Eight of the top nine U.S. mutual funds with Facebook
shares as a percentage of total assets are run by the asset management arm of Morgan Stanley
, which was the lead underwriter for the social media company's $16 billion initial public offering, according to the Wall Street Journal
The funds range from the $1.6 billion Focus Growth
fund to the $2.5 million Institutional Global Advantage
fund, according to the Journal
story. Morgan Stanley Focus Growth Portfolio
had 5.7 percent of its assets in Facebook shares as of July 31, according to Morgan Stanley's website, while Morgan Stanley Institutional Opportunity Portfolio
had 5.5 percent and Morgan Stanley Institutional Growth Portfolio
had 4.8 percent. Others among the eight Morgan Stanley mutual funds range between 3.6 percent and 4.6 percent. Those proportions ranged between 5 percent and 7.8 percent on June 30, according to the most recent Morningstar
data that included other fund families.
As lead underwriter, Morgan Stanley had a crucial role in lining up orders for Facebook as it prepared to go public. The firm also helped advise Facebook executives to increase the size and price of the IPO, despite warnings the company was making about its profit outlook, according to the Journal
. The New York securities firm, which declined to comment, took in $200 million in underwriting fees and trading profits, according to regulatory filings and people involved in the deal.
The Morgan Stanley funds that have Facebook shares got many of them before the IPO at prices well below the $38 offering price.
That means that fund shareholders may still have paper gains on their Facebook purchases, depending on when the fund bought their original stake. It also means the funds have been unable to sell any of their pre-IPO holdings.
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