Morgan Stanley has just confirmed our expectations and announced that star manager Hassan Elmasry will be taking his team with him when he leaves later this year to start his own firm. Investors did get one piece of good news, however: Elmasry's departure date has been extended until 15 June; the firm had previously said he would leave at the end of April.
Elmasry and his team currently run Morgan Stanley Global Brands in the UK and clones of the same fund domiciled in the US, Australia, and Luxembourg, along with US equity versions of the strategy that are sold in that market. We already considered his departure a significant blow to the funds he runs and also to Morgan Stanley's efforts to build
its credibility as an asset manager. However, we wrote in February that we thought there was a "real risk" the team could leave, and that this would diminish the fund's appeal considerably. This has now come to pass as Michael Allison, Paras Dodhia, Jayson Vowles and John Kelly-Jones have all notified Morgan Stanley they will be leaving with Elmasry. In other words, Morgan Stanley will be starting from scratch on these offerings, though they say the funds will "continue to focus on high quality companies with dominant intangible assets that possess inherent sustainable competitive advantages."
For investors here, there would seem to be little reason to stay around once Elmasry and his team set up shop and offer their new funds, assuming that the new offerings carry reasonable fees. Those who don't want to follow Elmasry out may want to note that they can either let Morgan Stanley select their new manager for them, or go out and pick one themselves by finding a new fund. The latter would seem to be preferable given the greater degree of control it offers investors over their money, unless there are tax reasons not to make a move. There are significant numbers of strong global equity funds to choose from, and our qualitative analysts have rated a number of them here.
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