Morgan Stanley Brazil head to start own hedge fund

Daniel Goldberg will step down as head of Morgan Stanley’s (MS.N) Brazilian unit at the end of the month to start a hedge fund specializing in high-risk credit products, structured finance and private equity-like investments.

Goldberg, a 35-year-old Harvard University-trained lawyer, will move into a new position as nonexecutive chairman of Morgan Stanley Brazil effective July 31, according to a confidential memo to employees obtained by Reuters.

His fund will have investment firm Farallon Capital Management as a minority partner, the memo said.

In his five years with Morgan Stanley, the former antitrust regulator helped the New York-based bank win business in mergers and stock and bond issuances.

Goldberg rose to prominence in 2003, when he became head of the Justice Ministry’s antitrust council at the age of 27.

“Daniel has helped build a franchise that has never been stronger,” said the memo, signed by Christopher Harland, Morgan Stanley’s head of Latin America. “Today we have a robust pipeline in banking and impressive performance across all of our sales and trading businesses.”

Morgan Stanley ranked ninth by number of deals in mergers and acquisitions advisory in the first half of 2011, according to Thomson Reuters data. It participated in four transactions with a combined estimated value of $1.08 billion in that time.

Investment banking activity has taken off in Brazil, especially in initial public offerings on the Bovespa stock exchange in Sao Paulo. The rise of Brazil as a regional powerhouse has allowed companies to expand overseas, helping Morgan Stanley and rivals fetch sizable fees from advisory, capital markets transactions and asset management.

Some of the business the bank won this year include sugar and ethanol giant Cosan’s (CSAN3.SA) sale of perpetual bonds, and Itau Unibanco’s (ITUB4.SA) sale of Tier II dollar-denominated notes in January.

Goldberg was not available for comment, according to his assistant at Morgan Stanley. A spokeswoman for the public relations firm that represents the bank in Brazil declined to comment.