Morgan Stanley struck a deal to buy a fintech to bring a key technical aspect of handling corporate stock plans in house, further beefing up the bank’s massive wealth-management arm.
The bank’s purchase of Vinyl Equity will give it the capability to transfer shares between companies and their shareholders, according to a statement Monday. That means Morgan Stanley and the corporate clients in its workplace channel will no longer have to tap a third party for that process, which is particularly complex when a company goes public.
“Clients are asking for it,” Jed Finn, Morgan Stanley’s head of wealth management, said in an interview. “Given everything that’s going on around client data protection, cyber security and risk, they want to keep everything within the four walls of Morgan Stanley.”
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Terms of the deal weren’t disclosed, but a company spokesperson said the integration will cost $65 million over a couple of years. Vinyl was founded in 2022 and raised $20 million in series A funding earlier this year.
The deal is Morgan Stanley’s second under Chief Executive Officer Ted Pick, who ascended to the top job nearly three years ago. The firm agreed last year to buy EquityZen, a trading platform for shares in private companies.
Both acquisitions have been in the wealth-management space, a business that’s become a powerhouse for Morgan Stanley. The bank’s wealth manager pulled in $500 billion in net new assets in the first nine months of this year alone.
Morgan Stanley has also expanded its workplace business, which is part of wealth management. That business handles such things as equity compensation plans for corporate clients, and has become a crucial way the bank hoovers up wealth assets. In an interview earlier this year, Finn described workplace clients going public as “a gift that keeps on giving.”
The workplace unit has thousands of corporate clients, a roster that executives have said includes more than 70% of the top 100 unicorns. It helped Morgan Stanley pull in a record $232 billion in net new assets in the third quarter, with about half of those being tied to initial public offerings.
“This is a natural synergy into that space where clients have been asking for help in solving what is really an antiquated technology,” Scott Whatley, head of Morgan Stanley at Work, said in an interview. It’ll remove “a lot of friction, not only for workplace clients, but also their employees, and individual and institutional investors as well.”
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