As Morgan Stanley credit traders leave in London, leadership questions linger

How much staff churn is normal for a credit sales and trading team in an investment bank? It's a question that's being asked of Morgan Stanley after two of its senior London credit professionals left in the past two weeks.   

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The departures of Saba Danish, Morgan Stanley’s head of European credit sales and Herbert Filho, its head of European credit trading and research, don't appear to have been linked. Danish is understood to have handed in her resignation a week before Filho resigned last Friday. Morgan Stanley insiders and others close to the situation say the immediate reasons for the resignations were unrelated: Danish went after receiving a bonus that allegedly didn't reflect her performance; Filho - who was supposed to replace Danish - left after receiving an offer to join Morgan Stanley veteran Sam Kellie Smith at hedge fund Jain Global. 

While the immediate reasons for the recent exits were unrelated, though, some people close to the situation point to a pattern of departures over time from Morgan Stanley's European credit trading business, which they suggest reflects unhappiness in the team. Over the past few years, the exits - both voluntary and involuntary - have included: Rani Nazim, the former co-head of European credit trading, who left in December 2023; Gareth John, the head of investment grade trading, who left at the same time; Nick Stevens, who left with others to become the head of UK credit at Bank of America in July 2024; Jasmine Welton, a VP in high yield trading, who left in the middle of last year; Charlotte Rahn who left in 2024 for Cross Ocean Partners; and Brad Selig, the head of EMEA credit sales, who left in 2022. 

Some in the London credit team were let go as part of the cuts made by Morgan Stanley in 2023. Others, though, are said to have left - like Danish - without jobs to go to. We haven't spoken to Danish for this article, but members of the team suggest many of those exiting voluntarily were left with little choice. "Your revenue is fine, but you get layered or paid a zero even though you've done nothing wrong. It's humiliating and you have to go." 

Morgan Stanley declined to comment for this article. It's far from the only bank to experience staff churn, particularly post bonuses, and six or seven senior traders leaving in three years might not be considered a lot. Many of those who've gone seem to have had their differences with senior managers, though, and in particular with Rehan Latif, the London-based global head of credit trading.

Latif, who is 43 years-old and has an interesting back-story, was promoted as the sole global head of the business last April. He previously co-ran credit at Morgan Stanley with New York-based Ed Bayliss, who left for Deutsche Bank.  Latif has his supporters internally. He's the eldest of three brothers, all of whom work in financial services. His family came to London after fleeing Kuwait and driving through war-torn Iraq and Iran. He's close to Reiss Lea, Morgan Stanley's head of SSG trading. And until last Friday, he was close to Herbie Filho. 

Latif is a member of the Baha'i faith; supporters insist he's a good guy.

Detractors, however, say Latif runs the team as a close-knit clique where decisions about bonuses and promotions can seem arbitrary. "It's the same as in all banks, but more extreme," says one former insider. "Meritocracy only gets you so far, and then it's about loyalty and protection. You need to keep your head down and avoid any disagreements. Being in the inner circle is good, but it can make you even more exposed."

There are unconfirmed suggestions that women, in particular, find it hard to play by these rules and that this is why various senior women have left the team. Others have hung around and been hired, though. - Alexandra Shardlow is still there as an executive director in leveraged loan sales; Charlotte Creager joined from Goldman Sachs in 2023. 

Defenders of the credit business say the exits are simply standard fare for a global bank in a competitive market. The test might come whether more senior traders disappear this year. 

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