BACK IN THE GAME(2)

Morgan Stanley's return to private equity gained further momentum last month, as the US investment bank renamed its Morgan Stanley Capital Partners division Morgan Stanley Private Equity (MSPE) and added a new senior recruit.

Gary Matthews joins MSPE as a managing director and operating partner. His experience includes leading business units at firms including Simmons Bedding Company, Bristol-Myers Squibb and Derby Cycle Corporation.

“Gary is a proven CEO in both the public and private equity arenas, and has generated top and bottom line growth for more than two decades by transforming internally focused companies into market driven organizations,” Stephen Trevor, co-head of MSPE, said in a statement. “Operating partners are critical to our strategy of building a world-class private equity franchise.”

MSPE is led by Trevor, who was recruited from Goldman Sachs last year, and fellow co-head Alan Jones, who was promoted internally. Morgan Stanley's previous in-house buyout group spun out three years ago, naming itself Metalmark Capital. Metalmark now manages all Morgan Stanley Capital Partners' prior funds except its Asian funds (the bank closed its third Asian private equity fund on $1.5 billion in October).

A source close to the bank said Morgan Stanley's current chief executive, John Mack, finds greater merit in private equity activities than did former chief Phillip Purcell, despite the asset class' fluctuating effects on short-term earnings.

As it sets about raising a $6 billion global fund, to which sources say the bank has committed $2 billion, MSPE is bolstering its staff worldwide. The recruitment drive includes former Metalmark managing director, Eric Fry, who has returned to work for the New York team.

In addition to 30-plus employees in Hong Kong, MSPE has about 15 New Yorkbased employees. It aims to have roughly the same number in London, where Brian Magnus, previously Morgan Stanley's head of UK investment banking, was recently appointed co-head of the European private equity business, alongside the former head of Lazard's European buyout arm, Graham Keniston-Cooper, who was hired in July.