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Morgan Stanley will be opportunistically hiring bankers as "pot pourri" of deals returns

Morgan Stanley's new CEO Ted Pick has a reputation for fragrant phrasing, and speaking today he used it to strong effect in the bank's investor call to accompany its first quarter results.  

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The whole "pot pourri" of banking deals is back, declared Pick, who became CEO of Morgan Stanley earlier this year. IPOs are back, financial sponsors are back and M&A is back, he added. 

Pick's comments came after Morgan Stanley reported a 113% increase in equity capital markets revenues and a 37% increase in debt capital markets revenues, although its M&A revenues fell 28% year-on-year."

Despite the slower M&A fees, Pick said the pipeline is up, and an increase in M&A deals is imminent. "We are in the early innings of a multi-year M&A cycle," he added. The renewed appetite for deals is being driven by "existential reality," he added. "Supply channels have been disrupted by two global conflicts, and companies need bolt-on changes around this." At the same time, Pick said clients have "regulatory risk" and need advice from Morgan Stanley to help deal with that, and that financial sponsors need to exit investments and deploy dry powder and will be in competition with corporates for acquisitions. 

This all stands to drive M&A hiring, and both Pick and Morgan Stanley CFO Sharon Yeshaya affirmed the bank's intention to "opportunistically" add talent. Junior M&A bankers may also be back in vogue: "The need to execute on cross-border M&A is here," observed Pick 

Despite all this bullishness, Morgan Stanley cut 400 people from across the bank in the first quarter and Yeshaya said it intends to increase operating leverage in the institutional securities business (investment bank) in the "higher brackets," which might imply pruning of the managing director ranks.

Away from M&A and equity and debt capital markets, Pick and Yeshaya said Morgan Stanley plans to invest in prime services and to build out derivatives and private credit. 

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AUTHORSarah Butcher Global Editor

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