More than a decade into his tenure, James Gorman is busier than ever remaking his firm.
The Morgan Stanley chief has carried out a deal-making blitz that’s transformed the white-shoe firm from a Wall Street specialist to a big player in the world of money management.
If stealing away a wealth manager from Citigroup Inc. propelled the Melbourne-born banker to the top perch in 2010, his recent shopping spree guarantees that the 62-year-old executive’s mark will be left on Morgan Stanley long after he’s gone.
Gorman’s two latest mega-deals — the takeover of E-Trade Financial Corp., to go after millennials and other individual investors, and now the $7 billion purchase of asset manager Eaton Vance Corp., announced Thursday — are the largest carried out by any of the big banks in Wall Street’s post-crisis reincarnation.
And both were done in the span of just 10 months.
The acquisitions guarantee Morgan Stanley’s wealth and asset-management group a standing that overshadows the bank’s core Wall Street operations, despite their dominance.
And Gorman, who rose up through Morgan Stanley’s wealth business and has been bolstered by a stock price that’s outperformed major Wall Street rivals this year, said the 38% premium he’s paying to gain Eaton Vance’s roughly $500 billion in assets is worth it.
“We paid full dollar for it, I make no bones about that,” Gorman said in a Bloomberg Television interview Thursday. “I’ve met a lot of people who want to buy great companies cheaply, and they end up not buying anything.”
Gorman — who started out as a lawyer, became a McKinsey & Co. consultant, then turned to banking — is doing what he says is necessary to decrease risk at Morgan Stanley, cut reliance on Wall Street’s fickle fortunes and deliver a company that looks less like the investment bank he inherited a decade ago.
Now the chief executive officer says he’s done bulking up Morgan Stanley and is focused on integrating E-Trade and Eaton Vance — the type of challenge that’s tripped up many other CEOs.
“We are not doing more acquisitions,” Gorman said. “We’ve made our bed and we want to lie in it.”
Gorman’s rise to the top came after a period of bickering and infighting that sullied the top ranks of Morgan Stanley.
The financial crisis brought to the fore much bigger risks. Former CEO John Mack hired Gorman in 2006 to run wealth management, and soon after the firm pivoted toward his business with the purchase of Citigroup’s Smith Barney.
He’s among the last veterans of the financial crisis still atop a Wall Street bank, with Goldman Sachs Group Inc.’s Lloyd Blankfein gone and Mike Corbat handing over the reins at Citigroup.