Morgan Stanley Seen as Jumping the Gun on Van Kampen Sale

Selling Van Kampen at a time when most asset managers are still bruised from the market downturn is not a wise idea for Morgan Stanley, analysts tell The Wall Street Journal. Assets have fallen 32% to $86 billion in the 12 months ended June 30.

“This company, over the past decade, seems to charge into each area at the top or charge out at the bottom,” said Richard Bove, a bank analyst with Rochdale Securities. “Now that they’re experiencing serious problems in their asset management business, they’ve made the decision to charge out at the bottom, apparently.”

Likewise, Well Fargo Securities Senior Analyst Matthew Burnell said a sale of Van Kampen would be “ill timed” and “hardly transformational. A near-term sale reduces any of the benefits that Morgan Stanley could enjoy if global markets continue to improve over the next few years. At current valuations for asset managers, and the modest earnings-per-share impact from a sale, we see modest reason to complete a sale in the near term.”

Companies interested in purchasing Van Kampen reportedly include Invesco, Aberdeen Asset Management, Federated Investors, Franklin Resources and Nuveen Investments. Analysts figure the company could sell for $860 million. Even though Van Kampen’s assets have fallen, they still comprise 24% of Morgan Stanley’s assets.