Non-bank prime brokers were one of the victims of counterparty risk jitters after the Lehman splashdown in late-2008. Now, they all carry implicit sovereign guarantees and the fight for business is back on.
Having scaled back its staff numbers in 2008, Morgan Stanley is now bouncing back and is setting its sights on re-establishing its duopoly status alongside Goldman Sachs.
To this end it has hired Marcella Lui as a vice-president and as a capital introductions specialist in its prime brokerage unit in Hong Kong. She will start on June 15 and will report to Lorraine Wong, head of business and capital consulting in Asia. The capital introductions team has also recently been bolstered by the addition of Keiko Kawauchi in Tokyo.
Lui joins Morgan Stanley from Sail Advisors where she was responsible for marketing, investor relations and business development for the fund of funds product in Asia. Previously, she held a number of positions at Merrill Lynch.
"Marcella's hire is one of a number of important steps as we continue to invest in our capital consulting and wider prime brokerage platform," says Richard Webb, who now co-heads Morgan Stanley's prime broking in Asia.
Morgan Stanley defines "capital consulting" as a more tip-top service than the erstwhile bog-standard cap intros job. It apparently goes beyond the old rolodex-based function of matching investors and funds and helps funds tee themselves up to satisfy the higher demands of investors in fund infrastructure and risk management.
Morgan Stanley is not holding its usual debutantes ball in Shanghai this year, but hopes to have an event for investors and hedge funds in Hong Kong later this year
With mandate-splits becoming a feature of service provider appointments, it is not easy to work out nowadays the pecking order of who are the royals and who are the rags. According to AsiaHedge, Morgan Stanley is now in second place in Asia, looking after $21 billion of assets, behind Goldman Sachs with $24.6 billion.
In an upcoming edition of AsianInvestor magazine, we will be looking at prime broking in Asia, how it has changed in the last year, who the star prime brokers are and in which firms they work, and whether the corporate duopoly really is back.