Two more Morgan Stanley heads are, well, heading to hedge funds, though the company has declined to speculate whether reported future cost-cutting measures were the motivation, according to Financial News. As reported earlier, Davide Serra, head of European banking research, is leaving to launch his own hedge fund, which the Financial Times says is being backed by the notorious bourse-basher The Children's Investment Fund Management as partner, and his old company as his new client. Serra told the FT that the change is "a natural evolution," comparing his move to a retiring football star, saying, "You stop playing and start coaching."

Also leaving is Stefano Russo, director in London and investment management co-head of sales, who is moving over to Renaissance Technologies in May to help market the firm's mega US$100 billion hedge fund. And Ben Funnell, co-head of European equity strategy, plans to go to GLG Partners.

Morgan Stanley has said that rumored projected cuts of 20% in European research and a heft halving of costs in the U.S. are "exaggerated."