Morgan Stanley, racing to re-establish its presence in private equity after a three-year hiatus, is actively hiring for a new buyout fund.
According to Financial Week, Morgan Stanley's buyout group will employ 20 investment professionals based in the U.S. and another 20 in Europe. Senior positions are being filled mostly by external hires, with internal candidates taking the junior positions. Half the hires have been made thus far, and expectations are to have two-thirds of the positions filled within a month, the newspaper says.
The new unit is led by Alan Jones, former head of the bank's financial sponsors group, and Stephen Trevor, who was hired away from Goldman Sachs in April.
Morgan Stanley spun off its previous buyout business, called Metalmark Capital, in 2004 under previous CEO Philip Purcell, but held onto a group of 30 Asia-based private equity bankers.
Financial Week ties the bank's "change of heart" last September to the strategy of current CEO John Mack to make more aggressive use of Morgan Stanley's $1.2 trillion balance sheet. The article cites several indicators of an increased appetite for risk within the firm, while questioning whether it is too little and too late, since the private equity boom may be peaking.
Morgan Stanley reportedly plans raise between $5 billion and $6 billion for the buyout fund starting in this year's fourth quarter. That target includes about $2 billion of its own capital and the rest from investors. Even before starting to raise capital from outside, the unit already has made at least one investment. In March it was part of a group that agreed to acquire McKechnie Aerospace for $850 million from Melrose PLC. Morgan Stanley put up its own funds for that deal.