Morgan Stanley suffered another high-level departure on Monday when Raymond McGuire, one of its top investment bankers, decided to leave the embattled Wall Street firm to join rival Citigroup.
Mr McGuire, who had been co-head of global mergers and acquisitions since the autumn of 2003, announced his intention to resign internally on Monday, according to people familiar with the matter.
Since late March, when Philip Purcell, chief executive, moved forward with a controversial management shake-up, Morgan Stanley has lost a handful of its most senior members.
Mr McGuire's move to Citigroup, where he will be co-head of investment banking, was seized upon by Mr Purcell's critics as evidence that he is failing to stem an exodus of top talent from the firm.
“This is consistent with what we said would happen,” said a spokesman for a group of eight retired Morgan Stanley executives who are seeking the removal of Mr Purcell.
Others who have left Morgan Stanley in the past two months are Vikram Pandit, who ran the institutional securities business; John Havens, the former head of equities; Stephan Newhouse, the former president; Joseph Perella, the veteran dealmaker; and Terry Meguid, former head of investment banking.
It was unclear last night whether Mr McGuire would be replaced or if Paul Taubman, the other co-head of global M&A, would become sole chief of the deals advisory business where Morgan Stanley has been a dominating force for decades.
So far this year, Morgan Stanley has been the top adviser on global M&A, with $289bn worth of deals and a market share of 31.2 per cent, according to Thomson Financial. Citigroup is in eighth place, with $132bn worth of deals and a market share of 14.2 per cent. Mr McGuire's departure did not come as a surprise to many Morgan Stanley insiders. Mr McGuire was close to Mr Perella. They had worked together in the 1980s at First Boston and later at Wasserstein Perella.
But the move, which takes effect in early July, will raise concerns that Morgan Stanley's M&A business could be substantially weakened if Mr McGuire, primarily a banker to the consumer products industry, is successful in taking clients with him.
At Citigroup, Mr McGuire will be working alongside Alberto Verme as co-head of investment banking. “The objective for us is for us to maintain an M&A franchise that is recognised for its leadership and long-term relationships,” Mr McGuire said in an interview with the Financial Times yesterday. Only last week, Mr McGuire had worked on an $800m deal Unilever's disposal of its fragrance unit to Coty.
But Mr McGuire had been unable to clinch a role for Morgan Stanley in the biggest US transaction of the year — Procter & Gamble's $58bn acquisition of Gillette.