GLOBAL – Morgan Stanley says Mitchell Merin is to retire as president and chief operating officer of its investment management arm.

The 52-year-old’s departure follows declining profits at Morgan Stanley Investment Management and the arrival of new group chief executive John Mack.

In June, the bank said MSIM’s second-quarter pre-tax income fell 16% to $175m, while revenues slipped 7% to $642m. But a UK-based spokesman said Merin had overseen an increase in profits.

Merin came into the firm via the Dean Witter Discover merger under former CEO Philip Purcell. At the time of the merger, Merin was DWD’s chief administrative officer. He took over at MSIM in 1998.

Real estate head Owen Thomas, 44, will serve as acting president of MSIM while a permanent replacement is found.

“As acting president, Mr. Thomas will focus on working with the senior management team on day-to-day management of the business and identifying the right strategy and long-term leadership for MSIM,” the bank said.

Investment chief Joseph McAlinden will be responsible for MSIM's investment process and strategy.

Mack – brought in after the shareholder revolt which ousted Purcell – said: “Investment management is a key business for Morgan Stanley, one that we are deeply committed to investing in and growing.

President Zoe Cruz added: “The firm is strongly committed to building our investment management business and realizing its promising growth opportunities.”