New Morgan Stanley Program Focuses on Diversity – Despite Tough Economic Climate

By Tina Vasquez (Los Angeles)

As we recently learned from the new Accenture study focusing on women leaders and resilience, despite a rough economic climate many companies are not only choosing to keep women’s initiatives and leadership programs, but in many cases they are expanding them and creating new ones altogether.

In December of last year, Morgan Stanley did just that by announcing its new Emerging Manager Program (EM Program), which, according to the company, “seeks to identify and provide capital, as well as strategic advice and infrastructure solutions to emerging asset managers.” What’s impressive is that the program will place a specific emphasis on including minority and women-owned asset managers.

The EM Program will be headed by Carla Harris, a 23-year veteran of Morgan Stanley. Currentlya Managing Director in Morgan Stanley Investment Management (MSIM), and chair of the Firm’s Private Placement Commitment Equity Committee, Harris was a logical choice as champion of the program due to her long tenure in the industry and as a high profile successful minority player. The actual manager participants themselves will be overseen by an investment committee comprising representatives and senior management from across Morgan Stanley.

Harris said, “We are excited about the prospects of partnering with Emerging Managers that we believe will benefit substantially from Morgan Stanley’s premier infrastructure partnerships, business strategy insights and accelerating capital, in order to allow them to focus on managing assets and achieving superior long-term performance.”

Focus on Underrepresented Segments

The goal of Morgan Stanley’s new program is to partner with equity, fixed income, alternative minority, and women-owned asset managers in order to increase the number of female and minority managers and heighten their opportunity for growth and success. The EM Program also intends to introduce plan sponsors and other institutional investors to a larger, more diversified pool of managers, while also providing the means for them to participate in the success of emerging talent.

As mentioned, the company intends to place an emphasis on minority and women-owned asset managers, but according to Harris, the program will have a much broader scope as well. “We are looking broadly at the emerging manager space, which means any manager with $2B or less under management, but we are focusing on women and minority women-owned managers because we believe that this has been a segment of the asset management provider universe that has been underrepresented, or unrecognized and in which we feel that there is some great talent which should be highlighted.”

In order to be chosen to participate in the program, candidates must submit their interest and an “emerging manager information summary.” Representatives from the program will then contact applicants for a preliminary meeting before the firm develops a list of those they believe will make a good fit in the program and benefit from it.

Recognizing Pipeline Development as an Important Platform

Currently, Morgan Stanley is still remaining rather tight-lipped about their program and there is no word on how long the firm will continue to seek out these emerging managers, though Harris did say that she expects the program to be “an important platform for Morgan Stanley going forward.”

The EMP will be a part of Alternative Investment Partners (AIP), a division of Morgan Stanley Investment Management (MSIM), which manages portfolios of private equity, hedge fund, and real estate investments on behalf of institutional and high net worth clients.