Morgan Stanley Announces Launch of Private Markets Transaction Desk
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Insights
The introduction of Morgan Stanley's Private Markets Transaction Desk is a strategic move that aligns with the evolving landscape of private market investments. With the number of unicorns—startups valued at over $1 billion—increasing significantly, there is a clear trend of companies remaining private for longer periods. This trend has created a demand for liquidity among shareholders of these private companies, who traditionally have fewer options to monetize their shares compared to those in public markets.
The service aims to facilitate smoother transactions in a market that is known for its lack of transparency and fragmentation. By offering a concierge service, Morgan Stanley is positioning itself as a bridge between shareholders seeking liquidity and investors looking for opportunities in the private sector. This initiative could potentially increase the flow of capital in the private markets, providing growth-stage companies with an alternative to public listings for raising funds.
Morgan Stanley's launch of the Private Markets Transaction Desk could be seen as a response to the growing interest in alternative investments, particularly in the wake of global economic uncertainties and market volatility. This new offering may diversify Morgan Stanley's revenue streams and enhance its competitive edge in the wealth management sector. By tapping into the private markets, the firm is likely to attract high-net-worth individuals and institutional investors seeking to capitalize on the higher potential returns that private equity investments can offer.
Moreover, the establishment of this desk may reflect on Morgan Stanley's stock performance by potentially increasing its assets under management (AUM) and strengthening client retention. Investors and analysts will be monitoring the impact of this initiative on Morgan Stanley's financial metrics, such as AUM growth rate, fee-based income and overall profitability in the wealth management division.
The creation of a Private Markets Transaction Desk by Morgan Stanley introduces a complex legal landscape that must be navigated with precision. Regulatory compliance is paramount, particularly with the Securities and Exchange Commission (SEC) rules governing private securities transactions. The service will need to meticulously adhere to securities laws, such as ensuring that transactions are conducted with accredited investors and maintaining the confidentiality of sensitive company information.
Additionally, managing the cap table and ensuring that all transactions are properly recorded and reported is critical for maintaining legal and financial integrity. This service will also need to consider the implications of the JOBS Act, which has provisions that affect secondary market transactions in private companies. Legal professionals will be interested in how Morgan Stanley mitigates potential legal risks associated with secondary market transactions and the measures they take to protect the interests of all parties involved.
- Companies are staying private longer, warranting the need for liquidity solutions
- New offering supports secondary trading for shareholders of private companies through an company-centric focus with concierge service
- Investors gain access to a distinct array of private market opportunities stemming from Morgan Stanley's unique ecosystem encompassing Companies, Wealth Management Clients, and Institutional Investors
Growth-stage venture-backed global companies worth over
“Alternative investments like private market shares are only growing in importance as investors seek deeper portfolio diversification,” said Jed Finn, Head of Morgan Stanley Wealth Management. “We are fortunate to possess the largest alternatives business there is, and when coupled with our world-class capital markets and private company solutions, are in a unique position to help meet the needs of both buyers and sellers within the private market.”
The Private Markets Transaction Desk helps solve these needs through an company-centric approach. Clients who use the desk can benefit from direct support for one-off sales of private company shares. Conversely, clients intent on investing in private companies can gain access to investments not widely accessible. This offering complements the existing private investment platforms for clients offered through Morgan Stanley Wealth Management.
“As a larger percentage of capital formation and economic growth is occurring in the private markets, we aim to continue to work hand in hand with all of our clients to source and facilitate these opportunities to create lasting value,” said Michael Gaviser, Head of Private Markets, Morgan Stanley Wealth Management.
The Private Market Transaction Desk is currently live and facilitating trades on behalf of clients. In addition to existing client relationships, it has established relationships with leading secondary marketplaces which can help clients gain exposure to a broader market with a focus on transaction execution quality. Morgan Stanley tapped industry veteran Jeff Urban to lead the desk, who previously led a number of leading private and public markets distribution and syndication businesses.
“As the private markets continue to evolve and mature, there is an increased appetite among shareholders and potential investors for a trusted institution to provide access to robust liquidity solutions in the secondary markets,” said Kevin Swan, Head of Private Markets Solutions. “With more investors and capital entering the space, the Private Markets Transaction Desk puts clients in the driver’s seat to streamline complex transactions and address the needs on both sides of the market while working closely with the company.”
Morgan Stanley continues to invest in private company solutions to serve this growing market. Through the Shareworks equity management platform, Morgan Stanley has achieved
About Morgan Stanley Wealth Management
Morgan Stanley Wealth Management is a leading financial services firm that provides access to a wide range of products and services to individuals, businesses, and institutions, including brokerage and investment advisory services, financial and wealth planning, cash management and lending products and services, annuities and insurance, retirement, and trust services.
About Morgan Stanley
Morgan Stanley (NYSE: MS) is a leading global financial services firm providing a wide range of investment banking, securities, wealth management and investment management services. With offices in 42 countries, the Firm’s employees serve clients worldwide including corporations, governments, institutions and individuals. For further information about Morgan Stanley, please visit https://www.morganstanley.com/.
Morgan Stanley Smith Barney LLC (“Morgan Stanley”), its affiliates and Morgan Stanley Financial Advisors and Private Wealth Advisors do not provide tax or legal advice. Clients should consult their tax advisor for matters involving taxation and tax planning and their attorney for matters involving trust and estate planning, charitable giving, philanthropic planning and other legal matters.
Alternative investments often are speculative and include a high degree of risk. Investors could lose all or a substantial amount of their investment. Alternative investments are appropriate only for eligible, long-term investors who are willing to forgo liquidity and put capital at risk for an indefinite period of time. They may be highly illiquid and can engage in leverage and other speculative practices that may increase the volatility and risk of loss. Alternative Investments typically have higher fees than traditional investments. Investors should carefully review and consider potential risks before investing.
Private equity interests may be highly illiquid, involve a high degree of risk and be subject to transfer restrictions.
Clients are responsible for complying with applicable securities laws requirements and potential issuer restrictions and should consult with third-party advisors regarding the risks of transacting in private issuer securities, including the risk of transacting in a market with little or no price transparency or liquidity.
With respect to the Private Markets Transaction Desk, Morgan Stanley: provides no opinion or view on the valuation of any private issuer securities or the sufficiency, fairness or competitiveness of any price obtained; does not solicit, make any recommendations or provide any investment advice associated with any investment in private issuers; and does not act as underwriter, placement agent, distributor, or in any other similar capacity.
© 2024 Morgan Stanley at Work and Shareworks services are provided by Morgan Stanley Smith Barney LLC, member SIPC, and its affiliates, all wholly owned subsidiaries of Morgan Stanley.
1 https://pitchbook.com/news/articles/unicorn-startups-list-trends
View source version on businesswire.com: https://www.businesswire.com/news/home/20240304793521/en/
Media Relations Contacts: Thayer Fox; Thayer.Fox@morganstanley.com; Lynn Cocchiola, Lynn.Cocchiola@morganstanley.com
Source: Morgan Stanley
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