Morgan Stanley mulls Van Kampen options: sources

NEW YORK (Reuters) - Morgan Stanley (MS.N) is reviewing options for its Van Kampen Investments unit and has been approached about a deal, as it looks to fix problems in its asset management business, sources familiar with the situation said on Friday.

Van Kampen, which managed about $86 billion in assets as of June 30, offers open- and closed-end mutual funds, unit investment trusts, retirement products and investment platforms.

A deal is not imminent, the two sources said, adding that options could include a sale of a stake in the business. The sources asked not to be named because the talks are private.

Morgan Stanley declined to comment.

The business could attract interest from companies such as Invesco Ltd (IVZ.N), Nuveen Investments MDPRTN.UL, Federated Investors (FII.N) and Franklin Resources (BEN.N), sources said.

Morgan Stanley has looked at options for its asset management business in the past. It was in formal talks with Janus Capital Group (JNS.N) in the spring of 2008 about a deal to combine Janus with Van Kampen, and potentially other parts of Morgan Stanley's asset management business, according to another source.

Those talks fell apart because Morgan Stanley wanted a controlling interest in the combined operation, said the source, who asked not to be named because the discussions were private.

Van Kampen is part of Morgan Stanley's asset management business, which has posted $2.64 billion in operating losses since the start of 2008. Last month, Chief Executive John Mack promised his firm was "taking steps to deliver better results" in asset management and other crucial businesses.

Brad Hintz, an analyst with Sanford C. Bernstein in New York, said he does not expect Morgan Stanley to sell Van Kampen, but he did not rule out a joint venture. He said merging the Van Kampen business could be a smart move.

"I don't see why you would sell, but I could understand why you would want to be bigger," Hintz said. "Scale is the name of the game in asset management."

(Reporting by Steve Eder and Paritosh Bansal; Editing by Tim Dobbyn, Matthew Lewis, Toni Reinhold)