MSCI expands its presence in the private assets sector
Financial services company MSCI has announced the acquisition of analytics provider The Burgiss Group. It sold a controlling 68% stake for US$697 million. It is worth noting that MSCI has been an investor in the company since the beginning of 2020 when it invested US$913 million in the business.
US-based Burgiss Group provides data processing and analysis services and develops technology solutions for investors. It specialises in researching and gathering information on private wealth and developing specialist software applications. Burgiss Group has been in business since 1978 and has become a leader in the data analysis sector. It employs 650 people and has over a thousand clients in 40 countries.
According to Henry Fernandez, who serves as a director of MSCI, the acquisition of Burgiss is strategically vital for the company’s development. Thanks to the deal, shareholders of the financial services company can expect significant returns in the long term. The acquisition of the data provider will allow financial services company to broaden its capabilities across asset classes and strengthen its position in the private wealth sector. According to analysts, Burgiss will generate more than US$90 million in revenue in fiscal 2023. It paid for the deal with funds from various liquidity sources available to MSCI.
Overview of the MSCI business
MSCI is a global financial services company that provides fixed-income and equity indices. It also offers investment services in real estate, climate products and ESG. The company manages several indices, including:
– MSCI World;
– MSCI Emerging Markets.
The company’s history began in 1968 when Capital International launched indices for the global equity market. In 1986, Morgan Stanley acquired the rights to these indices. This led to the index being renamed MSCI and becoming benchmarked outside the US.
Company was a division of Morgan Stanley until 2007 when it went public and became independent. Since 2010, the company has been actively expanding through acquisitions:
– 2010 – the company acquired RiskMetrics Group;
– 2012 – acquisition of Investment Property Databank;
– 2013 – investor Force became part of the company;
– 2014 – MSCI bought rating agency GMI;
– 2019 – Zurich-based climate change analysis firm Carbon Delta became part of the company.
Initially, company used eight factors to construct indices: value, liquidity, volatility, etc. Over time, the approach has changed, and more variables are in use.