Morgan Stanley M&A Head Defects to Citigroup

Raymond McGuire, co-head of mergers and acquisitions at Morgan Stanley, has quit the Wall Street bank to join rival Citigroup as global co-head of investment banking. He starts his new job in July.

Citigroup said yesterday that McGuire will work alongside Alberto Verme, global co-head of investment banking. He will report to Michael Klein, chief executive officer and head of global banking for Citigroup Corporate and Investment Banking.

McGuire had been working alongside Paul Taubman, the other co-head of mergers and acquisitions at Morgan Stanley, since 2003.

His departure comes after Philip Purcell, chief executive, reshuffled his senior management team in March, promoting Zoe Cruz, head of fixed income, and Stephen Crawford, chief administrative officer, to co-presidents.

Purcell has been under pressure from a group of eight former directors of Morgan Stanley, known as the "grumpy old men", which has been pushing for him to step down. The group claims the bank's share price has underperformed its peers as a result of Purcell's leadership.

Five senior bankers have left Morgan Stanley in the aftermath of Purcell's reshuffle. They include Joseph Perella, Terry Meguid, Vikram Pandit and Stephan Newhouse.

The group of dissident bankers wants these five to return under the interim leadership of Bob Scott, a former Morgan Stanley banker who is part of the rebel group.

Perella and Meguid last week received bonuses of $6.4m (€5.1m) each on condition, among other things, that they did not join the dissident group.

McGuire started his career leading the M&A group at First Boston Corporation, which later became Wasserstein Perella. Before his five year stint at Morgan Stanley, he was a managing director in the M&A group at Merrill Lynch.

Shares in Morgan Stanley closed last night down 0.22% at $49.89, valuing the banking services group at more than $54.8bn. The shares have fallen 13.27% in the past three months.