MORGAN STANLEY PRIVATE WEALTH … stanley private wealth management overview ... ipo of china unicom limited, ... morgan stanley private wealth management highlights

M O R G A N S TA N L E Y P R I VAT E W E A LT H M A N A G E M E N T O V E R V I E W

T H E M Y E R S T R E M A I N E G R O U P

2 The Myers Tremaine Group

A G E N D A

MORGAN STANLEY PRIVATE WEALTH MANAGEMENT

• Our Mission

• Client Principles

• Why Wealthy Families Choose Morgan Stanley Private Wealth Management

MORGAN STANLEY FRANCHISE

• Overview

• A Heritage of Confidence

• Morgan Stanley Global Footprint

• Comprehensive Capabilities

CUSTOMIZED WEALTH MANAGEMENT PROCESS


M O R G A N S T A N L E Y

P R I V A T E W E A L T H M A N A G E M E N T


O U R M I S S I O N

Morgan Stanley Private Wealth Management is dedicated to ultra high net worth individuals, their

families and foundations. By providing advice founded on a culture of excellence and driven by global

insight, Morgan Stanley Private Wealth Management is devoted to helping our clients preserve and grow

their financial, family, and social capital.


C L I E N T P R I N C I P L E S

PRIVATE WEALTH ADVISOR COMMITMENT TO CLIENTS

Manage investments with an unwavering

focus on your financial strategy and

personal goals

Structure wealth and customize solutions

based solely on an objective view of your

needs

Simplify financial complexity to help you

achieve clarity and control

Align your strategy with the values that

have shaped your life and constitute the

core of your legacy

CLIENT PRINCIPLES

• CONFIDENCE in a business that has navigated over 75 years

of market cycles

• ACCESS to Morgan Stanley’s brightest people and best resources

• An exclusive FOCUS on wealthy individuals, families and foundations

• Objective solutions for your family’s needs that reflect our INSIGHT

into the complex financial world

• The highest levels of PERSONAL SERVICE by serving a limited

number of clients per advisor

We are committed to maintaining the principles that have

placed Morgan Stanley at the forefront of the financial markets

since 1935, and we look forward to continuing to share our

legacy with you as you are building yours.


1 PWM Headcount as of July 2014. Morgan Stanley Smith Barney LLC ("Morgan Stanley"), its affiliates, Financial Advisors and Private Wealth Advisors do not provide tax or legal advice. Clients should consult their tax advisor for matters involving taxation and tax planning and their attorney for matters involving trust and estate planning and other legal matters.

W H Y W E A L T H Y F A M I L I E S C H O O S E M O R G A N S T A N L E Y

P R I V A T E W E A L T H M A N A G E M E N T

Characteristics that you may find at some alternative firms:

RETAIL BROKERAGE

Broad range of

sophistication and client

experience

Access to some franchise

and institutional resources

may be limited to valued

clients

Standard product and

service offerings; typically

limited customization

Retail pricing

Specialized services and

solutions tailored to the

needs and complexities of

each client

As a boutique group within a world-class firm,

Morgan Stanley Private Wealth Management

is well positioned to serve ultra high-net-worth

individuals, families and their foundations

around the world.

MORGAN STANLEY PRIVATE WEALTH MANAGEMENT

• Over 350 Private Wealth Advisors located in 40 offices across the U.S1

• Special focus on individuals and families with $20mm+ in investable

assets

• Boutique division providing highly customized solutions and tailored

wealth strategies

• Team coverage with intensive client service

• Direct firm wide access to analysts, strategists, traders and

investment bankers

• Objective and consultative approach with one of the largest third

party platforms as well as an extensive Morgan Stanley proprietary

platform; Holistic wealth management approach with an expertise in

complex financial structuring, tax/estate strategies and family office

services like philanthropy and family governance

• Exclusive client events and educational programs for small groups of

ultra-high-net-worth individuals

PRIVATE BANKS

(PROPRIETARY

PRODUCT-DRIVEN)

Service-oriented approach

Centralized investment

advice

Offering focused on

proprietary products

High turnover of advisors

Emphasis on trust

administration and sales

over investment expertise

High touch, low content

CONSULTANT AND

SMALL INDEPENDENTS

Objective, consultative

approach

Open architecture: product

offering primarily from

third-party providers

Ability to perform

research, asset allocation,

manager search &

selection, due diligence

Customized but limited

risk management

assessment

Structured investments,

trust & estate, cash

management functions

typically outsourced

Limited global reach


M O R G A N S T A N L E Y F R A N C H I S E


M O R G A N S T A N L E Y F R A N C H I S E

As a result of the integrated

leadership between PWM and the

other divisions of the Firm, PWM

is uniquely positioned to deliver

the Firm’s expansive resources to

each client.

MORGAN STANLEY FRANCHISE POWER1

1 As of 31 December 2013. At Morgan Stanley Wealth Management. 2 As of 30 June 2014. At Morgan Stanley Wealth Management.

• $2Tn in AUM2

• Total Deposits $112Bn

• Morgan Stanley reported revenues of

$32.4Bn

• Global employees approximately 56,1422

• The Tier 1 Capital Ratio under Basel I was

approximately 15.6% and leverage of 7.6%

• $202Bn in liquidity reserve

• Investment Banking No. 2 in Global Announced M&A

and No. 3 in Global Equity and Global IPO’s2

MORGAN STANLEY WEALTH MANAGEMENT

Clients

• Individuals

• UHNW Individuals, Families and their

Foundations (Morgan Stanley Private Wealth

Management)

• Small- to medium-size businesses and

institutions

Products and Services

• Brokerage and investment advisory services

• Financial and wealth planning services

• Annuity and insurance products

• Access to Banking and Lending products

and services

• Retirement plan services

• Trust services access

INSTITUTIONAL SECURITIES GROUP

Investment Banking

• Capital raising

• Corporate lending

• Financial advisory services, including advice

on mergers, and acquisitions, restructurings,

real estate and project finance

Sales, Trading, Financing and Market-Making

Activities

• Equity securities and related products

• Fixed income securities and related products,

including foreign exchange and commodities

• Research

• Mortgage servicing

• Prime brokerage

INVESTMENT MANAGEMENT

Global Asset Management

• Equity and Fixed Income

• Merchant Banking

• Alternative Investment Partners

• Liquidity Management

Three Principal Distribution Channels

• A proprietary channel consisting of Morgan Stanley’s

representatives

• A non-proprietary channel consisting of third-party

broker-dealers, banks, financial planners and other

intermediaries

• An institutional channel that provides advisory

services and global portfolio solutions to

corporations, central banks, sovereign wealth funds,

endowments and foundations, public pensions,

insurance general accounts and financial institutions


H E R I T A G E O F C O N F I D E N C E

1935

Morgan Stanley

founded

1953

Manages General

Motors $300 million

debt issue

1974

Represents INCO

(International Nickel

Company) in its hostile

bid for ESB (Electric

Storage Battery)

1985

Launches Fixed

Income division

1999

Lead underwriter for the

UPS $5.47 billion IPO

2008

Becomes a bank holding

company

1942

Becomes member

of New York

Stock Exchange

1966

Manages underwriting

syndicate for $100

million bond offering

for New York

Telephone Company

1977

Launches

Morgan Stanley

Private Wealth

Management

1997

Morgan Stanley Group,

Inc. merges with Dean

Witter, Discover & Co.

2000

Acts as the joint global

coordinator and book

runner for $5.65 billion

IPO of China Unicom

Limited, the largest

Chinese IPO to date

2009

Morgan Stanley and

Smith Barney join to

create a new leader in

wealth management

1935

Debuts with a $19

million bond offering

for Consumers Powers

Company

1961

Launches Morgan

Stanley Foundation

1975

Launches asset

management business

1986

Morgan Stanley is

publicly listed on the

New York Stock

Exchange

1998

Advises the Brazilian

government on the

$18.3 billion sale of

telecommunications

provider Telebra

2008

Enters into global

strategic alliance with

Mitsubishi UFJ Financial

Group

1952

Co-manages the World

Bank’s $50 million

triple bond offering to

help finance European

reconstruction

1973

Launches research

department

1980

Leads the Apple

Computer IPO

1995

Manages the

Netscape IPO,

sparking the rapid

growth of the

internet

2004

Co-manages $1.9 billion

auction for Google in

the largest Internet IPO

to date and largest

auction-based IPO in

U.S. history

2010

Co-leads the

General Motors

IPO, the largest in

U.S. history

Advises the U.S. Treasury

on crisis at Fannie Mae and

Freddie Mac


M O R G A N S T A N L E Y G L O B A L F O O T P R I N T

NORTH AMERICA

SOUTH AMERICA

EUROPE

AFRICA

ASIA

AUSTRALIA

Mexico

Peru

United States

Argentina

Brazil

United Kingdom

Canada

Switzerland France

Spain

Poland

Hungary

Turkey

Israel

Germany

Netherlands

Ireland

Saudi Arabia

South Africa

China

United Arab Emirates

India

Japan

Taiwan Hong Kong

Singapore

Australia

Italy

South Korea

Sweden

• Over 349 Private Wealth Advisors in more than 52 regional

offices

• Over $185Bn in assets under management1

• Focus on families with $20MM+ in investable assets

MORGAN STANLEY PRIVATE WEALTH MANAGEMENT HIGHLIGHTS

• US PWM dedicated offices include: Atlanta,

Boston, Chicago, Dallas, Houston, Los

Angeles, Menlo Park, Miami, New York,

Philadelphia, San Francisco, and Washington

Global Footprint — MS Today Has Approximately 55,700 Employees in 31 Countries

1 As of June 2014

• Generally co-located in the same offices as other

Morgan Stanley businesses such as Investment Banking,

Equities, Fixed Income and Investment Management,

which provides strong linkage to other parts of the firm


FINANCIAL PLANNING

• Goals-Based Planning

• Cash Flow Planning

• Retirement Planning

C O M P R E H E N S I V E C A P A B I L I T I E S

ACCESS TO BANKING AND LENDING

PRODUCTS AND SERVICES

• Securities Based Lending

• Residential Mortgage Lending

• Tailored Lending

TRUST, ESTATE & LEGACY PLANNING

• Wealth Transfer and Trust Strategies

• Current Will, Trust and Insurance Review1

• Foundation and Other Charitable Giving

Strategies

• Stock Option Analysis

INVESTMENT MANAGEMENT

• Assistance with your Investment

Policy Statement

• Tax Effective Asset Allocation

• Portfolio Construction and

Management

• Open Architecture Platform

RISK MANAGEMENT

• Hedging Strategies

• Concentrated / Restricted Stock Advice

• Interest Rate Risk Management

• Currency Exposure Strategies

• Portfolio Protection Solutions

• Insurance Solutions

• Cash Management Services

• Financing of Aircraft, Sports Teams,

Yachts and Art available through

third party lenders

• Commercial Lending

• Pre-liquidity Planning

• Coordination with Outside

Legal and Tax Advisors

• Morgan Stanley Proprietary

Investment Opportunities

• Exclusive Co-investment

Opportunities

• Money Manager Due Diligence

Research

• Alternative Investments

CORPORATE SERVICES

• Directed Shares, Stock Plans,

10b5-(1) Programs

• Capital Markets and

Investment Banking

Interaction

• Cash Management Services

• Retirement and Pension Plans

FAMILY OFFICE SERVICES

• Family Governance and Dynamics

• Philanthropy Management

• Educational Programs

• Custody

• Performance Management

• Health Advisory1

• Lifestyle Advisory1

• Personal Security1

1 Services provided by third parties and affiliates not Morgan Stanley Wealth Management

ONLINE & MOBILE APP CAPABILITIES

• Manage Accounts Online

• Trade Securities, Transfer Funds, and Pay Bills Online

• OneView

• eDelivery

• Mobile App available for iPhone®


C U S T O M I Z E D W E A L T H

M A N A G E M E N T P R O C E S S


A C U S T O M I Z E D A P P R O A C H 1

Your family’s dynamics, goals and risk tolerance are unique. We

will tailor our process to meet your personal and financial needs

and objectives.

Discovery Process While every client situation is unique, we

begin by learning about you, your family and

your financial complexities. What we learn

helps us to formulate specific strategies and,

of equal importance, it helps us customize the

entire relationship to your preferences and

requirements.

1

Formulation of Tax, Trust and Estate Strategy with Appropriate Advisors After reviewing your balance sheet and existing

estate plan, we help analyze your income and

estate tax circumstances to identify planning

techniques that may be effectively tailored to your

personal and financial objectives. We will work

with your tax and legal advisors in this effort.

2

Creation of a Customized Strategic Asset Allocation Managing significant wealth often involves

developing a customized asset allocation mix that

reflects risk, opportunities and taxation across

multiple entities, while integrating your investing

and estate plans. This asset allocation1 becomes

the basis for a long-term strategy formalized in

your investment policy.

3

Integration of Tactical Asset Allocation These short-term adjustments in asset allocations1

seek to take advantage of opportunities created by

temporary market distortions. Before adjustments

are made, we can analyze the impact of any taxes

or trading costs on potential returns.

4

Implementation of a Customized Wealth Strategy After comprehensive due diligence and extensive

analysis of expected results across a range of

market scenarios, investment strategies from our

global investment platform can be leveraged to

create your portfolio. This process can help to

create the most efficient balance of risk and return

for your specific strategy.

5

Ongoing Assessment of a Family’s Portfolio and Wealth Management Needs Coordinating with you and your other

advisors, we can conduct ongoing reviews

and comprehensive reporting to ensure that

your strategy adapts to changing financial

and family needs.

6

1 Asset allocation does not ensure a profit or protect against a loss


A D I A L O G U E T O I D E N T I F Y Y O U R U N I Q U E F A M I L Y P O S I T I O N

S T E P 1 O F 6 : T H E D I S C OV E R Y P R O C E S S

Risk Appetite Liquidity

Needs

Multi- Generational Family Goals

Taxability

Long Term Goals Special

Situations Charitable

Giving Restrictions

Time Horizon

Anticipated Wealth

Transfers

Short Term Goals

Concentrated Positions


A C O L L A B O R A T I V E A P P R O A C H

S T E P 2 O F 6 : F O R M U L AT I O N O F TA X , T R U S T, A N D E S TAT E S T R AT E G Y

Customized Tax, Trust &

Estate Strategy

Tax, Trust & Estate Legacy

Planning Professionals2

Your Current External Tax

Advisors

Your Current External Legal

Advisors

Your Morgan Stanley Private Wealth

Advisor

PROCESS FOR FORMULATING YOUR TAX, TRUST AND ESTATE STRATEGY

Conduct preliminary due diligence

(review of balance sheet and existing

documents)

Collaboratively discuss income tax and

estate planning needs with the client

Analyze available planning techniques

in relation to client’s financial goals

Assist clients and their tax and legal

advisors in the implementation of a

financially integrated estate plan

Integrate investment and estate plans

(combining “asset location” with “asset

allocation”1)

1 Asset allocation does not ensure a profit or protect against a loss. 2 Morgan Stanley Smith Barney LLC ("Morgan Stanley"), its affiliates, Financial Advisors and Private Wealth Advisors do not provide tax or legal advice. Clients should consult their tax advisor for matters involving

taxation and tax planning and their attorney for matters involving trust and estate planning and other legal matters. .

5

4

3

2

1


T H E P W M A S S E T A L L O C A T I O N F R A M E W O R K 1

S T E P 3 O F 6 : C R E AT I O N O F A C U S TO M I Z E D, S T R AT E G I C A S S E T A L LO C AT I O N

Analysis of Strategic Asset Allocation

• Employs quantitative analysis to identify the most

appropriate customized solution for each client

compared to various asset allocations

• Utilizes Monte Carlo Analysis, Factor Analysis and

Time Period Analysis

Integrate Strategic Asset Allocation and Trust, Tax & Estate Planning

• Demonstrates how the integration of strategic asset

allocation and appropriate estate planning can lead to

a potentially more efficient transfer of wealth from an

individual to charitable and/or noncharitable

beneficiaries

• Utilizes Monte Carlo Analysis

Starting with the Morgan Stanley Wealth Management Global Investment

Committee’s strategic frameworks, PWM utilizes rigorous analytical tools and models

to customize based on the complex needs of each family, endowment or foundation.

Concentrated Stock Analysis Model

• Shows comparable performance and valuation metrics for

a stock over the past 10 years

• Shows the risk/return tradeoff of transitioning into a

diversified portfolio from a concentrated stock position

• Provides insight into potentially favorable liquidation and

diversification strategies

Options Analysis Model

• Shows the valuation of ISOs and NQSOs for an individual

stock and decomposes their total value into intrinsic value

and time value

• Calculates the estimated tax cost of diversification as well

as hurdle rates necessary for breakeven after exercising

• Provides insight into potentially favorable liquidation and

diversification strategies

Formulated Tax, Trust & Estate Strategy

Your Customized Strategic Asset Allocation and Investment Strategy

Asset allocation does not ensure a profit or protect against a loss

By creating an investment

policy statement, you will

have a formalized document

that specifies your investment

needs and considerations.

YOUR INDIVIDUAL INVESTMENT

POLICY STATEMENT WILL:

• Clearly and concisely define

your investment

considerations and goals

• Ensure that all of your

investment needs are fully

and appropriately considered

• Provide a foundation upon

which to build and implement

a customized wealth plan


A C O M P R E H E N S I V E S U I T E O F S O L U T I O N S

S T E P 5 O F 6 : I M P L E M E N TAT I O N O F T H E C U S TO M I Z E D W E A LT H S T R AT E G Y

BALANCE SHEET & LIABILITY MANAGEMENT

CASH MANAGEMENT

FAMILY OFFICE SERVICES

1 Services may be provided by a third-party or through an affiliate of Morgan Stanley Smith Barney LLC

OPEN ARCHITECTURE INVESTMENT PLATFORM & ADVISORY SERVICES1

ADVISORY PLATFORM Asset-Based Fee

BROKERAGE PLATFORM Transaction-Based Fee

TRADITIONAL INVESTMENTS: Equity, Cash Alternatives, Fixed Income

Morgan Stanley Wealth Management Separate Account Managers

• Global Investment Solutions

• PWM Advisor Managed

• Morgan Stanley Investment Management

External Separate Account Managers

• Nationally recognized investment management firms

• Niche Strategies

ALTERNATIVE INVESTMENTS

Morgan Stanley/External Managers

• Hedge Funds

• Private Equity

Fund of Funds

• Managed Futures

EQUITY-RELATED

Research Calls

Syndicate Calendar

Derivatives

Strategic Equity

Portfolios (STEPs)

FIXED INCOME RELATED

Research and Credit Analyst Calls

Interest Rates

Corporate Credit Products

Municipal Bonds

Foreign Exchange

Commodities/Futures

ALTERNATIVES

• Private Equity

• Venture Capital

• Real Estate

• Real Assets

• Managed Futures

• Commodities

• Exchange Funds

• Fund of Funds

• Hedge Funds

• Hedging Strategies and Risk Management Solutions

• Structured Investments and Derivatives



U T I L I Z I N G T H I R D - P A R T Y E Q U I T Y , A L T E R N A T I V E

I N V E S T M E N T S , A N D F I X E D I N C O M E A S S E T M A N A G E R S

Providing clients with access to both affiliated and third party actively managed investment solutions

1 As of March 2014

EQUITY AND FIXED INCOME ASSET MANAGEMENT PLATFORM

• Open architecture platform featuring both proprietary and third party capabilities

• Solutions across a variety of asset classes and strategies

Morgan Stanley Investment Management (“MSIM”)

• With over $382 Bn in assets under management1, MSIM offers individuals comprehensive, multi-asset class investment solutions

• Morgan Stanley Alternative Investment Partners (“AIP”) manages portfolios of proprietary hedge fund of funds, funds of private equity funds, and funds of real estate funds, targeted at meeting a range of client objectives

Morgan Stanley Wealth Management Proprietary Resources

• Global Investment Solutions Group

‐ Professional asset managers dedicated to constructing and managing discretionary portfolios across various fixed income and equity strategies

• Strategic Equity Portfolios (“STEP”)

‐ Highly flexible, investment model portfolios leveraging Morgan Stanley Equity Research

Third-Party Asset Managers

• Consulting Group Investment Advisor Research (“CG IAR”), uses a rigorous due diligence process to screen a vast universe of equity, fixed income and some alternative strategy managers

• AIP is responsible for performing due diligence on single manager hedge funds

• Morgan Stanley Wealth Management Alternative Investments Research sources and performs due diligence on affiliated and unaffiliated fund of hedge funds, single manager hedge funds, Private Equity and Real Estate Funds



A C C E S S T O I N D U S T R Y - L E A D I N G C A P I T A L

M A R K E T S C A P A B I L I T I E S

Fixed Income Extensive inventory including U.S. Treasury, agency and mortgage-backed securities; certificates of deposit; municipal, corporate and convertible bonds; and preferred securities.

Equities Leading edge equity trading strategies that attempt to maximize efficiency and enhance profitability.

Structured Investments An evolving asset class, structured investments can be designed to meet a range of risk-return objectives.

Intellectual Capital Access, through the Financial Advisor, to the intellectual capital of Morgan Stanley & Co. and Morgan Stanley Wealth Management’s research analysts and strategists, respectively.

Portfolio Review and Account Evaluator Fixed Income Portfolio Reviews provide a detailed analysis of taxable and tax-exempt fixed income holdings; subject to portfolio size minimums. Account evaluator, a Financial Advisor tool, analyzes current asset allocation broadly.

Through our multiproduct trading desks, we provide you with a robust fixed income offering, institutional level

equity trading, research and market intelligence and the opportunity to invest in newly issued debt and equity

securities.

Syndicate Morgan Stanley Wealth Management leverages Morgan Stanley & Co.’s position as a leading debt and equity underwriter to provide access to new-issue and secondary offerings.

Global Reach and Execution Execution in financial markets in more than 25 countries across the globe.

1 As of Jan 1 2014


S E P A R A T E L Y M A N A G E D P O R T F O L I O S


OBJECTIVE: Leverage the extensive resources, talent and reach of the Morgan Stanley Wealth Management

franchise to provide clients with professionally managed discretionary portfolios, reflecting each client’s

specific financial goals, income requirements and risk tolerances

For important disclosures, please see the end of this presentation.

Applied Equity Advisors Portfolio Strategies

• Global Concentrated Equity

• Global Core Equity

• U.S. Core Equity

• Tax Enhanced Customized Solutions

‐ MSCI World - Russell 3000

‐ Russell 1000

Benchmark Aware, Not Benchmark

Driven

Systematic Risk

Management

Tax Efficiency

Attention to Valuation

Extensive Quantitative &

Qualitative Inputs

Rigorous Investment

Process

Portfolio Diversification

GLOBAL INVESTMENT SOLUTIONS:

Fundamental Equity Advisors Portfolio Strategies

• Fundamental All-Cap Equity Portfolio

• Fundamental All-Cap Equity Portfolio ex-MLPs

• Small/Mid-Cap Equity

• Fundamental MLP Portfolio

Opportunistic Equity Strategy

• U.S. Opportunistic Equity Strategy


P W M A S S I S T S W I T H M A N A G E R S E L E C T I O N A C R O S S A S S E T

C L A S S E S B Y L E V E R A G I N G I N V E S T M E N T A D V I S O R R E S E A R C H


Third Party Asset Manager Research

Open architecture platform dedicated to offering

clients a wide variety of separate account and

mutual fund asset classes, including:

• Balanced

• Convertible

• Emerging Markets

• Equity

• Real Estate

CONSULTING GROUP INVESTMENT ADVISOR RESEARCH (“CG IAR”)

• Fixed Income

• Global Equity

• International Equity

• Municipals

• Socially Responsible

CG IAR Manager Research Team

• Team of 29 manager research professionals

• Analysts average over 10 years of investment

analysis

• Specialized knowledge and skills derived from

a diverse range of experiences

Mutual Funds 7,100

CG IAR Approved Strategies

1,100

CG IAR’s Rigorous Due Diligence Process

MORGAN STANLEY WEALTH MANAGEMENT APPROVED STRATEGIES

ANALYSIS OF THIRD-PARTY MANAGERS

Quantitative Analysis

• Portfolio Strategy

Performance

• Risk/Reward Profile

• Portfolio

Characteristics

• Risk Statistics

• Quartile Rankings

• Asset Growth Statistics


• Personnel Turnover

• Asset Manager History

• Organizational Credibility

• Sound Investment Process

• Adherence to

Investment Strategy

• On-site Interviews with

Portfolio Managers

These materials do not constitute an offer to either buy or sell securities or to participate in any trading strategy.

Strategies 7,700


HEDGE FUNDS PRIVATE EQUITY REAL ESTATE MANAGED FUTURES EXCHANGE FUNDS

Morgan Stanley Alternative Investments Group

Single Manager • HedgePremier (Feeder) • Direct (Third Party)

Single Manager • Feeder (Third Party) • Direct (Third Party)

Single Manager • Feeder (Third Party) • Direct (Third Party)

Single Manager • Managed Futures

Premier (Proprietary)

Single Manager • (Third Party)

Fund of Funds • Registered & LPs

(Third Party)

Fund of Funds • Third Party

Multi-Manager (Proprietary)

MSIM Alternative Investment Partners2

Single Manager • Direct (Third Party)

Fund of Funds • Registered & LPs

(Proprietary)

Fund of Funds (Proprietary) • Co-Investment • Secondaries

Fund of Funds (Proprietary) • Co-Investment • Secondaries

Custom Portfolios • Discretionary &

Non-Discretionary

MSIM Merchant Bank & Real Estate Investing2,3

Single Manager (Proprietary) • Global PE • Asia PE • Infrastructure • Mezzanine Lending

Single Manager (Proprietary) • MS Real Estate Funds


S T R E N G T H O F T H E M O R G A N S T A N L E Y

A L T E R N A T I V E I N V E S T M E N T S P L A T F O R M 1

1 Alternative investments mentioned above refers to unregistered products as well as those products registered with the Securities Act of 1933 and Investment Company Act of 1940. 2 Alternative Investment Partners (AIP) and Merchant Bank are each a division of Morgan Stanley Investment Management. Morgan Stanley Investment Management also offers other, more traditional products

such as equity, fixed income and liquidity mutual funds which are not distributed by Morgan Stanley AIG. 3 MSIM also offers a global macro strategy hedge fund on the Morgan Stanley Alternative Investments Platform through their Long Only group. For illustrative purposes only. Not complete in depiction — MS AIG offers a wider range of alternative investments. For Qualified Investor and Financial Professional Use Only. May not be used with general public. Please see important disclosures at the end of this material.


H E D G E F U N D S O L U T I O N S ( “ H F S ” ) 1


Hedge Fund Solutions focuses on offering clients a single source for hedge fund portfolio management,

research, advice, education, execution and risk monitoring. HFS is structured as a full-service hedge fund

provider with a range of solutions to meet clients’ investment objectives and profiles.

Approval by Investment Committee

IDENTIFICATION, SELECTION & MONITORING PROCESS HFS PLATFORM DESCRIPTION:

• The HFS Platform focuses on offering clients a

single source for hedge fund portfolio

management, research, advice, education,

execution and risk monitoring

• Currently has over $8.7 billion in assets under

management and assets under advisement1

• Offers access to 80+ non-proprietary hedge fund

managers2

• Implements single fund investments and

customized portfolios on an advisory and

discretionary basis

ELIGIBILITY

Single Fund Investments: Accredited Investor and

Qualified Purchaser (generally $5M net investment

assets for an individual, $25M for an entity; net

worth must be at least 20x investment)

Custom Hedge Fund Portfolios: Accredited Investor

and Qualified Purchaser

Identification and Sourcing of Prospective Funds

Ongoing Due Diligence


Qualitative Analysis

Operational & Business Risk Assessment

MINIMUM INVESTMENT

• Single Fund Investments: $1M+

• Custom Hedge Fund Portfolios:

$25M+

CUSTOMIZED PORTFOLIOS

• Custom hedge funds portfolios are

created to meet client-specific

investment goals as a stand alone

portfolio or as a complement to a

broader portfolio of assets

• Construction of the portfolio

includes:

‐ Identifying client’s investment

objectives

‐ Selecting managers from HFS

approved hedge funds

‐ Monitoring portfolio’s

performance on an ongoing basis

1 As of March 31, 2014. 2 Morgan Stanley AIP is not responsible for sourcing and performing due diligence on single manager hedge funds that are affiliated with Morgan Stanley and its affiliates. For Qualified Investor and Financial Professional Use Only. May not be used with general public. Please see important disclosures at the end of this material.


Collateral

• U.S. and International

Eligible securities

• Commercial Real

Estate

• Certain Hedge Fund

Interests

• REIT Operating Units

• Fine Art

A C C E S S T O B A N K I N G & L E N D I N G P R O D U C T S & S E R V I C E S


Securities Based Lending

Purpose (Margin)

and Non-Purpose

Morgan Stanley Residential Mortgage

Loans

Tailored Lending 3rd Party Lenders1

• Commercial Lending

• Aviation

• Yacht/RV

Cash Management

Access to Cash

Management Services

Products

• Conforming,

Non-Conforming

• ARMs

• HELOCs


F A M I L Y O F F I C E S E R V I C E S


FAMILY OFFICE OVERVIEW

An integrated approach to planning that

includes family issues, wealth transfer, and

business succession planning

Helps you maintain family unity across

generations by focusing on family mission,

governance, conflict management and

family endowments

Solutions to help ease administration

burdens—from consolidating your financial

reports to managing some of the most

complex aspects of your life

Management of wealth that is focused on

your family’s interests over the long term

Helping to preserve and maximize what

you will transfer to the next generation—

your values as well as financial assets

Access to a range of resources and

solutions tailored specifically to you and

your family

WEALTH STRATEGIES

GROUP

1 TAX, TRUST & ESTATE

PLANNING

2

ACCESS TO BANKING &

LENDING PRODUCTS & SOLUTIONS

3 FAMILY GOVERNANCE & DYNAMICS

4

PHILANTHROPY MANAGEMENT

5

LIFESTYLE ADVISORY1

6

EDUCATIONAL PROGRAMS

7

PRIVATE HEALTH CARE

ADVISORY1

8

1 Services may be provided by a third-party or through an affiliate of Morgan Stanley Smith Barney LLC. Morgan Stanley Smith Barney LLC ("Morgan Stanley"), its affiliates, Financial Advisors and Private Wealth Advisors do not provide tax or legal advice. Clients should consult their tax advisor for matters involving taxation and tax planning and their attorney for matters involving trust and estate planning and other legal matters.


S T E P 6 O F 6 : O N G O I N G A S S E S S M E N T O F M A N AG E M E N T N E E D S

O N G O I N G A S S E S S M E N T T O H E L P M E E T Y O U R C H A N G I N G

F I N A N C I A L & F A M I L Y N E E D S

Review of Investment

Policy

Review of Strategic Asset

Allocation1

Review of Portfolio

Performance

Execution or Tactical

Adjustments

Breadth of Experience to Adapt to

Changing Client Needs

1 Asset allocation does not ensure a profit or protect against a loss.

Your individualized

investment policy

statement is reviewed

to ensure that your

investment objectives

evolve with your

current personal and

financial needs

Your strategic asset

allocation is analyzed

quantitatively and

qualitatively in relation to

your investment policy

statement to confirm that

your specific needs are

being addressed

The appropriateness of

each holding, based

upon performance and

your investment

objectives, is assessed

Leverage the Firm’s

intellectual capital and

investment platform to

integrate tactical

changes to your asset

allocation framework


D E F I N I N G Y O U R L E G A C Y

Tax Entity

Private Wealth Advisor

Family Name

Family Attorney / CPA

Working in conjunction with your

external advisors, we will help

develop a framework for integrated

planning and strategic decision

making across your entire family. • 5 investment accounts • Private equity • Private business

• Real estate • Executive stock options • Deferred compensation

• Life insurance

Advisor

Family Attorney And CPA

Household

Family Entity

Tax Entity

Family Entity

1 Family Entity

3 Family Entity

2

Tax Entity

Tax Entity

Tax Entity

• 5 investment accounts • Private equity • Private business

• Real estate

• 2 IRAs • 401(k) • Pension plan

• 1 investment account • 96% family LP • Artwork

• Primary home • Vacation home • 1 IRA

• 401(k)

Tax Entity

Tax Entity

Tax Entity

Tax Entity

Tax Entity

Tax Entity

Tax Entity

Tax Entity

• 5 investment accounts • Private equity • Private business

• Real estate


• Family controlled non-profit



• 401(k)






• 401(k)

Tax Entity


Morgan Stanley Smith Barney LLC ("Morgan Stanley"), its affiliates, Financial Advisors and Private Wealth Advisors do not provide tax or legal advice. Clients should consult their tax advisor for matters involving taxation and tax planning and their attorney for matters involving trust and estate planning and other legal matters.


M O R G A N S T A N L E Y O N L I N E C A P A B I L I T I E S

View and Manage Your Accounts Online

• Easily navigate between your

Account Summary, Activity,

Holdings, Gain/Loss, and Account

Documents

• Customize your Account Summary

Home Page and online experience

based on your priorities,

preferences and interests

Stay Current with the Latest Research and News

• View and download research reports

from Morgan Stanley and Standard

& Poor’s

• Get quotes, charts, SEC filing

documents, mutual fund

prospectuses, and investment

reports for most publicly traded

companies

• Use Watchlists to track up to 250

securities you own or want to watch

Morgan Stanley Online delivers secure, convenient, online access to your Morgan Stanley accounts. It helps

you stay informed so you and your Private Wealth Advisor can work together to make decisions.

Morgan Stanley

Online Features

Trade Securities, Transfer Funds, and Pay Bills Online (For Eligible Accounts)

• Trade stocks, ETFs and options online,

manage your orders, and collaborate

with your Private Wealth Advisor on

your investment goals

• Transfer money online between your

Morgan Stanley accounts and your

accounts at other financial institutions

Get eDelivery of Account Documents Instead of Paper Documents by Mail

• Get your statements, tax forms, trade

confirmations, and other important

account documents online from one

convenient place

• Receive an email notification when

your online documents are available

for viewing

• Reduce waste and clutter by no longer

receiving paper documents by mail

MOBILE APPLICATION

The Morgan Stanley Mobile App,

currently available for iPhone® ,

is the only mobile solution

designed exclusively for the needs

of Morgan Stanley Wealth

Management clients and:

• Connects you to a full suite of

cash management functions

• Allows you to scan and deposit

checks drawn on a U.S. bank 1

with some of the highest

deposit limits in the industry 2

• Provides secure access to your

investment portfolio, allowing

you to check asset allocations

and holdings

• Gives you access to up-to-date

news, company profiles and

quotes

Available for download from the

App Store sm for iPhone®

Simplify Your Financial Life with OneView

• Organize all of your account

information in one location,

regardless of where your accounts

are held

• Get a current, comprehensive

understanding of your overall

financial situation

• Automatically share your account

data with your Private Wealth

Advisor

Give Family Members and Personal Advisor Access to Your Account

• Securely grant family members and

trusted professionals access to view

your accounts

• Access your accounts held at

different branches with a single user

name and password

1 Subject to certain terms and conditions. 2 Up to a daily limit of $100,000 for existing Reserved customers. Morgan Stanley Smith Barney LLC, member SIPC reserves the right to change or terminate the Reserved program at any time and without notice.

Reserved program participants’ accounts and activity are reviewed periodically to confirm that they continue to qualify for Reserved.


D I S C L O S U R E S :

S E C U R I T Y T Y P E I N V E S T I N G R I S K S

SMALL/MID CAPS U.S. EQUITY Investing in smaller companies involves greater risks not associated with investing in more established companies, such as business risk, significant stock price fluctuations

and illiquidity. INTERNATIONAL/EMERGING MARKETS

International investing entails greater risk, as well as greater potential rewards compared to U.S. investing. These risks include potential and economic uncertainties of foreign countries as well as the risk of currency fluctuations. These risks are magnified in countries with emerging markets, since these countries may have relatively unstable governments and less established markets and economics.

FIXED INCOME Fixed Income Securities are subject to interest rate risk, credit risk, prepayment risk, market risk, and reinvestment risk. Fixed Income Securities, if held to maturity, may

provide a fixed rate of return and a fixed principal value. Fixed Income Securities prices fluctuate and when redeemed, may be worth more or less than their original cost.

REITS REITs investing risks are similar to these associated with direct investments in real estate; lack of liquidity, limited diversification, and sensitivity to economic factors such

as interest rate charges and market recessions. PRIVATE EQUITY

Private equity interests may be highly illiquid, involve a high degree of risk and be subject to transfer restrictions.

MANAGED FUTURES Managed futures investments are speculative, involve a high degree of risk, use significant leverage, are generally illiquid, have substantial charges, subject investors to

conflicts of interest, and are suitable only for the risk capital portion of an investor’s portfolio. Before investing in any partnership and in order to make an informed decision, investors should read the applicable prospectus and/or offering documents

carefully for additional information, including charges, expenses and risks. Investors should read the prospectus and/or offering documents carefully for additional information, including charges, expenses and risks. Managed futures investments do not replace equities or bonds but rather may act as a complement in a well diversified portfolio.

REAL ASSETS The prices of real assets – precious metals tend to fluctuate widely and in a unpredictable manner, and have historically experienced periods of flat or declining

prices. Their prices are affected by several factors, including global supply and demand, investors expectations with respect to the rate of inflation, currency exchange rates, interest rates, investment and trading activities of hedge funds and commodity funds,

and global or regional political, economic or financial events and situations. COMMODITIES

Investing in commodities entails significant risks. Commodity prices may be affected by a variety of factors at any time, including but not limited to, (i) changes in supply and demand relationships, (ii) governmental programs and policies, (iii) national and

international political and economic events, war and terrorist events, (iv) changes in interest and exchange rates, (v) trading activities in commodities and related contracts, (vi) pestilence, technological change and weather, and (vii) the price volatility of a

commodity. In addition, the commodities markets are subject to temporary distortions or other disruptions due to various factors, including lack of liquidity, participation of speculators and government intervention. I. MASTER LIMITED PARTNERSHIPS Master Limited Partnerships (MLPs) are (rolled-up) limited partnerships or limited

liability companies that are taxed as partnerships and whose interests (limited partnership units or limited liability company units) are traded on securities exchanges like shares of common stock.


D I S C L O S U R E S :

S E C U R I T Y T Y P E I N V E S T I N G R I S K S C O N T ’ D

STRUCTURED PRODUCTS An investment in Structured Investments involves risks. These risks can include, but are not limited, to: fluctuations in the price, level or yield of underlying instruments,

interest rates, currency values and credit quality; substantial loss of principal; limits on participation in appreciation of underlying instrument; limited liquidity; credit risk of the issuer; and, conflicts of interest.

These materials are provided for general informational and educational purposes based upon publically available information from sources believed to be reliable. These materials do not take into account your personal circumstances and we do not represent that this material is complete or applicable to your situation. These materials do not constitute an offer to either buy or sell securities or to participate in any trading

strategy. These materials may change at any time without notice to you. Indices are unmanaged. An investor cannot invest directly in an index.

Global Investment Solutions is an initiative dedicated to transforming compelling ideas — from wherever they arise — into innovative investments for the firm’s clients.. The

Global Investment Solutions initiative includes an investment management business within the global Morgan Stanley Smith Barney LLC (Morgan Stanley Wealth Management) group of companies that draws on the collective thinking of four

experienced portfolio management teams. These teams share a singular vision: to deliver professional investment advice centered on a culture of investment excellence. Each portfolio team within Global Investment Solutions specializes in particular asset

classes and investment styles. Possessing extensive knowledge within their respective disciplines, the teams also have the ability to draw on the capital markets analytics and world-wide investment expertise of the Morgan Stanley family of companies and

extensive non-proprietary resources. All services of Global Investment Solutions are delivered to clients in the United States only by Morgan Stanley Wealth Management. These materials are intended only for clients and prospective clients in the United States.

Any allocation containing alternative investments should note that they are highly illiquid and are only suitable for investors willing to put capital at risk for an indefinite period of time. Alternative investments often engage in leverage and other speculative

investment practices, may involve complex tax structures, typically have higher fees, and generally are not subject to the same regulatory requirements as traditional asset classes.

An investment in alternative investments can be highly illiquid, is speculative and not

suitable for all investors. Investing in alternative investments is only intended for experienced and sophisticated investors who are willing to bear the high economic risks associated with such an investment. Investors should carefully review and consider

potential risks before investing. Some of these risks may include:

• loss of all or a substantial portion of the investment due to leveraging, short-selling,

or other speculative practices;

• lack of liquidity in that there may be no secondary market for the fund and none is

expected to develop;

• volatility of returns;

• restrictions on transferring interests in a fund;

• potential lack of diversification and resulting higher risk due to concentration of trading authority when a single advisor is utilized;

• absence of information regarding valuations and pricing;

• complex tax structures and delays in tax reporting;

• less regulation and higher fees than mutual funds; and

• Risks associated with the operations, personnel, and processes of the manager.

Consulting Group is a business of Morgan Stanley Smith Barney LLC.


D I S C L O S U R E S

Borrowing against securities may not be suitable for everyone. You should be aware that securities-based loans involve a high degree of risk and that market conditions can magnify any potential for loss. Most importantly, you need to understand that:

1. Sufficient collateral must be maintained to support your loan(s) and to take future advances;

2. You may have to deposit additional cash or eligible securities on short notice;

3. Some or all of your securities may be sold without prior notice in order to maintain account equity at required maintenance levels. You will not be entitled to choose the securities that will be sold. These actions may interrupt your long-term investment

strategy and may result in adverse tax consequences or in additional fees being assessed;

4. Morgan Stanley Bank, N.A., Morgan Stanley Private Bank, National Association or

Morgan Stanley Smith Barney LLC (collectively referred to as “Morgan Stanley”) reserves the right not to fund any advance request due to insufficient collateral or for any other reason except for any portion of a securities based loan that is identified as

a committed facility;

5. Morgan Stanley reserves the right to increase your collateral maintenance requirements at any time without notice; and

6. Morgan Stanley reserves the right to call securities based loans at any time and for any reason.

The proceeds from certain securities based loan products may not be used to purchase,

trade, or carry margin stock (or securities, with respect to Express CreditLine); repay margin debt that was used to purchase, trade or carry margin stock (or securities, with respect to Express CreditLine); and cannot be deposited into a Morgan Stanley Smith

Barney LLC or other brokerage account.

To be eligible for a securities based loan, a client must have a brokerage account at Morgan Stanley Smith Barney LLC that contains eligible securities, which shall serve as

collateral for the securities based loan.

Residential mortgage loans are offered by Morgan Stanley Private Bank, National Association, an affiliate of Morgan Stanley Smith Barney LLC. With the exception of the pledged‐asset feature, an investment relationship with Morgan Stanley Smith Barney

LLC does not have to be established or maintained to obtain the residential mortgage products offered by Morgan Stanley Private Bank, National Association. All residential mortgage loans are subject to the underwriting standards and independent approval of

Morgan Stanley Private Bank, National Association. Rates, terms, and programs are subject to change without notice. Residential mortgage loans may not be available in all states; not available in Guam, Puerto Rico and the U.S. Virgin Islands. Other restrictions may apply. This document should not be construed as a commitment to lend. Morgan Stanley Private Bank, National Association is an Equal Housing Lender and member FDIC that is primarily regulated by the Office of the Comptroller of the

Currency. Nationwide Mortgage Licensing System Unique Identifier #663185. The proceeds from a residential mortgage loan (including draws and advances from a home equity line of credit) are not permitted to be used to purchase, trade or carry eligible

margin stock; repay margin debt that was used to purchase, trade or carry margin stock; or to make payments on any amounts owed under the note, loan agreement, or loan security agreement; and cannot be deposited into a Morgan Stanley Smith Barney

LLC or other brokerage account.

Morgan Stanley Smith Barney LLC. 2000 Westchester Avenue, Purchase, NY 10577. Tel: 800‐869‐3326. Nationwide Mortgage Licensing System Unique Identifier No. 171760.

Arizona Mortgage Broker License No. 0910887. California Department of Corporations Finance Lenders Law License No. 603H431. Georgia Residential Mortgage Licensee No. 23976. Kansas Licensed Mortgage Company No. MC.0025024. Massachusetts

Mortgage Broker License No. MB5439. Montana Mortgage Broker License No. 171760. Licensed by the New Hampshire Banking

Department. Licensed by the New Jersey Department of Banking and Insurance.

Registered Mortgage Broker—NYS Banking Department. Mortgage brokers may not make loans. Ohio Mortgage Broker Act Certificate of Registration No. MB.804039.000. Rhode Island Licensed Loan Broker.


D I S C L O S U R E S C O N T ’ D

Tailored Lending is a loan/line of credit product offered by Morgan Stanley Private Bank, National Association, an affiliate of Morgan Stanley Smith Barney LLC. A Tailored Lending credit facility may be a committed or demand loan/line of credit. All Tailored

Lending loans/lines of credit are subject to the underwriting standards and independent approval of Morgan Stanley Private Bank, National Association. Tailored Lending loans/lines of credit may not be available in all locations. Rates, terms, and programs

are subject to change without notice. The ongoing availability of a secured Tailored Lending loan/line of credit is contingent, among other things, on the client maintaining sufficient eligible collateral. Other restrictions may apply. This document should not be construed as a commitment to lend. Morgan Stanley Private Bank, National Association is a member FDIC that is primarily regulated by the Office of the Comptroller of the Currency. The proceeds from a Tailored Lending loan/line of credit (including draws and

other advances) may not be used to purchase, trade, or carry margin stock; repay margin debt that was used to purchase, trade or carry margin stock; and cannot be deposited into a Morgan Stanley Smith Barney LLC or other brokerage account.

Margin Loans are investment products offered through Morgan Stanley Smith Barney LLC. Margin Loans are securities‐based loans, which can be risky, and are not suitable for all investors.

Tax laws are complex and subject to change. This information is based on current law s in effect at the time this was written. Morgan Stanley Smith Barney LLC, its affiliates, employees and Private Wealth Advisors are not in the business of providing tax or legal

advice, and these Individuals should consult their personal tax advisor for matters involving taxation and tax planning and their attorney for matters involving personal trusts and estates planning.

Morgan Stanley Smith Barney LLC does business as Morgan Stanley Private Wealth Management. Morgan Stanley Smith Barney LLC is a registered Broker/Dealer, Member SIPC, and not a bank. Where appropriate, Morgan Stanley Smith Barney LLC has

entered into arrangements with banks and other third parties to assist in offering certain banking related products and services. Investment services are offered through Morgan Stanley Smith Barney LLC. Unless specifically disclosed in writing,

investments and services offered through Morgan Stanley Smith Barney LLC are not insured by the FDIC, are not deposits or other obligations of, or guaranteed by, a bank and involve investment risks, including possible loss of principal amount

invested.

Investment and services offered through Morgan Stanley Private Wealth Management, a division of Morgan Stanley Smith Barney LLC. Member SIPC.

Forex transactions have inherent risk, including the potential loss of principal, and are

not suitable for all investors. Forex transactions may be subject to exchange (or currency) risk or, the risk that an investor will have to close out a long or short position in a foreign currency at a loss due to an adverse movement in exchange rate. Before

undertaking Forex transactions, you should understand the associated risks. Engaging in foreign currency transactions entails more varied risks than normally associated with transactions in the domestic securities markets. Attention should be paid to market,

credit, sovereign and liquidity risks. Cash or forward positions in foreign currencies are volatile and involve inherent risks including the effect of leverage. The potential of loss is a significant consideration. Because of the effect of leverage, a relatively small

market movement will have a proportionately large impact on the funds deposited. This loss can be equal to or, in some instances, greater than the full amount of the initial investment. Certain Forex transactions may only be entered into by clients who qualify

as Eligible Contract Participants (ECP) as defined by the Commodity Exchange Act. Over-the-counter transactions require investors to be classified as an Eligible Contract Participant, and in certain instances transactions may be executed with a counterparty

that is an affiliate of Morgan Stanley Wealth Management.

Apple, the Apple logo and iPhone are trademarks of Apple Inc., registered in the U.S. and other countries. App Store is a service mark of Apple Inc.

CRC 988775 10/2014