Mitchell M. Merin to Retire as President and Chief Operating Officer of Morgan Stanley Investment Management

Owen D. Thomas to Serve as Acting President of Morgan Stanley Investment Management During Search for Permanent Successor to Merin Mack Says Firm Is Strongly Committed to Growing Investment Management as Key Business for Morgan Stanley

New York —

Morgan Stanley (NYSE:MWD) announced today that Mitchell M. Merin, President and Chief Operating Officer of Morgan Stanley Investment Management (MSIM) has decided to retire from the Firm, and Owen D. Thomas will serve as Acting President of MSIM during the search for a permanent successor to Mr. Merin. As Acting President, Mr. Thomas will focus on working with the senior management team on day-to-day management of the business and identifying the right strategy and long-term leadership for MSIM. Mr. Merin will remain as a senior advisor to MSIM, working with Mr. Thomas on a variety of matters related to the transition and other issues. Joseph McAlinden, MSIM's Chief Investment Officer, will be responsible for MSIM's investment process and strategy.

Mr. Merin, 52, has been with the Firm for more than two decades and for the past seven years has led MSIM, one of the world's 20 largest investment management businesses offering investment management services to a diverse client base of institutional and individual investors worldwide. During Mr. Merin's tenure as Head of MSIM, he led the combination of a variety of disparate businesses into a single, integrated investment management business; increased assets under management; and enhanced the profitability of the business.

Mr. Thomas, 44, is Head of Morgan Stanley Real Estate, the Firm's industry-leading real estate financial services franchise. Morgan Stanley Real Estate is one of the largest global real estate investment management businesses as well as a leader in mergers and acquisitions, restructuring and recapitalization, public and private debt and equity underwriting and mortgage financing. Mr. Thomas will retain his role at Morgan Stanley Real Estate during this interim assignment. Mr. Thomas and Mr. McAlinden will report to Zoƫ Cruz, Morgan Stanley's Acting President.

Firm Committed to Building on Strengths of Business

John J. Mack, Chairman and Chief Executive Officer of Morgan Stanley, said, "Investment Management is a key business for Morgan Stanley, one that we are deeply committed to investing in and growing. As head of the business, Mitch Merin provided strong leadership and established an excellent foundation on which to build. He has significantly enhanced profitability, and the performance of key funds continues to improve. We greatly appreciate everything that Mitch has contributed to the Firm and are grateful that he will be working with Owen Thomas to ensure a smooth transition following his retirement.

"Owen is an outstanding leader, who enjoys enormous credibility in the marketplace with clients and investors. Together with his partners, he helped build one of the world's top financial services businesses in the real estate sector. Since he became Head of Morgan Stanley Real Estate in 2000, Owen and his team have nearly doubled that business' revenues. As we look to the future, Owen Thomas will be working closely with Mitch and the rest of our management team to help us formulate the right strategy for MSIM, further strengthen day-to-day management and identify the type of long-term leadership for the business that we need to ensure continued success."

Ms. Cruz said, "The Firm is strongly committed to building our investment management business and realizing its promising growth opportunities. Mitch and his team have done an outstanding job creating strong momentum in the business, having achieved pre-tax margins of over 30 percent for the first half of 2005. Owen Thomas will now add his additional experience, insight and leadership ability to work with them on how to take the business to a new level of success. During this temporary assignment, the strong team that Owen has developed at Morgan Stanley Real Estate will continue to drive that unit's momentum."

Mr. Merin said, "It has been a great honor to work with the incredibly talented professionals at MSIM. They have accomplished a great deal in the past few years, and I am confident that they continue to have enormous potential for further growth in the business. Owen Thomas brings a valuable perspective to the business that will be extremely helpful in assisting the Firm realize that growth by defining the best possible strategy and leadership for the next phase of MSIM's development."

Mitchell M. Merin

In addition to his leadership of MSIM for the past seven years, Mr. Merin has held a wide variety of executive positions for more than two decades with Morgan Stanley and with Dean Witter, Discover & Co., which merged with Morgan Stanley in 1997. At the time of the merger, Mr. Merin was Executive Vice President and Chief Administrative Officer for Dean Witter Discover, and he led its merger transition effort. After the merger he served as President and CEO of Morgan Stanley Dean Witter Advisors, the Firm's proprietary asset management business serving individual investors, before assuming his current role in 1998 as head of the combined investment management business for both individual and institutional investors.

Mr. Merin joined Sears in 1981 before becoming Senior Vice President and Group Treasurer at Dean Witter in 1986. He subsequently served at Dean Witter as Managing Director of Corporate Finance as well as Executive Vice President and Director of Taxable Fixed Income and Futures, among other roles. He received a bachelor's degree from Trinity College, where he currently serves on the Board of Trustees, and an MBA from Northwestern University's Kellogg Graduate School of Management in 1977.

Owen D. Thomas

Under Mr. Thomas and his management team, Morgan Stanley Real Estate's investment management business has grown significantly through both acquisitions and organic growth. Morgan Stanley's real estate assets under management have grown from $2 billion in 1994 to nearly $40 billion today. Morgan Stanley Real Estate manages a variety of open-end and closed-end funds and separate accounts globally, with a broad range of strategies and return criteria.

Mr. Thomas joined Morgan Stanley in 1987 and has been actively involved in the Firm's real estate business since that time. He began managing the real estate investing business in 1994, was named Managing Director in 1995 and Head of Morgan Stanley Real Estate in 2000. He is a Trustee of the Urban Land Institute, Vice Chairman of the Pension Real Estate Association and a member of the Real Estate Roundtable. He received a bachelor's degree from the University of Virginia and an MBA from Harvard Business School.

Morgan Stanley Investment Management

MSIM, with $416 billion in assets under management and more than 400 investment professionals around the world, is one of the 20 largest businesses in the highly fragmented global investment management industry. The division, which serves both institutional and individual clients, contributed more than 12 percent of Morgan Stanley's profit before taxes in 2004, up from more than 8 percent in 2003.

MSIM has three distinct sets of clients:

  • Institutional clients, including 401(k)/defined contribution plans, endowments, foundations, pension funds, corporations, governments, and high-net-worth individuals;
  • Individual investors who own Morgan Stanley funds managed by Morgan Stanley Investment Advisors; and
  • Investors who make investments through other brokerage firms, banks and financial planners via Van Kampen Investments, a wholly owned subsidiary.
As of May 31, 2005, assets under management or supervision included $217 billion in institutional assets and $199 billion in retail assets.

Morgan Stanley is a global financial services firm and a market leader in securities, investment management, and credit services. With more than 600 offices in 28 countries, Morgan Stanley connects people, ideas and capital to help clients achieve their financial aspirations.