Morgan Stanley’s asset management business posted a pretax loss of $227 million in the quarter ended May 31, compared with a $303 million gain in the equivalent quarter of last year.
Net revenue dropped 68% to $488 million in the quarter, down from $1.5 billion in the second quarter of 2007, stemming from principal losses in Morgan Stanley’s real estate and private equity businesses and lower net revenue in its core asset management business, according to Morgan Stanley’s second-quarter press release. Losses from continuing operations hit $133 million in the second quarter, up from a $103 million loss in the first quarter. Also, the manager recorded an $86 million trading loss from a structured investment vehicle held on the unit’s balance sheet.
In its core asset management business, Morgan Stanley recorded $15.5 billion in net inflows, of which $12.8 billion came from institutional money markets. Morgan Stanley’s total assets under management hit a record $605 million, up 8% from a year ago, driven by growth in both the core business and the closing of a $4 billion infrastructure fund.
