Morgan Stanley has hired Amitabh Arora, formerly a prepayment analyst and head of the MBS modeling group at Lehman Brothers, to launch a mortgage-backed securities research effort. Arora started July 23. Reached at his desk at Morgan Stanley, Arora declined to comment. Arora reports to Chip Schorin, executive director and head of securitization research. "We've rededicated ourselves to MBS research," he says of the hire, calling it the first step toward re-creating an MBS research effort, after not having any research following the departures of MBS researchers Alec Crawford and Paul Check in 2002. Schorin adds the firm is in the process of hiring other analysts to work under Arora, but declines to specify any projected headcount.
The move is part of Morgan Stanley's broader push into the mortgage area, with the firm having hired several traders and salesmen in the last year and a half or so. Arora has been brought in to complement the effort, with one insider saying he represents "the third leg of the piece." The firm had scaled back its MBS operations in 1998, to where it only traded pass-through securities, but in the last year and a half has made a renewed commitment to the market by establishing full-fledged collateralized mortgage obligation and non-agency trading desks, according to the insider.
Morgan Stanley's broader MBS push is under the direction of Tony Tufariello, head of securitized products. He did not return a call.
Andy Sparks, a managing director in MBS research at Lehman, confirmed Arora's departure and says the modeling group will report to Sparks for now, until a permanent decision is made.