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February 01, 2005 at 07:00 PM
NEW YORK (HedgeWorld.com)–Morgan Stanley thus far has ignored a hedge fund’s demand that it restructure, and its silence may augur a fight at the annual shareholders’ meeting of the global financial services firm, set for March 15, Riverwood, Ill.
The demand came from Copper Arch Capital LLC, New York, an equity long/short fund, in a Dec. 9 letter made public this month.
Copper Arch has more than US$1 billion in assets under management, according to its chief financial officer, Michael Manley.
The letter to Morgan Stanley, signed by Scott Sipprelle, Copper’s chairman and founder, congratulates Morgan Stanley on having served as “an agent for change in the capital markets through strategic restructuring advice” but accuses it of a failure to look at itself in the mirror “when the issue of optimal levels of performance relates to its own portfolio of businesses.”
Mr. Sipprelle wrote that Morgan Stanley ought to return the company to its core institutional securities business and should sell or spin-off ancillary operations such as retail brokerage, investment management operations and the Discover credit card.
Near the end of the letter, Mr. Sipprelle used bold letters to emphasize a warning: “Should there be no constructive steps made toward addressing our concerns, we intend to oppose strongly the re-election of each of the Directors.”
Morgan Stanley’s board consists of 10 directors, divided into three classes. Each class has a three-year term, staggered so that one class must be elected or re-elected at each annual meeting. The four directors whose term expires this year, and who will presumably either be re-elected or replaced at the upcoming meeting, are John E. Jacob, Charles F. Knight, Miles L. Marsh and Dr. Laura D’Andrea Tyson.
