Morgan Stanley to sell fund arm

US bank Morgan Stanley has agreed to sell its retail asset management business to investment manager Invesco in a deal worth $1.5bn (£913m).

The sale of the loss-making division will allow Morgan Stanley to focus more on its institutional clients.
The deal includes a $500m cash payment and will see Morgan Stanley take a 9.4% equity stake in Invesco.
A number of banks, such as Bank of America and Barclays, have agreed to sell their fund businesses this year.
As profits have been squeezed during the global downturn, many banks are restructuring their businesses.
The Morgan Stanley sale to Invesco has been approved by the boards of both companies and should be finalised by the middle of next year, the firms said.
"By taking a minority interest in Invesco, Morgan Stanley will be able to realise significant value in partnership with a world class player," said Morgan Stanley co-president James Gorman.
He added that the deal would allow the Van Kampen Investments, which is part of its asset management division, to operate more freely.
Morgan Stanley is due to report its results for the July-to-September period on Wednesday.