The financial market landscape is a constantly evolving one, and yet new trends often merely reflect broader shifts in economic realities and the investor preferences that walk hand-in-hand with them. One such trend that has been experiencing growing traction is the tendency for private companies to remain in the hands of private ownership for longer and longer instead of opting to be publicly listed. The abyss this creates between private companies and the funds they need to grow is creating a need for more innovative liquidity solutions in the wealth management market, one that Morgan Stanley is seeking to provide through the creation of its Private Markets Transaction Desk.
Morgan Stanley Wealth Management is a commercial division of the Morgan Stanley investment bank that offers a diverse range of financial services and solutions. Their clientele spans individuals, families, businesses, and institutions, and offers a diverse array of solutions such as cash management and lending solutions, estate planning, investment management, tax planning, and wealth planning. Morgan Stanley is a behemoth in the wealth management market and offers its services to over 3.5 million people through 16,000 professionals in 42 countries. The division holds over $3.9 trillion in advisor-led client assets.
The Private Markets Transaction Desk is a service that empowers eligible shareholders to trade private company equity in the secondary market. This pivotal development offers investors custom services that facilitate secondary trading. According to Morgan Stanley, the Transaction Desk underpins the company’s commitment to offering comprehensive solutions that cater to diverse needs. In 2015, the market value of growth-stage venture-backed companies was about $1 billion, with an aggregate of about 150 entities. Today, there are well over 1,000 companies at this stage of their growth, with a cumulative value of about $4.3 trillion. This jump marks the significance of private market investments as well as Morgan Stanley’s rationale behind the new service. According to Jed Fiin, the Head of Morgan Stanley Wealth Management,
“Alternative investments like private market shares are only growing in importance as investors seek deeper portfolio diversification.”
The company’s access to world-class capital markets, and business solution tools already at its disposal complement this positioning on the market. These resources combined offer clients a company-centric service. The options these resources offer allow clients unparalleled access to investment opportunities not available to the wider public, even for one-off sales of private equity via the help desk. Getting in touch with the desk provides clients with the expert guidance they need as well as the quality in execution necessary to compete interactively in the market.
From the point of view of Morgan Stanley, the company also benefits from the growth of a particular niche in the private equity market. Michael Gaviser, Head of Private Markets for Morgan Stanley Wealth Management comments on the company press release,
“ As a larger percentage of capital formation and economic growth is occurring in the private markets, we aim to continue to work hand in hand with all of our clients to source and facilitate these opportunities to create lasting value.”
The Private Market Transaction Desk is currently live for prospecting investors. Industry veteran Jeff Urban heads the help desk on behalf of Stanley Morgan. To Jeff Urban, the highlight of the help desk is the empowerment it provides to new players in the market:
“As the private markets continue to evolve and mature, there is an increased appetite among shareholders and potential investors for a trusted institution to provide access to robust liquidity solutions in the secondary markets. With more investors and capital entering the space, the Private Markets Transaction Desk puts clients in the driver’s seat to streamline complex transactions and address the needs on both sides of the market while working closely with the company.”
The help desk is also not the goalpost for private company solutions for Morgan Stanley. The Shareworks equity management platform, for example, currently platforms over $20 billion in company-led private share liquidity programs since 2020. The help desk is an expansion of what Shareworks already offers with a suite of automated financial solutions.
(Theruni Liyanage)