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Morgan Stanley

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hired a new executive to oversee its prime brokerage division, which serves hedge fund clients.

Alex Ehrlich, who ran prime brokerage for


(UBS) - Get UBS Group AG Report

, took over the unit that had been run by Stuart Hendel, who is leaving Morgan Stanley, according to a


report that cited an internal company memo. A Morgan Stanley spokesman did not immediately respond to an email message.

While less profitable than it was before the crisis, prime brokerage remains critical to investment banking franchises of banks like

Goldman Sachs

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JPMorgan Chase

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Credit Suisse

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Deutsche Bank

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Morgan Stanley and Goldman used to dominate the

prime brokerage

business, but have lost ground to rivals over the past year.