Morgan Stanley Cuts Headcount at China Fund Unit

Morgan Stanley Cuts Headcount at China Fund Unit

Finews asia  Thursday, 7 March 2024 15:55 

The China onshore asset management unit of Morgan Stanley has reportedly cut staff as part of broader plans to stay defensive amid a difficult environment. 

Morgan Stanley Investment Management (IM) China has laid off about 9 percent of its staff, according to a «Reuters» report citing unnamed sources. The cuts started in December 2023 and have impacted about 15 employees. 

Previously a joint venture, the business has axed staff for the first time since buying out its local partner's 36 percent stake for about $54 million last year and rebranding the wholly-owned subsidiary in June.

AUM Decline, Losses

Since reaching a peak of 19.8 billion yuan ($2.8 billion) in June 2021, Morgan Stanley IM China has recorded a decline in assets under management every quarter resulting in a 53 percent plunge at the end of 2023, according to company disclosures. Based on the earnings results of its ex-joint venture partner Huaxin Securities, it also posted an operating loss of 48.5 million yuan in 2022 and 23.2 million yuan in the first half of 2023.

Meanwhile, Alex Zhou has been hired as the firm’s chief investment officer. Alongside the headcount reduction, the latest moves are part of initiatives to «recalibrate the business», the report added.