Morgan Stanley's European Institutional Equity Division recently took top honors from two industry publications. The Firm placed first when Institutional Investor asked buy-siders to rank brokers by execution excellence in pan-European equity trading, the first-ever survey of this kind. Morgan Stanley also ranked first among hedge funds for execution excellence in pan-European equities trading according to Alpha magazine, II's hedge fund publication.

Some traditionally long-only investors, II explained, have started to take cues from hedge funds and seek profits from arbitraging, putting a premium on unloading stakes quickly. "Executing these trades in a timely fashion often means asking a brokerage firm to take the other side using its own capital," the magazine wrote. "Consequently, over the past 12 months, many of Europe's biggest brokerages, according to their own private estimates, have doubled the amount of capital they are willing to commit to trading clients."

That level of service for clients earned the Firm significant approval. "Morgan Stanley, which finishes first in pan-European execution and trading, including the U.K., gets high marks for consistently putting its capital at risk," II wrote. "It also wins praise for having some of Europe's savviest traders."

Traders at hedge funds were quick to target innovative technology that set the Firm apart from the pack. "In particular, fans of program execution and other low-touch approaches are impressed with Morgan Stanley's [electronic] trading platform, Passport, which gives users an anonymous and programmable portal to the equity markets," Alpha noted.

The results of the II survey are based on voting by head traders at more than 200 major institutions that generated an estimated US$1.55bn in commissions in European equity trades. II asked respondents to rate brokerages (including electronic communications networks and alternative trading systems) in terms of overall execution quality in pan-European equities and for U.K. equities only.

The Alpha ranking is based on a retabulation of Institutional Investor's survey of head traders at money management firms investing in European equities, counting only hedge funds responses.