Morgan Stanley has appointed Wei Christianson and William Strong as co-chief executive officers for Asia-Pacific ex-Japan, replacing Owen Thomas who is soon to relocate to the US.
FinanceAsia broke the news of Owen Thomas's departure from the region on March 14 and in the same story we speculated that an enhanced role could be in the cards for Christianson, who is currently CEO of Morgan Stanley for China. Yesterday's announcement confirms that she is indeed stepping up to take on the regional CEO job, but she will share the workload with Strong, a Morgan Stanley veteran who has been with the Wall Street investment bank for 18 years.
Christianson’s in-depth knowledge of China specifically and the region in general is complemented well by the relationships Strong brings to the table, both within Morgan Stanley and with US corporates, said a source close to the situation. Strong is currently vice-chairman of investment banking and head of the US Midwestern region for Morgan Stanley, based in Chicago.
The promotion is a well-earned reward for Christianson for the stellar job she has done in China since she rejoined Morgan Stanley in 2006, said a banker from a rival firm. Morgan Stanley books the lion’s share of its Asian revenues from China, and Christianson has made a significant contribution to the investment bank’s success in the country. She will keep her role as CEO of Morgan Stanley for China alongside her new responsibilities.
"With China at its heart, Asia-Pacific is a critical growth region for the firm and an increasingly important part of our global business,” James Gorman, president and CEO of Morgan Stanley, said in a written statement announcing the two appointments.
In December last year Morgan Stanley finally announced a deal to sell its 34.3% stake in China International Capital Corp (CICC), paving the way for the US firm to set up a securities joint venture with China Fortune Securities (also known as Huaxin Securities) that will give it more direct access to China’s domestic markets. Final approval for the JV is expected in the second quarter of this year.
“With the sale of [the] CICC stake, we are poised to start a new chapter on the very strong relationships we've built in China and across Asia for many years,” said Gorman on an analyst call posted on seekingalpha earlier this year, while announcing Morgan Stanley’s results for 2010.
The influence of Beijing-based Christianson spans corporate China as well as the regulators and the government, said a source. Last year, China's sovereign wealth fund, China Investment Corporation (CIC), became one of Morgan Stanley’s largest shareholders following its purchase of $5 billion worth of mandatory convertible notes in 2007. CIC agreed at the time of the investment that its stake would be capped at 9.9% and negotiated the right to nominate a director to the Morgan Stanley board. CIC has not yet exercised that right. Christianson was involved in the original CIC investment and continues to be one of the bank's key liaisons with CIC, said the source.
Christianson and Strong will report to Colm Kelleher, co-president of institutional securities and head of Europe, the Middle East, Africa and Asia-Pacific. Kelleher announced the news that Thomas was leaving Asia at an internal Morgan Stanley town hall meeting on March 11.
Thomas used to be CEO for Asia, which at Morgan Stanley includes both Japan and Australia. The new co-CEOs will take on his role minus Japan. The explanation for this change could be the fact that a few months after Thomas was appointed CEO, Mitsubishi UFJ Financial Group (MUFG) made a $9 billion equity investment in Morgan Stanley. The investment, which came in the aftermath of the subprime crisis in October 2008, makes MUFG the largest shareholder in Morgan Stanley with a 21% ownership interest on a fully diluted basis. As part of the deal, MUFG deputy president Nobuyuki Hirano has been a director on the Morgan Stanley board since March 2009 and Morgan Stanley's operations in Japan have been merged into the securities unit of MUFG. The reconfiguration of the Japan business and the fact that Morgan Stanley’s largest shareholder is Japanese make this country different from the rest of Asia and that may be the reason Japan has been carved out this time around.
Morgan Stanley moves to a co-CEO structure for Asia-Pacific less than a month after it moved away from having co-heads for investment banking in the region. As reported earlier, Gokul Laroia has been promoted to head of equities for Asia, including Japan and Australia, to succeed David Russell who is moving to London to take on new responsibilities. Laroia’s promotion leaves Kate Richdale as the sole head of investment banking for Asia-Pacific (ex-Japan). Having two CEOs means Richdale will have a depth of senior talent to assist her in covering clients in the region, said a source.