Morgan Stanley Launches Trust Option To Attract Hedge Fund Clients

by Phillip Morton, Investors Offshore.com

19 June 2009

Morgan Stanley on June 17 announced that it will allow hedge fund clients to transfer some of their holdings into a trust bank; Morgan Stanley Trust National Association (MSTNA), a US national chartered trust company, regulated by the Office of the Comptroller of Currency, which also regulates the US’s largest banks. Although the trust will not fall under the added insurance of the government’s Troubled Asset Rescue Programme (TARP), it is nevertheless likely to lure back investors through the offer of added security.

"Recent market events have increased the demand for solutions that mitigate counter-party risk for hedge funds," said Rich Portogallo, Head of Institutional Clients and Services at Morgan Stanley. "The launch of new custodial services from MSTNA underscores Morgan Stanley's commitment to providing hedge fund managers and investors with alternative asset protection solutions in addition to our best in class financing services and technology."

MSTNA gives clients the option to hold their long securities with a Morgan Stanley subsidiary that is independent from Morgan Stanley's US and UK broker dealers.

"We are excited to offer this new asset-protection platform to our clients," added Joe Davis, Managing Director in Morgan Stanley Prime Brokerage and President of the custody business of MSTNA. He concluded: "The newly-created platform will provide a seamless client experience across Prime Brokerage's and MSTNA's systems, and offers fully automated transfers, aggregated reporting and a single client service point of contact."

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