Morgan Stanley’s 415 Group helps Silicon Valley entrepreneurs navigate complex financial issues

Jonathan Usich, left, and Victoria Bailey are managing directors at Morgan Stanley Private Wealth Advisors.

Photograph by Winni Wintermeyer

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Victoria Bailey and Jonathan Usich, Managing Directors of

Morgan Stanley
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415 Group in San Francisco, agree that their favorite customers’ situations are the most complex. “It’s not a good fit for us when someone wants to work on a small problem,” Usich says.

The big issues are what they get with their Silicon Valley clients, who are mostly entrepreneurs and private equity managers with a net worth of $50-500 million. Along with his partner Will Lyon and five staff members, they manage $6.5 billion, up from $2.25 billion two years ago.

Barons: What do you attribute your growth to?

Victoria Bailey: Our team has participated in the majority of direct quotes that Morgan Stanley has done on the investment banking side. Direct registrations became popular in 2018; it’s another way for a company to go public — existing shareholders sell through the initial public offering on the first day of trading. We have therefore developed our practice by advising executives involved in direct quotations.

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What are you currently working on?

Jonathan Usitch: I work with three generations of a family on estate planning for a large family estate after the death of one of the eldest. A simple thing to do is to cut a check to each payee and be done with it. But in coordination with the family estate planning lawyer and the certified public accountant, we develop a tax-efficient plan for several generations. Beneficiaries have different ESG criteria [environmental, social, and corporate governance] prospects, we take them into account in the plan. This has involved talking with the family continuously over the past three weeks.

What do customers want to talk about the most?

Utilize : Typically, what clients want to talk about is the situation in Russia and Ukraine, and after that, inflation and interest rate developments. We ensure they are properly allocated and segregated with respect to cash flow for expenses.

What does this mean for the way you manage their investment portfolios?

Utilize : We believe that we are at an advanced stage of the economic cycle and want to be very careful in allocating capital. There are opportunities in value and dividend-oriented stocks. We seek income for investors through private real estate investments and alternatives such as direct lending to private equity investors.

As things warmed up in Ukraine, we spent time with our clients to ensure they were not directly exposed to Russia. We opportunistically researched international markets, focusing on Europe.

How many of your clients have an ESG component in their portfolio?

Bailey: All of them, although their level of ESG varies. Most clients come to us with a concentrated stock portfolio, often due to inheritance, and each of our clients is in the highest tax bracket. This presents a challenge for transitioning to ESG while minimizing taxes. We have a custom stock index that we can use for tax loss harvesting, and we use donation strategies to manage taxes.

What is remarkable about the way your team works together?

Utilize : When I started as an analyst on the team in 1997, a partner who was my mentor was extremely important to my career. I know how important it is to do the same to help grow our team. We think a lot about retaining our talent and what makes them happy, not just with compensation.

Can you give an example of how you work there?

Bailey: We make a regular call to the support team once a week, and because our staff is all-female, it’s become an all-female call that I run. Every week is different, usually starting with business issues.

We recently did an in-depth analysis of fixed income, because they hear us talk about it from a global macro perspective, but don’t understand the nuances. We talked about maternity leave. My favorite call was about New Year’s resolutions. We shared a business and a personal resolution. It was insightful to hear what everyone wanted to focus on and helped everyone feel supported.

Thank you Victoria and Jonathan.

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