companies to register securities without a set sale date and delay the sale of the securities
until the issuers expect their securities will have strong prices in the market. These
registrations are known as "shelf registrations and have become an important part of
investment banking.
Shelf financing also contributed to the decline of the historic connections between
specific corporations and investment banks. Nevertheless, it did not change the basic
structure of the industry, which has retained the pyramid shape. The apex investment houses
before the introduction of shelf financing by and large remained the apex houses
afterwards.
Contemporary investment banking is also influenced by the growth of institutional
investors as key players in the securities market. Whereas Institutional investors
accounted for 25 percent of securities trade in the 1960s, they accounted for over 75
percent in the 1990s. In addition, the securities market has become more global. For
example, U.S. companies raised more money in London in the early 1980s than in New
York. Moreover, U.S. investors are buying more European and Asian securities than in
previous decades.
New technologyincluding telecommunications technology, computers, and computer
networkshas enabled investment bankers to receive, process, organize, and circulate
large amounts of diverse information. This technology has helped investment banks
become more efficient and complete transactions more quickly.
The increased competition within the investment banking arena has further quelled the
establishment of long-term relationships between corporations and investment houses.
Company executives receive offers from a variety of investment banks and they compare the
offers, choosing the ones they believe will benefit their company the most. Large
corporations generally have transactions with four or more investment banks. Nevertheless,
corporations still favor their traditional investment banks and about 70 percent of the
21

executives surveyed in a study said they do most of their business with their traditional
investment banks, according to The Investment Banking Handbook.
In the 1980s and 1990s, the investment banking industry continued to consolidate. As a
result, a few investment banks with large amounts of capital dominated the industry
and offered a wide array of services, earning the name "financial supermarkets." This
trend also altered the structure of the industry, affecting the size and roles of syndicates.
Syndicates became dependent on the type and volume of the securities being offered as a
result. For small offerings, syndicates are usually small and the managing banks sell the
majority of the securities. In contrast, for large offerings, the managing banks may create
a syndicate including more than 100 investment banks. Investment houses continued to
be innovative and introduce new financial instruments for both issuers and investors.
Some of the most significant innovations include fixed-income and tax-exempt securities,
which have grown in popularity since their inception in the 1980s.
With a growing number of mergers and acquisitions as well as corporate restructurings,
investment banks have become increasingly involved in the process of arranging these
transactions as part of their primary services. Because of changing economic, competitive,
and market conditions, several thousand small and mid-sized companies as well as a handful
of large corporations agree to merger and acquisition deals each year. Investment banks
facilitate this process by providing advice on such transactions, negotiating on behalf of their
clients, and guaranteeing the purchase of bonds for acquisitions that rely on debt, known as
leveraged buyouts.
The rapid expansion of the Internet in the mid-to-late 1990s provided an impetus for
stockbrokers to begin offering trading services through the Internet. Because of the popularity
of online trading, brokers began offering investment banking services. Early in 1999, ETrade established the online investment bank "E-Offering," which provides online
initial public offering services. Since the passage in 1933 of the Glass-Steagall Act, the
U.S. banking industry has been closely regulated. This act requires the separation of
commercial banking, investment banking, and insurance.

22

INVESTMENT BANKERS
INTRODUCTION
An investment banker advises clients on a wide range of financial issues and helps them
negotiate and execute financial transactions. An investment banker may provide advice
on issues such as how to raise capital through equity or debt instruments, capital
structures, mergers and acquisitions or the privatization of publicly owned assets.
An investment banker also assesses the market environment to ensure transactions can
be executed successfully. Investment banking clients range from government bodies to
public and private corporations. To operate effectively, an investment banker requires
real-time news and market data. An investment banker also needs access to in-depth
23

information and sophisticated research and financial modeling tools to analyze

companies, industries and markets and to draw up strategies and evaluate likely
outcomes.
Because the investment banking business has become increasingly international in scope, an
investment banker looks for services that offer high-quality global content. In particular, an
investment banker requires fundamental data on companies around the world, company
ownership details, access to brokers' research reports and business intelligence as well as
information on corporate transactions, mergers and acquisitions and the issuance of securities.
As an advisor, an investment banker needs to form close relationships with his or her clients,
devoting time to client contact, meetings and travel. An investment banker also needs to focus
on identifying and developing new business opportunities and spend time pitching proposals
to prospective clients. As a result, an investment banker looks for products which simplify
and speed up work processes. They should provide quick access to information allowing a
banker to integrate public and proprietary content and to embed data into financial models
and reports. Reuters offers a series of products that address the requirements of the
investment banker. They range from the most sophisticated international, cross-asset, highspeed, high-performance services that combine real-time information and powerful analysis
tools to browser-based products offering smaller sets of information tailored to specific
markets or business needs. These include products that allow an investment banker to access
broker research, real-time estimates, company ownership information and fundamental data.
Investment bankers function as intermediaries in financial transactions. They are
experienced in carrying out projects that, for most companies, take place very rarely,
but are critically important. Investment banking is a field of banking that aids
companies in acquiring funds. In addition to the acquisition of new funds, investment
banking also offers advice for a wide range of transactions a company might engage in.
Through investment banking, an institution generates funds in two different ways. They may
draw on public funds through the capital market by selling stock in their company, and they
may also seek out venture capital or private equity in exchange for a stake in their company.
An investment banking firm also does a large amount of consulting.

24

Investment bankers give companies advice on mergers and acquisitions, for example.
They also track the market in order to give advice on when to make public offerings and how
best to manage the business' public assets. Some of the consultative activities investment
banking firms engage in overlap with those of a private brokerage, as they will often give
buy-and-sell advice to the companies they represent. The line between investment banking
and other forms of banking has blurred in recent years, as deregulation allows banking
institutions to take on more and more sectors.

ROLES AND FUNCTIONS

Investment banks provide four primary types of services: raising capital, advising in
mergers and acquisitions, executing securities sales and trading, and performing
general advisory services. Smaller investment banks may specialize in two or three of these
categories.

Raising Capital

An investment bank can assist a firm in raising funds to achieve a variety of objectives,
such as to acquire another company, reduce its debt load, expand existing operations, or
for specific project financing. Capital can include some combination of debt, common
25

equity, preferred equity, and hybrid securities such as convertible debt or debt with
warrants.
Although many people associate raising capital with public stock offerings, a great deal of
capital is actually raised through private placements with institutions, specialized investment
funds, and private individuals.

Mergers and Acquisitions

Investment banks often represent firms in mergers, acquisitions, and divestitures.
Example projects include the acquisition of a specific firm, the sale of a company or a
subsidiary of the company, and assistance in identifying, structuring, and executing a
merger or joint venture. In each case, the investment bank should provide a thorough
analysis of the entity bought or sold, as well as a valuation range and recommended structure.

Sales and Trading

These services are primarily relevant only to publicly traded firms, or firms which plan to
go public in the near future. Specific functions include making a market in a stock, placing
new offerings, and publishing research reports.

NEED OF INVESTMENT BANKER

Any firm contemplating a significant transaction can benefit from the advice of an
investment bank. Although large corporations often have sophisticated finance and
corporate development departments, an investment bank provides objectivity, a
valuable contact network, allows for efficient use of client personnel, and is vitally
interested in seeing the transaction close.

26

Most small to medium sized companies do not have a large in-house staff, and in a financial
transaction may be at a disadvantage versus larger competitors. A quality investment banking
firm can provide the services required to initiate and execute a major transaction, thereby
empowering small to medium sized companies with financial and transaction experience
without the addition of permanent overhead. Investment banking is a service business, and
the client should expect top-notch service from the investment banking firm.
Generally only large client firms will get this type of service from the major Wall Street
investment banks; companies with less than about $100 million in revenues are better
served by smaller investment banks.

NECESSARY ASPECTS TO BE CONSIDERED

WHILE

APPOINTING AN INVESTMENT
BANKER

Experience
It extremely important to make sure that experienced, senior members of the
investment banking firm will be active in the project on a day-to-day basis. Depending
on the type of transaction, it may be preferable to work with an investment bank that has
some background in your specific industry segment. The investment bank should have a
wide network of relevant contacts, such as potential investors or companies that could
be approached for acquisition.

Record of Success
Although no reputable investment bank will guarantee success, the firm must have a
demonstrated record of closing transactions.

Ability to Work Quickly

Often, investment banking projects have very specific deadlines, for example when bidding
on a company that is for sale. The investment bank must be willing and able to put the right
people on the project and work diligently to meet critical deadlines.
27

Fee Structure
Generally, an investment bank will charge an initial retainer fee, which may be one-time
or monthly, with the majority of the fee contingent upon successful completion of the
transaction. It is important to utilize a fee structure that aligns the investment bank's
incentive with your own.

Ongoing Support
Having worked on a transaction for your company, the investment bank will be
intimately familiar with your business. After the transaction, a good investment bank
should become a trusted business advisor that can be called upon informally for advice
and support on an ongoing basis.
Because investment banks are intermediaries, and generally not providers of capital, some
executives elect to execute transactions without an investment bank in order to avoid the fees.
However, an experienced, quality investment bank adds significant cant value to a transaction
and can pay for its fee many times over. The investment banker has a vested interest in
making sure the transaction closes, that the project is completed in an efficient time frame,
and with terms that provide maximum value to the client. At the same time, the client is able
to focus on running the business, rather than on the day-to-day details of the transaction,
knowing that the transaction is being handled by individuals with experience in executing
similar projects.

28

Type

Public (NYSE: MS)

Founded

1935

Headquarters

New York, New York

29

Key people

John

J.

Mack,

Zo

Chairman

Cruz,

Robert

Scully

&

CEO

Co-President,
Co-President,

James P. Gorman COO GWM

Industry

Investment services

Products

Financial

Services

Investment

Banking

Investment management
Revenue

$52.498 billion USD (2005)

Employees

Over 55,000(Jun 2007)

INVESTMENT BANKING

A global leader in investment banking, Morgan Stanley consistently ranks among the
top firms in mergers and acquisitions, equity underwriting and debt financings. Our
Investment Banking Division offers unsurpassed financial advisory and capital-raising
services to corporations, organizations and governments around the world.

30

Morgan Stanley (NYSE: MS) is an investment bank and retail broker provider headquartered
in New York City. Morgan Stanley is a global financial services firm that, through its
subsidiaries and affiliates, provides its products and services to customers, including
corporations, governments, financial institutions and individuals.

31

The Company operates in four business segments: Institutional Securities, Global

Wealth Management Group, and Asset Management.

Institutional Securities includes capital raising; financial advisory services,

including advice on mergers and acquisitions, restructurings, real estate and project
finance; corporate lending; sales, trading, financing and market-making activities in
equity securities and related products and fixed income securities and related
products, including foreign exchange and commodities; benchmark indices and risk
management analytics; research; and investment activities.

Global Wealth Management Group provides brokerage and investment advisory

services; financial and wealth planning services; annuity and insurance products;
credit and other lending products; banking and cash management services; retirement
services, and trust and fiduciary services. Global Wealth Management Group serves
individual investors and small-to-medium size businesses and institutions with an
emphasis on high-net-worth investors. It provides clients with an array of financial
solutions comprising Morgan Stanley's products and services, as well as products and
services from third-party providers, such as insurance companies and mutual fund
families.

Its financial and wealth planning services offered include education savings
programs, as well as annuity and insurance products, including life, disability and
long-term care insurance.

Asset Management provides global asset management products and services in

equity, fixed income, alternative investments and private equity to institutional and
retail clients through third-party retail distribution channels, intermediaries and
Morgan Stanley's institutional distribution channel. Morgan Stanley's asset
management activities are principally conducted under the Morgan Stanley and
Van Kampen brands. It provides asset management products and services to
institutional investors worldwide, including pension plans, corporations, private
funds, non-profit organizations, foundations, endowments, governmental
agencies, insurance companies and banks.

Morgan Stanley Investment Management also sub-advises funds for various

unaffiliated financial institutions and intermediaries. Morgan Stanley offers open-end
funds and separately managed accounts to individual investors through affiliated and
unaffiliated broker dealers, banks, insurance companies and financial planners.

32

Closed-end funds managed by Morgan Stanley or Van Kampen are available to

individual investors through affiliated and unaffiliated broker dealers.

Investment Opportunity Chart Offered Morgan Stanley

33

Industry and Regional Coverage

Morgan

Stanley

Investment

Banking Industry Coverage:

Basic Materials

Industrials

Consumer Products

Power and Utilities

Communications

Real Estate

Energy

Retail

Financial Institutions

Technology

Financial Sponsors

Transportation

Healthcare

34

Morgan Stanley combines global presence with local knowledge

to play a major role in each country where we offer our services:

Morgan Stanley Investment Banking

Regional Coverage

The Americas
Canada

Asia Pacific
Australia

Europe
Belgium

Latin America
U.S. - Eastern Region
U.S. - Midwest Region
U.S. - Southwest Region
U.S. - Western Region

China
Hong Kong
India
Indonesia
Korea
Malaysia
New Zealand
Philippines
Singapore
Taiwan

France
Germany
Italy
Netherlands
Portugal
Russia
Spain
Switzerland
Turkey
United
Kingdom

Thailand
Vietnam

SERVICES PROVIDED BY MORGAN

STANLEY
35

Africa
South Africa

Morgan Stanley is a global financial services firm, offering a wide variety of products
and services. A partial list of these products and services includes:

Investment banking services such as advising, securities underwriting

Institutional sales and trading, including both equity and fixed income
investments

Research services

Individual investor services such as private wealth management and financial and
estate planning

Traditional investments such as mutual funds , unit investment trusts and separately
managed accounts

Alternative investments such as hedge funds, managed futures, and real estate

Despite offering such a diverse array of services, Morgan Stanley is an industry leader in
many areas, particularly equity and debt underwriting and investment banking. The company
considers its brand name and reputation as a longtime leading financial firm among its
most valuable assets.

PRODUCT OVERVIEW SERVICE

Mergers and Acquisitions
Morgan Stanley's Mergers and Acquisitions (M&A) department devises and executes
innovative, customized solutions to our clients' most challenging issues. The M&A team
excels in domestic and international transactions including acquisitions, divestitures, mergers,
joint ventures, corporate restructurings, recapitalizations, spin-offs, exchange offers,
leveraged buyouts and takeover defenses as well as shareholder relations. Morgan Stanley
applies its extensive experience with global industries, regions and banking products to meet
our clients' short- and long-term strategic objectives.

Global Capital Markets

36

Morgan Stanley's Global Capital Markets (GCM) group responds with market
judgments and ingenuity to clients' needs for capital. Whether executing an IPO, a debt
offering or a leveraged buyout, GCM integrates our expertise in Sales and Trading and in
Investment banking to offer clients seamless advice and sophisticated solutions. We originate
structure and execute public and private placement of a variety of securities.
Securitized Products Group
The Securitized Products Group (SPG) engages in a wide array of activities that
includes structuring, underwriting, and trading collateralized securities across the
globe. SPG makes active markets and takes proprietary positions in the full range of assetbacked, residential mortgage-backed, commercial-backed and collateralized debt obligation
securities in both the cash and synthetic markets.
In addition, SPG originates commercial mortgage and single-family loans through conduit
and loan purchase activities, and advises clients on securitization opportunities. Bringing
together Morgan Stanley's Fixed Income and Investment banking divisions, SPG draws on
their expertise in finance, capital markets, trading and research to give clients the best of
securitization finance.

History: Mergers, Acquisitions, Divestitures, employees and

awards
Morgan Stanley was founded in New York on September 5, 1935, by Henry S. Morgan,
and Harold Stanley of J. P. Morgan & Co. along with others from Drexel & Co. This
split of the commercial and investment banks came as a result of the Glass-Steagall Act.
Within its first year it achieved 24% of market share among public offerings.
In 1964, Morgan Stanley created the first viable computer model for financial analysis. By
1971, the Mergers & Acquisitions business was established along with Sales & Trading.
In 1986, Morgan Stanley Group became publicly listed. In 1996, Morgan Stanley
acquired Van Kampen American Capital, a respected mutual fund company.
On February 5, 1997, the company merged with Dean Witter and Discover & Co. (a.k.a.
Dean Witter Reynolds) the spun-off financial services business of Sears Roebuck. The
merged company was briefly known as "Morgan Stanley Dean Witter Discover & Co."
until 1998 when it was known as "Morgan Stanley Dean Witter & Co." until late 2001.
To foster brand recognition and marketing the Dean Witter name was dropped and the firm
became "Morgan Stanley".

37

Recent years: 1991present

Historical logo used by Morgan Stanley in the early 2000s
In 1996, Morgan Stanley acquired Van Kampen American Capital. On February 5, 1997, the
company merged with Dean Witter Reynolds, and Discover & Co. the spun-off financial
services business of Sears Roebuck. The merged company was briefly known as "Morgan
Stanley Dean Witter Discover & Co." until 1998 when it was known as "Morgan Stanley
Dean Witter & Co." until late 2001. To foster brand recognition and marketing the Dean
Witter name was dropped and the firm became "Morgan Stanley". Morgan Stanley acquired
AB Asesores of Spain and entered India in a joint venture with JM Financials in 1999.
In 2001, Morgan Stanley lost thirteen employees in the September 11, 2001 attacks, but 2687
were successfully evacuated by Secrity Director Rick Rescorla, who was one of the thirteen
lost; after the disaster, the surviving employees moved to temporary headquarters in the
vicinity. In 2005, it moved 2,300 of its employees back to lower Manhattan, at that time the
largest such move.]
In 2004, Morgan Stanley co-managed the Google IPO which is the largest internet IPO in
U.S. history. In the same year Morgan Stanley acquired the Canary Wharf Group. On
December 19, 2006, after reporting 4th quarter earnings, Morgan Stanley announced the spinoff of its Discover Card unit. In order to cope up with the write-downs during the Subprime
mortgage crisis, Morgan Stanley announced on December 19, 2007 that it would receive a
US$5 billion capital infusion from the China Investment Corporation in exchange for
securities that would be convertible to 9.9% of its shares in 2010.
In August 2008, Morgan Stanley was contracted by the United States Treasury to advise the
government on potential rescue strategies for Fannie Mae and Freddie Mac.
On September 17, 2008, the British evening-news analysis program Newsnight reported that
Morgan Stanley was facing difficulties after a 42% slide in its share price. CEO John Mack
wrote in a memo to staff "we're in the midst of a market controlled by fear and rumours and
short-sellers are driving our stock down." The company was said to explore merger
possibilities with CITIC, Wachovia, HSBC, Banco Santander and Nomura.
On September 22, 2008, the last two bulge bracket investment banks in the US, Morgan
Stanley and Goldman Sachs, both announced that they would become traditional bank
holding companies, bringing an end to the era of investment banking on Wall Street.The
Federal Reserve's approval of their bid to become banks ends the ascendancy of the securities
firms, 75 years after Congress separated them from deposit-taking lenders, and caps weeks of
chaos that sent Lehman Brothers Holdings Inc. into bankruptcy and led to the rushed sale of
Merrill Lynch & Co. to Bank of America Corp.

38

Organization
Morgan Stanley splits its businesses into three core business units. These follow below.

Institutional Securities
Institutional Securities has been the most profitable business segment. for Morgan Stanley in
recent times. This business segment provides institutions with services such as capital raising
and financial advisory services including advice on mergers and acquisitions, restructurings,
real estate and project finance, corporate lending etc. The segment also encompasses the
Equities and the Fixed Income divisions of the firm.

Global Wealth Management Group

Global Wealth Management Group provides brokerage and investment advisory services. As
of 2008 Q1 this segment has reported an annual increase of 12 percent in the pre-tax
incomeThis segment provides financial and wealth planning services to its clients who are
mainly high net worth individuals and hedge funds.

Asset Management
Asset Management provides global asset management products and services in equity, fixed
income, alternative investments and private equity to institutional and retail clients through
third-party retail distribution channels, intermediaries and Morgan Stanley's institutional
distribution channel. Morgan Stanley's asset management activities are principally conducted
under the Morgan Stanley and Van Kampen brands. It provides asset management products
and services to institutional investors worldwide, including pension plans, corporations,
private funds, non-profit organizations, foundations, endowments, governmental agencies,
insurance companies and banks. As of 2008 Q1 the segment posted a pre-tax loss of US$161
million

Magazine and Popularity Rankings

Morgan Stanley was named one of the 100 Best Companies for Working Mothers in
2004 by Working Mothers magazine.
Family Digest magazine named Morgan Stanley one of the "Best Companies for
African Americans" in June 2004
Essence magazine named Morgan Stanley as one of the "30 Great Places to Work" in
May 2004
Asian Enterprise magazine named Morgan Stanley as one of the "Top Companies for
Asian Americans" in April 2004
Hispanic magazine selected Morgan Stanley as one of the "100 Companies Providing
the Most Opportunities to Hispanics" in February 2004
Morgan Stanley is listed in The Times Top 100 Graduate Employers, only recently
dropping out of the top 40
The Times listed Morgan Stanley 5th in its 20 Best Big Companies to Work For 2006
list

39

Great Place to Work Institute Japan in 2007 ranked Morgan Stanley as the second
best corporation to work in Japan, based on the opinions of the employees and the
corporate culture

Controversies and Lawsuits

In 2003, Morgan Stanley agreed to pay billions of dollars in order to settle its portion of
various legal actions and investigations brought by Eliott Spitzer, the Attorney General of
New York, the National Association of Securities Dealers (Now FINRA), the United States
Securities and Exchange Commission, (SEC) and a number of state securities regulators,
relating to fraud that was allegedly perpetrated upon retail investors by a dozen of the largest
investment banking securities brokerage firms.
On July 12, 2004, Morgan Stanley settled a sex discrimination suit brought by the Equal
Employment Opportunity Commission for $54 million.
On January 12, 2005, The New York Stock Exchange imposed a $19 million fine on Morgan
Stanley for alleged regulatory and supervisory lapses.
On May 16, 2005, a Florida jury found that Morgan Stanley did in fact fail to give adequate
information to Ronald Perelman about Sunbeam thereby defrauding him and causing
damages to him of $604 million. In addition, punitive damages were added for total damages
of $1.450 billion. This verdict was directed by the judge as a sanction against Morgan Stanley
after the firm's attorneys infuriated the court by failing and refusing to produce documents,
and falsely telling the court that certain documents did not exist.[citation needed] On March 21,
2007, the ruling was overturned and Morgan Stanley was no longer required to pay the 1.57
billion dollar verdict.
On March 2, 2006, Morgan Stanley settled a class action lawsuit filed in California by both
current and former Morgan Stanley employees for unfair labor practices instituted to those in
the financial advisor training program. Employees of the program had claimed the firm
expected trainees to clock overtime hours without additional pay, and handle various
administrative expenses as a result of their expected duties. A $42.5 million settlement was
reached, though Morgan Stanley admits no fault in the settlement.

FINRA fine for e-mails

On September 27, 2007, FINRA announced a $12.5 million settlement with Morgan Stanley
to resolve charges that the firm's former affiliate, Morgan Stanley DW, Inc. (MSDW), failed
on numerous occasions to provide e-mails to claimants in arbitration proceedings as well as
to regulators - while representing that the destruction of the firm's email servers in the
September 11, 2001 terrorist attacks on New York's World Trade Center resulted in the loss of
all pre-9/11 e-mail. In fact, the firm had millions of pre-9/11 e-mails that had been restored to
the firm's active e-mail system using back-up tapes that had been stored in another location.
Customers who had lost their arbitration cases against Morgan Stanley DW Inc. because of
their inability to obtain the emails to demonstrate Morgan Stanley's misconduct will each
receive a token amount of money as a result of the settlement.

40

Awards
2007

Financial Times' International Prime Brokerage House of the Year 2005, 2006 and
2007
Euromoney Best Prime Brokerage House 2007
BusinessWeek #1 Prime Brokerage House 2006 and 2007
Euromoney's Global Investment Bank of the Year
Financial Times Number 3 Best Place to Work in the UK
Newsweek Most Prestigious Global Investment Bank of the Year 2007
Best Investment Bank Spain
Best Investment Bank Luxembourg
Best Investment Bank Taiwan
Best M&A House UK
Best M&A House Denmark
Best M&A House Nordic and Baltic region
Best M&A House Singapore
Best M&A House Hong Kong
Best Debt House China
Best Debt House Singapore
Best Debt House Colombia
Best Project Finance House in Latin America

Information found at Euromoney

2008

Deal of the Year; Equity Market Deal of the Year - 2008 ALB SE Asia Law Awards
Deal of the Year; IT/Telecommunications Deal of the Year - 2008 ALB China Law
Awards
Deal of the Year; M&A Deal of the Year - 2008 ALB China Law Awards
Deal of the Year; China Deal of the Year - 2008 ALB China Law Awards
Deal of the Year; Equity Market Deal of the Year - 2008 ALB Hong Kong Law Awards

41

Notable current and former employees

Business

Barton Biggs - hedge fund manager

Aaron Brown - financial quant and author
Shelby Bryan - communications executive
Walid Chammah - Co-President
Vikram Chatwal - hotelier
Zoe Cruz - First Woman to Become Co-President
David Darst - chief investment strategist PWM
Robert Diamond - president of Barclays plc
James P. Gorman - Co-President
Robert Greenhill - founder of Greenhill & Co.
Jonathan Knee, author of The Accidental Investment Banker
Mattias Kling - Swedish Investor and Businessman (former co-owner of Skype)
John J. Mack - Current Chairman and CEO
Robert Matschullat - private equity investor
Mary Meeker - financial analyst
Vikram Pandit - CEO of Citigroup
Joseph R. Perella - co-founder of Perella Weinberg Partners
Charles Phillips - president of Oracle Corporation
Frank Quattrone - investment banking
Steven Rattner - private equity investor
Leopold David de Rothschild - financier
James A. Runde - investment banking
Ali Sabanc - Turkish businessman
David E. Shaw - founder of D. E. Shaw & Co.

Politics and public service

Robert H. B. Baldwin - Undersecretary of the U.S. Navy

Erskine Bowles - White House Chief of Staff (1996-97), U.S. Senatorial candidate
Evan G. Galbraith - U.S. Ambassador to France (1981-85)
Jeremy Heywood - Principal Private Secretary to the Prime Minister (19992003)
Mickey Kantor - U.S. Secretary of Commerce (1996-97)
Philip Lader - U.S. Ambassador to the United Kingdom (19972001)
Francis Maude - Member of the British Parliament (19831992, 1997present)
Jyotiraditya Scindia - Member of the Lok Sabha (2002present)
Jan Stenbeck - Swedish entrepreneur
Kevin Warsh - member of the Board of Governors for the U.S. Federal Reserve
System (2006present)

Other

42

David Grimaldi - advisor

Nathan Haselbauer - founder of International High IQ Society
Nigel Jaquiss - journalist
Andy Kessler - author
Paul Kundel - photographer
Daniel Lian - economist
John Myung - poker player
James Parrish - professional football player
Rick Rescorla - former U.S. Army officer who helped in the September 11 evacuation
efforts
Joshua Schachter - creator of del.icio.us
Jamie Smith - professional UK athlete and alumni of Royal Holloway.
Julia Moiseeva - Latvian actress, nominated for the Oscars in Best Foreign Film 2003.

, Patricia (200. Blue Blood and Mutiny: The Fight for the Soul of Morgan Stanley.
New York: William Morrow & Co.. ISBN 0-060-88191-7.
Chernow, Ron (1990). The House of Morgan: An American Banking Dynasty and the
Rise of Modern Finance. New York: Grove Press. ISBN 0-802-13829-2.

43

Morgan Stanley Real Estate

Meeting clients' needs with a global platform, a knowledgeable and talented team of
people, and innovative solutions. That's Morgan Stanley Real Estate. Since 1969, the
longest uninterrupted real estate industry presence of any Wall Street firm, Morgan Stanley
has consistently supported our expansion from roots as a mortgage/asset brokerage business
through the introduction of new products and services, such as public debt and equity capital
raising, real estate investment management and mortgage lending.

Today, Morgan Stanley's real estate franchise comprises three distinct yet globally
integrated businesses: Banking, Investing and Lending. Our senior real estate
managers, many of whom have spent their entire careers growing Morgan Stanley's real
estate business, provide clients with a team of experienced and knowledgeable advisors
dedicated to superior client service and performance. We leverage Morgan Stanley's
global network of economists, strategists, research, and capital market and product specialists
with unique property market and industry specific knowledge to deliver our clients the most
informed strategic and investment advice possible.

44

CONCLUSION
I

therefore

conclude

that

Investment

Banking

individual or institution which acts as an underwriter or

agent

for

securities.

corporations
Investment

and
banks

municipalities
help

issuing

companies

and

governments and their agencies to raise money by

issuing and selling securities in the primary market.
They assist public and private corporations in raising
funds in the capital markets (both equity and debt), as
well as in providing strategic advisory services for
mergers,

acquisitions

transactions.

and

Investment

other
banks

types

of

also

financial
act

intermediaries in trading for clients.

o Source
www.google.com
www.answers.com
www.wikipedia.com

o BIBLOGRAPHY
The ICFAs Book On Investment Banking
And Merchant Banking

45

as