Morgan Stanley plans to bargain hunt distressed assets around the world, including in the Middle East, where markets have been hard hit in recent months.
The investment bank will establish up to five global funds this to seek out fire-sale assets that present good fundamental value.
“After considering what has happened [during the financial crisis] and the impact it has had on portfolios, sophisticated investors and institutions are starting to pick up quality assets sold off by distressed investors at attractive prices,” said James Dilworth, head of Morgan Stanley Investment Management (MSIM) operations in the Europe, Middle East and Africa.
The funds will focus on private equity, property opportunities, levered loans, credit and infrastructure. The firm continuously reviews investment options in the Middle East for these funds as well, according to Mr Dilworth.
“We don’t focus on any specific region, so if we find good opportunities in the Middle East, by all means we will consider them,” he said.
In August 2008, the firm launched the Morgan Stanley Saudi Equity Fund to offer GCC investors exposure to the kingdom’s market through investment in Saudi shares.
“This area is very much a hot spot on the emerging markets map; we want to see how the Saudi equity fund performs,” said Mr Dilworth. “If it is successful, we’ll take a look at the rest of the region.”
Morgan Stanley manages two funds with a focus on the Gulf. The Frontier Fund and the Emerging Europe, Middle East and Africa Fund. The Frontier Fund, which is an exchange traded fund that listed on the New York Stock Exchange last year, reached a 52 week low in mid-November at a price of $7.51. The fund, which closed at $7.57, was down 1.56 per cent earlier this week. According to data from Morgan Stanley, the Emerging Europe, MENA Fund was down 59 per cent last year. However, now was the time to look for bargains.
“International investors are increasingly interested in the GCC, which is seen as a way to diversify portfolios,” said Michael Samaha, the head of sales and business development for Morgan Stanley Investment Management in the MENA region. “This is one of the reasons why we launched the Saudi equity fund.”
As of the end of last year, approximately 16 per cent of Morgan Stanley’s US$400 billion (Dh1.5 trillion) assets under management came from the Europe, Middle East and Africa region, according to Mr Dilworth.
“Some of our first mandates in the [EMEA] region came from this area [the GCC]; we’ve been present for a long time so it’s not about building our business, but continuing to invest in it,” he said.
By Sara Hamdan The National shamdan@thenational.ae
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