Morgan Stanley (MS) Unit Completes Buyout of Mesa West

Morgan Stanley Investment Management, a unit of Morgan Stanley MS, has successfully completed the acquisition of Los Angeles, CA-based commercial real estate credit platform, Mesa West Capital, LLC.

Mesa West is a leading, originations-focused, commercial real estate credit platform that has originated 250 loans since its inception in 2004, totaling $12 billion in principal balance.

Its acquisition adds $5 billion in assets under management (AUM) to Morgan Stanley’s Investment Management unit and nearly 7% to the company’s overall revenues.

Morgan Stanley’s Investment Management wing will now be able to offer real estate credit that was previously unavailable.

Notably, Mesa West’s employees will continue to work from its offices in Los Angeles, New York and Chicago, and Mesa West itself will operate as a separate entity within Morgan Stanley Investment Management’s Real Assets group.

Also, Mesa West’s current management team, led by Co-Founders Jeff Friedman and Mark Zytko, will continue to manage the company on a day-to-day basis.

With an aim to lower balance-sheet risk and focus on its two less capital intensive businesses -- Wealth Management and Investment Management, Morgan Stanley has been taking several restructuring initiatives over the past few years. Moreover, its significantly diversified footprint and product portfolio are expected to support top-line growth in the future.

Shares of Morgan Stanley have gained 33.5% over the last 12 months, outperforming the industry’s rally of 29.6%.

Currently, Morgan Stanley carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the same space are Interactive Brokers Group IBKR, Moelis & Company MC and Stifel Financial Corp. SF, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Zacks Consensus Estimate for Interactive Brokers Group has been revised nearly 1% upward for the current year over the last 60 days. Its shares have surged more than 95% over the past 12 months.

Moelis & Company witnessed an upward earnings estimate revision of 10.5% for the current year in the last 60 days. Also, the stock has gained 43% in a year’s time.

Stifel Financial’s Zacks Consensus Estimate has been revised marginally upward, for the current year in the past 60 days. Also, in a year’s time, its share price has moved up 30.4%.

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