Morgan Stanley has agreed to acquire Vinyl Equity, a fintech that digitizes the traditionally manual job of transferring shares between companies and their shareholders, the bank announced Monday.
Financial terms of the deal, which is set to close in the first quarter of 2027, were not disclosed. However, a Morgan Stanley spokesperson told Bloomberg the integration would cost $65 million over a couple of years.
The acquisition means Morgan Stanley won’t have to enlist a third-party transfer agent for cap table management, equity administration or share transfer – which can be complicated, for example, when a company goes public.
“Private markets are playing an increasingly important role in wealth management as companies stay private for longer and value is created outside the public markets,” Jed Finn, the head of Morgan Stanley Wealth Management, said in a statement Monday. “As these companies grow larger and more complex, the infrastructure must keep pace when they enter the public markets.”
Simultaneously, Finn said, “blockchain technology, atomic settlement and tokenization are reshaping the industry.”
“As part of Morgan Stanley Wealth Management’s private-to-public platform, Vinyl's digital-first technology will help us advance how ownership is recorded, transferred and managed,” Finn said.
Scott Whatley, head of Morgan Stanley at Work, told Bloomberg the bank’s clients had been “asking for help in solving what is really an antiquated technology” and added that the Vinyl deal provides a “natural synergy” that would remove “a lot of friction.”
Vinyl will become part of Morgan Stanley’s workplace unit, which counts 6.7 million participants, more than 3,400 corporate clients, and over 70 of the top 100 unicorns based on market cap, the bank said.
That workplace unit, in turn, is couched within a wealth-management division that posted a company-record $232 billion in net new assets in the third quarter. About half of those are linked to initial public offerings, Morgan Stanley said last month.
“We started Vinyl with the belief that the infrastructure supporting corporate ownership needed to change,” Rob Schoder, Vinyl’s co-founder and CEO. “Joining Morgan Stanley provides an exciting opportunity to accelerate that vision and deliver our technology and expertise to a broader range of companies.”
Vinyl, founded in 2022, raised $20 million in series A funding this year, it said.
Scott Siefers, an analyst at TD Cowen, labeled the deal “a small transaction” but “strategically attractive … insofar as it enhances the capabilities of a critical business that feeds into MS's broader wealth management platform,” according to Monday note to clients seen by Banking Dive.
The Vinyl transaction is meant to bolster Morgan Stanley’s arsenal of tools for late-stage private companies – much in the same vein as the bank’s January acquisition of EquityZen, a trading platform for shares in private companies.
In an interview with Bloomberg, Finn said clients’ concerns surrounding data protection, cybersecurity and risk drove them to “want to keep everything within the four walls of Morgan Stanley.”
