Finance

Morgan Stanley’s prime brokerage head steps down

Morgan Stanley’s global head of prime brokerage, Edward Keller, is stepping down from his role to deal with a personal health issue, the bank said in an internal memo on 24 May.

The bank named Penny Novick and Kim Shaw as global co-heads of prime brokerage to succeed Keller. The pair are the first women Morgan Stanley has named to run prime brokerage globally.

Keller is a nearly 30-year veteran of Morgan Stanley who was promoted to his role in January 2020. The memo said Keller had told the bank about his wish to step down and that he would return to a senior role advising clients, reporting to the global co-heads of institutional equities. Prime brokers cater to trading clients such as hedge funds, executing their trades, lending them money and helping introduce them to investors.

“Ed has been as responsible as anyone for the growth of our Prime Brokerage business and by extension for the return of our Equities franchise to prominence,” said the memo, signed by Alan Thomas, Gokul Laroia and David Russell. The three are Morgan Stanley’s global co-heads of institutional equities.

They wrote that Novick and Shaw had more than 40 years of experience cumulatively at Morgan Stanley and that they would “ensure we will continue to sustain our leading, world-class Prime Brokerage business.”

Prime brokerage is typically a low-risk business because banks provide collateralized lending. Prime brokers were thrust into the spotlight earlier this year with the collapse of Archegos Capital Management, the family office of former hedge-fund manager Bill Hwang. Morgan Stanley was one of several banks that logged losses related to Archegos, reporting a $911m loss it said it believed was the first taken by its prime-brokerage business. Chief Executive James Gorman said at the time Morgan Stanley’s obligations to an investment-banking client prevented it from acting sooner to avoid losses.

Credit Suisse Group, which has taken the largest loss related to Archegos, has announced the exits of a raft of senior executives, including its co-heads of prime services.

A Morgan Stanley spokesman said Tuesday Keller’s role change wasn’t related to Archegos.

Write to Juliet Chung at [email protected]

This article was published by Dow Jones NEWSPLUS

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