Morgan Stanley is moving its commodities trading business, which has been housed in Purchase, New York, for the last 15 years, to the bank’s Times Square headquarters. The physical move is part of a broader strategy shift for the once high-flying team of traders, as Morgan Stanley has moved away from riskier parts of the business, like owning and storing oil or placing bets on the direction of commodity markets. A Morgan Stanley spokesman said the move from Purchase was aimed at ensuring the commodities group was more closely connected with the company’s fixed income unit and the broader institutional securities business. The spokesman did not give further details but a person familiar with the matter said the firm expects to move around 150 employees over the summer.
Morgan Stanley initially moved its commodities business to Purchase, a leafy suburb around an hour outside New York City, to spread out its operations after the Sept. 11 attacks. The former Texaco campus also houses its wealth management division, but the bulk of its other U.S.-based trading operations are in Manhattan.Post-crisis regulations and a desire to take less risk have molded the bank’s commodities operation into a more traditional trading business where Morgan Stanley simply stands between buyers and sellers. It is also lending to energy companies and issuing derivatives that allow clients to hedge market risk.
In January, former equities trading executive Sam Kellie-Smith took charge of the bank’s broader fixed income and commodities trading unit. The division was previously overseen by Colm Kelleher, who was promoted to become Morgan Stanley’s president.In November, Morgan Stanley completed the sale of its physical oil business to commodity trading firm Castleton Commodities, after the U.S. Federal Reserve pressured Wall Street banks to get out of that type of business.
The transaction ended Morgan Stanley’s three-decade history as a major player in physical oil markets. The bank lost around 100 front office staff to Castleton as part of the deal.Morgan Stanley also sold its controlling stake in oil storage business TransMontaigne to NGL Energy Partners LP in 2014. (Reporting by Olivia Oran in New York; Editing by Lauren Tara LaCapra and Frances Kerry)Download