Executive Summary
Morgan Stanley has restructured its energy investment banking operations by merging its Global Energy and Global Power & Utilities teams into a new Global Power and Energy Group, effective mid-September 2025. The move installs Jon Fouts and Michael O’Dwyer as co-heads, with new regional leads, and reflects strategic recognition that demand is recovering across both renewables and traditional power sectors. While deal volumes are high and the investment banking pipeline is reportedly at record levels, key open questions remain around execution risks, regulatory headwinds, and capital intensity amid competition in energy transition finance.
Analysis
In September 2025, Morgan Stanley announced a major reorganization of its energy-related investment banking franchises: its Global Energy and Global Power & Utilities groups were consolidated into a single Global Power and Energy Group. The leadership structure is now shared between Jon Fouts (former head of Global Power & Utilities since 2022) and Michael O’Dwyer (former head of Energy), with regional leads assigned for North America, Houston, and EMEA.([reuters.com](https://www.reuters.com/business/energy/morgan-stanley-combines-two-investment-banking-teams-create-global-power-energy-2025-09-17/?utm_source=openai))
This restructure reflects several strategic imperatives. First, the traditional silos between conventional oil & gas, utilities, grid infrastructure, and renewables are breaking down as clients seek integrated solutions—e.g. combined fossil fuel plus renewables projects, energy transition mandates, storage, hydrogen, etc.([reuters.com](https://www.reuters.com/business/energy/morgan-stanley-combines-two-investment-banking-teams-create-global-power-energy-2025-09-17/?utm_source=openai)) Second, the energy sector is returning to growth: gas and power are rising, and investment is flowing back into both upstream and downstream energy transition initiatives.([investing.com](https://www.investing.com/news/commodities-news/us-energy-sector-makes-strong-start-to-2025–morgan-stanley-3949033?utm_source=openai)) Third, Morgan Stanley’s own investment banking business is enjoying a rebound, with record revenues in Q3 2025, including an increase in IB fees of approximately 44 % year-over-year. In equities and fixed-income underwriting, the bank saw even stronger percentage gains.([fnlondon.com](https://www.fnlondon.com/articles/morgan-stanleys-44-investment-banking-jump-pushes-wall-street-dealmaking-to-11bn-e73bc903?utm_source=openai))
From a competitive standpoint, this positions Morgan Stanley to compete more directly for mandates that span both traditional energy and new power/utility elements—areas that are increasingly the domain of cross-sector deals (e.g. LNG to power, grid scale storage, EV charging, etc.). There is risk, however: consolidating teams may introduce execution challenges, talent overlap, and integration costs. Additionally, regulatory risk in energy markets—permitting, tax incentives, environmental regulation—continues to shape deal economics and may favor those banks with strong advisory, political connections, or deep capital markets resources.
Strategic implications include:
• Enhanced ability to deliver end-to-end solutions across the energy transition value chain, which may deepen client relationships and expand fee opportunities.
• Greater cross-selling potential: power utilities clients increasingly want exposure to carbon capture, storage, hydrogen, and are interested in upstream gas or oil projects tied to LNG or derivative fuels.
• Risk of competitive pressure: other bulge brackets like Goldman Sachs and JPMorgan are similarly building out power, utilities, and transition finance practices, meaning fee pools will be contested.
• Capital allocation challenges: many transition assets require significant upfront capital, long development cycles, and uncertain return profiles depending on regulatory support and grid capacity.
Open questions include:
• How will Morgan Stanley balance potential conflicts between fossil fuel clients and renewables/transition mandates (e.g. ESG investor expectations)?
• What are the specific financial incentives or cost savings expected from this merger—headcount, system integrations, geographic rationalization?
• How will the bank’s risk management framework evolve to handle more exposure in power markets, grid infrastructure, and possibly merchant risk?
• To what degree will regulatory or incentive regimes (e.g. U.S. tax credits, permitting reform, subsidies) enable or constrain ambitious project pipelines—especially in storage, hydrogen, and generation?
Supporting Evidence
- Morgan Stanley merged its Global Energy and Global Power & Utilities investment banking teams into one new Global Power and Energy Group; coincedent leadership was assigned to Jon Fouts and Michael O’Dwyer. ([reuters.com](https://www.reuters.com/business/energy/morgan-stanley-combines-two-investment-banking-teams-create-global-power-energy-2025-09-17/?utm_source=openai))
- Regional leadership for the restructured unit appointed: Eddie Mannheimer to oversee North America Power & Utilities, Ryan Synnott to head Houston Energy, Francesco Puletti and Mutlu Guner to lead EMEA power/utilities and energy respectively. ([reuters.com](https://www.reuters.com/business/energy/morgan-stanley-combines-two-investment-banking-teams-create-global-power-energy-2025-09-17/?utm_source=openai))
- The reorganisation’s featured rationale: converging demands across conventional and renewable energy, rising demand for both power and energy infrastructure projects globally. ([reuters.com](https://www.reuters.com/business/energy/morgan-stanley-combines-two-investment-banking-teams-create-global-power-energy-2025-09-17/?utm_source=openai))
- Morgan Stanley’s investment banking revenue rose 44 % year-over-year in Q3 2025, reaching US$2.11 billion for IB fees; equity underwriting rose 80 %, fixed income underwriting 39 %. ([fnlondon.com](https://www.fnlondon.com/articles/morgan-stanleys-44-investment-banking-jump-pushes-wall-street-dealmaking-to-11bn-e73bc903?utm_source=openai))
- The broader environment shows strong energy sector performance: U.S. energy stocks up ~8 % YTD to Q1 2025, outperforming the S&P 500, with defensive niches like natural gas and integrated majors doing well. ([investing.com](https://www.investing.com/news/commodities-news/us-energy-sector-makes-strong-start-to-2025–morgan-stanley-3949033?utm_source=openai))
- Morgan Stanley commentary and research highlight themes such as behind-the-meter power, carbon capture, co-located generation, and electronics/AI-driven power demand as key long-term growth areas in energy strategy. ([morganstanley.com](https://www.morganstanley.com/insights/articles/energy-transition-trends-sustainability-leadership-summit?utm_source=openai))
Sources
- [1] www.reuters.com (Reuters) — 2025-09-17
- [2] www.fnlondon.com (Financial News London) — 2025-10-15
- [3] www.investing.com (Investing.com) — 2025-03-26
- [4] www.investing.com (Investing.com) — 2025-01-24
- [5] www.morganstanley.com (Morgan Stanley Insights) — 2025-07-10
- [6] news.yahoo.com (Yahoo Finance) — 2025-09-18