MSCI (MSCI) Barclays 24th Annual Global Financial Services Conference summary

Market environment and industry trends

• Structural changes in capital markets include a shift toward systematic investing, multi-asset portfolios, and increased focus on private markets.

• Strong client engagement and a robust pipeline of opportunities are driving business momentum.

• Secular pressures on traditional asset management persist, but recent equity market stability has been constructive for active management.

• Significant flows into international markets have benefited index-linked products.

• Efficiency gains and innovation are enabling organizations to restructure and differentiate in the market.

Financial performance and growth

• Recurring net new sales are up 24%-25% year-to-date, with trailing 12-month growth at 20% over the prior period.

• Custom indexes and private assets are key growth drivers, with strong momentum across hedge funds, asset managers, and broker-dealers.

• Asset-based fee run-rate grew 25%, with quarter-over-quarter growth above 8%.

• Fee rate declines are attributed to mix shifts toward lower-fee, hyperscale ETFs, not fee reductions by partners.

• The BlackRock contract extension includes a phased 0.1 basis point fee adjustment, supporting a long-term partnership.

Innovation, AI, and operational efficiency

• Accelerated pace of new product introductions, with 40% of new recurring sales in the first half of the year from new products.

• AI has enabled increased investment in innovation while keeping headcount flat and moderating expense growth.

• Restructuring and AI-driven efficiencies are reducing run-the-business expense growth to low-single digits, supporting higher operating leverage.

• Elevated severance and acquisition-related expenses are expected this year, but position the company for future profitability.

• AI savings are being reinvested to accelerate top-line and bottom-line growth, not just margin expansion.