After taking over Credit Suisse, UBS becomes the world's second-largest wealth management bank. The number one just made a big announcement.
James Gorman, the long-serving head of Morgan Stanley is stepping down in 2024 at the latest, with the 64-year-old executive setting the bar very high for his successors. Speaking at its mid-year conference, the CEO said that in 14 years, reaching $20 trillion of client assets under management is achievable.
«I know people are going to call me crazy and I know it’s the end of my tenure and I get to do this kind of stuff. But if you did 5 percent [compounding] over 14 years, you end up at $20 trillion,» he told analysts according to a «Financial Times» (behind paywall) story.
Unstoppable Force
He said that Morgan Stanley's wealth division which now manages $6.3 trillion, started with much less when he took the reigns 14 years ago, and the unit is «a pretty much unstoppable force.»
Pillar of the Group
The division's quarterly revenues increased 16 percent year-on-year to $6.7 billion and attracted new money of $89.5 billion, nearly $30 billion more than analysts expected.
Morgan Stanley's goal is likely to be noted by UBS chairman Colm Kelleher, who had a long career at Morgan Stanley and wants to forge UBS and the acquired Credit Suisse into a $5 trillion bank in global wealth management giant.
UBS Analysts Tip Their Caps
Morgan Stanley serves a large volume of business, especially in the US home market, and has what it takes to become the eternal rival of UBS. Kelleher also seems obsessed with Wall Street firms having higher price/book ratios than UBS.
UBS analysts are currently tipping their hats to Morgan Stanley, with one noting that the new money flowing into Morgan Stanley was «very strong».
