GLOBAL - US banking giant Morgan Stanley says it plans to cut 9% of jobs in its loss-making asset management division.
"Our performance in asset management has been mixed of late and we continue to focus on restructuring that business," said chief financial officer Colm Kelleher said at a presentation posted on the company's website.
"We're improving profitability through closing and consolidating non-performing, sub-scale and overlapping products. We're in the process of reducing our asset management [headcount] by 9% globally."
Asset management posted a pre-tax loss of $592m in the first nine months of 2008 - against a profit of $1.2bn a year earlier.
According to Kelleher's presentation, the firm's asset management arm employs more than 800 "investment professionals" out of a total bank payroll of just over 56,000. Asset management accounted for 7% of Morgan Stanley's $22.9bn in revenues in first nine months of 2008.
The firm had $570bn in assets under management or supervision as at the end of August this year.
"The firm is resizing its cost base and headcount to match current opportunities in the marketplace, while reallocating resources to those businesses that provide an attractive risk adjusted return on capital," said a London-based spokesman.
Meanwhile, Morgan Stanley Investment Management in the US has published a 40-page survey of public pension funds' chief investment officers.
The survey, conducted between July and August 2008, interviewed 51 CIOs with portfolios larger than $1bn, found that schemes are "increasingly relying on external providers for investment advice" and that 74% use derivatives in their portfolios.
Another finding was that private equity, real estate, hedge funds and non-US equities are among the top asset classes for funds to increase their asset allocations over the next two years.