(Reuters) - Morgan Stanley (MS.N) has scaled back a group that invests in financial technology on behalf on the bank’s equities division, according to people familiar with the matter.
Most of the eight to 10 members of the principal strategic investments group have left the Wall Street firm in the last few months, including head Gary Offner, the people said.
A Morgan Stanley spokesman declined to comment.
The move comes as Morgan Stanley, like its Wall Street peers, is looking to cut costs amid pressure on its bottom line.
It also comes as the group shifts its strategy to focus more on the investments’ strategic fit to the bank’s sales and trading operations, rather than one that just looks at returns, one of the people said.
The business will continue to exist with a smaller headcount and the bank is not retreating from investing in financial technology, the people added.
The principal strategic investment group invests in market structure ventures and financial technology that align with the bank’s equities division. It has held stakes in companies including Philadelphia Stock Exchange, BATS Global Markets, Chi-X Global and bank messaging company Symphony Communications.
Morgan Stanley’s equities division, which this week named Peter Santoro as its global head of trading, remains a bright spot for the bank.
The business, which competes head-to-head with rival Goldman Sachs Group Inc (GS.N), generated revenue of $8.1 billion in 2015, excluding adjustments, up 18 percent from the year prior.
A separate Morgan Stanley group based in London makes investments on behalf of fixed income. It is unclear if this group was impacted by the cuts.
Other banks including Goldman Sachs, Citigroup (C.N) and Credit Suisse AG MLPN.P have teams that make bets on the future of financial technology.
Reporting by Michelle Price in Hong Kong and Olivia Oran in New York; Editing by David Gregorio