Morgan Stanley’s IPO after-party: a wealth management bonanza

{"text":[[{"start":8.72,"text":"Morgan Stanley is betting a wave of upcoming IPOs will deliver windfalls worth tens of billions of dollars in client assets for its wealth management division, repeating the bonanza from SpaceX’s listing."}],[{"start":21.34,"text":"In the second quarter, the Wall Street bank’s money management business took in more than $74bn in net new assets from IPOs, including SpaceX, through its work managing employee equity plans for companies it has underwritten. This was in addition to the $100mn in fees it received for its investment bank’s role in underwriting the SpaceX IPO."}],[{"start":42.56,"text":"The Wall Street bank generated $8.9bn in wealth management net revenue in the second quarter, a record, with the influx of new assets from IPOs expected to generate tens of millions in recurring fees if they remain with the bank. Scott Whatley, head of Morgan Stanley at Work, which encompasses the stock plan business, told the FT that this performance was “not a one-time hit”."}],[{"start":64.8,"text":"“We’ve got dozens of IPOs lined up for our corporate clients,” Whatley said. “If capital markets continue to, knock on wood, stay open, we’ll continue to deliver results like that.”"}],[{"start":null,"text":"

"}],[{"start":75.68,"text":"The comments underscore the multiple ways in which Wall Street firms are poised to benefit from the boom in AI investment, which is stimulating financial markets and also minting huge fortunes for employees and investors of these companies."}],[{"start":88.36,"text":"SpaceX was the largest IPO of all time, achieving a valuation of more than $1tn. AI companies OpenAI and Anthropic are also exploring IPOs."}],[{"start":98.68,"text":"Morgan Stanley has worked to expand its wealth and investment management business since the 2008 financial crisis as a way to make the company less reliant on volatile investment banking and trading. The bank recently passed $10tn in client assets, the bulk of which sits in its wealth management division."}],[{"start":116.48,"text":"In the second quarter, Morgan Stanley reported total net new assets of $148bn, with over half coming from IPOs including SpaceX and AI chipmaker Cerebras Systems. The metric is closely tracked by investors as a gauge of the business’s growth trajectory."}],[{"start":null,"text":""}],[{"start":132.04,"text":"Morgan Stanley administers employee equity plans, which come through the Solium business that Morgan Stanley acquired in 2019. It helps employees with things like stock vesting schedules, tax planning and financial advice. For private companies, employees can receive equity ownership but have a harder time monetising their stock until the business goes public or is sold."}],[{"start":155.28,"text":"Whatley said “liquidity events of the IPOs are a big driver” for Morgan Stanley and the bank was still in the early stages of seeing its benefits."}],[{"start":164.32,"text":"The IPO market boomed in 2020 and 2021 but became sluggish in 2022 despite rising equity markets, as higher interest rates stunted the proposed valuations that many private companies could achieve in the public market. From 2020 to 2025, Morgan Stanley’s workplace business generated about $400bn in net inflows, according to Whatley."}],[{"start":188.72,"text":"“There were periods there that there were not capital market activities going on at all. And yet we were still executing at a really high level,” Whatley said."}],[{"start":201.88,"text":""}]],"url":"https://audio.ftcn.net.cn/album/a_1785744090_8470.mp3"}