MSCI Profile
MSCI Inc. provides critical decision support tools and solutions for the global investment community. The company’s offerings help investors address the challenges of a transforming investment landscape and power better investment decisions. Leveraging its knowledge of the global investment process and its expertise in research, data and technology, the company enables its clients to understand and analyze key drivers of risk and return and confidently and efficiently build more effective portfolios.
Investors all over the world use the company’s research-driven and technology-enabled tools and solutions to gain insights and improve transparency throughout their investment processes. The company’s tools and solutions help investors define their investment universe; inform and analyze their asset allocation and portfolio construction decisions; measure and manage portfolio performance and risk; implement sustainable, climate-focused and other investment strategies; conduct performance attribution; construct and manage exchange traded funds (ETFs) and other indexed financial products; and facilitate reporting to stakeholders.
The company’s products and services include indexes; portfolio construction and risk management tools; environmental, social and governance (ESG) and climate solutions; and private asset data and analysis. The company is increasingly focused on open and flexible technology, and its content and capabilities can be accessed by its clients through multiple channels and platforms.
The company focuses on product innovation and data collection to address the evolving needs of an increasingly complex industry. In order to most effectively serve its clients, the company is committed to advancing an integrated approach to its offerings, achieving service excellence, enhancing its differentiated research and content, and delivering its solutions via flexible, cutting-edge technology.
Clients
The company’s clients comprise a wide spectrum of the global investment industry and include the following key client types:
Asset owners (including pension funds, endowments, foundations, central banks, sovereign wealth funds, family offices and insurance companies);
Asset managers (including managers of institutional funds and accounts, mutual funds, hedge funds, ETFs, insurance products, private banking products and real estate investment trusts);
Financial intermediaries (including banks, broker-dealers, exchanges, custodians, trust companies, fund administrators and investment consultants);
Wealth managers (including large wealth management organizations, robo-advisors and self-directed brokerages);
Real Estate Professionals (including real estate brokers, agents, developers, lenders and appraisers); and
Corporates (including public and private companies and their advisors).
As of December 31, 2023, the company served approximately 7,000 clients1 in more than 95 countries. For the year ended December 31, 2023, the company’s largest client organization by revenue, BlackRock, accounted for 9.8% of its consolidated operating revenues, with 95.4% of the operating revenues from BlackRock coming from fees based on the assets in BlackRock’s ETFs and non-ETF products that are based on its indexes.
Strategy
The company provides critical tools and solutions that enable investors to manage the transformations taking place in the investment industry, better understand the drivers of performance and risk, and build portfolios more effectively and efficiently to achieve their investment objectives. The company key elements of the company’s strategy are to extend leadership in research-enhanced content across asset classes; lead the enablement of ESG and climate investment integration by delivering the data, information and applications necessary to identify, assess and incorporate material ESG and climate risks and opportunities; enhance distribution and content-enabling technology; expand solutions that empower client customization; strengthen client relationships and grow into strategic partnerships with clients; and execute strategic relationships and acquisitions with complementary data, content and technology companies.
Financial Model
The company has an attractive financial model due to its recurring revenue and strong cash generation. Clients purchase the company’s products and services primarily through recurring fixed and variable fee arrangements, a business model which has historically delivered stable revenue and predictable cash flows. Finally, the company’s disciplined capital-allocation policy provides it with flexibility to balance internal resources and investment needs, acquisitions and shareholder returns through dividends and opportunistic share repurchases.
Segments
For the year ended December 31, 2023, the company had the following five operating segments: Index, Analytics, ESG and Climate, Real Assets and Private Capital Solutions, which are presented as the following four segments: Index, Analytics, ESG and Climate, and All Other – Private Assets. For reporting purposes, the Real Assets and Private Capital Solutions operating segments are combined and presented as All Other – Private Assets. On October 2, 2023, the company acquired the remaining 66.4% interest in Private Capital Solutions.
Index
Clients use the company’s indexes in many areas of the investment process, including for developing indexed financial products (e.g., ETFs, mutual funds, annuities, futures, options, structured products, over-the-counter derivatives), performance benchmarking, portfolio construction and rebalancing, and asset allocation. The company calculates more than 290,0002 end-of-day indexes daily and more than 16,000 indexes in real time. Clients access the company’s index data directly from MSCI or from third-party vendors worldwide.
The company’s index product offerings include:
MSCI Global Equity Indexes: MSCI Global Equity Indexes are designed to measure returns across a wide variety of equity markets, size segments, sectors and industries. As of December 31, 2023, the company calculated indexes that covered more than 80 developed, emerging, frontier and standalone equity markets, as well as various regional indexes built from the component indexes.
ESG and Climate Indexes: ESG and Climate Indexes are constructed from an underlying index by applying data from the company’s ESG and Climate segment to additional screening or other criteria.
Factor Indexes: Factor Indexes seek to reflect the performance characteristics of a range of investment styles and strategies, such as momentum or value. These indexes include stocks that demonstrate high exposure to the target factor. In addition to single factor indexes, the company offers multiple-factor indexes for investors with diversified multi-factor strategies.
Thematic Indexes: Thematic Indexes are designed to measure the performance of companies associated with shifts in macroeconomic, geopolitical and technological trends. These indexes can target areas of interest under megatrend categories, such as the environment, healthcare and lifestyle. Examples of the company’s Thematic Indexes include digital economy, efficient energy, genomic innovation and smart cities.
Client-Designed Indexes: Client-Designed Indexes are calculated by applying additional criteria supplied by a client – such as stock exclusion lists, currency hedging rules, tax rates or special weighting – to an MSCI index. Investors with unique index requirements can build an index to meet their specific needs and better update index design over time to support their evolving investment strategies.
Fixed Income Indexes: Fixed Income Indexes include both investment grade and high-yield securities across a number of currencies that reflect the performance of credit markets generally, or specific investment strategies, including climate-focused or factor strategies.
Real Assets Indexes: Real Assets Indexes provide transparency and insight into real asset strategies, including performance of portfolios across private real estate investments, REITs and others. The company’s Private Real Assets Index products are reported under its All Other – Private Assets reportable segment.
In 2023, the company launched a number of new indexes and data products, including the following:
MSCI Float Data Product: The MSCI Float Data Product is a new offering created to provide additional transparency related to free float market capitalization at a security level. The MSCI Float Data Product offers greater visibility into a security’s investability metrics. This extensive data set includes all securities within the MSCI equity universe and is updated on a monthly basis.
MSCI Biotech Advance Indexes: Part of the company’s suite of MSCI Life Sciences Indexes, the MSCI Biotech Advance Indexes aim to measure the performance of a set of companies that are associated with research, development and commercialization of products for treating a broad range of diseases and disorders.
MSCI MarketAxess Tradable Corporate Bond Indexes: The MSCI MarketAxess Tradable Corporate Bond Indexes incorporate MarketAxess liquidity data and make use of the MarketAxess Relative Liquidity Score to capture more liquid fixed income securities.
MSCI Global Thematic Rotation Index: The MSCI Global Thematic Rotation Index aims to represent the performance of the highest-ranked thematic megatrends, selected from a larger subset and rotated regularly based on media sentiment tied to MediaStats Megatrend Scores.
MSCI Climate Action Corporate Bond Indexes: The MSCI Climate Action Corporate Bond Indexes are designed to measure the performance of the fixed-income securities of companies that have been assessed to have favorable characteristics relating to climate transition actions relative to sector peers.
The company’s Index segment also includes revenues from licenses of GICS and GICS Direct, the global industry classification standard jointly developed and maintained by MSCI and S&P Dow Jones Indices, a division of S&P Global Inc. This classification system was developed in response to investors’ need for a comprehensive and consistent framework for classifying companies into industries. GICS is widely accepted as an industry analysis framework for investment research, portfolio management and asset allocation. GICS Direct is a dataset comprised of active companies and securities classified by sector, industry group, industry and sub-industry in accordance with the proprietary GICS methodology. The MSCI Sector Indexes are comprised of GICS sector, industry group, and industry indexes across countries and regions in Developed, Emerging and select Frontier markets.
For the year ended December 31, 2023, 57.4% of the company’s revenues were attributable to its Index segment. A majority of those revenues were attributable to annual, recurring subscriptions. A portion of the company’s revenues comes from clients who use its indexes as the basis for indexed investment products. Such fees are primarily based on a client’s assets under management (AUM) or trading volumes and are referred to herein as asset-based fees. Since market movement and investment trends impact the company’s asset-based fees, its revenues from asset-based fees are subject to volatility. For the year ended December 31, 2023, asset-based fees accounted for 38.4% of the total revenues for the company’s Index segment.
Analytics
Analytics segment offers risk management, performance attribution and portfolio management content, applications and services that provide clients with an integrated view of risk and return and tools for analyzing market, credit, liquidity, counterparty and climate risk across all major asset classes, spanning short-, medium- and long-term time horizons. The company’s offerings also support clients’ various regulatory reporting needs.
The company’s Analytics tools and capabilities include the following: models to support factor-based analytics (e.g., Barra equity models and fixed income and multi-asset class (MAC) models), pricing models and single security analytics, time series-based analytics, stress testing, performance attribution, portfolio optimization and liquidity risk analytics, as well as underlying inputs, such as interest rate and credit curves. The company continues to develop new and improved tools and capabilities in response to the evolving needs of its clients. In addition, the company’s analytics capabilities are helping to fuel growth in key areas across its business, such as its factor indexes and many of its climate risk and reporting offerings.
The company’s clients access its Analytics tools and content through its proprietary applications and application programming interfaces (APIs), third-party applications or directly through their own platforms. The company’s Analytics solutions provide clients with tools to construct and manage portfolios, including integrated market data from multiple third parties, as well as content from MSCI’s other segments, which significantly reduces the operational burden on clients to independently source this information and populate it in its Analytics products. The company’s key Analytics products include:
RiskMetrics RiskManager: RiskMetrics RiskManager provides risk analytics across a broad range of publicly traded instruments and private assets. Clients use RiskManager for daily analysis, including Value-at-Risk (VaR) simulation; measuring and monitoring market and liquidity risk at position, fund and firm levels; sensitivity analysis and stress testing; interactive what-if analysis; counterparty credit exposure; and regulatory risk reporting.
BarraOne: Powered by the company’s MAC Barra factor model, BarraOne provides clients with MAC risk and performance analytics. BarraOne allows clients to build equity, fixed income, and MAC portfolios with specific risk, ESG and climate exposures.
Barra Portfolio Manager: Barra Portfolio Manager is an integrated risk, performance and portfolio-construction interactive platform with a flexible user interface that enables the company’s clients to design investment strategies and build portfolios, and to share analytics and reports across their organizations. It is used by equity fund managers and their teams to gain additional portfolio insight and manage their investment processes more systematically.
RiskMetrics WealthBench and RiskMetrics CreditManager: RiskMetrics WealthBench is a web-based platform used by private banks, financial advisers, brokerages and trust companies to help wealth managers assess portfolio risk, construct asset allocation policies and create comprehensive client proposals. RiskMetrics CreditManager is a portfolio credit risk management system used primarily by banks to quantify portfolio credit risk by capturing market exposure, rating changes and default risk.
Climate Lab Enterprise: Powered by MSCI’s climate data integrated with MSCI’s enterprise analytics infrastructure, Climate Lab Enterprise enables the company’s clients to measure, manage and monitor net-zero commitments and climate exposure and risks. Climate Lab Enterprise is able to aggregate climate data across multiple portfolios and asset classes, providing clients the ability to understand alignment with their climate goals from the enterprise level down through portfolios to individual positions and issuers.
Insights: The company’s Insights offering calculates, stores and delivers a broad range of risk, performance, climate and sustainability measures to help investors identify trends and respond to rapid changes in markets. Insights automates many tasks to allow investors to more quickly and effectively understand the overall level of risk in their portfolios, how that risk has changed and what factors may have caused the changes.
The company’s Analytics segment also provides various managed services to help clients operate more efficiently, including consolidation of client portfolio data from various sources, review and reconciliation of input data and results, and customized reporting, including ESG and climate reporting. In addition, the company’s RiskMetrics HedgePlatform service allows clients, such as funds of funds, pension funds and endowments who invest in hedge funds to measure, evaluate and monitor the risk of their hedge fund investments across multiple hedge fund strategies.
For the year ended December 31, 2023, 24.4% of the company’s revenues were attributable to its Analytics segment.
ESG and Climate
The ESG and Climate segment3 offers products and services that help institutional investors understand how sustainability considerations can impact the long-term risk and return of their portfolio and individual security-level investments. The company provides data, ratings, research and tools to help investors navigate increasing regulation, meet new client demands and better integrate ESG and climate elements into their investment processes.
In recent years, sustainability related issues have become key business priorities across industries. At MSCI, the company’s ESG and Climate solutions support ESG integration by strengthening transparency around ESG and climate metrics and helping to analyze and quantify ESG and climate risks. Investors commonly use its ESG and Climate solutions, including MSCI ESG Ratings, to help assess ESG-related financial risks in their investment processes and to help inform their investment decisions. The company’s ESG and Climate solutions are also used by some clients to help them identify investments that may generate a social or environmental impact or that may otherwise align with an investor’s ethical values.
The company’s ESG and Climate research team analyzes over 10,0004 entities worldwide, and it will continue to expand and deepen its coverage to help investors and others in their asset allocation, portfolio construction and risk management processes. Clients include global asset managers, leading asset owners, consultants, advisers, corporates and academics.
The company’s ESG and Climate offerings include:
MSCI ESG Ratings: The company’s ESG ratings aim to measure a company’s resilience to long-term ESG risks. Companies are scored on an industry-relative scale across the most relevant key ESG issues based on a company’s business model. MSCI ESG Ratings include ratings of equity issuers and fixed income securities. The MSCI ESG Industry Materiality Map is a public tool that explores the key ESG issues by GICS sub-industry or sector and their contribution to companies’ overall ESG ratings. In assigning an MSCI ESG Rating, the company collects the most relevant, publicly available data and assess the most significant ESG risks a company faces. Investors use MSCI ESG Ratings for a variety of purposes, including to assist with fundamental or quantitative analysis, portfolio construction and risk management, engagement and thought leadership, benchmarking and custom index design.
MSCI ESG Business Involvement Screening Research: MSCI ESG Business Involvement Screening Research is a screening service that enables institutional investors to manage ESG standards and restrictions reliably and efficiently. Asset managers, investment advisers and asset owners can access screening research through the online MSCI ESG Manager platform or a data feed to support alignment with their investment guidelines, implement client mandates or manage potential ESG portfolio risks.
MSCI Climate Solutions: With MSCI Climate Solutions, investors and issuers utilize the company’s climate data and tools to support their investment decision making. These activities can include measuring and reporting on climate risk exposure, implementing low-carbon or fossil-fuel-free strategies, factoring climate change research into risk management processes and engaging companies and external stakeholders. For example, in 2023, the company launched MSCI Corporate Sustainability Insights, a solution that gives clients the ability to track, measure and compare their ESG and climate data versus peers, while also identifying potential disclosure gaps, through intuitive charts, graphs and maps. In 2023, the company also completed the acquisition of Trove Research Ltd (Trove), a carbon markets intelligence provider, which will accelerate its ability to provide data and analysis on voluntary carbon markets.
MSCI ESG ratings and certain other ESG and climate data provided to the company’s clients are also made available to, and used in, its other operating segments, such as in the construction of its MSCI ESG and Climate equity and fixed income indexes. These Index products are designed to help institutional investors more effectively benchmark ESG investment performance, issue indexed investment products, as well as manage, measure and report on ESG mandates.
For the year ended December 31, 2023, 11.4% of the company’s revenues were attributable to its ESG and Climate segment.
All Other – Private Assets
The company’s private assets offerings include extensive data and analytics for private assets, enabling investors to evaluate fundamental information, measure and compare performance, understand exposures, manage risk and conduct robust analysis. The company’s private assets offerings also enable investors to compare performance and risk across both private and public asset classes, and enhance its multi-asset class and total portfolio capabilities. In 2023, the company acquired the remaining 66.4% interest in Private Capital Solutions, which provides a suite of tools to help private assets investors across mission-critical workflows, such as evaluating operating performance of underlying portfolio companies, managing risk and other activities supporting private capital investing. This acquisition built on the company’s existing capabilities across real assets, including from its 2021 acquisition of Real Capital Analytics (RCA).
The company also integrates its private assets data and analytics in other MSCI products offered by its other operating segments, including indexes, climate risk models, MAC models and other MSCI solutions.
The company’s Real Assets offerings include:
Real Capital Analytics: RCA aggregates timely transaction data and provides valuable information on market pricing, capital flows and investment trends in more than 170 countries. The company’s clients use this unique data to formulate strategies, source new opportunities and execute deals.
Portfolio Performance Insights: The company’s Portfolio Performance Insights application offers an interactive, integrated solution to analyze the drivers of performance across investments, as well as review exposures and concentrations across markets, asset types and portfolios.
Portfolio Climate Insights: The company’s Portfolio Climate Insights solution provides forward-looking and return-based valuation assessments to measure climate-related risks for real estate assets in an investment portfolio.
Portfolio Income Insights: The company’s Portfolio Income Insights solution enables investors to proactively measure and manage income risk. This offering uses intuitive dashboards, bond-equivalent rating scores and a proprietary global tenant grading system to enable investors to better understand the likelihood of current and future tenant risk across assets and portfolios.
Index Intel: The company’s Index Intel offering is an extensive private real estate database that is used by institutional investors, asset managers, banks, custodians and investment consultants to drive allocation decisions, research and strategy developments, and portfolio and risk management.
Property Intel: The company’s Property Intel offering provides web-based services for the analysis of commercial real estate and offers extensive information on real estate, rental levels, property holdings, transactions, ownership, occupiers, footfall, lease data and the ability to simulate market values.
The company’s Private Capital Solutions offerings include:
Private Capital Portfolio Management Platform: The Private Capital Portfolio Management Platform merges analytical tools and powerful reporting to help investment, risk and operations teams consistently and accurately monitor, measure and report on their private asset portfolios and associated investment activity.
Caissa Total Plan Platform: The Caissa Total Plan Platform is an industry-leading, multi-asset class investment analytics platform. It provides a comprehensive view of the drivers of performance and risk in both public and private investments in total portfolios.
Transparency Data: The company’s Private Capital Transparency Data offering provides investment teams with information on the holdings of private capital funds that is gathered from original source documents provided by managers and augmented with extensive research.
Universe Analytics: The Universe Analytics offering provides private capital performance data used by asset allocators as a source of official institutional benchmarks and as a basis for asset allocation, research, due diligence and compensation decisions.
For the year ended December 31, 2023, 6.9% of the company’s revenues were attributable to its private assets offerings.
Competition
Index: Among the company’s Index competitors are S&P Dow Jones Indices LLC (a joint venture of S&P Global Inc. and CME Group Inc.); FTSE Russell, a subsidiary of the London Stock Exchange Group plc; Solactive AG; Nasdaq Inc; and Bloomberg Finance L.P. (Bloomberg).
Analytics: The company’s Analytics offerings compete with those from a range of competitors, including Axioma (part of SimCorp), BlackRock Solutions, Bloomberg, and FactSet Research Systems Inc.
ESG and Climate: The company’s ESG and Climate offerings compete with a growing number of companies that issue ESG data, ratings or research. For example, the company’s ESG and Climate offerings compete with those from a range of competitors, including Sustainalytics Holding B.V. (a part of Morningstar, Inc.), Institutional Shareholder Services Inc. (majority owned by Deutsche Börse AG), Trucost (an S&P Global Inc. business), Refinitiv (a London Stock Exchange Group business), Bloomberg and Moody’s Corporation.
Intellectual Property, Other Proprietary Rights and Sources of Data
The company has registered MSCI and other marks as trademarks or service marks in the United States and in certain other countries.
Government Regulation
The company is subject to reporting, disclosure and recordkeeping obligations pursuant to SEC requirements applicable to U.S. public companies. The United Kingdom’s Financial Conduct Authority (UK FCA) authorized MSCI Limited (a subsidiary of MSCI Inc.) to be the benchmark administrator for applicable MSCI indexes. In addition, MSCI Deutschland GmbH (a subsidiary of MSCI Inc.) is authorized by Germany’s Federal Financial Supervisory Authority as an EU benchmark administrator for applicable MSCI indexes.
MSCI ESG Research LLC is a registered investment adviser and must comply with the requirements of the Investment Advisers Act of 1940 (the Advisers Act) and related SEC regulations. Such requirements relate to, among other things, disclosure obligations, recordkeeping and reporting requirements, marketing restrictions and general anti-fraud prohibitions.
History
MSCI Inc. was founded in 1998. The company was incorporated in 1998.
