NEW YORK — Morgan Stanley named veteran investment bankers Paul Taubman and Cory Spencer to run its investment banking businesses, replacing Walid Chammah.
Chammah, a longtime associate of Morgan Stanley Chief Executive John Mack, has been shifted to oversee the company's businesses in Europe, the Middle East and Africa as chairman and chief executive of Morgan Stanley International. Chammah, who will continue to report to Co-President Zoe Cruz in his new role, will relocate to London from New York according to an internal memo dated Wednesday from Mack and Cruz.
Taubman and Spencer, who formerly reported to Chammah, now report to Cruz. They will remain based in New York. Spencer was previously head of U.S. investment banking, and Taubman was global head of mergers and acquisitions. Gavin MacDonald, who is based in London, replaces Spencer in the M&A post.
"Our decision to send Walid - our most senior banker and a global division head - to lead our efforts in Europe is a testament to the tremendous success and financial stature of Europe both within Morgan Stanley and in the global marketplace as a whole."
Jonathan Chenevix-Trench, the former chairman of Morgan Stanley International, also was based in London. Under the new alignment he was named chief operating officer of the institutional securities business, which includes trading and investment banking.
Chammah, who is 53 and has lived in New York for 29 years, said his move illustrates the growing importance for U.S.-based firms of geographical diversification.
"I've been advocating for a long time that the future is in Europe and Asia," he said in an interview.
The shift also represents a continuing progression of power to the 52-year-old Cruz, who has reorganized Morgan Stanley's trading and banking businesses - its most profitable division - several times since being promoted to copresident almost two-and-a-half years ago.
Chenevix-Trench in his new role also is responsible for Morgan Stanley's business in Latin America, and will oversee the institutional bank's information technology executives. Eileen Murray, another longtime ally of Mack, quit as global head of information technology and operations last week after her reporting line was shifted to Cruz from Mack.
In other moves, London-based Gavin MacDonald replaces Taubman as head of global mergers and acquisitions. Taubman and Spencer will continue to work from the bank's New York headquarters.
The new alignment also gives more power to European investment banking head Franck Petitgas. He takes the new title of "head of international investment banking," adding Asia to his realm, according to the memo. Matthew Ginsburg, head of Asia investment banking, now reports to Petitgas. Ji-Yeun Lee assumes Spencer's alternate title of deputy head of investment banking in the new alignment. She and Petitgas report to Spencer and Taubman.
Chammah, who began his career at Morgan Stanley in debt capital markets, considered jumping with Murray and other Mack loyalists in 2002 to Credit Suisse First Boston after Mack became head of the Swiss bank's U.S. operations. He was offered a top role as cohead of investment banking, but backed out after Morgan Stanley rebutted with a lucrative, five-year employment contract, according to news reports at the time.
When Mack returned to Morgan Stanley in June 2005 as chairman and CEO after the ouster of his rival Philip Purcell, he elevated Chammah to run all investment banking. He also affirmed his confidence in Cruz, Morgan Stanley's former head of fixed income, keeping her as copresident and give her more authority over the firm's operations. Cruz has since reorganized investment banking several times. Last year she shifted the firm's highly profitable real-estate investment area from investment banking to its asset management division.
