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Morgan Stanley's Push Into Alternatives: Is It an AUM Growth Catalyst?
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Key Takeaways
MS is expanding into alternatives, targeting AUM growth via private markets and wealth channels.
MS acquired EquityZen to offer pre-IPO access, boosting appeal to high-net-worth clients.
Private credit expansion faces risks from higher rates, defaults and liquidity pressures in tighter markets.
Morgan Stanley (MS - Free Report) has intensified its push into alternatives by expanding its private markets ecosystem, a strategy that is aligned with a broader industry shift, where alternatives have grown into a roughly $20 trillion market and are increasingly being democratized beyond institutional investors to high-net-worth and mass-affluent clients.
In this area, a key move by MS has been the acquisition of private shares platform EquityZen in January 2026, which allows investors to buy and sell stakes in pre-IPO companies , thereby effectively bringing venture-style opportunities into its wealth management channel.
Moreover, Morgan Stanley is deepening its capabilities in private credit and broader alternative strategies to support long-term assets under management (AUM) growth. The firm continues to invest in origination, leadership and structuring capabilities in private credit — viewing it as a core pillar of expansion — even as it adopts a disciplined approach to underwriting in a tighter market.
This is expected to materially boost AUM growth by attracting new client capital and increasing allocations from existing clients. Private market investments offer higher return potential and diversification benefits. By expanding access through its wealth platform, Morgan Stanley is encouraging clients to shift a greater portion of their portfolios into these strategies, thereby lifting overall AUM. Moreover, the ability to offer differentiated, previously hard-to-access opportunities will likely strengthen client acquisition and retention, further supporting AUM inflows.
However, as early signs of stress emerge, Morgan Stanley will likely face a more challenging backdrop in private credit. Higher interest rates and tighter financial conditions are raising borrowing costs, increasing default risks and weakening repayment capacity among leveraged borrowers. Slower dealmaking and refinancing activity are constraining new lending opportunities and limiting exit options. Liquidity pressures are also building as cautious investor sentiment drives higher redemption requests. This has prompted Morgan Stanley to restrict withdrawals in certain private credit vehicles, highlighting the mismatch between illiquid assets and investor expectations for flexibility.
How Are MS’ Peers Expanding Into Alternatives?
Peers of Morgan Stanley like Goldman Sachs (GS - Free Report) and JPMorgan (JPM - Free Report) have also been expanding into alternatives.
Goldman Sachs has been scaling private credit, raising capital and broadening its product ecosystem across private markets. A major pillar of its strategy is private credit expansion, which the firm views as its biggest opportunity within alternatives. Goldman Sachs is targeting a $300 billion private credit portfolio over the next few years, supported by global expansion, partnerships and direct lending platforms.
Beyond credit, GS is broadening its alternatives platform and distribution reach. It has been expanding into venture and secondary markets through acquisitions like Industry Ventures, while strengthening its wealth platform to deliver institutional-quality private equity, hedge fund and real asset strategies to high-net-worth clients. The firm’s alternatives business now sits at the center of its asset & wealth management strategy, with a focus on integrating origination, product manufacturing, and distribution.
JPMorgan is expanding into alternatives through a multi-pronged strategy focused on private markets, product innovation and wealth distribution. The bank is building out its private markets capabilities and origination engine. It recently created a dedicated Private Capital Advisory & Solutions team to connect investors with companies raising capital outside public markets.
Also, JPMorgan is expanding access to alternatives through its wealth platform. The firm has strengthened its private wealth alternatives team and is rolling out evergreen and semi-liquid structures to improve usability for clients. Partnerships with platforms like iCapital further support distribution, enabling broader access to private equity, hedge funds and credit strategies.
Morgan Stanley’s Price Performance, Valuation & Estimates
In the past six months, the company’s shares have gained 0.9% against the industry’s 6.2% decline.
Image Source: Zacks Investment Research
From a valuation standpoint, MS trades at a 12-month forward price-to-earnings (P/E) of 13.99X, above the industry average of 12.56X.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Morgan Stanley’s 2026 earnings suggests a 9% rise on a year-over-year basis, while 2027 earnings are expected to grow 7%. In the past 30 days, earnings estimates for 2026 and 2027 have moved upward.
View the Zacks #1 Rank List
Image: Bigstock
Morgan Stanley's Push Into Alternatives: Is It an AUM Growth Catalyst?
Key Takeaways
Morgan Stanley (MS - Free Report) has intensified its push into alternatives by expanding its private markets ecosystem, a strategy that is aligned with a broader industry shift, where alternatives have grown into a roughly $20 trillion market and are increasingly being democratized beyond institutional investors to high-net-worth and mass-affluent clients.
In this area, a key move by MS has been the acquisition of private shares platform EquityZen in January 2026, which allows investors to buy and sell stakes in pre-IPO companies , thereby effectively bringing venture-style opportunities into its wealth management channel.
Moreover, Morgan Stanley is deepening its capabilities in private credit and broader alternative strategies to support long-term assets under management (AUM) growth. The firm continues to invest in origination, leadership and structuring capabilities in private credit — viewing it as a core pillar of expansion — even as it adopts a disciplined approach to underwriting in a tighter market.
This is expected to materially boost AUM growth by attracting new client capital and increasing allocations from existing clients. Private market investments offer higher return potential and diversification benefits. By expanding access through its wealth platform, Morgan Stanley is encouraging clients to shift a greater portion of their portfolios into these strategies, thereby lifting overall AUM. Moreover, the ability to offer differentiated, previously hard-to-access opportunities will likely strengthen client acquisition and retention, further supporting AUM inflows.
However, as early signs of stress emerge, Morgan Stanley will likely face a more challenging backdrop in private credit. Higher interest rates and tighter financial conditions are raising borrowing costs, increasing default risks and weakening repayment capacity among leveraged borrowers. Slower dealmaking and refinancing activity are constraining new lending opportunities and limiting exit options. Liquidity pressures are also building as cautious investor sentiment drives higher redemption requests. This has prompted Morgan Stanley to restrict withdrawals in certain private credit vehicles, highlighting the mismatch between illiquid assets and investor expectations for flexibility.
How Are MS’ Peers Expanding Into Alternatives?
Peers of Morgan Stanley like Goldman Sachs (GS - Free Report) and JPMorgan (JPM - Free Report) have also been expanding into alternatives.
Goldman Sachs has been scaling private credit, raising capital and broadening its product ecosystem across private markets. A major pillar of its strategy is private credit expansion, which the firm views as its biggest opportunity within alternatives. Goldman Sachs is targeting a $300 billion private credit portfolio over the next few years, supported by global expansion, partnerships and direct lending platforms.
Beyond credit, GS is broadening its alternatives platform and distribution reach. It has been expanding into venture and secondary markets through acquisitions like Industry Ventures, while strengthening its wealth platform to deliver institutional-quality private equity, hedge fund and real asset strategies to high-net-worth clients. The firm’s alternatives business now sits at the center of its asset & wealth management strategy, with a focus on integrating origination, product manufacturing, and distribution.
JPMorgan is expanding into alternatives through a multi-pronged strategy focused on private markets, product innovation and wealth distribution. The bank is building out its private markets capabilities and origination engine. It recently created a dedicated Private Capital Advisory & Solutions team to connect investors with companies raising capital outside public markets.
Also, JPMorgan is expanding access to alternatives through its wealth platform. The firm has strengthened its private wealth alternatives team and is rolling out evergreen and semi-liquid structures to improve usability for clients. Partnerships with platforms like iCapital further support distribution, enabling broader access to private equity, hedge funds and credit strategies.
Morgan Stanley’s Price Performance, Valuation & Estimates
In the past six months, the company’s shares have gained 0.9% against the industry’s 6.2% decline.
Image Source: Zacks Investment Research
From a valuation standpoint, MS trades at a 12-month forward price-to-earnings (P/E) of 13.99X, above the industry average of 12.56X.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Morgan Stanley’s 2026 earnings suggests a 9% rise on a year-over-year basis, while 2027 earnings are expected to grow 7%. In the past 30 days, earnings estimates for 2026 and 2027 have moved upward.
Image Source: Zacks Investment Research
Currently, MS carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.