Morgan Stanley has promoted Gavin MacDonald, a 23-year veteran of the US bank, to run its European mergers and acquisitions business following today's surprise departure of Paulo Pereira to join star dealmaker Joe Perella at his new M&A boutique.
MacDonald, vice-chairman of European investment banking, takes over from Pereira with immediate effect.
For most of his career, MacDonald worked in the UK M&A team, and in the past few years has advised on some of the biggest transactions in the UK.
MacDonald has taken a lower profile than Pereira, who is one of the most prolific M&A bankers in Europe and who has worked on more than €500bn ($612.5bn) worth of deals in the past decade.
MacDonald, 44, takes over from Pereira at a critical time for Morgan Stanley's European investment banking business, which has been hit by a series of senior defections and management reshuffles in the wake of last year's bitter campaign to oust chairman and chief executive Philip Purcell.
He will have to move quickly to stem further departures amid speculation that other senior bankers are preparing to quit Morgan Stanley having banked bonuses in the past few weeks.
Last month Michael Tory, head of UK investment banking, quit to join Lehman Brothers, and Morgan Stanley appointed Jonathan Chenevix-Trench as the new head of its European business.
This month, Jon Anda, Morgan Stanley's global co-head of investment banking left to join Perella. Peter Weinberg, former chief executive of Goldman Sachs International, has also joined Perella's boutique.
In the Financial News ranking of investment banks in Europe across debt, equity and M&A, Morgan Stanley slipped from second place to fifth in 2005.
It had a disappointing year in M&A, dropping from second to fourth in the rankings, and to fifth place in equity capital markets. In both sectors the bank traditionally jostles with Goldman Sachs for first place.
Some of MacDonald's deals include advising the private equity consortium that bought the retailer Debenhams in 2003 for 1.7bn (€2.5bn), and advising Imperial Tobacco on its €5.2bn takeover of German tobacco company Reemtsma in 2002.
More recently MacDonald has focused on advising private equity firms, including working with Blackstone on its acqusition of the Legoland theme parks business last year.