MSCI, Inc. Barclays 24th Annual Global Financial Services Conference

Absolutely. Happy to be here. Great event. Great turnout, and fun to be jumping into it in September here.

Yeah. So it's a dynamic environment. There is not only the macro geopolitical dynamics that you alluded to, there's the AI change taking place, but there are structural changes taking place within the capital markets and the investment industry. You're seeing this move towards more systematic investing, is the term we use. You see that manifest itself in more multi-asset class portfolios, things like direct indexing, basket trades, the total portfolio approach. You're seeing it in structured products, fixed index annuities, and all of these parts of the investment industry, you're seeing these shifts. As you all know, you're seeing higher allocation and intense scrutiny around private markets and private asset investing. Those are all things that impact our business. So you have those broader dynamics you alluded to on top of the structural changes taking place in the investment industry.

It's a busy time for us, and we're seeing strong engagement from our clients. The exciting thing is there are opportunities out there, and you are seeing many parts of the investment industry thriving, capitalizing, taking advantage. We are in the epicenter of providing those tools and solutions that can help them take advantage of those trends that I alluded to earlier. For those that need to restructure, we're providing those frameworks, those tools, those solutions, the support they need to transform their business models. All parts of the industry we are heavily engaged with. We're seeing attractive opportunities. As we mentioned on our second quarter earnings call, we've got a very attractive pipeline of opportunities out there. Business is busy. As we were talking about earlier, we see a lot to do.

There are a lot of demands, and the opportunities are ours for the seizing here, so we're excited.

Yeah. Listen, there are secular pressures on traditional asset management, which I think we're all aware of, and I alluded to. That's not new. That's something that's been around since the financial crisis. It was probably most acute in 2022, 2023, 2024. I think given the runs that we've seen and some of the stability we've seen in equity markets, it's been helpful to active management. It's more constructive than it was a couple of years ago. Those secular pressures still persist, and as I alluded to in your last question, there are areas where organizations need to change. They need to restructure. We can help them, but there are pressures on those organizations. It's generally more constructive. Then layered on top of that, we have seen, over the last couple of years, the last 18 months, a rotation into international markets.

We've seen tremendous flows into international markets, and that's something that cyclically benefits us as well, given our core franchises on the index side are anchored to international investing, emerging markets, developed markets outside the U.S., global investing. That's also added to the opportunity set in front of us.

Yeah. To that point, for sure, we do see those pressures, as I alluded to, with traditional active managers is kind of the epicenter of that pressure. We continue to grow with these organizations, and we can unlock additional value through a couple of channels. One is we can be helpful in making them more efficient in how they operate. We can help them replace internal systems, we can help them displace other providers and save money in consolidating providers. Probably most importantly, we are in the areas where they want to move to. We can help them build those strategies, those approaches, those teams that are in areas where they can attract assets, charge higher fees, really differentiate themselves in the market.

We are both helping on the efficiency side, but we're also we call ourselves a revenue center, and you've heard us talk about moving more towards the front office with a lot of these organizations. Not just being a benchmark, a middle office enterprise risk solution, but actually something that is used by the CIO, the portfolio managers, the research analysts day-to-day in developing their portfolios, in making better decisions, and ultimately delivering better returns for their clients.

Yeah. Listen, the market is ultra-focused on our recurring net new every quarter. We see it, you alluded to it. I understand why. Our subscription run rate growth is a core part of the franchise and a key indicator of the momentum of the business and the opportunities in front of us. We believe we've had good momentum. As I alluded to, we have attractive pipeline of opportunities. If you look at our year-to-date recurring net new, it's up 24%, 25% over last year. If you look at the trailing 12 months of recurring net new as of 6/30, it's up 20% over the prior LTM period. We have good momentum. We're delivering recurring net new that is well ahead of our current subscription run rate growth, which means we're accelerating. We're accelerating at a nice pace.