Morgan Stanley at Barclays Conference: Strategic Growth and Optimism

Morgan Stanley (NYSE:MS) took the stage on Wednesday, 10 September 2025, at the Barclays 23rd Annual Global Financial Services Conference. Co-President Dan Simkowitz provided a strategic overview, highlighting a positive market environment with improvements in capital markets and M&A activity. While expressing optimism about regulatory changes and pro-growth policies, Simkowitz also noted the challenges posed by a significant backlog in strategic activity.

Key Takeaways

• Morgan Stanley is leveraging its global presence and integrated business model to capitalize on market trends.
• The firm has experienced significant growth in its Institutional Securities Group, Wealth Management, and Investment Management divisions.
• A focus on capital deployment and strategic acquisitions aligns with Morgan Stanley’s business strategy.
• The regulatory environment is viewed favorably, with an emphasis on common-sense capital regulation.
• Private markets present a compelling opportunity, driven by increased client allocations and the rise of private credit.

Financial Results

• M&A and IPOs: Activity has improved significantly compared to earlier periods, with a large backlog still existing.
• Corporate Cash: Corporations hold $7 trillion in cash on their balance sheets.
• Private Equity: There is approximately $4 to $5 trillion in private equity dry powder, with 1,500 U.S. companies valued at over $1 billion.
• Bank Growth: Loans have grown from $115 billion to $250 billion, and deposits from $190 billion to nearly $400 billion over six to seven years.
• Wealth Management Growth: Expanded from 2.5 million to 20 million households, with $1.6 trillion in new assets and a 99% client retention rate.
• Investment Management Growth: Assets have increased from $400 billion in 2018 to $1.7 trillion, with a substantial rise in private markets and alternatives.

Operational Updates

• ISG: Focused on global client relationships and gaining market share by integrating the firm’s offerings.
• Bank: Enhancing funding and growth by moving eligible ISG assets into the bank model and leveraging ETRADE’s digital infrastructure.
• Wealth Management: Positioned as a leading destination for financial advisors with strong client acquisition and retention.
• Investment Management: Parametric’s model is gaining validation, while the credit business is expanding significantly.

Future Outlook

• Capital Deployment: Plans to increase capital deployment, supporting M&A and investments in data centers, AI, and energy transitions.
• M&A Strategy: Focus on acquisitions that extend products or client bases in wealth and asset management.
• Private Markets: Innovation continues with products like PMAX, anticipating $35 trillion in credit movement over the next five years.
• Integrated Firm: Emphasis on unifying firm components to better serve asset managers, corporates, and affluent individuals.

Conclusion

For a detailed understanding, readers are encouraged to refer to the full transcript of the conference call.

Full transcript - Barclays 23rd Annual Global Financial Services Conference:

Jason, Host: Great. Welcome up next. Very pleased to have Morgan Stanley. You can put up the first question as we introduce our speaker, but very pleased to welcome back Dan Simkowitz. I think this is your third consecutive year, but for those that don’t know, Dan’s Co-President of Morgan Stanley, responsible for the Institutional Securities Group, serves on the firm’s operating, management, and risk committees, as well as the Morgan Stanley MUFG steering committee. Before we jump in, Leslie asked me nicely to do this. This discussion may include forward-looking statements which reflect Morgan Stanley management’s current estimates and are subject to risks and uncertainties that may cause actual results to differ materially. Morgan Stanley does not undertake to update the forward-looking statements. This discussion today is copyrighted by Morgan Stanley and may not be duplicated or reproduced without their consent and is not an offer to buy any securities. Great.

With that, Dan, welcome back.

Dan Simkowitz, Co-President, Morgan Stanley: Jason, it’s great to be here. You and your partners, including Venkat, put on a great event. We really like coming each year, and it’s a great place to bring the industry together, right time. I really appreciate being here.

Jason, Host: Thank you, Dan. Appreciate that. Dan, maybe the best place to start is just the overall environment. It certainly feels a lot better. You know, many suggesting we’re finally kind of seeing green shoots grow. It’s maybe taking a little bit of a while. Just, you know, do you agree with that? How does this current environment feel to you?

Dan Simkowitz, Co-President, Morgan Stanley: Yeah, I think it’s much better. It’s much better across the board from our perspective. If you look maybe narrowly, but it’s really, really important from a capital markets and M&A perspective, it is dramatically improved. Not just versus the April, May, maybe tariff volatility, but versus any period we’ve seen since the post-COVID inflation move. I think what we’re seeing through the summer, you see it in equity beta, you see it in credit spreads. Policy volatility is actually narrowing. It doesn’t always feel that way, but it is narrowing. I think the equity markets are reflecting that.

Both the people in this room, you know, asset managers, asset allocators, corporates have sort of had to get through, I would argue, the early tough medicine, some of which could be long-term good medicine, around the economy, tariffs, the cost cutting or the growth inhibiting part of DOGE, not maybe the deficit reducing part of DOGE, immigration. Now, you know, in front of us, our whole series of pro-growth policies around deregulation, the impact of the tax cuts, especially on the corporate sector, private and public partnerships. That’s in Fed. If you just look at the data this morning, the market is telling us six Fed cuts between now and the end of 2026. At the same time, the market or the consensus is not talking about recession.

That is a confidence building backdrop as you think about people who have to make decisions on strategy and large, let’s say, illiquid capital investments. At the same time, the last three years, M&A and IPOs, but I’ll almost group IPOs as a part of the M&A and strategic dialogue, way off the trend line versus GDP growth. You’ve had three years where it’s just way, way off. There is a huge backlog around strategic activity that’s out there. As you know, we’ve talked about this in the past. When I ran strategy in Emsim, we had a pretty good run on M&A. I think we bought $20 to $25 billion at companies. I think they’re all working out incredibly well. We’ll talk about that. We looked at over 100. What I will tell you is you look at 100, each one begets a discussion about something else.

That could be at the corporate development team, that could be at the C-suite, that could be at the board, but you don’t just look at something and then reject it. I think we ended up doing five or six deals, not just the big ones. Flow begets flow in the strategic element. That is happening across all of our clients in the corporate world, all around the world, as well as our private equity clients. The other element is, there’s a lot of change going on. Sometimes it’s scary, but other times you have to react to it. The industrial policy in the United States is being sort of restructured. That has impact on supply chains and where you want to put your assets if you’re a multinational company. AI is generationally changing.

If you’re in the U.S., you’ve got energy independence, and if you’re in Europe and other places, you’ve got energy transition, all driving boardrooms to now react into that environment. The flow begets flow. The other place where flow is coming is private equity is just starting to monetize. They were skewed to the buy side this summer, and I’ll talk about that in a second, but they are monetizing. I think that’s a function of both LP pressure, which people have talked about. The LPs want some of that capital back. They want the model of PE to be reaffirmed. Also, there’s some compensation element. You don’t get paid in private equity until the assets get sold or really the entire fund gets monetized. There are some junior partners who want to get the compensation going. There’s private equity flow.

We estimate that there’s 1,500, I got to get the numbers right, 1,500 private equity-owned companies just in the United States worth at least $1 billion, and many are worth much, much more. So there is flow coming. The other flow element is regulatory, right? We advised Wiz when they got bought by Google. We closed the Discover transaction, where we were an advisor, and we were the advisor to Union Pacific. We’re going to go from four railroads to three railroads. All of that creates a flow. Then there’s fuel. You and I have talked about this. I’ve been waiting for it. As you said, not just shoots, but the growing of shoots, but the credit market has been really stable and really deep throughout. There is a connection between the IPO market and the M&A market.

The IPO market has recovered in sort of late May, June, and has continued through this morning with a big deal that we announced, pricing last night for Klarna, has been really, really strong. What that does in an M&A context is it creates another alternative that sellers can use. It lowers the execution volatility and execution risk, which then gets buyers and sellers more willing to engage. I think that is why we’re enthused. It’s a narrow topic maybe around M&A and the IPO market, but for a firm like Morgan Stanley, it cascades through our entire business. The M&A revenue is obviously impacted, the advisory revenue on a lag because you’ve got to wait for the deals to close. IPOs, you see the closings. In our entire credit infrastructure, we’re financing all those transactions. People want to risk manage rates, FX, sometimes commodities in and around those transactions.

In wealth, it creates a lot of M&A money in motion. We’re the number one wealth management firm in the U.S., so you get things going on. Even in Emsim, you don’t get carry. I think that gives us some real encouragement around the market backdrop. The other thing I would say around that backlog that is built and what we’re seeing, the backlog being not just the corporate backlog I mentioned, but probably $4 to $5 trillion of PE dry powder, that doesn’t all get done in late 2025 and 2026. We’re going to have bumps along the road. I’m confident of that. To get through that backlog and get back on trend line, this is a multi-year, I think, recovery. We’re in the early innings, to use a baseball phrase.

Jason, Host: I guess, you know, solid near-term outlook. You talked about the early innings. Let me just expand on that in terms of, you know, your view of the longer-term wallet opportunity as well.

Dan Simkowitz, Co-President, Morgan Stanley: Yeah, I think we get a lot of questions around the markets business. You know, this is in ISG. I think you’re asking me specifically on ISG and the securities business. Just, you know, back on that M&A, there’s $7 trillion of cash back around health. You know, you don’t do anything for three or four years. You get conservative, and yet GDP continues, productivity continues. There’s $7 trillion of cash sitting on corporate balance sheets. There’s a lot of fuel in that. In terms of markets wallet, we just go, sort of line by line. Long-term debt, long-term government debt is still a growth business. You’ve got, you know, we got defense spending and stimulus in Europe. The Japanese bond market was not a place anybody focused on for 20 years. It’s now a place. You got a real rate curve in Japan.

Macro still has some growth, underlying growth and volume behind it. Risk management against that macro is still a growth business. In a world of financial repression, we didn’t have a Japanese bond market to go deal with. We didn’t have to risk manage because it was all being repressed. Now, if you’re a corporate or a private equity firm, as an example, you’re making investments, you’re worried about your rate exposure given what’s gone on in the last few years, and you’re going to go hedge it. You come hedge it with us, or our peers in that context. That creates growth in the business.

I think we’ll talk a bit more, but we are very bullish as a long-term, really scaled secular trend is credit is moving into the asset management space in real size and with more activity and more active management, and more, sort of complexity to it. That is really good for us. In equities, we continue to see just really good equitization trends around the world. Japan was dormant back to that point. The rate curve developed in Japan, but then the equity market comes to, there’s real IPO volume, there’s activism, there’s hedge funds coming there for the first time. You have a lot of activity in Japan. You’ve seen the press around how much activity there is in India. We have an enormous rate of change in the interest in greater China, the Middle East, Brazil. There’s a lot of equitization around the world.

At the same time, this is one of my new phrases, maybe a word I used with you. There’s derivativization. That’s not a real word, but it’s a Dan word all around the world, including, you know, single-day options here. People want to change their risk and return profiles. That could be the managers in this room who don’t have a pure Delta One view on Morgan Stanley, hopefully positive. They’ll manage that in a way because you can’t just afford to be lazy in your expression, in your views. Certainly in the wealth management platforms, people want, generally speaking, not pure Delta One. They want risk management, downside protection, or a little bit of leverage on the upside. All of that helps the equity business create elements.

The final thing I would say as it relates to markets is all of this is coming in a world that I would say is more complex globally rather than less. In a world where I think everybody in this room thinks about what’s going on around the world more than they ever have before, deglobalization is not showing up yet in our asset management clients, our private market clients, and our corporate clients. They have to worry about it more than they ever have before. In that context, they have to come and assess that with Morgan Stanley. That allows us to have just less competitors. The number of competitors who can build, Ted used to talk about nine boxes. Think about nine boxes at the whole firm level.

We are in the credit markets, we’re in the equity markets, we’re in the macro markets, we’re in the corporate control markets. We’re doing that across cash and derivatives and financing. We’re doing it everywhere around the world at a time when, hopefully, our asset management and corporate partners want to have less partners around the world, less advisors. What we can do is really optimize. I’ll just give you two examples. They’re both from conferences. Morgan Stanley is doing the healthcare conference. You guys are doing this conference as an example. If we do a study for a big multinational around the Chinese market, they may not act in China, but they know we have a world-class M&A franchise, and they’ll hire us to sell a U.S. division. At the same time, we’ve got an asset manager. We’re getting them corporate access, our version of this.

They’re going to pay us back potentially because we’re the number one prime brokerage firm in Asia with complex Asian prime brokerage, which is higher margin. The ability to create that kind of ecosystem is really expensive. We’re actually, you know, we lost competitors. We lost Credit Suisse in Equities. We lost a few others. In that context, we like the market share dynamic in the markets business. I’ve already sort of talked about the, I would say, the cyclical but multi-year cyclical move in the banking businesses.

Jason, Host: I guess we could just stick with ISG for a second. You kind of touched on market share. We’ve seen, you know, Morgan Stanley this year kind of increase its share versus peers and versus the last couple of years. There’s maybe anything else you would add in terms of just how you’re doing this.

Dan Simkowitz, Co-President, Morgan Stanley: I think there’s a relentless, I think being global is a, being global, being focused, right? We’re not distracted. I’m sure, along the way as it relates to corporate strategy. Ted and Andy and I, building off of James’s focus on this, we just help clients allocate capital. When business strategy is that defined and that distinct, and that client could be a wealth management client, that could be hopefully a whole bunch of the asset managers in the room, asset owners, and corporates. In that context, if you get really focused and you’re not distracted and you’re not wandering strategically, we think you can gain share. If you do it with all those boxes I mentioned and they’re linked together, we’ll talk a bit more about this integrated firm, you can gain share.

We’re just relentless right now on bringing the entirety of the firm, the value we bring, and where can we gain share. The question we’re often asked, and I’ll deal with later maybe, is you’re gaining share, and you’re really big, but do you need to, do you need to go somewhere else? We think the growth opportunity still in the firm in ISG around market share, but certainly around wealth, around just this TAM is still really attractive. We don’t need to wander. That keeps us quite focused. Again, being global in a world that’s more globally complex, and we’re investing and, we’re big enough, $250 billion market cap or so, circa $60 billion in revenue, that we’re investing in the underliers. We’re investing in technology in the equity business. We’re investing in credit financing. We’re investing in you sort of regular way, U.S.

investment bankers here who know sectors because the private equity industry has become much more sector-oriented rather than generals. These are sort of bread and butter core investments that help us drive share because the brand and the client need is so high. I hope I just found out I won a piece of business. We won a piece of business. We’re on row. Our client base generally, and this is a great thing to inherit, that I came back to ISG. Clients want to do more business with us just across the board. Corporates, asset managers, public and private, they want more from Morgan Stanley into an environment that is turning.

Jason, Host: Interesting. I guess we’ve heard, we’ve also heard that Morgan Stanley is looking to leverage its bank more. Maybe just help us understand what the firm is doing and how that fits into the overall strategic plan.

Dan Simkowitz, Co-President, Morgan Stanley: Yeah, the bank is critically important and really has been for maybe the last six or seven years. Just to put it in context, we had regions and I think maybe at Fifth Third before I got all of them here, but the numbers are important. It’s both sides of the balance sheet, and then I’ll give you a context of the strategy. Loans have gone from about $115 billion to $250 billion in the last six or seven years. On the deposit side, we’ve gone from $190 billion to almost $400 billion in deposits in the last six or seven years. Both sides of that balance sheet in the bank have been driven entirely by the client franchise and client value. Our clients want to both leave their money with us in good hands on the deposit side and lend back to that client base.

We’re not wandering to either go grab either side of that trade. There’s no mission creep in the bank. What’s new, and this is just a function of how we became a bank and some of the intervening years, is we have dramatically less of our ISG asset base versus our peers on the bank. What you’ll see over the next four years is if there are eligible assets, we’re going to move more and more of that into the bank funding model. That has a whole bunch of real-world positive impacts. It’s got a funding impact, it allows us to do more growth into those client bases, and it makes us both more client-friendly because we look like our peers. There’s client simplicity to that, but it’s also regulator simplicity because we look like all the other firms that they regulate.

I think that is a play around just the ISG element. The other part of this is we’ll talk a little bit more about lending. Everyday banking for wealth management, we’ve got the client, we’ve got the deposit, we’ve got the loan. Can we put more to make it even more sticky? The ETRADE digital bank infrastructure helps us do that. I can’t believe I made it this far and I haven’t mentioned workplace, but workplace delivers a vehicle where we can broaden our bank scope. We’ve got a really great team managing in a very integrated way. Ted and Andy and I, Sharon, and our Chief Risk Officer, we spend an enormous amount of time around this growth area as the infrastructure to help us grow in many ways.

Jason, Host: I guess maybe that’s a good segue into wealth management. Love to get an update on what’s going on there. Maybe just start with giving us a sense of how you’re seeing retail clients behave. Love to hear about, you know, kind of what you’re focused on, the growth path of business, and just maybe how do you kind of maintain the moat around the business. Wealth management is certainly something we’re hearing a lot of other providers talk about.

Dan Simkowitz, Co-President, Morgan Stanley: I think the client base has been patient, resilient, despite some of the volatility and other elements. You’re seeing the numbers, you know, the business continues to grow pretty dramatically, which is a function of clients wanting advice and staying engaged in their investment portfolios and still very, very much engaged in the market. I think it’s worth, I still am surprised, hopefully not, definitely not with Jason and hopefully not with this room, that people haven’t been keeping up with what Morgan Stanley wealth management is. If I had been at this conference six or seven years ago, I’d be talking about 2.5 million households and fighting it out with wirehouses for people, for advisors who are not young and clients who are not young. We’re at 20 million households today, the 2.5 to 20 million households as an example.

$1.6 trillion in assets just over the last six quarters. We’re getting those households much earlier, much younger, ahead of their wealth accumulation, which is really important. As their lives become more complex, they become advisory clients. I think Ted and Leslie put up a slide at the beginning of the year, 99% retention on advisory clients. If you do that math, we’re in the very, very early days of monetizing that move from 2.5 to 20 million. Once we monetize and once their lives become complex, they need advice and they become advice clients. They are advice clients for a very long time. We’re going to have that much earlier in the element. That whole formula means we are the destination of choice for financial advisors. This is our best attrition year ever. People were writing off this industry or our model a while ago.

Our model is not like anybody else’s model. We are generating leads. In that world where we’ve gone from 2.5 million to 20 million, there’s an enormous lead potential if you’re a financial advisor. These are leads that could become clients for 30, 40, 50 years, you know, outstripping the lifespan of actually the advisor. We are a leads machine in that context. We’re also, we’re not a recruiting machine, but our ability to go to the high end and recruit this year is one of our best years ever. I think, as you know, when we hire, our assets coming in are dramatically higher than the assets we lose when we lose advisors. There is a delta in the asset accumulation. That is just a function of we can help advisors grow. We can help them grow in terms of new clients around leads and lead generation.

That is, as Andy and Jed say, you know, we’re a model of one. We can get it through the workplace, we can get it through digital on ETRADE, and then we can be part of the advisory model. That is a really powerful element. I think it’s also somewhat underappreciated that the service that we provide, that 99% retention has to be earned. The service we can provide off the platform, we’re the number one private market alts firm in wealth in the country by a big margin. It’s innovative. Most of that stuff we’re showing, more than half is exclusive or first look product. The integration of Parametric has been a huge home run around delivering real value in the portfolio into the wealth management client. That’s going to grow over time.

Lending, as I mentioned, off the bank, and all of that is tech enabled, which is really powerful.

Jason, Host: I guess maybe shifting gears to investment management, business near and dear to you. We’ve had, we’ve seen pretty strong net flows this year. Maybe talk to kind of what’s driving this strength and what differentiates your franchise.

Dan Simkowitz, Co-President, Morgan Stanley: Yeah, again, you guys have so many companies to cover. You have to think through it. I know it and Jason knows it more, but just to put this in context, this was a $400 billion franchise in 2018, dominated by mutual funds, and sorry, some of the people in the room, mutual funds, active equity, developed market, $400 billion. Today it’s more than quadrupled. It’s $1.7 trillion, dramatically more global in its distribution and dramatically more diversified in its asset classes. $1.7 trillion, you’ve got a quarter trillion dollar private markets and alternatives platform. As you know, and I’ve seen, these are really hard to build. They’re really potentially expensive to buy. We’ve built over a couple of decades this really powerful private markets and alternatives platform at a quarter trillion dollars. Embedded in that are two or three market leading franchises.

We’re the largest open-ended core real estate fund in the country. We are the dominant player in the private funds that help people diversify away from their concentrated positions. Both of those are really big funds and really big market leaders. Alternatives is one. Parametric just keeps on delivering value to Emsym and the entirety of Morgan Stanley. It’s now almost $600 billion. It’s, I think, two or three times bigger than its next nearest competitor. You’ve seen a real validation this year around the product, which is historically, it’s been a beta product that gives you customized indexes. We are now seeing external asset managers, the Capital Group, Lazard, there’s, I think there’s almost a dozen, come to us and say, we’re not going to go build this ourselves. We’re going to wrap our active portfolios in an SMA wrapper. That’s tax efficient, and that SMA wrapper is Parametric.

When the industry, the asset management industry, the people in this room are not building it themselves and they’re coming to Morgan Stanley Investment Management to wrap that and take that, that’s a validation of the product, the validation of a little bit of our open architecture ethos all the way through the firm. It’s also a validation of the fact that the strategy is tight and there’s real integrated firm going on because I can tell you all those relationships from those asset managers that are coming into another asset management company are driven by the relationships we have in ISG, the relationships we have in wealth. That’s a pretty powerful growth driver. Parametric has been a really fantastic growth element.

The other one, we just have a secular view, as I’ve mentioned already, around credit, and we’ve needed to get that business bigger and get the overall EMSIM more diversified. The credit business at EMSIM has gone from $60 billion six or seven years ago to over $350 billion. That is a nice sort of balance to that old, extremely profitable, great performance model, but was pretty narrow in its construct. We like the dynamics, and to get over the last several quarters into very healthy long-term flows has been really encouraging.

Jason, Host: Maybe we’ll come back to some of that, but I just wanted to shift gears a second to capital. You know, you and the industry are in a strong capital position. The environment for capital regulation is getting easier. Your SEP came down. It maybe comes down further. Maybe just talk about how you think about deploying that excess capital, and it’s not lost on me that you’ve mentioned ETRADE, Eaton Vance, and/or their capabilities multiple times so far this morning.

Dan Simkowitz, Co-President, Morgan Stanley: Yeah, I think at the core of this is we’re just very encouraged by the regulatory backdrop. Vice Chair Bowman is bringing to the dialogue and the policy a common sense approach to capital that as we see it is rational. It’s highly professional. She is hiring really very, very talented, thoughtful people to be part of her leadership and her staff to go over. It’s detail-oriented, and as it relates to capital, it’s holistic. It’s holistic across SLR, SEB, GSIB, maybe even Basel. The net of that is it’s going to create a greater level of certainty as we plan. On the supervision side, which I don’t think you can discount, there’s just a real-world, real-life intense focus on what really is safety and soundness and stability issues.

Both on the income statement as well as the balance sheet, we’re just going to be able to run safer and more efficient, and then play a bigger, bigger role in the growth of the economy. As part of that, you come back, it’s going to allow us to continue to deploy capital in greater amounts of both capital levels, income statement impact, and then a remote move of our own internally generated buffers given some of the vagaries of the past, invest in the business. I’ve already mentioned ultra high net worth, high net worth lending in wealth management, supporting corporates in the context of an M&A wave, but also a CapEx wave in data centers and AI and energy transition, so around the corporate client base. What you’ll see is continued investments and growth in our financing businesses in the markets business.

Financing of credit asset managers in fixed income and financing of a prime brokerage, all enabled by a more rational, common sense, and holistic capital model. That’s coming. This obviously is in the context of the dividend and dividend growth being paramount. We have a durable business that is getting more durable and more scaled, and we can, we’re really committed to not just the dividend level, but the dividend growth. On acquisitions, we love what we have. We love the TAM that we’re operating in. I didn’t say it earlier. The number one growth opportunity, because I used, when I ran strategy and I got and ran Emsym, I got to speak to everybody, other asset managers, wealth platforms, other financial services companies. The number one growth opportunity in financial services, I think, that’s scaled, is Morgan Stanley Wealth Management in the U.S. today.

We’re already number one, but the growth, the scaled growth from here to there as we monetize that workplace funnel and have all those capabilities. We love what we have. In essence, M&A really fits into business strategy, and it fits in in a context where ISG, we have relatively good and solid market share and the market’s sort of mature. If there’s product extensions or client extensions in wealth and asset management, we’ll look at that. We don’t have to go anywhere because we do love what we have. What I will say is embedded in that, in those business units, we’ll continue to look at innovation engines. I think Solium, if you think about it, Solium, Parametric, ETRADE, probably three of the greatest fintech acquisitions in financial services in the last 15 years.

In the case of Solium, it’s not the biggest, so you won’t see big, big deals, but where we can see innovation that could help our individual business strategy. The business strategy is very simple, just help clients allocate capital. We love that strategy. You’ll see that as a part of the capital deployment and the strategic agenda. Strategy doesn’t drift. We really just keep it to the business.

Jason, Host: Got it. We have five, six minutes remaining. I just want to touch on kind of private markets and maybe a bit more, talk a little bit more about that and why you see that as such a compelling opportunity.

Dan Simkowitz, Co-President, Morgan Stanley: Yeah, again, it touches all parts of our business and I’ll sort of mix it with both a private market view and a view on the credit markets as well. We’re the number one allocator into the private markets in wealth management. We think we may be the largest private markets investor in the world. That includes sovereign wealth funds and asset managers. It’s a little hard to get the data, but we have $250 billion in private markets in wealth management. It extends actually also into private shares. Because of the cap table business and the partnership with Carta, we’re in the flow and our advisors like us to be in the flow and our investment bankers like us to be in flow with every private company in the ecosystem. We are in there with the Carta partnership and we’re innovating.

When I ran Emsym, it was all around ease of use. We now launched over the summer PMAX, which is a single ticket bold private market portfolio product, third party or, you know, open architecture product, and it is going. The advisors then get their entire portfolio with a single ticket. That is really, really important. We’re innovating in that business. In ISG, the largest segment, fastest growing part of the business is on the private markets manager. It’s not just PE firms, but it’s also private credit firms. There’s a lot of talk about private credit. What I think is more relevant is just think about credit. Financial repression is over. Asset owners historically had extremely low allocations to credit. Big U.S. pension funds, they followed the Swensen model. The Swensen model had zero strategic allocation of credit. Financial repression is over.

Banks are regulated or bank investors don’t want banks to lend. Asset managers are stepping into that. We see huge flows and it’s both on the public side and the private side. To a degree, at Morgan Stanley, we’re indifferent. As long as money is flowing to supply credit and it’s flowing through the asset management industry, it’s really powerful for us. Apollo and Mark Rowan in particular deserve a lot of credit. The insurance industry and how it invests its credit portfolio has been revolutionized. You have all this insurance capital that has gone from being very, very passive to very active and is being run by asset managers. All those asset managers who are embedded in this credit secular trend, they need us to help them come up with new products. We help them raise capital. We help them buy other asset managers. We originate the assets.

We finance the assets. We securitize the assets. Depending on where it sits on that public-private line, and the line is getting blurrier, we trade the assets. The ROE of that business for Morgan Stanley, that move from assets being maybe in the bank sector or maybe in the insurance sort of sleepy part of the insurance account, all moving to asset managers, big secular trend and big ROE play. We think, you know, over the next five plus years, there could be $35 trillion of credit money in motion. That gives, and the private markets are just one example of that. You’re seeing it gives us what’s happening in the insurance market and the sophistication of these asset managers is it gives our investment banking team an ability to be a solutions provider to a corporation or a private equity fund that we’ve never been before.

We are the origination partner for all these funds. They need assets. They have to come through the Morgan Stanley Investment Bank and maybe one or two others, but not a lot of others. That’s pretty attractive. We’re deploying that strategic view, as I said, in Emsym, where the credit business has gone up 6X, the private credit business has gone from $1 billion to $50 billion. Wealth management is definitely deep into that ecosystem.

Jason, Host: We’ve got a minute left, but it wouldn’t be complete without talking about integrated firm, something we spent a lot of time on last year. Just maybe quickly, how important is that to driving long-term results? How’s that coming together? Any metrics we should be looking at to monitor the progress?

Dan Simkowitz, Co-President, Morgan Stanley: I think the metric is, are we doing well as a firm? We, as I said, we love all the components that the leadership team, inclusive of James, built over the period. We love all those components. At this point, we think one of the greatest, I guess, deployments, and it’s not maybe deployment of capital, but deployment of energy, and time and technology dollars, is to bind them together. What we’re finding is there’s so much synergy around our client bases. You just think about this room. The prior speaker was a regional bank. We have a great relationship with them. We have a great relationship with every asset manager in this room. Our wealth management clients want investment banking services. There’s real linkages. Increasingly, we’re saying we love what we have, but instead of thinking about them like business units, let’s think about them as client segments.

The client segments are asset managers, asset owners, corporates, and relatively wealthy or affluent individuals. They all engage intensely with each other. As an example, in essence, I’m here, we’re here at this conference because corporates need to engage with asset managers. Right there, we’ve done two of them. I’ll give you two examples. I know I’m 30 seconds over. Workplace, just think about workplace. This is corporations that we know in investment banking. We’re now running part of their sort of talent management program. We got in there with a product, but we’re not stopping with the product. We’re going to go and do financial wellness. Our investment banker has a conversation with the CEO and says, I’d like to do financial wellness, not just with your top 100 executives, but your rank and file, the next 1,000.

We’re the only firm who can handle in scale the ability to service that CEO all the way from their CFO to their software engineer. We can go do that at Morgan Stanley. That creates the funnel and that gets to the 20 million households. That’s linkage. Asset managers, hopefully a whole bunch of this room, we can be their holistic partner. The more we’re doing it, the more we’re seeing. A holistic partner and help them create a new product, raise money in that product, trade the product, finance the product. Now we can also go back and help their employees. Think about private equity. The portfolio companies are great workplace clients. The partners are great high net worth clients. Putting that all together has been a real passion of Ted, Andy, and I.

We put one of our best people, Mandel Crawley, to run it because what we had as ingredients is we had a culture and we had real clarity of strategy, but we did feel like we had to put a little organization around it. I think you’ll see it in the results. Right.

Jason, Host: On that note, please join me and Dan for our time today.

Dan Simkowitz, Co-President, Morgan Stanley: Thank you.

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