Morgan Stanley is reworking its high-yield group in what may be a sign the firm wants to capture a greater share of the European market. Armins Rusis, the firm's high-yield sales manager, will move to London to oversee its European junk effort, according to senior officials at the firm. He will report to Mike (Mitch) Petrick, the current New York-based co-head of high-yield. Petrick will soon be named the sole head as Dan Placentra, the other co-head, will step down to run an internal hedge fund, the officials say.
London has been seen as the high-yield equivalent of Siberia over the last year or two, but there are signs that the European market is picking up. As of last Thursday there had been $12 billion in new European junk priced this year compared to just $4.6 billion for all of 2002, according to Bloomberg. In a further sign of euro-bullishness, firms are poaching talent again, as indicated by Goldman Sachs' recent hire of Tim Gately from J.P. Morgan Securities to run its European high-yield trading business.
Morgan Stanley insiders say Rusis' stock is clearly rising at the firm, as he was made a managing director just last year. Calls to Rusis and Placentra were not returned, and Petrick declined to comment.
Morgan Stanley's performance in Europe has lagged its U.S. business. While the firm ranked ninth among U.S. underwriters through last Thursday, with a 4% share of the high-yield market, it was 17th in Europe, with just an 0.6% share.
Other members of Morgan Stanley's high-yield team expected to change seats include Pat Lynch, a senior trader, who is said to be headed for London, and Kevin Corgan, a senior trader, who is reportedly headed for a capital markets position. Lynch declined comment, and a call to Corgan was not returned.
