Sheldon Trainor has left Morgan Stanley to become head of Asian investment banking at Merrill Lynch. In what is a newly created position, he will report to Damian Chunilal, the firm's respected head of Pacific Rim investment banking, who has been in the position for little over a year.

Trainor's last day at Morgan Stanley was yesterday (Monday) and he starts a one-month period of gardening leave today. For the last four years, he has been an MD running the firm's highly successful general industries group (GIG) for the region. This basically encompasses all investment banking clients that are not tech companies, telcos or financial institutions.

In the aftermath of the tech and telco crash in Asia, this group quickly became the most important coverage area for the bank. Indeed, it is understood that last year, Trainor generated more fees than any other investment banker in Asia.

His key clients include Singapore Power, New World Group and an array of Chinese industrial companies he guided towards the high yield bond market, most recently Mandra Forestry.

Trainor's move to Merrill is believed to be the result of the promotion the new job entails rather than any dissatisfaction with Morgan Stanley. He will cover the whole of the region outside of Japan.

What makes it interesting is that it is rare for a position of such importance to be filled by a lateral hire from another firm. Banks usually want a long-time insider in such a leadership role.

It would also be natural to think the move might in part stem from problems that Morgan Stanley is having around the globe, with top bankers deserting the firm in droves due to disagreements with the strategy of CEO Phil Purcell. But those close to Trainor say this is not the case and that he is simply taking advantage of a unique opportunity that presented itself.

At Morgan Stanley, he would only have been able to go higher if current investment banking head Mike Berchtold were to leave. And there are no suggestions this is happening.

Indeed, rival banks have often expressed envy at the way that Morgan Stanley's Asian operations have been able to engender loyalty and longevity from a core group of bankers. While other investment banks have seen senior international bankers come and go from the region, the Berchtold frat pack has been a constant - using its longstanding knowledge of the region to find the most lucrative pieces of business and develop deep client relationships that yield repeat business.

Trainor is said likely to implement a similar strategy at Merrill and will avoid low fee paying commodity business in favour of a more focused service. In doing so he will be able to help build on what Chunilal has already put in place over the past year, when the bank has won some key banking mandates and used its vaunted distribution power to good effect in the deals it has completed.

Canadian born Trainor leaves Morgan Stanley after 11 years with the firm. He came to Asia in 1994 as an associate in the investment banking division, helping the then Chairman Jack Wadsworth establish the bank's joint-venture with CICC. Prior to Morgan Stanley, he was based in Australia at Credit Suisse First Boston.

No head hunters are understood to have been involved in the deal. Morgan Stanley insiders confirm that Trainor has left the firm, but say it is a bit early to announce who his replacement will be.