Morgan Stanley is "open for business" in seeking out asset managers to acquire in areas the company thinks it could strengthen its platform, Chairman and CEO James Gorman said.
Gorman referred to the company's pending purchase of Mesa West Capital LLC as an example of the type of transactions it is seeking. Morgan Stanley pursued another asset manager for several quarters until the asking price became too high, he added during a conference call to discuss third-quarter earnings.
"There are a bunch of areas across the asset management platform we could continue to build out," Gorman said.
The company considered fixed income and could look to add to a narrow but productive long-only active management business. There are also geographic areas Morgan Stanley could look at to fill out its business, Gorman said. The company is looking for inorganic growth opportunities that can build out parts of its platform that make sense, not necessarily big and splashy deals, the CEO added.
The investment bank is also looking for clarity in the regulatory environment, and depending on how it settles, it could use excess capital to buy back shares or for more acquisitions, Gorman said.
Morgan Stanley continues to see strong business and client demand for lending-based wealth management products, said CFO Jonathan Pruzan.
"We're continually designing products we think fit within the footprint," Pruzan said. Research shows that its market penetration rates are relatively low, and the company thinks there continues to be room to grow in the small business and mortgage loan sectors, Pruzan said. The company's platform has seen consistent loan growth during the last couple of years, he added.