Morgan Stanley 2005 Annual Report Download - page 24

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22
Q10.
What kinds of acquisitions
will Morgan Stanley consider,
and how will they benefit
the firm?
Answer:
We are looking across a range of businesses for acquisitions to
accelerate our growth or strengthen our market position. For
instance, we agreed to acquire the Goldfish credit card business
in the United Kingdom, which will help us to increase the scale
of our U.K. card business in a market where size is critical.
Asset management, alternative investments, international mort-
gages and commodities are some of the other areas where we
will consider such acquisitions.
Q11.
You’ve talked about a firmwide
approach to emerging markets.
What cross-company opportu-
nities does Morgan Stanley
intend to pursue in these
markets, and where?
Answer:
Emerging markets are becoming an increasingly important part of
Morgan Stanley’s business, and we want to focus on those markets
we believe will yield the greatest returns, such as Russia, China,
India, Turkey, Brazil, South Korea, Mexico and the Middle East.
Strong regional managers for those businesses are working across
offices and functions to meet the needs of our local clients and
international investors. Our experiences in Russia and China are
useful examples of what we can do. In 2005 we led the largest
IPO both in Russia and in China, and we have played a leading
role in the large-scale privatizations and public offerings of state-
owned enterprises. This past year, we led our first local IPO ever
in Brazil. We also built on our presence in both Russia and South
Korea by acquiring bank licenses in those countries. In the com-
ing year, we plan to continue to build on our strong position in
all of these emerging markets.
MORGAN STANLEY ANSWERS YOUR QUESTIONS
Q12.
What are the advantages of
configuring your asset
management business for
growth as opposed to
profitability?
Answer:
By managing the Asset Management business to maximize margins,
we missed a number of fast-growing, profitable opportunities.
We now are pursuing a number of opportunities that will allow
us to grow and achieve even greater profitability over the long
term. For example, we plan to use our scale internationally to
build our alternative investment portfolio offerings through
a combination of organic growth and acquisitions. We also are
taking steps designed to improve our performance and stem
outflows from our proprietary funds.