MSCI's Expansion into Private Assets and Its Impact on Index Licensing Growth

MSCI's strategic pivot into private assets has positioned the global index and data provider as a key player in a rapidly evolving market. With private assets now representing a significant portion of institutional portfolios, MSCI's initiatives-from data platforms to index licensing partnerships-highlight its ambition to capitalize on this growth. However, while long-term catalysts like innovation and ESG alignment promise robust revenue expansion, near-term subscription risks, including client budget constraints and data access challenges, could temper immediate gains.

Long-Term Revenue Catalysts: Innovation and Market Leadership

MSCI's 2023–2025 strategic roadmap underscores its commitment to private assets, a sector projected to grow as investors seek diversification and higher returns. A cornerstone of this strategy is the Private Company Data Connect platform, launched in early 2024, which addresses the chronic lack of transparency in private markets by aggregating and standardizing data for institutional investors, according to a Simply Wall Street analysis. This initiative aligns with MSCI's broader goal to bridge the gap between public and private markets, as seen in its collaboration with Goldman Sachs Asset Management to launch the Goldman Sachs MSCI World Private Equity Return Tracker ETF. This product offers investors exposure to private equity-like returns via a public index of 1,500 global stocks, effectively broadening MSCI's index licensing appeal to both institutional and retail clients, as noted by Simply Wall Street.

The company's October 2024 launch of MSCI PACS (Private Asset Compliance and Standards) further reinforces its leadership in private markets. By enhancing transparency and compliance frameworks, MSCI is addressing regulatory and operational pain points that have historically hindered private asset adoption. Financially, MSCI's ESG and private assets segments drove a 12.94% revenue increase in 2024, reaching $2.86 billion, while its recurring subscription model ensures high profit margins despite rising operating costs. Analysts project MSCI to achieve $3.8 billion in revenue by 2028, reflecting an 8.5% annual growth rate, fueled by demand for passive investment products and ESG-aligned solutions.

Short-Term Subscription Risks: Budget Constraints and Data Access

Despite these long-term tailwinds, MSCI faces near-term headwinds. Active asset managers, a critical client base for index licensing, are grappling with budget constraints amid macroeconomic uncertainty. This has led to muted demand for MSCI's sustainability and climate solutions in the U.S., a market that contributes significantly to its revenue, according to a TradingView article. Additionally, regulatory complexity in Europe-particularly around ESG reporting standards-has created friction for clients seeking to adopt MSCI's tools, per TradingView.

A more systemic risk lies in data access. While MSCI's Private Capital Intel product offers one of the largest private capital datasets, the opaque nature of private markets means data quality and availability remain inconsistent. This could delay adoption of MSCI's benchmarks and analytics, particularly among risk-averse investors, as Simply Wall Street observed. Furthermore, competition from firms like S&P Global and Bloomberg in private asset data and index offerings could erode MSCI's market share if it fails to maintain its first-mover advantage.

Balancing Growth and Risk: What Investors Should Watch

MSCI's third-quarter 2025 earnings, scheduled for October 28, 2025, will provide critical insights into how these dynamics are playing out. The Zacks Consensus Estimate forecasts $4.37 per share in earnings, a 13.2% year-over-year increase, driven by recurring revenue from index licensing and asset-based fees, according to TradingView. However, investors should monitor whether macroeconomic pressures and regulatory hurdles offset these gains.

The Goldman Sachs ETF partnership is a litmus test for MSCI's ability to scale its index licensing model. If the product attracts significant assets under management, it could catalyze further collaborations, reinforcing MSCI's role as a market infrastructure provider. Conversely, sluggish adoption would highlight the challenges of monetizing private asset innovations in a public market framework.

Conclusion

MSCI's expansion into private assets is a masterclass in aligning long-term industry trends with strategic innovation. Its data platforms, index licensing partnerships, and ESG expertise position it to benefit from the secular shift toward private market allocations. However, near-term risks-budget constraints, regulatory complexity, and data access issues-could slow revenue growth in the short run. For investors, the key will be to assess whether MSCI's long-term vision can outpace these challenges, ensuring that its private assets segment becomes a durable engine of growth.