PROSPECTUS Dated May 1, 1996                       Pricing Supplement No. 1 to
PROSPECTUS SUPPLEMENT                     Registration Statement No. 333-01655
Dated May 1, 1996                                                  May 8, 1996
                                                                Rule 424(b)(3)


                           Morgan Stanley Group Inc.
                          MEDIUM-TERM NOTES, SERIES C
                            Senior Fixed Rate Notes


     The Fixed Rate Notes, as further described below and in the Prospectus
Supplement under "Description of Notes --  Fixed Rate Notes," will bear
interest from the date of issuance until the principal amount thereof is paid
or made available for payment at the rate set forth below.

     The Fixed Rate Notes will be redeemable in whole, but not in part, at the
option of Morgan Stanley Group Inc. upon 30 to 35 calendar days notice on any
May 23 or November 23, commencing May 23, 1998.
                                                                             
Principal Amount:              $10,000,000                  Redemption
                                                              Percentage:             100%
Maturity Date:                 May 23, 2011
                                                            Annual Redemption
Interest Rate:                 7.75% per annum                Percentage
                                                              Reduction:              N/A
Interest Accrual
  Date:                        May 23, 1996                 Interest Payment
                                                              Period:                 Monthly
Interest Payment
  Dates:                       The twenty-third day of      Specified Currency:       U.S. Dollars
                               each month,
                               commencing June 23,          Issue Price:              100%
                               1996
                                                            Settlement Date
                                                              (Original Issue
Redemption Dates:              Redeemable in whole,           Date):                  May 23, 1996
                               but not in part, at the
                               option of Morgan             Book Entry Note or
                               Stanley Group Inc.             Certificated Note:      Book Entry Note
                               upon 30 to 35 calendar
                               days notice on any           Senior Note or
                               May 23 or November             Subordinated Note:      Senior Note
                               23, commencing May
                               23, 1998                     Total Amount of OID:      N/A

Minimum                                                     Original Yield to
  Denomination:                $1000                          Maturity:               N/A

                                                            Initial Accrual
                                                              Period OID:             N/A

                                                            Trustee:                  Chemical Bank




 Capitalized terms not defined above have the meanings given to such terms in
                  the accompanying Prospectus Supplement.

                             MORGAN STANLEY & CO.
                                 Incorporated