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Morgan Stanley is back on top.

Once again, it is the #1 tech bank in the US.

This is a comeback.

Morgan Stanley's shine wore off a little in the wake of Facebook’s 2012 IPO. The bank was among a group of Facebook’s partners on the offering that withstood criticism for an oversubscribed offer that was hampered by Nasdaq’s technology.

Morgan Stanley may not have actually been to blame. Even outside Morgan Stanley’s walls, other banking pros are quick to point out what went wrong in Facebook’s IPO: the company’s capital structure was muddled thanks to unfettered secondary market trading, making it difficult to gauge who owned what, or, when.

Fairly blamed or not, after Facebook offering, Morgan Stanley saw its rank on Dealogic’s US technology advisory league table falter after several years being #1 in 2013.

This happened for a few reasons. Goldman Sachs got better at tech. It took the lead on Twitter’s 2013 IPO, which was Goldman's biggest tech or Internet IPO lead, ever. Meanwhile, Morgan Stanley also had to fend off boutique firms, like ex-Morgan Stanley veteran Frank Quattrone’s Qatalyst Partners, Guggenheim Securities, or Allen & Co.

But that's all over now.

As of mid-week, Morgan Stanley has reclaimed both the top spot for US tech M&A, and for IPOs so far in 2015, according to Dealogic data. The comeback appears complete.

That’s partly due to mega-deals like WhatsApp’s sale to Facebook, which is said to have netted Morgan Stanley about $80 million on one deal alone. But it is also thanks to Morgan Stanley reclaiming its mojo in the IPO space post-Facebook — though 2015's IPO tally is paltry, Morgan Stanley was number-one worldwide and in the US for tech IPOs in 2014, Dealogic data shows. 

The bank did not respond to requests for comment for this story, including questions on how many staffers Morgan Stanley's tech banking team employs.

Part of the reason the firm has experienced so much longevity at the top of the technology sector league tables owes to the tenure of its top bankers: several have been with the firm nearly two decades.

With specific dealmakers focusing on semiconductor companies, Internet, or software firms, industry sources say Morgan Stanley’s tech banking team has a depth of experience few firms’ “TMT” shops can top. Morgan Stanley's banking team doesn't focus on the "MT" part of TMT (which stands for telecom/media/technology, a vestige of days when technology M&A made up a smaller amount of banks' revenue). The firm's bankers that do tech deals only focus on tech. 

• Morgan Stanley has a history of dominance in tech. “Morgan Stanley goes back some 25 years as the leading tech underwriter in the US,” says one Wall Street veteran, who recalls Morgan Stanley’s dominance in the late 1990s, in part fueled by its then-stars Mary Meeker and Quattrone.
• “Paul Kwan is a rock star; the guy’s just a beast,” says another banker, who has worked with Kwan in the past. Kwan (who, according to his online bio, has been with Morgan Stanley 16 years) is credited as being the bank’s ’software’ banker, while Greg Mrva, who joined in 2013, is their ‘Internet’ guy. It’s this kind of focus to tech sources say has made Morgan Stanley stand out among tech firms.
• Another thing that helps is Morgan Stanley’s West Coast location. “They’ve got a shop set up in Menlo Park, they’re demonstrating a commitment to the community,” says one Silicon Valley investor, while a corporate source notes “Goldman Sachs made a big mistake pulling out of Silicon Valley after 2000."
• If Morgan Stanley really is back on top for US tech banking, this time, it could be for good: “It’s going to take years for someone to build that kind of infrastructure,” says an investment banker. It’s “going to be hard for someone to come in and take that market share.
• Tenure seems to matter at Morgan Stanley. Drew Guevara, who has spent 20 years with the bank, and Andy Kearns, a 16-year veteran, last year became co-heads of global technology investment banking alongside Michael Grimes, a 20-year veteran who also took the lead for the bank’s work on Facebook’s IPO. Mike Wyatt has been with the firm for 21 years, and serves as head of global tech M&A.
• A veteran's return has made a difference. Morgan Stanley lost Mark Edelstone, who is known in the Valley for semiconductor deals prowess (he also worked on the NXT-Freescale Semiconductor deal, 2015's biggest tech transaction) to JP Morgan, in 2007. But, in 2013, Edelstone returned to Morgan Stanley, and has been there ever since. 

We'd like to hear more about what people think of Morgan Stanley. Email [email protected].

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The geographical heart of the tech boom, Silicon Valley up through San Francisco, has a major problem: it has too many people making lots of money, and not enough places for them to live.

A 2013 Wealthfront post on how much a couple needs to afford a wealthy lifestyle in Silicon Valley has gotten renewed attention in the last couple of days on social media.

freaked out by @Wealthfront analysis of $ reqd to own a modest house & send kids to college living in silicon valley http://t.co/GGHzPv3QT8

— Lindsay Meyer (@lindsaymeyer) May 20, 2015

You need at least one sizable exit to live in Silicon Valley & send your kids to university!! https://t.co/xbYygtGW2j

— Chris Maddern (@chrismaddern) May 20, 2015

This is somewhat alarming: "You Need Equity To Live In Silicon Valley" https://t.co/3gDYWspR6D

— Jason Gelman (@JasonGelman) May 20, 2015

You may not be moved by the plight of the couple making $250,000, but policymakers should be. If the country's wealthiest laborers can barely afford to live where they work in this part of California, what is to be said for everyone else in the area? Where are the service workers, bus drivers, hotel operators, and support staff supposed to live?

Wealthfront's analysis finds that a couple making $250,000 a year, with a 3-bedroom house in Silicon Valley and plans to send their (two) children to private college will end up several hundred thousand dollars short on retirement savings if they rely on investing alone.

Wealthfront says that the couple needs a good cushion of equity from a successful startup in order to make up the difference.

Here are Wealthfront's assumptions: 

To do our analysis we had to make a number of assumptions about a young, professional Silicon Valley couple[1]. We started with 30 year olds. We assumed they earn a generous $250,000 per year and spend $60,000 per year on items not related to supporting children.  The couple’s income and spending grow at an inflation rate of 3% per year. Their income stops at age 65, when they retire, but they begin drawing social security at 70.

They buy a house when they turn 30 for $1 million financed with a $200,000 down payment and an $800,000 mortgage. The mortgage has a 3.75% fixed interest rate for 30 years. For context, a 3.75% interest rate is historically low.

Federal and state taxes represent 45% of income, and savings are invested at 6% a year.

The couple has two children, one when both are 30 and the other when they’re 32. Each child costs about $22,000 a year to support. (This number includes housing costs for the United States. In Silicon Valley, we think $22,000 is the cost without housing). The couple needs to save $1,100 per month for 18 years to afford to send each child to private college. Alternatively, they could save $6,500 per child per year for 18 years to afford to send their kids to a public university.  (Unfortunately, families that currently earn $250,000 per year do not qualify for financial aid at most universities.)

Absurdities in the assumptions aside ($2400 a year for a gardner creates about 50% of the $270,000 hole Wealthfront says the couple will have after 50 years), the big problem here is housing. Wealthfront assumes that the couple needs $1 million for a house. That's absurd. But it's pretty much a reality if you want to live within a reasonable commute and — this is an important and — in a good public school district.

The individual solution from the perspective of a financial advisor might be to strike it rich with an equity stake in a successful startup, but that's not solving the larger societal problem. Housing prices in the San Francisco area are high because there aren't enough houses for everyone who wants to live there.

And that's a policy problem that affects everyone from the $250,000 couple down to the Google bus driver giving them a ride to work.

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