Episode summary
MSCI CEO on Private Assets, Climate Change, and More | At Barron's
At Barron's
· · Hosts: Andy Serwer · Guests: Henry Fernandez
Summary
MSCI’s business has grown from a small Morgan Stanley joint venture into a subscription-based market infrastructure company that now calculates about 250,000 indexes daily and serves roughly 78,000 institutional clients in about 100 countries. Henry Fernandez said the company makes money mainly from recurring fees for data, benchmarks, risk tools, sustainability products, and a smaller transaction-based stream.
Fernandez argued that indexing is not a threat but a benefit to markets because index investors are long-term owners and because benchmarks let investors spend more time on asset allocation rather than security selection. He said MSCI’s recent stock stagnation reflects two headwinds: weakness in active asset management, which is losing share to indexation, private assets, and concentrated portfolios, and a downturn in ESG demand in the U.S. after political backlash and European rule changes.
He said ETFs remain a major growth engine, especially as the market expands beyond plain market-cap exposure into active ETFs and non-market-cap strategies. He also framed private assets and climate change as large opportunities, saying MSCI is building transparency, valuation, and risk tools for private credit, private equity, and real estate, while climate data is shifting from transition targets to physical-risk analysis.
Key takeaways
- Henry Fernandez said MSCI now calculates about 250,000 indexes daily, with roughly 10,000 to 15,000 updated in real time.
- Fernandez said about 75% of MSCI revenue comes from fixed subscription fees, with most of the rest tied to asset-based fees.
- He blamed recent stock underperformance on pressure in active asset management and a slowdown in ESG demand after political and regulatory backlash.
- Fernandez said ETFs are still a major growth driver, especially as active ETFs and non-market-cap exposures expand.
- He said private assets are a major opportunity because MSCI can add transparency, valuation, and risk analysis where benchmarks are scarce.
Notable quotes
“we now say indexes. Got it. Okay. Indexes. I like that”
“Well, it's about 250,000. 250,000 index precise. Yeah, we calculate 250,000 uh indices daily”
“the first thing to think about is if you're an asset allocator, particularly an institutional asset allocator, your job is to have a leverage play on global economic growth”
“we at MSEI are in the process of changing that. What we want to do is create total transparency for an investor in investing in a private credit fund”
“the two most significant changes to the global capital markets and obviously to our lives going to be two AI and climate change”
How the episode opens
Hello everyone and welcome to At Barons. I'm Andy Serwarter and welcome to our guest Henry Fernandez, CEO of MSCI. Henry, great to see you.
Thanks for having me. So MSCI, the old Morgan Stanley Capital Index. There's a long history there.
Give us some of that backstory, please, Henry, to start us off. So in those days back in the mid 80s, mid to late 80s, um I uh I I thought that that I thought about you know the these indices because they were a joint venture between the Morgan Stanley and the Capital Group uh set up around 88 89 something like that and um and it was interesting to follow them because you know they had the name of Morgan Stanley and it was performance of global markets and all of that. So anyhow, you roll the clock forward 10 years after in the kind of late night mid to late 90s.
I was trying to figure out whether I should leave Morgan Stanley to set up a venture, which I had already done once, an entrepreneurial venture, uh, or whether I should look at a part of Morgan Stanley and make it highly entrepreneurial and see if I could develop a third division of Morgan Stanley. So um so I thought about the idea of uh creating an investment tools company, investment infrastructure, investment tools and uh and wrote some papers around it, you know, uh that we went to talk to the uh management committee of Morgan Stanley and uh and and then I looked at what parts of Morgan Stanley can help me get started so that I would not start from scratch. And I discovered this little area of Morgan Stanley called Morgan Stanley Capital International which was a joint venture between the Capital Group of Los Angeles and Morgan Stanley.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- private assets
- climate change
- indexes
- index licensing
- asset management
Companies and tickers mentioned
- MSCI
- MSCI
Watch the episode
Watch “MSCI CEO on Private Assets, Climate Change, and More | At Barron's” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
More from At Barron's
-
Kai-Fu Lee on How AI Can Help Grow a Company's Earnings -
Rocket CEO: "Homeowners Are Still Waiting to Buy Homes" -
Moderna CEO on the Biotech’s Cancer Vaccine and Pipeline -
Anthony Scaramucci on Katie Zacharia, Trump, and the Midterms | At Barron's -
IMAX CEO on 'The Odyssey,' Chris Nolan, and Company's Sudden Ascent | At Barron's -
PG&E's CEO on Data Centers, Energy Rates, and the Stock | At Barron's
At Barron's, this episode and its artwork belong to At Barron's. Octagon is not affiliated with the show; this page is an independent summary.
