Philip J. Purcell

Philip J. Purcell (b.1943) was the former Chairman and CEO of Morgan Stanley in the late 1990s and 2000s. He previously served as Chairman and CEO of Dean Witter and managed the firm under its ownership by Sears, Roebuck & Co.

Purcell is currently the head of Continental Investors, a private equity firm that invests in Internet-enabled financial services and consumer companies.

Career

Philip J. Purcell has been a leader in the financial services industry for over 30 years. He was the main architect of Dean Witter’s acquisition of Morgan Stanley in 1997, and was Chairman and CEO of the merged firm (known as Morgan Stanley) from 1997-2005. During that period, the market cap of Morgan Stanley increased from $23 billion to $64 billion. He previously served as Chairman and CEO of Dean Witter, Discover & Co., from 1986 to 1997. After leaving Morgan Stanley, Purcell formed Continental Investors LLC, a private equity firm.

McKinsey, Sears, and Dean Witter

Purcell began his business career in 1967 at McKinsey & Co., the international management consulting firm. He traveled extensively, working closely with clients throughout the United States, Europe, and Asia. When he left McKinsey to join Sears in 1978, he was Managing Director of the Chicago office—the youngest head of a major office in the firm’s history.

At Sears, Purcell became Senior Vice President for Corporate Administration and Planning, reporting directly to the CEO. In addition to long-range planning, his duties included exploring acquisitions and divestitures for the company. He played a leading role in Sears’s acquisition of Dean Witter Reynolds on December 31, 1981, and became President in 1982 and Chairman and CEO in 1986. In 1993, Purcell led the spin-off from Sears and initial public offering of Dean Witter Discover. Shareholders buying the IPO made 20% per year, or 9 times their original investment by March 2005.

At Dean Witter, Purcell saw the potential of the asset management business well ahead of other firms. The approximately $11 billion in money and mutual fund assets at Dean Witter in 1982 grew to more than $100 billion by 1997 and to about $400 billion by 2004. He started the Discover Card from scratch in 1986; by 2006 it had grown to more than 50 million accounts and $1.5 billion in pre-tax income.

Morgan Stanley

Purcell’s record of building value for shareholders continued following the acquisition of Morgan Stanley by Dean Witter. During the time Purcell headed Morgan Stanley, the firm outperformed market indices by a wide margin. An investment in Morgan Stanley after the merger in 1997 returned three times the original investment by March 4, 2005—a return of 16% a year compared to 5% for the S&P 500.

Morgan Stanley also achieved significant gains in the league table rankings throughout the eight years Phil Purcell was CEO. Morgan Stanley ended 2004 with the best competitive rankings in the history of the firm: • #1 in global equity trading. • #1 in global equity underwriting in 2004 for first time since 1982. • #1 Global IPO market share in 2004. • #2 in global debt underwriting in 2004, with steady gains since late ‘90s. • #2 in completed global M&A in 2004. (SOURCE: Morgan Stanley 2004 Annual Report.)

Purcell was at the helm of Morgan Stanley on September 11, 2001, when the terrorist hijacked planes hit the twin towers of the World Trade Center. More than 3,500 Morgan Stanley employees worked in the World Trade Center. Based on the firm’s experience in the earlier 1993 WTC bombing, contingency plans were in place long before 9/11. As a result, there was a rapid evacuation and organized follow-up on 9/11 that helped mitigate the terrible tragedy. Morgan Stanley employees at the WTC helped save lives of both Morgan Stanley employees and many others.

Purcell resigned as CEO of Morgan Stanley in June 2005 when a highly public campaign against him by former Morgan Stanley partners (the Group of Eight) threatened to disrupt and damage the firm and challenged his refusal to aggressively increase leverage, increase risk, enter the sub-prime mortgage business and make expensive acquisitions.

Continental Investors

Purcell is currently the head of Continental Investors LLC, a private equity firm that invests in financial services firms or in consumer businesses where the Internet is important. In founding the firm, Purcell stated, “I want to associate myself with young, highly talented entrepreneurs, assisting them with their dreams to grow small businesses into big ones. Looking back on my career, I have always felt this is where I contributed the most value and had the most fun.”

Other affiliations

Purcell has been actively involved in a number of philanthropic endeavors. They include parochial school education, multiple sclerosis research, multiple myeloma research, children’s healthcare and others. His support for Mt. Carmel, a parochial school in Harlem, has enabled a vital inner-city educational facility to stay open and continue serving the community. Purcell has served as a trustee of Notre Dame University since 1991, and has been a major contributor to the University. He and his wife Anne have made gifts to the University of Chicago Booth School of Business to establish the Distinguished Fellows Program, which provides full scholarship support for the school’s top students.

Phil Purcell has been a leader in the financial services industry for many years. He has served on the Executive Board and as Vice-Chairman of the New York Stock Exchange. He was one of the founding members of the Financial Services Forum and served as chairman during its first three years.

Early Background

Phil Purcell was born and raised in Salt Lake City, Utah, where he graduated from Judge Memorial, a small Catholic parochial school whose students were mainly from modest backgrounds. Though from a moderately well-to-do family himself, Purcell worked during the school year selling magazine subscriptions and pressing clothes at a drycleaner, and during summers on road construction and at the national parks in southern Utah. He was a star center on the basketball team and starting tackle on the state championship football team.

Following high school, Purcell won a scholarship to the College of the Holy Cross in Worcester, Massachusetts. He transferred to Notre Dame in South Bend, Indiana, after his freshman year. His academic career was distinguished. He won fellowships, first, to the University of Chicago's Booth School of Business and, then, to the London School of Economics. He paid his own way through graduate school with the fellowships he won and with his own earnings and savings. In October 2006, Purcell contributed $12.5 million for the renovation of Notre Dame basketball arena, which was renamed "Purcell Pavilion" in his honor.

References

• Unconventional Wisdom. Chicago GSB
• Exile From Wall Street. New York Times, August 21, 2005
• The Reward for Leaving: $113 Million. New York Times, July 8, 2005
• A Strategist Who Struggled as a Manager. New York Times, June 14, 2005
• Chief Will Leave Morgan Stanley, Ending Struggle. New York Times, June 14, 2005
• Talking Business; with Purcell of Dean Witter Reynolds; Cutting Volatility To Help Investors. New York Times, November 28, 1989

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Name	Purcell, Philip
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Date of birth	1943
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