Morgan Stanley Global Franchise fund ‘on hold’

Research house Morningstar has placed the Morgan Stanley Global Franchise fund on hold as it waits to see the outcome of restructuring following the departure of one of the fund’s key decision-makers.

Managing director Hassan Elmasry has announced he will be leaving the firm in April to pursue his own initiatives, and Morgan Stanley is yet to make an announcement about how the team will look going forward.

While Morningstar said it is comfortable that investors’ short-term needs will be met, they believe Elmasry’s replacement “will have big shoes to fill”.

“Much of our favoured opinion about the Global Franchise strategy rested with Elmasry, and we’re downgrading our Morningstar recommendation to ‘hold’ as a result,” the report stated.

Morningstar said Morgan Stanley would continue to run the fund with the existing process and strategy, with the remaining team members running the portfolio until a long-term solution is found. Morningstar said the current team had been trained and guided by Elmasry since 2002, with low staff turnover.

Regardless, “until the firm irons out the uncertainties surrounding the team and Global Franchise’s long-term future … we advise new investors contemplating investing here to stay away for now”.

The Morgan Stanley Global Franchise fund is distributed in Australia through Macquarie’s Professional Series.

Elmasry will continue to perform his duties until mid-April. He has been with Morgan Stanley since 1995.