Morgan Stanley has approached asset management companies in the past two months to gauge their interest in buying or forming a partnership with its Van Kampen mutual fund business, people with knowledge of the talks said.

The banking company, which based in New York, told at least one would-be bidder it was discussing a transaction in which it would gain a stake in Invesco Ltd. of Atlanta, according to one of the people, who declined to be identified because the negotiations were confidential. Nuveen Investments Inc. and Aberdeen Asset Management PLC were among those approached, the people said.

"A joint venture makes sense because asset management is fundamentally a very good business," said Brad Hintz, a former treasurer at Morgan Stanley who is now an analyst at the New York investment firm Sanford C. Bernstein & Co. "I don't see why Morgan Stanley would want to sell an asset management business if you think the economy's coming back."

James Gorman, Morgan Stanley's co-president, is overhauling its investment management operations after they logged six straight quarterly operating losses. Though most of the losses resulted from the company's bets on real estate and merchant banking funds, he is also looking to shake up the individual investor unit.

Morgan Stanley bought Van Kampen for $720 million in 1996. It is worth about $1.1 billion now, Robert Lee, an analyst at KBW Inc. in New York, wrote in an Aug. 24 research note.

Van Kampen's assets under management fell to $86 billion at the end of June, from $127 billion a year earlier. A person with knowledge of Morgan Stanley's plans said no formal auction process has begun for the unit.

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