The headline deal of Q2 was SpaceX. Morgan Stanley and Goldman Sachs led the SpaceX IPO in June as joint lead underwriters, with Goldman Sachs securing the “lead left” spot despite a significant role for Morgan Stanley’s Michael Grimes. But the deal also highlighted a broader playbook for Morgan Stanley: investment banking opens the relationship, while wealth management captures the long-term opportunity.

That strategy was reflected in the quarter’s results. Morgan Stanley gathered a record $148 billion in net new assets, more than double the year-ago quarter. On Wednesday’s earnings call, Yeshaya said that more than half of those inflows came from employees at companies that completed IPOs during the quarter. Morgan Stanley is not just advising issuers on transactions; it is using those corporate relationships to build lasting wealth management relationships.

Yeshaya framed those results as the payoff from years of investment in the workplace channel. “We have about 70% of the top 100 unicorns by market cap in terms of our workplace pipeline,” she said. “We’ve spent a lot of time thinking about: how do we service some of these companies at the very early stages?” She added, “This is a long game.”

Yeshaya described IPOs as “top of the funnel” for a broader migration into fee-based advice. That funnel runs through 401(k) plans, E*Trade, savings products, and tools like Lead IQ that connect employees with advisors. The immediate payoff appears in asset flows; the longer-term payoff is recurring fee revenue and expanding margins.

Outside analysts increasingly see the same operating leverage. Morningstar raised its fair value estimate for Morgan Stanley to $184 from $165, citing a stronger outlook for trading revenue growth and roughly 640 basis points of margin expansion in 2026.

Regarding workplace inflows, Yeshaya emphasizes retention, referral models, and the firm’s goal of becoming the “principal financial advisor” across roughly 20 million client relationships. Vesting schedules, timing differences, and capital structures influence when and how those workplace assets ultimately translate into revenue.

CEO Ted Pick reinforced the supportive IPO backdrop, noting that “the IPO exit opportunity is real.” But Morgan Stanley’s results suggest the firm’s advantage lies not simply in underwriting the next blockbuster listing, but in building the infrastructure to turn one-time capital markets events into durable, high-margin wealth management relationships.

Sheryl Estrada
sheryl.estrada@fortune.com

Leaderboard

Fortune 500 Power Moves

Alexis Rollier was appointed CFO of PVH Corp. (No. 446), home to brands Calvin Klein and Tommy Hilfiger, effective in early September. Rollier brings more than three decades of experience. He joins PVH from Sephora, part of the LVMH Group, where he has served as global chief operating officer and global CFO since 2018. Before that, he held senior leadership roles at the company, including CFO for Europe and the Middle East, and CFO. Earlier in his career, he served as global CFO at Guerlain and held senior finance roles at Kingfisher and LVMH.

Every Friday morning, the weekly Fortune 500 Power Moves column tracks Fortune 500 company C-suite shifts—see the most recent edition.

More notable moves

Bob Fishman has been appointed interim EVP and CFO of Pentair plc (NYSE: PNR), a global water treatment company. Fishman's appointment follows Nicholas Brazis' departure from the company on July 10 to pursue another opportunity at a private company. Fishman originally joined Pentair in 2020 and served as the permanent EVP, CFO and chief accounting officer until March 2026. Brazis then served as CFO from March until July. Pentair has initiated a search to identify its next CFO.

Salim Omar was promoted to CFO of Peraton, a provider of national security solutions. Omar most recently served as acting CFO of Peraton, following more than a decade in senior finance leadership roles across the company and its predecessor organizations. He has also held leadership roles at Perspecta, Vencore, ManTech, and SAIC. Omar began his career at the Federal Reserve Board.

Big Deal

Investors are becoming more discerning about sustainable finance, focusing less on whether a bond carries a green or transition label and more on whether issuers can demonstrate a credible path to decarbonization. According to S&P Global Ratings, labels and sustainable finance frameworks still signal intent, but they are no longer sufficient on their own to attract capital in a market shaped by fragmented regional rules and inconsistent transition definitions. 

Instead, investors increasingly rely on issuer-level analysis, higher-quality data, and transparent reporting to assess real-world impact, reflecting a shift toward a more disciplined, execution- and outcomes-focused phase of sustainable finance.

Going deeper

In a new episode of Fortune 500: Titans and Disruptors of Industry, Fortune’s Editor-in-Chief Alyson Shontell sat down with FedEx CEO Raj Subramaniam to discuss his rise within the company from the lowest level possible up to the CEO seat; how he’s overhauling the logistics company and taking it through three transformations; and how he’s thinking about AI, robotics, and the future of the company.

Overheard

“We must act now to guide AI to complement humans rather than simply imitate them—and to generate prosperity for the many, not just the few.”

—Erik Brynjolfsson, a professor at Stanford University and director of the Stanford Digital Economy Lab is one of the organizers of a statement signed this week by over 200 economists—including 16 Nobel laureates and the chief economists of OpenAI and Anthropic—admitting, in effect, that the profession is flying blind on AI, Fortune reported.