By Tatiana Bautzer
NEW YORK (Reuters) – Morgan Stanley (NYSE:) is looking to add early-stage employees as asset management clients as U.S. investment banks prepare for a resurgence in initial public offerings.
Last week, the bank signed an agreement with Carta, a shareholder management company for startups backed by private equity and venture capital firms. Carta estimates that about 2,000 of its 40,000 clients are headed for an IPO.
“Participants within these companies will need not only stock administration, but also all the advice, guidance and financial planning that comes with a significant liquidity event,” Jed Finn, head of Morgan Stanley Wealth Management, said in a statement.
For example, the bank would offer founders and employees pension and investment advice.
Bankers were cautiously optimistic about a revival of IPOs in the third quarter. After this month’s election, markets expect President-elect Donald Trump’s administration to ease regulations and reduce restrictions on deals, boosting capital markets activity.
“Wealth clients who come from workplace relationships, either during IPOs or when the company is already listed, tend to be younger than the average wealth client and have around 70% of their assets in shares of the company they work for,” Finn told the phone. interview.
Morgan Stanley has about 19 million wealth clients, and most of the 1.3 million new clients it added last year came from workplace agreements.
The bank bought Solium Capital, an equity management company, for $1.1 billion in 2019 and rebranded it as Shareworks.
While capital markets have been sluggish, upcoming IPOs could include large companies that have gone through multiple fundraising rounds with a larger workforce, Finn added.
