GLOBAL – Morgan Stanley says it is looking for new leadership in asset management amid a 25% fall in quarterly profits at the division.

The New York-based bank said in its second-quarter earnings report today that it has taken a series of steps to improve performance.

Among these were the launch of the search for new leadership in asset management. Other changes involved new personnel, the retention of the Discover business and the appointment of new directors.

The comments come after the departure earlier this month of Morgan Stanley Investment Management president and chief operating officer Mitchell Merin.

“In key business, like retail and asset management, we are bringing new leadership to help us build on their strong potential,” the bank added.

Today the firm disclosed that asset management’s pre-tax income fell 25% in the quarter to $162m from $217m a year before.

Its pre-tax margin also fell, to 24% from 31%. Net revenues slipped 2% to $679m – reflecting lower private equity revenues.

Assets under management rose 9%, or $34bn, to £428bn – which was primarily due to market appreciation.

Institutional assets under management rose $27bn to $227bn – again reflecting market appreciation. The release makes no mention of asset inflows or mandate wins.

Overall, the bank said net income fell 83% to $144m, while net revenues were up 29% at $6.9bn.

“Given the management changes and other distractions the firm has faced over the past nine months, this impressive performance is a testament to the talent and commitment of our people and the fundamental strength of our franchise.”