Morgan Stanley Tops European Derivatives Poll

Terry Flanagan

Morgan Stanley’s investment in flow equity derivatives five years ago helped the firm rise to the top of Greenwich Associates’ survey of European fund managers, according to Matt Renirie, co-head of equity derivatives sales in the region.

Greenwich Associates said in a survey yesterday that Morgan Stanley is either the leader or tied for the top spot in Europe in the three major flow equity derivatives categories: options, volatility and delta one products.

The consultancy interviewed 170 fund managers, traders and equity derivative specialists at the largest institutions in the UK and continental Europe in May and June of this year.

“The ranking is a result of five years’ worth of work,” Morgan Stanley’s Renirie told Markets Media. “We have always been a strong player in the cash business so it made sense for the firm to re-invest in its equity derivatives business five  years ago in order to better serve our existing client base.”

James Gorman, chairman and chief executive of Morgan Stanley highlighted equities on the bank’s third quarter results call. “One of the things that has been a determined move by equities management is to provide a much more integrated approach across cash, derivatives and prime brokerage to our clients,” he said.

Morgan Stanley historically had a large hedge-fund client base due to its top three position in prime brokerage but equity derivatives clients now also include asset managers, pension funds and insurers.

Greenwich said brokers in Europe win equity derivatives business based on their performance in three areas: pricing, understanding clients’ investment strategies or hedging needs and consistency of sales and trading service. “What distinguishes Morgan Stanley and all the 2013 Greenwich Leaders from competitors is their strength across all these critical areas,” said consultant Jay Bennett in the report.

Renirie said:  “We invested heavily in people and technology which gave us the ability to execute efficiently and in scale and to price well and quickly. Our strategy has been to deliver what our clients need in terms of strong ideas and timely market information that is relevant for their portfolios.”

In the Greenwich survey more than 60% of European institutions active in equity options and volatility products cited important trading relationships with Deutsche Bank, JP Morgan and Morgan Stanley.

In equity futures Morgan Stanley, Goldman Sachs and JP Morgan led the market while in exchange-traded funds Morgan Stanley and Deutsche Bank had penetration scores of between 45% and 47%, followed by SG Equity Derivatives at 38%.

“We are incredibly focused on not letting our standards slip. We are always thinking about what we can do better for our clients in terms of contents and technology and we are never complacent,” Renirie added.


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