New York | Morgan Stanley has appointed Ted Pick as its new chief executive, succeeding Australian James Gorman after his 14-year run that reshaped the US investment bank.
Mr Pick, a co-president and three-decade veteran of the bank, will take over the top job in January and join the board, a bank statement said. Mr Gorman, 65, will stay on as executive chairman.
In tapping Mr Pick, 54, the bank is turning to the man credited with spurring a revival in its trading business after a perilous stretch during the GFC, when clients ditched Morgan Stanley amid doubts about its ability to survive.
Mr Gorman rescued the bank from that near-collapse and engineered a transformation with wealth management at its core.
That strategic overhaul was accelerated by two signature deals announced in 2020, turning Morgan Stanley into a money-management powerhouse barrelling toward a $US10 trillion ($15.9 trillion) goal and taking its market value above that of rival Wall Street giant Goldman Sachs.
“The board’s selection of Ted Pick is an outstanding one,” Mr Gorman said in the statement. “He is battle-tested, understands complex risk, and works very effectively not just in the US, but around the globe. In short, he is an outstanding executive and leader.”
Mr Pick beat out two other contenders – co-president Andy Saperstein and Dan Simkowitz, who has led investment management. Morgan Stanley said Mr Saperstein will become head of wealth and investment management and named Mr Simkowitz co-president and head of institutional securities.
“Morgan Stanley is a storied institution, and I am deeply honoured to have been chosen to lead it,” Mr Pick said in the statement. “Thanks to James’ excellent leadership, our firm is now well-positioned to succeed across market cycles, and I am excited about the opportunities for future growth.”
The succession saga has played out since Mr Gorman’s chief deputy, Colm Kelleher, exited in 2019. Soon after, the CEO unveiled the biggest leadership shake-up in a decade, positioning a small group of men as the most likely successors. One of them, Jon Pruzan, exited earlier this year to be president at Don Mullen’s investment firm, Pretium.
In May, Mr Gorman said he would step down within a year. Mr Pick was viewed as the most likely heir to Mr Gorman, thanks to his role overseeing the more complex institutional securities business, which until recently was also the more dominant division.
But with the bank’s recent acquisitions, the wealth-management unit has been capturing a bigger piece of the revenue pie, helping lift the prospects of Mr Saperstein, who runs that arm.
“As co-presidents of Morgan Stanley, Andy and Dan will be invaluable leaders in helping Ted manage the firm,” Mr Gorman said.
A lot of people focus on what business you’re running and whether a business is doing well or not,” he said earlier this year. “Well, if that were the criteria, I wouldn’t have got the job because I was running the smallest and worst-performing business.”
Mr Pick ascended through Morgan Stanley’s ranks after he was the last one hired into his analyst class; his early rise was tied to his role as a capital-markets banker, helping companies raise money by selling stock.
But that changed after 2008 when he led the equities unit as the bank lost haemorrhaged clients. Under Mr Pick, the unit became healthier, surging past competitors to a No. 1 ranking.
After his success in equities, he got another challenge: resuscitate the fixed-income division, that struggled to keep pace with larger rivals. The division’s recovery since then is touted as a success story by the bank’s leadership.
The prime brokerage division Mr Pick helped build into Morgan Stanley’s crown jewel was wrong-footed in 2021, when Bill Hwang’s Archegos Capital Management collapsed. The revelation that Morgan Stanley lost $US911 million on dealings with the family office made it US banking’s biggest loser.
The bank also recently said it was negotiating with US prosecutors to resolve a probe into its block trading practices – a business under Mr Pick’s command.
The more pressing challenge for Mr Pick will be to restore market share in the investment bank, after ceding ground to Goldman Sachs and JPMorgan.
The investment bank is waiting on a rebound in capital markets and deal-making activity to help revive earnings in that business. At the same time, investors who had been heaping praise on its wealth unit now want reassurance it can further build assets.
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