move into hedge funds keeps rolling along.
The big Wall Street firm on Wednesday said it had purchased a 19% equity stake in Lansdowne Partners, a London-based hedge fund with $12 billion in assets. This is the third hedge fund acquisition Morgan Stanley has made this week, after talking about doing so for nearly a year.
On Tuesday, Morgan Stanley struck a deal to buy FrontPoint Partners, a $5.5 billion hedge fund for $400 million. The week began with Morgan Stanley formally announcing that it had purchased a 20% equity stake in Avenue Capital Group, a $12 billion hedge fund that specializes in buying and selling distressed bonds.
The three hedge fund deals are part of a strategy by Morgan Stanley Chairman and CEO John Mack to bolster the offerings or the firm's investment management group. Morgan Stanley Investment Management, which boasts its own hedge fund and so-called fund of funds, has more than $450 billion in assets under management.
In recent years, a number of Wall Street firms have either acquired hedge funds or bought stakes in hedge funds as a way of bolstering their alternative investment offerings. Two firms that have been active on the hedge fund acquisition front are
JP Morgan Chase
Morgan Stanley's desire to bolster its hedge fund offerings comes at a time when its prime brokerage business is gathering new hedge fund customers.