Morgan Stanley, one of the world's two biggest prime brokers, has eliminated five jobs in the unit that provides services for hedge funds in Tokyo, two sources said.
Morgan Stanley's local prime-brokerage team has thus been reduced to two people, including team leader Roger Dunphy, the sources said, declining to be identified as no public announcement has been made. The cuts took place last month.
Global hedge-fund closings rose to a record in the third quarter because of financial-market losses and client defections, according to Hedge Fund Research Inc., crimping demand for prime-brokerage services.
Morgan Stanley is shrinking its prime brokerage to adjust to "the rapidly changing market environment," the company said Dec. 17.