But Jon Anda, a co-head of the new group, says it’s being created to address broader changes in what clients want -- such as hybrid financings that can mitigate risk in volatile markets. And layoffs, he insists, are not in the cards for now: “CFOs and treasurers don’t specialize in equity or debt. They want solutions, not products. I see this as more secular than cyclical. We think this group is going to grow, not shrink.”
Morgan isn’t alone. Dresdner Kleinwort Wasserstein merged debt and equity units earlier this year. Goldman Sachs made a similar move in Japan and has said it is considering following suit in the U.S. Anda, previously the global head of equity capital markets, will run Morgan Stanley’s group with debt counterpart Walid Chammah, who was widely rumored to be leaving for Credit Suisse First Boston earlier this year.
The new structure means that clients will have one point of contact for advice about raising capital. But it could cause friction among bankers looking to protect their turf -- not to mention their bonuses. Sector coverage will start with one senior banker from each former group but will eventually be handled by single relationship managers as bankers acquire enough expertise with various products. Any bruised egos and internecine jostling are worth the risk, says Anda. “There’s always a fear factor when you change established practices,” he notes. “We think this will help our clients, and if it helps our clients, it helps everyone here.”
