MSCI Bets Big on Investment Customization

During a recent investing conference held by Raymond James & Associates on March 3, 2025, MSCI (NYSE: MSCI) CFO Andy Wiechmann shared valuable insights about the company's position, growth initiatives, and future opportunities. For long-term investors, the discussion revealed important strategic elements about MSCI's business model and ability to capitalize on key trends in the investment industry.

MSCI's Role as Critical Market Infrastructure Provider

MSCI provides essential frameworks and tools that connect various participants across the capital markets ecosystem. This positioning creates significant competitive advantages and touches multiple growth trends.

One way to think of MSCI is thinking of us as a critical provider of infrastructure across the capital markets, providing infrastructure that connects the providers of capital with the managers of capital, and ultimately, the users of capital and the intermediaries in between. ... As a result, we are in the strike zone of many of the key trends that are taking place in the capital markets and the investment industry.

-- Andrew Craig Wiechmann, CFO

This infrastructure role means MSCI benefits broadly from growth in global savings and the investment industry while being positioned at the intersection of numerous growth trends.

Focus on Mass Customization and Rules-Based Investment Strategies

MSCI's largest strategic investment area focuses on custom indexes at scale, targeting a major shift in the investment industry toward personalized, systematic strategies.

Probably the most notable trend facing us, and it's one of the most significant trends in the investment ecosystem, is this move toward rules-based, systematic, customized strategies or personalization at scale. ... A very elegant way to do that is an index. ... And given those frameworks that I talked about in the last question, our indexes are very uniquely positioned, and our franchise is uniquely set up to do that mass customization at scale.

-- Andrew Craig Wiechmann, CFO

The company is investing heavily in data infrastructure, production environments, and go-to-market capabilities to capitalize on this trend across institutional, wealth management, and trading segments.

Expanding the Franchise Beyond Traditional Markets

MSCI is actively working to bring structure and standardization to private assets, fixed income, and sustainable investing -- areas where the company sees significant growth potential.

The private asset investment landscape is not mature today, just to be blunt about it. There aren't good standard definitions for how to define sub-asset classes. ... These are all things that MSCI does, and we have the capabilities to develop those tools that the industry needs to be comfortable allocating more assets to privates and understanding the risk and return that they're getting from those allocations.

-- Andrew Craig Wiechmann, CFO

The company sees opportunities to replicate its public markets success in these less developed areas of the investment industry, positioning for long-term growth beyond its traditional strengths.

Looking Ahead

MSCI's management expressed confidence in the company's future growth trajectory, despite recent pressure on index subscription growth rates. With its diversified franchise, ability to help clients attract assets, and positioning in multiple growth trends, the company appears well positioned to capitalize on the evolution of the industry.

We continue to have conviction about the long-term opportunity in index subscription as well as indexes more broadly. ... Given the wealth of opportunities across customization at scale, indexation more broadly, the opportunities we have in wealth managers, hedge funds and trading firms and brokers with insurance companies lead to massive opportunities. And so we continue to be very excited about the trajectory and opportunity in front of us.

-- Andrew Craig Wiechmann, CFO

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David Kretzmann has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends MSCI. The Motley Fool has a disclosure policy.