AI market round up: Morgan Stanley takes hedge fund hit

October 03, 2007

Buried deep in the announcement of Morgan Stanley’s third-quarter earnings results was a substantial hit from the bank’s newly built hedge funds business.

Morgan Stanley took a $480 million loss mainly related to market-neutral, quantitative hedge fund strategies. The firm says that the hit was spread across several groups and looked even worse at one point earlier in the third quarter.

By the time the relevant investment strategies began to recover ground towards the end of August, managers had delevered and reduced their positions, so capturing less of the upturn.

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Peter Lee

Editorial director

Peter Lee is editorial director. He joined Euromoney straight from Oxford University in 1985, and has written about banking and capital markets ever since, being appointed editor in 1999. He became editorial director of Euromoney in May 2005.