Ted Pick, CEO Morgan Stanley, talking on CNBC’s Squawk Box on the World Economic Forum Annual Meeting in Davos, Switzerland on Jan. 18th, 2024.
Adam Galici | CNBC
Morgan Stanley‘s new CEO Ted Pick on Thursday expressed confidence that his financial institution will hit financial targets of $10 trillion in shopper property and a 20% return.
Pick, a three-decade Morgan Stanley veteran who took over this month, mentioned he has three priorities: sticking to the technique laid out by predecessor James Gorman, sustaining the financial institution’s tradition and attaining their targets.
“Ten trillion in wealth and asset administration {dollars}, that is going to be coming,” Pick mentioned in a CNBC interview on the World Economic Forum in Davos, Switzerland. “We’re going to get there and hit 20% returns. That’s it: 10 and 20. It will take a while, however I’m tremendous bullish.”
Pick’s predecessor guided Morgan Stanley within the aftermath of the 2008 financial disaster that just about capsized the funding financial institution. Gorman reworked the financial institution right into a wealth administration large by a sequence of savvy acquisitions, whereas serving to rehabilitate buying and selling companies for a brand new period on Wall Street.
The pivot to wealth administration boosted Morgan Stanley’s valuation effectively past rivals together with Goldman Sachs, however extra lately considerations about development in that enterprise have stymied the inventory. Shares of the financial institution are down 12% within the final yr.
“Part of the rationale the boss had a lot success is he type of guided the place to a sturdy narrative as a substitute of the herky-jerky, unpredictable Morgan Stanley,” Pick mentioned.
The agency’s “secret sauce” is within the mixture of a number one funding financial institution with its wealth administration operations, he added.
“The title of the sport is to type of steadiness reasonable expectations and construct credibility, however have individuals understanding that we’re extremely assured of each of those items to develop,” Pick mentioned. “The ecosystem of being a number one wealth supervisor, banking people not establishments, after which additionally protecting them as an funding financial institution or hedging the chance as a buying and selling home, that is distinctive.”
What might assist issues this yr is an anticipated rebound in company mergers and associated actions after greater than a yr of depressed volumes, Pick mentioned. A backlog of offers has been constructing since earlier than the Covid pandemic started in 2020, he mentioned.
“There’s a ton of exercise buzz,” Pick mentioned. “I believe as soon as individuals begin getting going, we’ll see a bunch of it.”
The U.S. financial system is “in all probability previous peak inflation,” and it is “not inconceivable” that the Federal Reserve might be pressured to chop charges quicker than anticipated due to weakening information, Pick added.