Morgan Stanley (MS) Earnings Call Transcript & Summary

Great. I think if we take a seat, we can get started. Thanks very much everyone for attending this keynote session with our very own Dan Simkowitz, Co-President of Morgan Stanley and also Head of Institutional Securities Group. Thanks, Dan, for coming one more year.

Thank you. It's great to be back. But most of all, thank you to everybody in the room. I think over 100 companies, 400 investors, I get to spend the rest of the day meeting a lot of them.

600 of them, registered, yes.

600 investors. Sorry, Alvaro. And I mean, I often meet people who claim that they founded this conference, but you keep on making it better with your partners. It's a great conference. It is a -- we'll get into this pure expression of the Morgan Stanley strategy to bring all these great investors and great companies together. So it's a pleasure to be here.

Great. Before we get started, I need to read a disclaimer. This discussion and the one with Sharon Yeshaya and Clare Woodman later today may include forward-looking statements, which reflect Morgan Stanley management's current estimates and is subject to risks and uncertainties that may cause actual results to differ materially. Morgan Stanley does not undertake to update the forward-looking statements. The discussion, which is copyrighted by Morgan Stanley and may not be duplicated or reproduced without their consent, is not an offer to buy any security. And with that, we can start.

There's been a lot going on in markets recently, you may have noticed. What's -- what are you seeing on the ground?

It's interesting. I've been at Morgan Stanley 34 years. And we've certainly had the periods of straight-up euphoria or real crisis. But in terms of cross currents, and I say that not with a negative view, cross currents. This is the most I've ever seen. And so I would say it's in the context of things really being interesting. So you have Alibaba up 74% and yet NVIDIA, I think, in 1 day, had the largest market cap down move. This is all this year, [ BUN's ] down 5 points and the DAX up, I think, 17% as an example. And yet in the U.S., there's a feeling of real very unsettled field. You had a de-grossing, you had some big derisking elements in the market, but yet some bellwether sort of consumer names, Coca-Cola, for example, is up 13% on the year, and U.S. credit is up on the year. So all these cross currents that we're seeing. We looked at, for example, the last 15 large sell-offs in the last 15 years in the U.S., this is the one with the highest level of dispersion, i.e., the lowest correlation. And so what we're seeing is despite sort of an unsettled field, real uncertainties, increased volatility, there is still risk taking. There's still alpha to be had all around the world, and it creates a really, I guess, tiring for many of the people in this room and for people at Morgan Stanley, but pretty exciting environment. You have to stay extremely active on. And what I would say in the context of what we're seeing in the business is the capital markets, the primary capital markets are doing pretty well. They're representing some of that dispersion and not just the negative tone that you may have seen out of sort of the broad U.S. averages or even the tech averages in that context. And again, I mean, it's useful to take a step back. We're really lucky at Morgan Stanley, we're incredibly global in our markets business. We're multi-asset class. We're both public and private markets. But the total market index, VT, the Vanguard ETF is up 1% on the year. It doesn't feel often in rooms like this and the technology conference I attended 2 weeks ago that the market is actually up on a global basis, but it is. What's interesting is when things are really bad, you would typically think that the primary capital markets would be worse than the secondary capital markets. And actually, the primary capital markets in both fixed income and equities are doing pretty well. So fixed income credit capital raises are right around record levels for the first 2 months of the year, both in the investment grade and in the non-investment-grade space. But I think what is proven to be more resilient on lower volumes, which I think is largely a reflecting slower supply, but not demand, the equity markets have been resilient for the market participants in the room, March 10th was a really ugly day in the markets, yet we raised Morgan Stanley as lead book runner $5 billion of equity capital across 3 transactions; 1 for Galderma here in Europe, 1 from a consumer brand in the U.S. and 1 for KKR. And so the risk-taking market, looking through the volatility in the secondary market, was really engaged. Obviously, the big new news is that an administration that I think we -- the consensus clearly was, was going to be pro-growth, pro-market, pro-business has, over the last few weeks, shown a willingness to both say and do, to take pain to accomplish some of their objectives. And I think the objectives are coming out around a complete reset of trade relationships, reindustrializing the U.S. and then ultimately taking both deficits and rates down and the use of the word pain, that's the new news. I think as a business matter, the dynamics we see around capital markets, if we can hit in particular, an equilibrium around trade policy. And again, I think there was a great quote I read over the weekend someone who was agreed with their moves in theory on trade policy around resetting it with the world did say day trading trade policy, putting in a market context. It's probably not the right way to execute on that method. If we can get to a place where there's a little bit more equilibrium, a little bit more predictability than the underlying dynamics that we felt for some time around being in the early stages of a capital markets recovery, led by M&A, but also reflected in the IPO market are all there. You've got private equity with a lot of assets to sell and yet a significant amount of dry powder to participate. And what I certainly saw when I was running both strategy and asset management, Morgan Stanley, when a banker would bring in an asset to be acquired, even if you said no, it led to a chain of thinking about, well, if we don't want that asset, what could we buy to grow. And if we don't act and one of our competitors act, what is the second order effect and that type of thinking, which really began in earnest in the second half of last year is still happening. It's just on pause as we try to understand both the income statement as well as broader macroeconomic impact of the tariff policy. And so in that sense, we still see some of that M&A pause as not a permanent reduction, it's just a timing delta in the marketplace.

Right. Maybe changing to a bit more about Morgan Stanley specifically. We're hearing a lot of firms talk about and focused on delivering their full firm. What makes Morgan Stanley's integrated firm different?

It's interesting. So we, over the last really since the financial crisis under James' leadership, refined our strategy and Ted has been super focused on this as well. I think the strategy is really straightforward and powerful. We just help clients allocate capital. And so as I look at this room, this is mostly an asset management room. So hopefully, we do it to asset managers. We do it to asset owners and that could be big sovereign wealth funds or pension funds, but it also could be wealth management platforms around the world. We certainly do it at corporates, the center of sort of what we do in our history, the corporation is presenting here and all the other corporates we engage with. And then we do it with individuals. But the strategy -- that's all we do. And we do it all around the world, and we could do it in one sentence. And so a lot of other financial services companies, it takes either an hour or 2 or an Investor Day, for us, it's $0.01. And that's what we can do. And what we've done is we love the capability and businesses that we've aggregated over the years to go deliver against that strategic mission and, especially in the context where E*TRADE integration and Eaton Vance integration are largely complete. And then Ted put together a really integrated investment bank where all the pieces between the markets business, and the underwriting and the M&A business are working seamless, we feel against that really tight strategy and great culture that there is an immense amount of growth at bringing the entirety of the firm's capability against those 4 client segments, asset owners, asset managers, corporates, and individuals. And that if we bring it all together and sort of ignore any business segment, we can deliver a lot of value to our clients and then therefore, value to our shareholders. What we've done is put real structure around that. So one of our leaders in the business, a number of our operating committee, Mandell Crawley has taken the Chief Client Officer role and is leading that effort. But where you see it practically day-to-day and with some intensity. And I think, importantly, with scale is in 2 places. The first is in the workplace. And again, I think the workplace started as a product. It's a product that came out of the acquisition of Solium. It's a product that came out of the acquisition of E*TRADE around the stock plan. And it got us into the workplace where Americans manage their money. They don't really manage it at their bank branch. They don't manage it on their own typically, they get that capital and they manage it through their workplace, and we now have a very large workplace business, but at those workplaces, we also have an investment banking, a C-suite, often a lending relationship. And what we are doing right now is taking that product, taking that relationship and turning it into a service. And that service is to help that C-suite drive better value out of their employees, financial wellness for their employees. And what you've seen in the numbers is we've gone from 3 million or 4 million client relationships before that workplace is built. And now it's 19 million relationships. So we've had almost a 5x increase in our relationships into our wealth management business through the workplace and driving the funnel and driving the value that we provide to both the company and its employees is a full firm effort because it's going to include the investment banking team talking to the CEO and the CFO. It's going to talk -- it's going to be both the workplace team and that team talking to the head of HR and just trying to implement that fully through. And I think as you know or your peers in the U.S. know, there are very few, really very few firms that have that access point in scale into the workplace, and that's why we've gone from 4 million to 20 million households. The second big category is actually the group in this room, which is the asset management industry, we can be the holistic partner to the asset management industry. We can help them with M&A as they think about strategically where they want to be? Do they want to be geographically diverse, if they are public markets manager? Do they want to get into the private market? If they are largely a PE firm? Do they want to get into private credit? We have that strategic dialogue all the way at the top. We also happen to have taken public most of the private and public asset managers over the year. So we can help them build their business because we have an asset management business, and we have some IP and we're the largest wealth manager in the world, we can help them in R&D on their products, and we can help them raise that capital. So we have an entire business that helps asset managers build a business. And then that complements and is next to the Alpha business, which is to run conferences like this, deliver research, deliver great market access, deliver financing if they're running a hedge fund. So we've got an Alpha business with asset managers and a business building with asset managers. And oh, by the way, asset managers, some of them in the private market side, but some of them on the public market side have huge employee bases. So we're doing workplace back into a large private equity firm or many private equity firms where we will then extend that workplace into all of their portfolio companies and all of their employees. So again, bringing that all together under Mandell's leadership, who reports now directly to Andy Saperstein, my Co-President and I, my partner, is a really powerful example on both the asset management side and the workplace. We're bringing the whole firm together to drive value at the client level and real revenue growth.

When you look at the franchise across equities, investment banking and fixed income, do you see any gaps in any of the businesses or regions which you want to improve? What do you think is the wallet opportunity of the markets business?

Well, on the last piece of that, certainly on the -- maybe I'll touch a little bit later on the Investment Banking side. But on the market side of the business, I get asked a lot of questions. I think I got it last year at this conference. I get asked it in sort of private settings, is the market business -- is the wallet in the market business at peak? Have we hit secular tops on the Markets business? And our view continues to be, no. When we look around the world, and again, you have to have a global view, you have to have a multi-asset view. But if we look around the world in fixed income, I'll start with, government debt is a growth business. The last few weeks, I've shown that is the case. You've got defense spending, you've got stimulus depending on what region of the world in, you have energy transition. All of these means the macro traded wallet is going up in that perspective. Secondly, in that context, when you have the bundle moving where it has and you have the volatility we've had in the dollar versus all the other currencies this year, risk, macro risk management is also a growth business, especially in the corporate client base and the private market asset management client base. And so when we think about helping our corporate clients or private equity clients manage interest rate risk, FX risk, commodity risk, these -- both the market is growing and our view somewhat around bringing the entirety firm, integrated firm or being focused, there's a market share opportunity. So macro risk management, we think, is still a growth business. And then we continue to believe even if there is some deregulation in the United States, that there has been a fundamental shift and an acceleration of this shift because of market dynamics away from banks to being the sort of primary deployer of credit to the asset management industry. And to a degree, we're indifferent at Morgan Stanley, whether it goes in a private credit or public credit. If the credit -- the deployment of credit is shifting from banks, commercial banks, regional commercial banks in the U.S. or domestic banks in Europe, if it's shifting from them into the asset management community, it is a very powerful secular trend for Morgan Stanley because if it's in the public market, we're obviously trading it. There's a huge gray area developing between the public credit market and the private credit market. And in all those cases, we're helping to source assets, we're helping to structure assets, we're financing those assets. And then even in the private markets, we're trading some of those assets. And so that dynamic is also a growth dynamic in our fixed income business. And in equities, whereas pure U.S. large-cap equities may be a mature business, we're seeing real equitization trends and then large market share appreciation for Morgan Stanley and margin potential for Morgan Stanley in Japan, India, Brazil, Saudi Arabia, Germany still to come. So our conversations with the German government are not just around stimulus and not just around defense spending, but should there be pension reform and should there be retirement reform in Germany to bring more of the capital markets and capital raising in Germany out of the banking sector and into the market sector. And I think it would have been a long station and we'd have required max patience. But what we've seen in Japan in the last 4 years is a pretty dramatic transformation through the work that the Ministry of Finance did, the stock exchange, GPIF largest pension fund, asset managers, asset owners, private equity firms like ourselves and the Prime Minister of Japan who knew more about the 401(k) program in the U.S. than many people in the U.S. did in running financial services companies. They brought it all together. And so the retirement program in Japan is now known on the street and the flow of funds in the Japan that we think is something that should happen in Germany and that it's a country that needs capital markets to grow. There is real science. There's entrepreneurial. There is the middle stat that needs to be monetized, but it needs a more robust capital market and to a degree, and we would not have predicted this, Japan is showing a path to that on Monday, as you may know, Alvaro, we go to open our office in Munich. And so to a degree, we're investing in Europe where we think restructuring will happen into a more market-based economy, and it has -- right now, it's an imperative as an example. The other thing on the equity side is customization around return profiles in the form of derivatives is a real trend line. And that's happening actually even in a mature market like the United States, but it's also occurring around the world. I believe the option market in India is one of the largest financial markets in the world. So if you're an asset manager, if you're a manager in this room, our belief, data is going to be harder in the next 10 years than it has been in the next -- last 10. And in that context, if you got a view, you may want to take off the tails on both ends and monetize those and only own the view you really have the highest conviction on. So that's at the portfolio management side. On the wealth management platform, you also may want to have various forms of downside protection. So the demands on Morgan Stanley in a very good way to customize profiles back to asset managers and the asset owners is also still a growth business. So when you put all those together, we think our markets business is not peaked out in terms of the opportunity, both in terms of market opportunity, but also in terms of market share.

You've kind of alluded to this, but indirectly that there's a new strategic goal in IHC to achieve durable share gains. Can you give us any insights on the thinking there? Where have you or where do you expect to gain share?

Well, we gained 100 basis points of market share last year. So some element of the durables, we want to hold on to those. I think we're holding on to those around being in the right places. So the dynamics I just described, movement to credit, we want to be a preeminent credit firm. We think that is good for our market share equitization around the world. When I talk about those markets, Saudi Arabia, India, as an example, Brazil, we're bringing the best of the Morgan Stanley tech stack and equity monetization toolkit into those markets. And so when we go there with a client base or we go into these markets, not only are we gaining really large share, the margin is pretty good in these frontier, I guess, markets, which are still growing significantly. We do see the ability where we're investing against that durable market share we see in the early stages of this capital markets recovery, a real opportunity to gain market share actually in our home core original market, U.S. investment banking. And so where we're adding real head count is at the very senior level of that group in sectors in the investment banking level. We're putting lending capital around large-cap corporations behind that banking community. And we're also, as a firm-wide matter, when we think about that integrated firm, the ability to gain share in the asset management community, but in particular, in the private market asset management community behind a more robust or larger investment banking effort that Ted started a few years ago. And then I've continued, we see share there as well.

There's been a few discussions on regulation in previous sessions. In the U.S., Basel Endgame has been put on hold and some questions if it's going to happen at all. How do you see this affecting the business? Is there more capital to deploy to support those durable gains that you've alluded to? How much room is there to continue to gain share?

Well, I think we were encouraged by the official appointment of Bowman in the last 24 hours. We have a very strong dialogue with her. We're a fan. I think to a degree, we've been one of the quieter parties in all of this in the last couple of years. But our ultimate goal was rational, both regulatory capital levels and then process. And I think in that context, we're excited with her appointment and to be able to work to come up with the right framework for us to deploy capital back to our clients. What I would say is at the client level, both in wealth management, around lending, some capital deployment, but pretty focused on efficient returns. We're still at an intensely ROTCE-driven firm. I think Ted developed a mantra 1.5 years ago, which I think was exactly the right thing at the right time given that we had set up the strategy to be so powerful. We had all the things we wanted to go deliver value to clients, the segments I mentioned and to be really sound strategically after Smith Barney E*TRADE, Solium, Eaton Vance, Parametric, et cetera, but we wanted to sweat the income statement, meaning we wanted to deliver that sort of potent combination of both growth and operating leverage, which I think we did last year. But at the same time, certainly in ISG, we wanted to sweat the balance sheet and so that we wanted to deliver really great ROTCE in the ISG business, which we did last year. And in essence, the core to that has been where can we deliver the most value to our clients around deploying capital. And that's, again, working with our wealth management clients around lending product, it's working with our investment banking clients, both corporations and private equity firms around helping them deliver against their growth objectives and the capital they need. And then teaming up again in the most optimal capital way, risk prudent way with the asset management community. And I think over time, you will be able to do that with a lot more predictability than we have been in the past if the regulatory environment shifts the way we think it will.

Mean changing topic on -- there's a lot of excitement around AI. How are you thinking about that as part of your broader tech strategy?

It's interesting. And please take this the right way, okay? We have 100 companies and 600 investors here at this conference. And then I think the other important stat and this is around dispersion, it's around the Morgan Stanley business model, it's around us opening the office in Munich, staying fully invested. I think Clare and Sharon will talk about this later. In Europe, we think this is really, really critical. But 2 weeks ago, when I was in San Francisco, we had 1,800 investors and 400 companies at what is now the flagship -- or has been for 30 years, flagship technology conference. And so back to the integrated firm, for a moment. We had big wealth management clients and advisers there as well as the 1,800 institutional investors, and we had all the companies there. And so it's interesting, if you use AI as a microcosm, we had Elon Musk, Sam Altman on different days. CEO of Anthropic, Google, Microsoft. We had our Board meeting last summer in Menlo Park, and we took NVIDIA public and Jensen hosted us for a day at the NVIDIA headquarters. And what was great and so you have something to aspire to, however, is he said, I've only had 1 person come to our Board meeting. Jensen goes to other Board meetings. We do not have an exclusive Jensen at our Board session arrangement. But he's only had 1 person come to his Board meeting. And that was his research analyst at Morgan Stanley, Mark Edelstone, who took it public. So that's the specialness we have. What's fascinating about the conference last week is we're advising around capital, data center capital, IPOs, fixed income offerings, other strategic ideas with all these companies in the AI ecosystem. We're connecting them to all those 1,800 investors. I don't have the count, but the AI one-on-ones at that conference probably measured close to 1,000, but what's been phenomenal as a business building matter is that we're getting great insight early on how do we change how Morgan Stanley operates. And so we were very fortunate through the curiosity and intensity of my partner, Andy Saperstein in late 2021. And think about how long that is in AI terms. In late 2021, he was out in California having meetings on AI, and we built a relationship with Sam Altman and Open AI. They presented at our Board meeting in the spring of 2022, what that's allowed us is to be on the leading edge, even though we're a very regulated company around how to use AI in our own business. And I think the model quality has moved so dramatically in the last year that we're seeing not really use cases, we're seeing the ability to take huge swaths of our business processes and think about how to apply it and generate productivity savings, increase client value and it will change the way we do a lot of our businesses. It will change the way we do a lot of the sort of research and analytics functions in our investment bank, in our research department and in our markets business. It will change the way we do customer service in big chunks of our wealth and asset management business. We are a big technology firm, and we have bought big technology enterprises. E*TRADE, Parametric, even MSET, Morgan Stanley Electronic Trading and Equities. These are all 3 leading technology franchises in their own right. They're all really successful fintech companies in their own right, our ability to bring coding productivity and real technology transformation capabilities through GenAI and partnerships with all the companies I've mentioned, we think will be a real tangible productivity efficiency play for Morgan Stanley. I think it will extend through almost every industry, but the unique element for us is we have a partnership dialogue from before day 1 with these companies because we're their adviser, because we're connecting them to investors, and we're using them as a partner in our business. So we feel very honored to have that early look and be on the edge of what this can do in terms of productivity and value to both clients and shareholders.

Maybe we can move to wealth. Can you talk about Morgan Stanley's competitive positioning in wealth? What is the business focus on now? And how has the strategy been playing out?

Well, I'm going to say the same thing. I said, I think, a year ago. And I feel it even more passionately today. So if you look at the opportunity set from here, Morgan Stanley well management in the Unites States and from here forward, next 5, 10, 15 years is what I think is the best growth opportunity in all of financial services. So I've got a lot of clients. We're a great adviser to financial services firms, Alvaro, and team covers all these clients. But if you had a situation where you've got a premier brand, you've got all the product offerings, you've gone from 4 million households to 19 million households, you're in the early days of leveraging technology, including AI that I just mentioned, to monetize that move from 4 million to 19 million. As Ted put up, once they become an advisory client, we have 99% client retention. And we're getting those clients now not in their 60s and 70s, we're getting them in their 30s or 40s. And therefore, we have decades in front of them. And we have limited competitors who can do all of those things. It is the core growth, strategic center of Morgan Stanley. And it gets even more powerful when it gets connected to an investment bank that can bring it incredible trading opportunities, investment opportunities on the private side, workplace relationships that I mentioned, asset management product and R&D. It becomes a global firm, even though it's largely domestic. These gets connected to our securities and asset management businesses. And again, there are very few firms who have the access point to the client that we do. We have an access point at the workplace to already 19 million households and the number will go up. And then we have everything they want. If they want to engage digitally, we have E*TRADE. If they want to engage with an adviser, we have the best and largest advisory network. If they want to engage self-directed, we have E*TRADE. We have the ability to service them and that they want to invest in alternatives. If they want to know how to manage their taxes in coordination with their philanthropy, we have all those tools in-house. And again, we're just in the earliest stages of revenue monetizing that move from $4 million to $20 million. And again, what I see is if you can acquire a 30-year-old through the workplace, who's got a pretty good job prospects. By the time they get to 40, they will be over $1 million household net worth. They want an advisory account. And if they want -- and we've serviced them and we can service them really efficiently with a digital bank, and with E*TRADE, then at 40, if the 99% holds and the life expectancy holds and the accretion of their capital holds, they are a phenomenal client for the next 50 years. And so when you think about that annuity business and the cash flow that comes out of that, it's a really exciting business model. And we think we are a category 1 in that context. And we are not, not standing still, not standing still around technology, not standing still around what products and services that client base needs. We're going to leverage, as I said earlier, the fact that we've got a great banking business or a bank that we can put into that network as well. And you'll see, I think, phenomenal growth over the next -- again, I was going to say the next 5 or 10 years, but that growth is set up if we do our job right for decades.

Right. What role does asset management play in the overall context of the firm?

Well, to a degree, asset management, which I ran is a really pure, and I'm speaking to a room full of asset managers, it's like really pure form of Morgan Stanley strategy because it's a fiduciary form, right? So to a degree, asset management is helping clients allocate capital -- helping clients allocate capital is the one sentence, Morgan Stanley strategy, and then asset management does it in fiduciary form. I think what's particularly interesting and something we're focused on is we want to be there where we can provide differentiated value to our clients. And so in particular, in customization in the United States, we are the largest firm providing customized index capabilities by a factor of several times. And so I think parametric assets are now over $0.5 trillion. It's the market leader. It's grown dramatically since we acquired it. It's both a market trend and a market share grower in a business that has really good secular growth prospects. So we're excited about that. And we don't have the same fanfare maybe as some others, but we're now, I think, up to about $250 billion, $0.25 trillion, in private market or alternative assets available to be invested. And so there's secular growth as a firm, we believe, in the private markets and then the alternatives market and we've got real capability sets there we're growing. And at the same time, with Eaton Vance, we had a view. It's been expressed in our securities business. As I mentioned, we had a view around credit being more important in the asset management industry, and Eaton Vance brought a much bigger credit business to us as an example. And so -- and we're a great long-only concentrated equity manager. So we try to find the places where we have distinct value to our clients and where there is secular growth. And I think in that sense, that business is set up really well, given the industry dynamics that everybody in this room deals with.

We can run a bit more over time because I want you to touch on alternatives that you referenced. So how are you thinking about alternatives offering? And what's the opportunity here?

Well, I think I'm going to borrow a phrase from some of my "alternative asset managers and leaders." We don't really want to always call it alternative because it's sort of -- I'm not sure it's mainstream, it's just a form of asset management. So maybe I'll refer to it as private markets. But I would include the hedge fund product suite in there. We think we're if not the most important, one of the most important private market firms in the world, and it epitomizes both integrated firm and client strategy that's really tight, which is in our wealth management business, we think we're the largest allocator to the private market/alternatives universe in the world. I think it's close to a quarter of $1 trillion. Our asset allocation team in both wealth and asset management, I think the percentage of assets into the private market should be higher longer term versus that implied allocation in the business. So we think the prospects of us continuing to be the largest allocator in the world. We don't just allocate, we partner with asset managers as I've talked about in the past, open architecture system. We partner around creating the vehicles and creating the structures that are appropriate for the wealth management community, so we're an R&D partner with the private market ecosystem. In Asset Management, as I mentioned, we're both a direct manager of private markets in infrastructure and real estate, mid-cap private equity and special situations, but we are a co-invest partner with the industry as well. So we've got a very large now private credit offering. So it supports the product equity industry. We have a big co-invest fund that also co-invest with the private equity industry. And then obviously, in the securities business, whether it's in M&A or it's in underwriting, or it's in risk management, as I said, macro risk management or importantly, in credit, where some of our largest and fastest-growing clients or private credit managers, it's also an important part of it. And so if you believe in the secular growth of private markets, and alternatives. And obviously, we have the largest -- or one of the largest prime brokerage businesses in the world. If you believe in that growth, there is no better sort of partner both as a shareholder or as a client than Morgan Stanley and what Mandell and his team will increasingly do because our touch points with the asset managers are so abroad is bring that all together in a cohesive way, so that we can bring the best advice, the best network, the best alpha, the best business building capabilities to all of those private market asset managers. And it's part of why that durable share comment is out there, and it's why Ted is so focused on this integrated firm is we've got a real opportunity. And again, in a world where dispersion is higher and data is harder, whether it's in the private market or in the public market, we think the value equation that we can provide to asset managers, whether they're public or private, and the connectivity that we can then take to corporates, and therefore, provide real differentiated value corporates is at its highest that I've seen in the 34 years I've been at Morgan Stanley. So we're pretty excited.

Great. With a bit over time. But if anyone wants to ask one question, we can take 1 question in. Masimo here in the front.

You made some comments on primary activity being quite strong, but I was wondering whether you're detecting any sign of the policy use uncertainty in the U.S. filtering through boardroom mindsets, delay in investments and potential changes in primary pipeline going forward.

Yes. It's a good question because it's always -- it allows me to then make sure I reflect my answer correctly from the original. The execution quality in the equity markets is surprisingly good when deals are coming. The amount of deals coming is still pretty modest. And I think that modest flow is exactly it reflects the policy uncertainty. And so I think the flow of equity new issue and again, I would extend it to M&A announcements is certainly a bit on pause or the bar is high because of some of the policy uncertainties. In contrast, both the credit market in the secondary market and in the primary market has stayed really, really strong. So you've got continued really strong credit dynamics in the primary market, reflective of pretty strong fundamentals and technicals in the secondary market. And again, that underpins whenever the M&A decision maker wants to go, they have the credit market behind them. On the equity market, those who have gone, I think, both they and we have been surprised at the breadth of demand. And I think it does reflect this need to go try and find alpha and feel like you're being rewarded as an asset manager to go get alpha because beta is going to be harder. That has been better than we expected, but the flow is still light. And I think the flow stays a little light until we have some more policy certainty. And again, equity flow around raising capital either in primary form or secondary form is very similar to M&A. It just gets paused. It doesn't get deleted. And I think that's important as we think about business building and you think about investing is the need for someone to monetize their stake in a company or their need to go raise primary capital to grow it doesn't go away. It's just -- the decision on when gets pushed out in periods of uncertainty like the one we're in. And at the same time, whether it's Honeywell buying a company called Sundyne out of Warburg or KKR raising capital or Galderma raising secondary capital. Those companies who did raise -- either do M&A or raised equity capital, the execution quality still remains very resilient.

Okay. I think in the interest of time, we're going to leave it there. Thanks very much.

Thank you again for the conference and for today. Thank you.