Morgan Stanley is to move its European investment management division from London to Dublin as the business seeks to soften the potential impact of a hard Brexit.
Addressing an event hosted by the bank on Tuesday, chief executive James Gorman said the move would be in parallel to a reassignment of up to 500 jobs out of London into other parts of the EU, Bloomberg reported.
The upper estimate of British job losses would be equivalent to one in 10 of the staff Morgan Stanley currently employs in the UK.
‘It’s big, it’s meaningful, but it’s not life changing,’ he told colleagues. ‘It’s net negative, there’s nothing particularly good about Brexit.’
The bank’s primary European legal holding company would be based in Germany he added, as domestic regulators are ‘used to dealing with large trading businesses’. Additional sales and trading staff will be added in Milan and Paris.
UK businesses looked to minimise the danger of barriers to services after Brexit are increasingly reassigning management contracts for European clients out of the UK and into the single market.
M&G is to transfer £34.2 billion (£30 billion) in assets to Luxembourg, while Columbia Threadneedle is to redomicile $7 billion. Both Standard Life Aberdeen and Legal & General IM have incorporated new fund businesses in Dublin.
‘They are saying, “we need to be in European jurisdictions” and they recognise the need to have a Brexit strategy in case of a hard Brexit,’ he said. ‘They recognise the need to have that option to sell into the UK.’