Morgan Stanley distributes merging-mkt debt fund

FWR Staff

1 May 2007

Wirehouse-affiliated AM calls it a new investment opp. for private clients. Morgan Stanley advisors are distributing a new proprietary closed-end fund that invests mainly in emerging-market sovereign debt denominated in the currency of the issuer. The wirehouse says the offering is significant because retail investors don't generally have access to local-currency emerging-market debt, which the firm characterizes as "the next phase of development for emerging markets economies."

The Morgan Stanley Emerging Markets Domestic Debt Fund initial offering ran from 26 March 2007 through 23 April 2007. Though focused on government-secured debt, the fund may also invest in debt obligations of non-governmental issuers located in emerging markets, including bonds, convertible securities and commercial paper.

Power of proprietary

The emerging-market domestic-debt fund "is another example of our commitment to providing sophisticated and innovative strategies that leverage our experience as one of the world's leading institutional money managers," according to Morgan Stanley Investment Management president Owen Thomas. "More than ever, we're working across borders and asset classes to develop new forms of investment opportunities for our clients."

Morgan Stanley's Global Wealth Management division distributes the fund. MSGWM head James Gorman says the emerging-market domestic-debt fund "is very good example of the kind of opportunity -- drawing upon the full depth of intellectual capital available at Morgan Stanley -- that we want to bring to our clients."

Adds Gorman: "Innovative investment products such as this fund help fulfill the potential of a Morgan Stanley relationship."

MSIM's Emerging Markets Debt team, which has been managing money in emerging-debt markets since 1993, manages the new fund.

"The Emerging Markets Domestic Debt Fund provides exposure to improving emerging market fundamentals through investments in a regionally diversified group of sovereign government bonds denominated in a diversified basket of emerging market currencies," says fund managing director Abigail McKenna.

Morgan Stanley more than 600 offices in 31 countries. MSIM managed around $500 billion at the end of February 2007. -FWR

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