Winners’ Circle: MSCI — Collaboration and Commitment

What does it mean for the team to win this award?

We are honored that MSCI RiskManager has been recognized as the leading market risk product in the industry. For more than 20 years we have innovated to provide clients with deep, multi-asset-class risk analytics across a range of instruments, including commodities, equities, fixed-income, foreign exchange, mortgages, structured credit and alternatives—including hedge funds holdings, and now private assets. We are completely client-focused and work continuously to address clients’ most complex investment challenges in areas ranging from managing risk to dealing with ever-changing regulatory compliance and reporting requirements. 

What are the greatest challenges facing the market and how have you enhanced RiskManager to help clients address those hurdles?

On a daily basis, our clients confront macroeconomic and political uncertainty, and a wave of continually evolving regulation. Examples of our recent innovations include our Macroeconomic Risk Model and Scenario Analysis Service, which enable clients to evaluate and attribute the impact of macroeconomic scenarios of their own design on global multi-asset class portfolios. Another example is the enhancements we are making to our asset-pricing models, which now provide clients with the ability to simulate various negative interest-rate scenarios. We also continue to invest and strengthen our core market, credit, counterparty and liquidity risk capabilities, as well as our stress-testing capabilities that institutional investors can use to evaluate the impact of a myriad events. 

This was a competitive category. What do you feel separated your product from others in the space?

I think three things helped us stand out. First is our commitment to clients. We are focused on supporting the world’s top investors, one client at a time. We aid their investment process with a truly multi-asset-class approach to risk analytics that spans both public and private asset classes to provide them with an integrated view of risk and return. Our clients come to us with their most pressing investment challenges. Our goal is to offer them the “optionality” they need to quickly and seamlessly integrate our tools and services into their investment process. This optionality affords our clients the ability to choose the methodology, parameters and pricing models that meet their unique needs. It also allows them to choose how they want to interact with the analytics, and we also offer multiple delivery channels to fit the needs of each client. Second is our high-volume processing capabilities that help clients address evolving regulatory requirements. We have doubled our processing capability over the last year and can now scale to meet any client’s processing and reporting needs. Finally, our commitment to research-driven innovation helped us stand out. Our deep bench of researchers takes a practitioner’s approach to financial innovation. Recent work includes both new private equity and real-estate models, as well as continued enhancements to our fixed-income models.

Your clients today face new regulatory mandates that focus on measuring and reporting risk, and stress testing capital reserves during a global crisis. How can RiskManager help clients to tackle these new rules?

One advantage of our serving many of the world’s largest investors is that we have an in-depth understanding of regulatory requirements across the globe. In recent years, we have responded to increasing demand from clients for stress testing and risk reporting that addresses such frameworks as the Federal Reserve’s Comprehensive Capital Analysis and Review (CCAR), the Bank of England’s and the European Banking Authority’s stress-testing exercise, as well as regulatory and economic capital assessments under both pillars 1 and 2 of the Basel III framework. Our platform has more than 100 pricing models and counting, and can be deployed in a brief time thanks to our robust data infrastructure. In addition, we also offer a suite of off-the-shelf regulatory reports and analytics that address the needs of asset managers and others on the buy side for liquidity risk management and reporting, as well as for assessing compliance with the European Union’s Solvency II, AIFMD, Ucits and other directives.

What new tools and features will you look to add as we head into the second half of 2016?

We’ll continue to focus on helping clients solve their toughest investment challenges. That includes work in two main areas. First, we are continuing to invest in our fixed-income analytics capabilities, with a focus on prepayment models for agency mortgage-backed securities and collateralized mortgage obligations. As part of that, we will introduce new models for bank loans, collateralized loan obligations, contingent convertibles and traditional convertible bonds. And by the end of this year we expect to introduce new MSCI fixed-income factor models. And second, we also are continuing to invest in helping clients address such developments as the liquidity and derivative rules proposed by the SEC or the Basel Committee’s Fundamental review of the trading book.