Morgan Stanley Bankers Falling Behind Rivals in M&A Fees

Wall Street dealmakers basked in the spotlight this week as the biggest U.S. banks touted their windfalls from a surge in corporate hookups. But as Morgan Stanley finished the parade of earnings reports, some competitors smirked.

The firm -- one of three that dominate the world of mergers and acquisitions -- had lost ground to arch rivals Goldman Sachs Group Inc. and JPMorgan Chase & Co. in pocketing fees for advice during the first half of what’s shaping up to be a record year.

Goldman occupied its typical No. 1 spot. But JPMorgan, which often vies with Morgan Stanley for second place, was $452 million ahead this time. Put another way: If the trio pooled their revenue from the business, Morgan Stanley’s share was 22%, its weakest start in at least a decade. Behind the scenes, senior executives at Morgan Stanley’s rivals, who normally profess not to pay too much heed to quarterly shifts in rankings, have been pointing out the slippage with glee.

Morgan Stanley Bankers Falling Behind Rivals in M&A Fees

Deal advisory is a notoriously lumpy business where a few big scores can shuffle rankings. Yet this time, Morgan Stanley’s bankers have left themselves a lot more catching up to do than any other time in recent memory. Its leaders can point to other successes: The firm’s gigantic wealth business has been fueling record quarters for the bank, helping win more love for its stock than either of its rivals.

Morgan Stanley declined to comment.

Investment banking is fiercely competitive and closely watched on Wall Street -- a high-return business that imbues all kinds of bragging rights. For rivals struggling to keep up with Morgan Stanley’s other successes, this year’s M&A trend is providing some comfort.

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