MSCI Inc. (MSCI) Earnings Call Transcript & Summary

Good day, and welcome to MSCI's 2021 Investor Day. I am Salli Schwartz, Head of Investor Relations and Treasurer. Thank you to everyone for joining us here virtually. We very much appreciate your interest in MSCI. I would like to draw your attention to the forward-looking statements and non-GAAP measures language included on Slide 3 of the presentation materials. Additionally, we have a third-party guest speaker from Burgiss on the agenda. So I will also refer you to the Burgiss disclaimer included on Slide 3. Please take a moment to review this slide. Earlier this morning, we issued a press release announcing new 2021 effective tax rate guidance reaffirming all other guidance for 2021 and announcing our new long-term financial targets to this press release, along with the presentation we will reference during today's event are available on our website, msci.com, under the Investor Relations tab. Today, we will provide an update on our growth opportunities, our strategy and initiatives to achieve them and our long-term financial targets. As you can see, we have a full agenda. Our prepared remarks have been prerecorded, and we will have 2 live video webcast Q&A sessions. Once we are finished with the first half of our presentations, we will transition to the first Q&A session. We will then have a final Q&A session after the second half of our presentations. We ask that you submit your questions on the video platform in the Q&A box that should be visible at the bottom of your screen now. If you have any challenges with the video platform, please e-mail your questions to investorrelations@msci.com. There is a link to that e-mail address in the quotation icon also at the bottom of your screen. Please submit your questions as you have them. We will be collecting questions as they come in, and I will be reading your questions for the management team during the Q&A session. Before we start this morning's presentation, I would like to thank our executive team for their thoughtful preparation for today's event. I also want to thank Cecilia Aza as well as my many colleagues across MSCI's Finance, Marketing, Legal and Workplace Technology teams for their steadfast support. On my first day at MSCI, which was September 16, 2019, the stock opened at $227.47. Not even 6 months later, we were in the midst of a global pandemic that sent markets roiling among many other challenges, as you know, all too well. Throughout it all, MSCI has stood tall, supporting its clients, and its employees and demonstrating that it truly is an all-weather franchise. It has been just over 17 months since I joined MSCI. In that short time, assets under management and equity ETFs linked to MSCI indexes have increased almost 50%. And the run rate in our ESG franchise has increased more than 70%, to name just a couple of financial measures. The last 1.5 years has been a whirlwind. I can't wait to see what we do next. We have a great lineup of speakers for you today. When you look through the biographies towards the end of the presentation, you'll see that we have executives with a wide range of experience and expertise, providing MSCI with a broad set of perspectives that allows us to optimize our strategy and our execution. We will start today with Henry Fernandez, Chairman and CEO of MSCI. It is my distinct pleasure to turn the program over to him now. Henry?

Thank you, Salli, and good day, everyone. I would like to start by thanking all of you that participated in our listening tour and in our survey during the last few months. We have listened to your feedback intently and have incorporated your views into our thinking. It is with great pleasure that we present to you today our ambitious plans to help transform and inspire the investment world. It was 25 years ago, this very month, when I started with a dream of creating a company to provide mission-critical tools for investment decisions by owners, managers and intermediaries of assets, in all asset classes and all over the world. In 1996, we started with one product line in the MSCI equity indices for measures of performance of global equity markets. We acquired Barra in 2004 for measures of equity risk to complement equity performance in our indices. In Barra, we also acquired a small product line in multi-asset class risk management, but it needed more capabilities and much larger scale. We, therefore bought RiskMetrics in 2010 to add scale, use cases and new clients to our Barra multi-asset class risk capabilities. Through RiskMetrics, we also acquired KLD and Innovest, 2 very small businesses dedicated to ESG. They form the foundation of our subsequent organic growth in ESG and climate, later complemented by the acquisitions of GMI Ratings and Carbon Delta. We entered the private asset market via our 2012 acquisition of Investment Property Databank, a world leader in private real estate performance analysis. The learnings and experience in IPD, gave us the confidence to expand deeper in private assets with the investment that we have made in Burgiss, the largest private capital data and analytics company in the world. In the businesses that we have acquired, we have concentrated intensely on innovating and growing them organically, and integrating them into a holistic One MSCI business so that each product line benefits from and contributes to the other ones. We have purchased and built unique assets and developed organically major capabilities and solutions. We believe we have learned, adapted and capitalized on significant opportunities in a constantly changing environment. But we still have much work to do in some key areas, including fixed income, climate, more in private assets, some very large client segments and some critical capabilities, especially in technology and data. We have achieved much success in these 25 years and created significant value for our shareholders. What we are here today to tell you that MSCI is still on the ground floor of what is possible to achieve as an agent of change in the reshaping of the investment landscape. In a way, we feel we're only getting started, and we have a large and long runway ahead of us. I am more excited about our prospects today than I have ever been at any time since that cold day in February of 1996 when I embarked on this journey. We held our last Investor Day in February of 2019. And I am pleased to report that over the last 2 years, we have achieved what we set out to do. I am sure you have been following our progress closely and can attest that we have consistently delivered on the promises we maintain. We now come before you today, to present our new plans, share our dreams and aspirations, infect you with our excitement and enthusiasm and invite you to join us in this fabulous adventure. You surely do not want to miss this next slide. In my remarks today, I would like to present to you our vision and mission for the company, and summarize our strategy and execution. Baer will elaborate further on our strategy, its main elements and the specific areas of focus on investments. Our other colleagues who head our client and product units will describe the significant opportunities they see in their areas and the investments we plan to make. Peter and Jigar will present the capabilities we're building in research and especially in technology and data and the investments that we're pursuing. Andy will then translate all of our business plans into attractive financials and the opportunity for strong value creation. Salli will help us manage the Q&A sessions in the middle and at the end of the discussion. The investment industry is one of the most important ones in a society, because it helps channel savings into productive investments for economic growth and prosperity. Our vision at MSCI is to be a change agent for an industry that needs to modernize, become more efficient and create greater scale to serve our societies better. From the start, 25 years ago, our mission has always been to help clients build better portfolios for a better world, by leveraging the power of a state-of-the-art models and analytics, technology and data. Our strategy to achieve our mission is to meet investors' needs with unique and highly differentiated solutions supported by best-in-class capabilities. The relentless execution of our strategy will result in significant benefits to our clients, opportunities for our employees and exceptional returns for our shareholders over time. Investment world has become much larger and significantly more complex over the last few decades. Investable assets are growing as a percentage of global economies. Investors are multiplying and facing a myriad of choices worldwide. This include more markets, more securities, asset classes, factors, ESG and climate, just to name a few of the choices they face. This increased complexity has driven major trends in investment worldwide, from home culture buyers to global investing, from single asset class to multi-asset class portfolios, from public assets to private capital, from an emphasis on performance to the integration of risk management, from a primary focus on western markets to the rapid rise of Asian and emerging markets, and from ESG and climate as niche considerations to become a part of the mainstream. If you are an institutional investor that has embraced these trends and now owns a small pace of millions of investments around the world, how do you aggregate the data about these investments? Based on performance, underlying attribution, manage risk and reallocate assets on a timely basis, it is an impossible task unless investors avail themselves of state-of-the-art investment tools powered by Big Data, sophisticated models and analytics and advanced technology. The increasing complexity and the growth of investable assets present enormous opportunities for MSCI to provide these mission-critical tools. Estimated the amount of global investable assets in the hands of owners at some $113 trillion in 2021, or a cumulative growth of about $17 trillion over the last 2 years and managed assets at $82 trillion, some $12 trillion more than in 2019. MSCI has only scratched the surface in both the client segments we cover and the use cases we serve. Most of our focus historically has been on defined benefit pension plans and sovereign wealth funds, active and passive equity managers and hedge funds and broker-dealers. This segment represent a minority of global assets among owners, managers and intermediaries. As we continue to develop new products in ESG and climate, fixed income and private assets, we have begun an expansion to other large client segments, including wealth managers, insurance companies, fixed income managers, endowments and foundations and private equity managers. This is all in addition to making these new solutions available to our historical client base. When we examine the totality of all these global client segments, we can see how our total addressable market then becomes very large and provide us with incredible opportunities for continued expansion and growth. We believe we can provide a wide range of solutions to enable all participants in the entire investment ecosystem. From the providers of capital, the users of capital, to the financial intermediaries. In the latter category, we have deepened our relationship with derivative exchanges, and banks and broker-dealers with more use cases to serve them. Lastly, we have also began to cover corporates as users of capital, with ESG and climate data, ratings and other information. Corporates are clearly a vast market that we have only begun to touch and present a significant opportunity for growth supported by best-in-class capabilities. Our goal is to be a leading one-stop provider of all the mission-critical investment tools that investors need for all their important investment decisions. The broad range of investors need include portfolio construction and asset allocation, performance measurement and attribution and risk analysis and management to name a few. To be such a one-stop provider to meet these needs, our ambitious goal is to offer indices for every portfolio in anywhere in the world in any asset class, and of any investment preference, and investment tools for all types for every important investment decision. The capabilities needed to fulfill our strategy, our highly differentiated models and analytics, comprehensive data sets and best-in-class technology. We have very strong track record of successfully penetrating new client segments and providing distinct solutions to solve their problems and enable their opportunities. We have well-defined plans to continue to grow in our historical client segments and expanding to new ones. Besides continue our attention to our established markets, our current focus is especially expanding in wealth managers, insurers and corporates. Critical to our market expansion has been our ability to develop new solutions that meet the needs of new client segments and allow us to expand in existing ones. We continue to deepen our competitive advantage in our existing solutions in equity indices, equity and multi-asset class analytics, ESG and real estate. We have also been developing new solutions, specifically in fixed income indices and fixed income portfolio management analytics, in climate, and in private assets through Burgiss. Our success thus far would not be possible without a 50-plus year track record of innovating and creating industry standards that have transformed the investment architecture. Our indices created active benchmarking and passive investing in international markets. Our factor analytics ignited the quantitative asset management industry. Our value-add risk offerings launched our advanced risk management for banks and later for investment firms. Our performance analysis service has stated performance attribution in the private real estate industry. And the Burgiss transparency data and analytics have ushered a new dawn in private asset investing. Our heritage of bold innovations continues today with the work on establishing new standards in ESG and Climate Solutions that are defining sustainable investing in the world. Fixed income index and analytics that add deeper insight into this asset class. Private asset data analytical tools, similar to those in public asset classes. And the use of advanced technology in combination with Big Data and sophisticated models to build scale and efficiency in the investment process. We are particularly optimistic and excited about achieving significant technological leadership through our widening partnership with Microsoft. Key to the successful execution of our strategy is our loyal client base, supported by innovative solutions, our first-mover advantage that gives us industry leadership, our disciplined capital allocation based on our triple-crown investments, and our entrepreneurial mindset with an owner-operator culture. These attributes provide a rare combination for continued success. We remain committed to our relentless focus on creating value for all our stakeholders. For our clients, with invaluable tools that enable investment differentiation and operating efficiency and scale. For our employees, with unparalleled career opportunities, a unique entrepreneurial and empowered culture and a value system that believes strongly that diversity, equality and inclusion drive better debate, better decisions and better outcomes. For our communities, with responsible and dedicated engagement in their affairs and a commitment to corporate responsibility and good stewardship of our environment. And for our shareholders with robust governance, aligning board, management and shareholders, discipline and stewardship of their capital, and a relentless focus on compounding returns over time. We have a long track record of success in creating value for all of our stakeholders. And we have strong confidence we will continue it in the future. I would like now to introduce our next speaker. Baer Pettit is our President and Chief Operating Officer, and my partner for '21 years. MSCI will not be where it is today without his leadership, dedication and drive.

Thank you, Henry, and greetings, everyone. I'm Baer Pettit, the President of MSCI. This is my 21st year at the firm, and I spent the first 12 years there running our client coverage organization. Subsequent to that, I ran our Index business until 2015 when I became Global Head of Products, and shortly after that, Chief Operating Officer. And now for the last 3 years or so, I've been President. Just as many of you know, that Henry is an immigrant to the United States. In some regards, I'm an emigrant as I've been in London, my entire adult life and still there now. Henry painted a picture of the huge opportunities open to MSCI in a changing investment landscape. And he also laid out the 3 pillars of our strategy based around client needs, solutions, and our capabilities. I'd like to expand on each of those and tell you a bit more about how we bring them together in a unique competitive strategy that I think will continue to create great value for our clients and shareholders going forward. As Henry referenced, we have made 3 main sources of our competitive advantage. The first is our global client base with its ever changing, rapidly adopting client needs. And our culture of client centricity, which puts those clients at the very center of everything we do. The second pillar of our competitive advantage is our long track record of creating innovative solutions, which continues today. It is these which form the main basis of our client engagement and the products and services that we sell. And finally, we need best-in-class capabilities to deliver all of that to our clients. Each one of these pillars would be valuable and create a lot of upside for MSCI on their own. But I think that the manner that we bring them together creates something quite unique and special, which combines innovation and discipline to create very strong outcomes. As Alvise will expand on after me, we put the client at the center of everything that we do. But as an important emphasis in that, we not only think about the client, but we think about the clients of our clients. If we can help our clients service their clients in the way that they build products and solutions, then we believe we can build strong long-term client relationships, which will be the future of the firm. That's why if you look around MSCI and you look at our products and services, you'll see that they typically fit into 3 categories of solutions. In the first, we help our clients' design strategies. Typically, we do that with portfolio construction tools or indexes. Secondly, we help our clients manage those strategies with risk and return models that give insight at the security level, at the portfolio level or even at the total plan or total firm level with asset allocation models. And finally, because like us, our clients live in a competitive world where they need to justify their existence every day, we help them evaluate those strategies and communicate them -- to them -- to their clients about them. In doing so, we use benchmarks, performance attribution applications and a range of risk analytics and reporting. Hence, the backbone of our strategy is to help our clients manage their day-to-day investing activities. And when they come across a new area that's challenging or something they haven't dealt with before, like ESG and climate, we want to be there with them, ideally, as a leader, bringing new ideas to help them better understand their portfolios and what they're building for their clients. Absolutely central to MSCI is our research DNA, which Peter will expand on further. When we think about research, of course, we have blogs, white papers, podcast and the like, which give clients timely insight of what's happening in the market. But much more important to us is the continuous effort of our teams to build innovative content to help our clients understand financial markets better. This means building new models, refining them and always being on the cutting-edge of what's going on in the investment world. Clearly, we have a long track record of doing that, across international equity indices, factor models, the list is long. As we accrue ever more of these capabilities, it leads our clients when faced with an investment challenge, often to ask the question, how can MSCI help me with this problem? And that question, in turn, leads to a virtuous circle of client interaction and solutions building. Another critical component linked to this is that while historically we were often seen as experts in a narrow subject, speaking to experts at the client. As we have built out all these capabilities over time, we are increasingly seen as a partner for our client firms. We're able to move up to the value chain -- up the value chain and work with the C-suite of our clients. And that, in turn, is a very powerful mechanism for better understanding their businesses and hence, continuing this flywheel of innovation that I've just discussed. One point I'd like to emphasize is that we at MSCI always think about the value-added integration of our content and capabilities. Of course, the product segments that we report on as a public company are critical to us. But arguably, as are more important than that, is we are continuously thinking about how we can use content in one area to cross-fertilize with other capabilities that we have. Because it's in doing so that we create the sort of value, which we believe is unique at MSCI and distinguishes us from our competitors. So when we look at a category like private assets, it needs to obey to the rule that it serves our mission and helps our clients build better portfolios. It needs to be a growth opportunity on a stand-alone basis, but also it needs to integrate into this broader framework of client solutions that we build. A simple financial way that this manifests itself is through some basic numbers. Today, 60% of our clients purchase from all of our product lines, and that percentage has been going up steadily over time. Equally, the longer someone is a client of MSCI, the more likely that their run rate will go up. And that increase in the run rate cannot be put down to simple mechanistic things like price increases. It's due to their expanding use of all of our content and services. Let me give you a few examples here of some of the ways that we take content in one area and add it to it from another to create new services. Internally, I typically call this 1 plus 1 equals 3. In one example, which many of you are familiar with, we added factor models to equity indices. And today, we have a factor index business with over $80 million of run rate. Here are a few more recent examples. We combined climate value at risk with our real estate database to create Real Estate CVaR. In another instance, we added ESG Ratings to fixed income indexes to create ES&G Fixed Income Indexes. This one I particularly love as it has a good claim to be called 1 plus 1 equals 4, because in this instance, the indexes in question are not merely those produced by MSCI, but those produced by our partners. And in a final example, we again took climate value at risk. And in this instance, combined it with our analytics reporting so that our clients can create reports for the task force for climate-related disclosure, which is a pressing need for them today. These sort of developments don't just happen. They require extensive client consultation, deep expertise and also the business discipline to make the right choices. Let me look at one example in greater detail. As many of you may be aware, in the last year, we've been building out a climate research center in Zurich. This is subsequent to our Carbon Delta acquisition in 2019. The climate research center has expertise in understanding the impact of climate change on securities markets. Various members of our research team in real estate thought it would be an exciting idea to combine the physical risk models the Zurich team has with our database of over 60,000 buildings. In this instance, we have the geo location for all of those buildings. So we were able to create a very interesting physical risk model. In turn, this has not only created new sales pipeline for the firm, but it has allowed us to engage with the C-level at our real estate clients in a manner that previously was somewhat challenging. Let me now expand on some of more forward-looking capabilities we have at the firm and which Jigar will later go on in greater detail. MSCI has always been a leader in understanding investment problems and creating models so that investors can have a better grip on what's going on in the investment world. MSCI has also always been a leader in complex heavy-duty financial engineering and calculations and the resultant data with thousands of algorithms running across millions of data points daily. Unfortunately, MSCI has not always been a leader in making it easy for our clients to use all of our content, and we are determined that, that will change. At present, we are building new platforms and data distribution capabilities, many of which will see the light of day in 2021. We believe these will be faster, more agile, more flexible and create much greater interoperability across all of our content. In turn, this should amplify our reach and allow us to touch a much broader range of users than we have previously. So it is our belief that we can add ease of use and flexibility to the enormous other competitive advantages that we have that we can put the icing on the cake to drive growth forward for MSCI. So let me now finish by recapping a bit on what I think are the key elements of our competitive strategy. We have a proven track record of innovation driven by our research, which continues today. This, in turn, is built on a model of total client centricity and client consultation. We have excellence across data and technology, which produces high-quality, extremely differentiated financial content, and we're adding to that with greater ease of use and greater flexibility. And finally, and very importantly, I believe that the team who's about to present to you are all strong business managers who have great financial discipline. So that we not only choose the right things to invest in, but we execute on them in an efficient manner. I hope that the way that I've described the sources of our competitive advantage has helped you better understand our strategy, how we execute on it on a day-to-day basis, and why it will continue to create value for clients and shareholders going forward. Thank you for listening. I'll now pass you over to Alvise, our Global Head of Client Coverage, who is on the front line of making this happen every day. Alvise?

Thank you, Baer. Good morning, and good afternoon, everybody. As Baer said, I'm Alvise Munari, responsible for client coverage globally and London based and I joined MSCI in 2015 after 20 years on the sell-side, spent mostly in derivatives. I joined MSCI as Head of Commerce for the EMEA region, which I helped bring on a steady growth path. And at the end of 2019, I took on the global role. As you've heard from Henry and Baer, there are very significant growth opportunities that lie ahead of us. And today, what I want to talk to you about is how we're going to capture them by embracing client centricity even more fully than we ever did, so as to grow our client franchise faster, deeper and broader than ever before. To start with, I want to give you some background on our current client franchise and the journey that led us to where we are today. Next, I want to talk about identifying the new growth opportunities by focusing on client needs. After that, I will discuss how the evolution of our client engagement model will help us execute on the identified opportunities. And finally, I will talk about how critical technological and organizational transformation will be to achieve these goals. So let's start with a short recap on what happened over the last 4 years and also since the last Investor Day in 2019. Thanks to our strong focus on client centricity, our client franchise has been on a steady growth path with gross sales and subscription run rate have grown at a consistent 12% and 10.4% CAGR, respectively. This has far outpaced personnel growth, a figure of 4%. And also the growth in client numbers, which was approximately 24% over the period. What made this possible was greater focus on effective prospecting and execution, the deepening and broadening of existing relationships with larger average ticket sizes and more clients buying more products on MSCI, as mentioned by Baer in his remarks. And higher focus on client servicing, leading to significantly higher productivity and Net Promoter Scores increases over the period. To support expansion into new areas such as wealth, derivatives, ESG and climate, in China, just to cite a few, over the last 18 months, we also noticeably accelerated the pace of hiring of client coverage personnel, and in particular, our frontline sales people, to have individuals with the necessary specialized skill sets to pursue these new opportunities. I will now move on to the stats how we will identify the new growth opportunities. We will do so along 3 dimensions, which would be the main accelerator as well our strategy: client segment, client region and client partnership. So let us start with the segment I mentioned. The first observation following on Henry's opening comments, is the number of deep and partial trends, secular trends playing out across the whole investment industry and us and beyond, and very favorable to MSCI, and will offer us the key to sustain growth across all client segments and supercharge growth across a few of them, that our all 4 powerful monetizable subsecular trends thus report this picture: Firstly, exponentially growing demand for indices and indexation services; second, rapidly growing demand for ESG and Climate tools; third, increasing allocations and appetite for illiquid and private assets; and fourth, much more ubiquitous and universal focus on portfolio construction, risk and performance analysis. All of these are already playing out, and we'll continue doing so for a number of years, allowing us to continue growing at a steady 10-plus percent rate in segments like asset managers and asset owners. MSCI, already has a strong franchise and that represents 2/3 of MSCI franchise today. It will also allow us to supercharge growth at a rate well above 20% in a number of segments that are newer and less penetrated for MSCI, like wealth managers, insurers and corporates. I now want to give you some concrete compete examples how these trends will play out segment-by-segment to allow us to accelerate our growth trajectory over the next several years. All the trends will play out favorably for us in each segment, but a few will be particularly powerful, and I want to focus on them. For instance, for wealth managers, the need to offer more tailor-made services, and for us it will translate into an explosive growth in demand for indexation services, from direct indexation to mass customization, from tailored product creation to individualized asset location. Diana will talk more about these used cases in her segment. For financial intermediaries, and insurers, ESG and Climate will become a critical element of capital market facilitation, new product creation, asset selection, regulatory compliance and risk and capital management. Remy will focus on this in his section. Asset orders, here the demand for more and newer source of yield, which translates into a far grade of acceptance and demand and then allocation to private assets and illiquid assets. And Jay will describe this phenomenon in his section. And then finally, asset managers will need to integrate risk as an essential component of their investment process back to front. And therefore managing factor exposure, liquidity risk, ESG adapted portfolio construction or climate risk management, they will need to embrace risk in anything they do. This will be explained by Jorge in his section. Now I want to focus on the regional dimension. So what I want to point to you is to the fact that although the powerful trends we describe will be playing out globally, many important differences, namely structural, regulatory, also geopolitical between macro regions, Americas, EMEA, APAC but also the subregions will remain and possibly accentuate and accelerate in the post-pandemic world. It is therefore essential to identify each region, which segments offer the most attractive dynamics and where MSCI is under-penetrated to help accelerate growth uniformly to over 10%. We then need to identify those subregions where the fundamentals are particularly attractive as well as potentially as being in areas where MSCI is under-penetrated by kind of core Europe, South and Eastern Europe, China, Australia and New Zealand. Here, growth pretty much faster. We are aiming for growth rates of over 15%. We will need to adapt our investment strategy accordingly, both with regards to people and also to use case and solution development. We also note that EMEA, in spite of an overall less favorable set of fundamentals, has led the growth of MSCI's client franchise over the last 3 years with a subscription run rate CAGR over 2% higher than that of MSCI as a whole. This has been possible due to our high-performing regional coverage team that has developed a very effective template combining greater focus on account management, use case innovation and lead generation, including discipline. We believe that EMEA can continue on this path, and that the growth rates of APAC and Americas can also be accelerated by 4% to 6% and 1% to 2%, respectively, by combining the right regional strategy with EMEA execution blueprint. Let me now talk about client partnership, the third key pillar in our acceleration strategy. Now let's start by discussing what we mean by client partner. And we made an institution where there's a strong strategic and cultural alignment and complementarity with MSCI that allowed us to build a deep, strong and highly mutually beneficial relationship that goes well beyond the traditional tender buyer report. We continuously and proactively work to identify new opportunities for mutually beneficial collaboration and also ways to enhance the existing ones. The engagement model and the commercial approach are holistic and top-down as well as bottom-up as opposed to tactical and specific opportunity focused. MSCI makes the very best of its research for development and servicing model available and the partner willingly agrees in exchange to this to work closely with MSCI on broad for wide content, product and platform initiatives as well as developing joint downstream go-to-market strategies and client engagement methodologies. Over the course of the last decade, MSCI has entered into a handful of such relationship with very successful results. We now intend to do this much more systematically across segments, regions and subregions and also specific product areas. We can, of course, not do this with everybody, but we can substantially grow the current numbers of such relationships. A good example of what is possible is the partnership we developed over the last 3 years, with a large global financial services firm, with a very strong brand and a very strong distribution footprint. Thanks to the current partners, strong client franchise, MSCI effectively acquired much broader distribution capabilities and stronger brand recognition, including in the segments such as corporate, high net-worth and retail, where MSCI has traditionally not focused. Vice versa, the client partner acquired significant new product creation capabilities, leading to increased AUMs, higher sales and trading volumes as well as better tools for internal risk and capital management purposes. As a consequence of this partnership, MSCI subscription run rate with the client increased significantly faster than MSCI's overall run rate growth trend. I'll now focus on discussing the engagement model evolution needed to effectively capture all these opportunities. And here, I talk about investing in the client engagement model as the key expression to keep in mind. So what we have so far focused mostly on the outside-in growth drivers, we shall now focus on the inside-out components. The picture you see on the slide, the complete client centricity at its apex help us better understand the interplay between the different ingredients as well as effectively identifying growth opportunities by segment, region and individual client partner, we also need to put an equally strong focus on structuring our teams optimally to respond to client needs and demands and giving them the best tools to identify and capture the opportunities. The year of the pandemic while has forced us to move to a virtual engagement protocol has helped us identify more clearly some of the key enablers and accelerator of this transformation, in particular, we'll need to have more client communication, connectivity and analytics tools to offer more and more targeted engagement opportunities, build better intel and in turn offer better servicing and increased commercial productivity. Also, process automation and simplification to increase commercial velocity and client satisfaction will be critical. And these are 2 trends that Jigar will talk about in his segment. More dynamic talent acquisition, training programs also very important to help our team grow faster to support our supercharged growth. And also ensure that they always have the most up to date and relevant skills. Finally, we want to ensure that our research and insight generation capabilities are at the center and at the core of our go-to-market strategy, to maximize the perceived intellectual value and property and the brand value of MSCI. Peter will comment on this in his section. So what is the resulting vision of this investment in transformation? Well, a complete concentric MSCI where clients feel it's easy to do business with us, and that has a holistic approach to satisfying the needs that makes them substantially better at their job and positions us as the go-to-place to address any challenge they might have, large or small, enhancing their investment process. We want as many clients as possible to see us as a product, not a vendor, a provider of insight and differentiating solutions into complex investment problems as opposed to just a data provider. We also want clients to be able to contract with us with just a few clicks of the mouse and consume our content, data, and services through whatever channel they might prefer, whenever and wherever they want. We want client to trust us completely to see us a reliable, enabled to handle scale. So they know they can confidently count on us to support whatever volume of data, product and analysis queries they might want to send to us. And I will summarize. We want complete client centricity to be the cornerstone of our philosophy, to well support and lead our growth acceleration strategy. Listening to our clients carefully and adapting our go-to-market strategy by client segment, by region and by specific partnership opportunities, will help us make the most of the favorable industry trends discussed earlier on, and allow us to identify new and substantial opportunities to accelerate our growth. We got to capture and execute on these tremendous opportunities, a significant evolution of the engagement model is needed with our emphasis on process, technology and evidence-based decision-making tools, as well as a more dynamic and targeted management of the talent pool. This will in turn lead to substantial simplification and automation in the way clients do business with MSCI, leading to much higher client satisfaction, higher sales, better retention and ultimately, help supercharge growth rates for MSCI. Thank you for tunning in today, and I hope you found this brief presentation both informative and interesting. And I will now hand over to Diana Tidd, Global Head of Index Products and also MSCI's Chief Responsibility Officer.

Thanks so much, Alvise. I think your section is so important because client needs really are at the core of everything we do at MSCI. I'm Diana Tidd, Head of Indexes and Chief Responsibility Officer. I've been working at MSCI for over 20 years. I'm based in San Francisco, California, where I love to go running and to go on hikes with my family. Today, I'm going to talk to you about supercharging index growth. In order to understand our plan for supercharging index growth, I want to talk to you a little bit about some foundational aspects of our business. First, we have a very large and rapidly growing addressable market; two, we've seen tremendous demand for index relevant content and tools, and MSCI is uniquely positioned to capture this demand; and three, we have a very strong investment plan that could further accelerate our winning strategy. Before I go on to talk about our strategy for supercharging index growth, I want to take you back to 2 years ago when we were last together for an Investor Day in 2019. At that time, we committed to focusing on high-growth markets, such as new client segments for us, like wealth management, but also licensing new areas of the market, such as multicurrency derivatives or MSCI based futures contracts listed on exchanges. In addition, we committed to focusing on growing adoption, such as the increase by our clients globally and investing more internationally, lowering their home country or domestic bias in their portfolios as they seek to expand their global investing. Also capturing trends such as factor investing, sustainable investing and thematic investing and more. And of course, capturing the growing expansion of index for passive investing into new areas of the market. And our commitment was to do this by investing in our people, our products and our technology. And we leveraged our global franchise and our strong execution, and we delivered. 2020 year-over-year run rate growth tells the story. 91% for ESG and Climate, 65% for futures and options licensing, 20% for Wealth management, 12% ETF asset-based fee run rate year-over-year growth. And we hired 180 people and launched over 20,000 new indexes last year. And we are just getting started. So now I want to talk to you about our very large and growing addressable market. Demand for index-based solutions is led by huge transformations occurring in the industry and around the globe. Clients are seeking to diversify further their investments by allocating to international and global. In addition, factors are becoming more mainstream as clients seek to integrate them fully into their investment management processes. And we're seeing an explosion in demand for sustainable investing solutions. Also, clients are seeking to capture the massive societal shifts that have been occurring and have been expedited by COVID in the forms of mega trend investing. And of course, the steady drumbeat of the expansion of indexed and passive investing to new areas of the market continues. On top of this, the uses of indexes have expanded. So that 20 years ago and continuing today, indexes are used to measure the opportunity set. But on top of that, in recent years, indexes have also been used to represent an investment thesis. So if we look back 20 years ago, the primary users of indexes were active managers, who are using indexes as a yardstick as a measure of their performance. They would also use the index constituents as a list of potential securities to purchase for their portfolios. As time passed from 2010 to 2020, we saw the huge expansion of the use of indexes for ETFs growth in futures contracts based on multicurrency indexes, structured products, and an explosion in the use of model portfolios, which so often used to capture the exposures indexed or passively managed funds underneath to build their asset allocation for their modeled portfolio. As we look forward, we see continued and accelerated opportunity for growth as use of ETFs expands, futures and options growth, using annuities, index-linked annuity products, fixed income, multi-asset class and new areas like direct indexing. And these new use cases put indexes at the center of the investment process. So whether it's for portfolio construction, defining the investable universe and for asset allocation or for portfolio management, use and exposure and liquidity management and performance attribution or risk management, where clients can customize their own index to meet their own risk profile or they can use futures and options contracts to hedge their exposures and, of course, reporting their benchmark performance and so much more. So when you take these huge transformations occurring in the industry and the expansion of the use cases and add a layer of MSCI's focus on relentless product innovation, you can see that if you want an index for a particular country, a region, global, a sector, developed markets, emerging markets, front-tier markets or more, we are there. If you're an asset owner, an asset manager, a hedge fund, a wealth manager, an insurance company or more, we are there. If you're looking for equity, fixed income, private asset classes, multi-asset classes, we have the indexes. If your investment approach is active, passive or indexed, quantitative and you're investing globally in ESG, climate, thematic, factors, we are there. With all of these growth areas, let's look at some forecasts from industry leaders to understand how they may accelerate these growth areas going forward. So for example, in ESG, we have a quote, where there's a forecast that ESG mandates, the assets in those could reach $100 trillion by the end of 2028. And then a quote I love about climate: the creation of sustainable index investments has enabled a massive acceleration of capital towards companies that are prepared to address climate risk. So it's clear, our addressable market is very large and growing rapidly. So now I want to talk to you about how do we capture this explosion in demand, and the answer is through our unique value proposition and our strong brand. The world is complex. I think we all see that every day now, and our clients are telling us, they want simplicity and choice. And we are looking to provide an index for every portfolio. So whether it's readymade index they're looking for, MSCI World or EAFE or emerging market, those industry standards or indexes that target an investment thesis and capture it, such as an MSCI Minimum Volatility ESG index, we have the ready-made indexes or clients are enabled by MSCI to customize indexes through our powerful screening tools tag ESG, factors, thematic or more, or we give clients an option, where they can actually use our ingredients. So they can use MSCI's ESG ratings, our factor models, our optimizer, our universe of securities and our indexes to create their own indexes for self-indexing. So we enable the self-indexing use case. So it's as simple or complex as our clients want. Our indexes are modular. They're building blocks. And MSCI is uniquely positioned to meet the industry needs, and that's because we are able to harness the industry-leading capabilities we have across the firm, whether it's our factor models, our ESG ratings, our technology, our thematic scores, and we're able to bring them together into our indexes to enable us to provide indexes for portfolio management. So our accelerating growth is coming both from our core franchise and from new products. So we are growing from our core market-cap indexes, industry standards, such as MSCI ACWI and MSCI World and, on top of that, we're adding additional customization capabilities, but also tremendous innovation, where we're growing from factors, thematic, climate, ESG and more. So we are innovating every day. This fuels our growth. Each new innovation has a multiplier effect. Think of indexes like MSCI World, high-dividend yield, low-carbon equity indexes or an MSCI, high-yield climate change corporate bond index. Those are just some examples of the innovation. Let me give you a specific example of a growing use case, direct indexing. What is direct indexing? So just as when wealth managers are creating highly customized indexed or passive, separately managed accounts for their wealthy client. They're often tax optimized and often have an ESG focus. So clients can use and choose from one of the many ready-made indexes we have or they can use our powerful system of screening the indexes to customize them to their end client specific ESG focus areas. The clients can also use our ingredients. They can use our analytics for tax optimization and risk analysis, they can use our ESG ratings and research and more. And MSCI captures revenue from the direct indexing use case through subscriptions to our indexes and data, subscriptions to our analytics tools and our ESG research as well as asset-based fees for the index or passively run funds. Second example, the European Bank. Here, we're talking about an example for financial products licensing. So the European Bank has a large retail network, and they wanted to offer ESG and climate products to complement their existing exchange-traded fund and structured product suite. Using our powerful system of screening to have an MSCI World climate change ESG index, they distribute that in the form of a structured product through their branch network in Continental Europe, and they also work with 2 separate broker-dealers to help them create the hedge for the structured products. Those brokers use listed options based on MSCI World. And then, those 2 brokers saw the success of the initial product, spoke to that original client and then they themselves launched products into different areas on the same indexes. So they launched structured products and distributed them in South Africa and Eastern Europe. So another example, MSCI takes subscription revenue as well as asset-based fee revenues for ETFs structured products, but also for the options contracts. So clearly, MSCI is ready to meet the demands of our clients. So now I want to talk to you a little bit about our investment plan that will also help us supercharge our winning strategy. Innovations for new trends and use cases are going to multiply our index range. So from simple, small country indexes with just a few stocks in them to an MSCI ACWI digital economy index, there are tons of permutations. So you take MSCI's historical growth rate of the number of new indexes we calculate each year, that grows at 20%. If we continue at that rate, we could be calculating 2 million indexes by 2030. But what if it accelerates further with these growth opportunities? Imagine a 50% growth rate. That means MSCI could be calculating 14 million indexes by 2030. So it's important, we're thoughtful about our investment plans. So our business at MSCI is a flywheel. Client demand feeds relentless innovation, and that fuels our growth. It's a circle that feeds itself, but we also fuel it through investments. So some of our key investment areas are accelerating content innovations like factors, ESG, thematic indexes, like autonomous vehicles and others; areas like China and new markets; additional asset classes, such as fixed income, multi-asset class and customized indexes; also expanding the licensing of our ecosystem for financial products, like futures and options and more; and enhancing our technology to enhance the client user experience. We envision an index for every portfolio. As long as the market is keeping complex and we believe they will be, our indexes can demystify a complex world. Our growth opportunity is accelerating. Now I'll pass it to Remy Briand to talk to you about the exciting area of sustainable investing.

Thank you, Diana. So let me introduce myself, now I'm handling the ESG and climate business for MSCI. I've been with the firm for 20 years and got involved in this product line in 2010. So a bit more than a decade ago. And at that time, you almost had to beg to have a conversation on these topics. Clearly, the situation has changed dramatically nowadays. So in this session, we'll discuss, now first, the dramatic acceleration that we're seeing in the market, how to prepare for what is due to come in the next few years. We also discuss how we are positioned to capture these opportunities and, more importantly, how we are investing in our competitive strength now to capture these opportunities and continue to lead in this expanding market. And then we'll finish by discussing new and additional avenue for growth, such as the one linked to the corporate market, as an example. So clearly, the market has been accelerating over the last few years. Maybe the most striking illustration of that is with the ETF linked to the MSCI ESG indexes, where the assets under management linked to those ETFs went from roughly $40 billion in 2019 to more than $100 million in 2020. Similarly, we've seen that the level of interest by companies linked to the ESG rating has been steadily increasing over the years. And today, for example, if you look at the companies that are part of the MSCI World, roughly 75% of them have been interacting at least once with MSCI in the context of understanding better their rating. So quite a lot of momentum in the marketplace. But what's really important is to actually anticipate what is due to come in the next few years in order to prepare ourselves to be ready to capture these additional opportunities coming in the next near future -- in the next few years. So in particular, we think that the continuous incorporation or integration of ESG in climate further in the investment process is going to lead to a fairly radical change. In particular, we think that the mandates or the purpose linked to the various financial products are going to incorporate ESG and climate outcomes much more specifically. We think also, by the way, that in the context of the wealth segments, we would expect that solution based on ESG and climate will become the default option proposed to wealth manager clients as opposed to the current situation where you actually need to raise your hand today in order to have any ESG option. And on climate, there will be also, we think, radical changes in the context of probably every single corporation and every single financial institution having to put a public climate strategy, most likely linked to commitments to go to net zero or commitments to reduce carbon emission. Similarly, the banks will have to run stress testing on a very regular basis. And then the dialogue between shareholders and corporates, which we typically call engagement, we think will be focusing a lot more on measuring progress towards those climate targets and done in a much more systematic way. So the other dimension, which we think is very specific to this year, is the fact that this year is the year of the COP26 conference. COP26 is a conference organized by the UN. If you remember, the previous version of that conference that was held in Paris led to the Paris agreement. So it's a very important moment in terms of climate policy. And we think that in the context of this particular cycle of the COP 26, which is focused on the financial institution, we will see a number of an announcement by governments, by asset owners, by managers, most of the time, either on the regulatory side to ask for more disclosure and as far as the asset owners or the asset manager essentially putting public commitments to reduce emission. So we will see an acceleration this year in a market, which is already quite dynamic. So the question then clearly is how are we equipped to capture these opportunities. We've been focusing on this market for a very long time. We've been pioneering this space. So we've established a leadership position in the space. Leadership in terms of ESG rating and data, leadership in terms of ESG indexes. And then in climate, following the acquisition of Carbon Delta as well as our own pre-existing position, we also are in a position of leadership in climate data and analytics, and we're also in a leadership position in terms of climate indexes. So the current position clearly is a very strong one. But the question is really how to maintain that leadership position in the future. And there, we think we need to look at a few competitive strengths that we have and where we invest in order to strengthen them further. So first, we have to look at the product, and we have a very, very comprehensive and solid product. And that's especially important in the context of the market, where a lot of players are entering the market with a lot of claims, hopes, but not necessarily workable solution for the end clients, asset managers or asset owners. So we have a solution that we think works. And that explains why we've been selected as part of this leadership context, right? So we focused on financial materiality. So we try to assess long-term financial risk. We're not trying to push a particular theme, if you want, as an NGO and activist would do, but we're really trying to assess what matters in terms of long-term risk and opportunities for company. We also are focusing on looking at as much data as we can find, alternative data, in order to cross-check what companies are seeing. So we go beyond corporate disclosure. And there, to give you a sense, 45% of the inputs today in the ESG ratings are not coming from companies that have disclosed information. And we think it's a very important dimension to make sure we get through green washing of false claim in that could be made by certain actors. And finally, we have a very broad coverage of instrument, which, again, is important in order to assess the full risk of portfolios. We also have very unique assets. If you want, we have a very deep knowledge, which comes from an extensive team of analysts with a long experience in the field, but we've also invested over the years quite a lot in our technology. So we have now a very good balance, if you want, 2/3, 1/3 between fundamental analysts and technologists and/or data scientists. And I would expect actually this balance to shift even further in the future towards technology and data science. And finally, we have a unique track record. We have a lot of academics looking through our data, comparing it with other providers, and they are clearly the evidence brought by academic push to an excellent track record linked to the MSCI data and MSCI approach. Now that's clearly a strength, but we don't think it's enough. There are also additional dimensions that we will think in terms of competitive strength will play a bigger role in the future. And that's, in particular, the place we have in the ecosystem. So we've, throughout the years, essentially built connections with the various players in the industry. So we work and our clients in the asset management space are using our information on ESG as well as on climate to run their portfolios. But the very same information is then used by the asset owners in setting their own policies, in a number of time changing the benchmark to use the ESG and climate benchmark. The same data is used by consultant to assess the various managers. Similarly, on the wealth side, the teams that are doing fund manager selection are using our information to look through the managers. So we use as a common language, a common measuring framework for the entire industry. And this is really important in the context also of additional segments that we're starting to focus much more heavily upon, which is generally the corporate and the corporate finance space. So there, the fact that we have a very strong position is in and of itself a reason why a capital markets group or investment banking team would want to with MSCI as opposed to somebody else. Intuitively, if you run a corporate advisory team in an investment bank, you want to understand and use the ESG ratings because it is the one that is being used by the shareholders. So hence, the one that matters in terms of advising a corporate. Similarly, if you're in the trading side of a large financial institution, you would want to operate and create your products that are closely linked to the real money flow. And there, again, the fact that a lot of asset owners are using MSCI ESG and climate Benchmark are implementing allocation changes due to ESG or climate, 2 vehicles that would be linked to MSCI is in and of itself for a reason why if you're a trader, you would want to work very closely with MSCI. So that's the sort of second element in terms of competitive strength and one that we think will continue to bring additional growth for us. But more importantly, the selection of MSCI is accelerating the business of our clients, which is really a key element. The third point is about the deep integration of the ESG and climate information across all the MSCI products. So there previously explained this symbiotic element where the various components strengthen the various solutions that MSCI offers, and we've been extremely active clearly in making sure that ESG and climate is embedded in indices, embedded in our real estate solution, embedded in our analytics and reporting systems and this is really a key element clearly and a key competitive strength. So we've been able to actually grow over the years using that approach of identifying use cases across the ecosystem. It has been gone -- it has been done through bringing obviously new clients, but maybe more importantly and that's what we're trying to illustrate in this chart once a client selects MSCI, it's very likely to continue to ask for more from us. And to give you an example, if you look at on the right-hand side, which shows the growth of the various cohorts of clients, if you take, for example, a client that we have had in 2014 as a new client, that client has increased their spend in ESG and climate solution with us 3.4x between 2014 and today. So we would expect that as we continue to refine our product range, as our clients continue to get more and more sophisticated that we will continue to increase our wallet share with our clients. So that's about the mechanism for growth. Now more specifically, what is our current strategy to maintain this leadership and capture the new opportunities linked to this market. So one, obviously, we need to protect and continue to grow the core product, there is a lot of demand for ESG ratings, a lot of demand for ESG indexes and so we're very focused on making sure that we can deliver on that track. The second one related to what we've discussed a little bit earlier is the opportunity in climate. So we're putting a lot of focus and investment in this climate solutions because we think, again, that the opportunity is completely here and now, and we have an extremely strong position there. Third is to monetize the growing corporate needs, corporate financing need, but also the need to understand and improve the rating which is something that corporates are very focused on. The fourth element is to continue our strategy to make sure we cover as many asset classes as possible in order to cover the total portfolio of our client as well as refining our offering in new segments, such as the wealth segment, which again is not new, but where there is a high demand for additional services. Finally, we will continue to embed the ESG and climate solution within the MSCI offering. And that sort of completes the strategy elements at the moment. To conclude, looking at the overall market, and the growth we expect from the market, we've done an exercise of looking at the addressable market of the existing solution and how that market could evolve in the next 3 to 5 years. And so today, we estimate that that market within near-term time frame could grow to $3.2 billion. And when we look at the additional services that are emerging today, bank stress testing, more corporate use as well as the solutions that can be created in private asset classes, we think that can bring in the relatively short-term an additional addressable market of $700 million. So overall, an addressable market for the existing solutions and the new ones that we see emerging right now of a bit less than $4 billion. So quite a lot of runway, if you want, to continue the growth path for the ESG and climate opportunity at MSCI. So with that, in conclusion, quite a lot of opportunity, a strong focus on the competitive strength and the investment to continue to develop them and then an execution mindset to make sure that we do capture the opportunity right now and with as much breadth, if you want, and speed of execution as possible. And overall, we would expect this growth to continue in the next few years. So that concludes our ESG and climate discussion, and we will now start the Q&A session. As Salli mentioned, you can use either the questions -- ask questions through the presentation system or send an e-mail to investorrelations@msci.com. Thank you very much.

Thank you, Remy. Let's go ahead and get started with our first Q&A session. As Remy noted, we ask that you submit your questions on the video platform in the Q&A box that should be visible at the bottom of your screen. You can also e-mail your questions to investorrelations@msci.com. For this session, we'll focus on questions for the first several presenters and then leave questions for the later presenters to the second Q&A session. Our first question is going to be for Henry. Henry, you mentioned a number of new markets and new opportunities and growing markets like that. Of all the opportunities that you talked about, what are you most excited about?

Well, Salli, that's like asking a kid in a candy store, what chocolate does he want to have first. Since you asked the question, I feel like I got to answer it. I feel we're most excited about our opportunities in wealth management because it's a very large client segment, and we have really a chance to make a difference to hundreds -- millions or tens of millions of people in the world with our solutions. With respect to solutions themselves, I'm most excited by climate. It's an area that we've been focused on and an area that we're expanding and, for sure, it's going to make a difference to us, this generation and to future generations and improve the capital allocation process of our clients. And in terms of capabilities, I'm most excited about technology. alluded to this earlier. We've done well in technology, but the area that we are really focused on is client technology in terms of making it easy for our clients to do business with us, and we have a lot of exciting developments in that area.

That's great. Thank you, Henry. We definitely have a number of opportunities to choose from in the candy store, as you said. I actually have a great follow-on question from Toni Kaplan at Morgan Stanley that I'd like to send to Alvise to address. Alvise, as she said, we discussed future markets, including individual investors and family offices and so forth. Do we need to ramp up the number of salespeople to address those markets? And it seems like those could be lower margin, unless we have a really low-touch strategy. So how should we think about what going after those groups needs for our margins?

Thank you, Salli, and thanks to you, Toni. Great and natural question. So to the extent that we increase our coverage of New York client segments, in particular, what I would call the extended well space, we will need to add more salespeople because we will need to have specific skills that are instrumental to being successful with those segments -- with those newer segments. But not to the extent that the end results will mean that we will need to have more so people to produce the same unit of production. And this is because of 2 reasons. Because part of the client types you decide, like for instance, family offices, endowments and the defined contribution phase looks pretty much like other institutional segments that we are very skilled in covering efficiency. And we will only go to the final investor to aggregation platforms and through tools and technologies that make this opportunity. It's very much low touch, high velocity for MSCI. So I would argue that, if anything, the margins could be even more attractive.

Great. Thank you, Alvise. I actually like to move over to Remy and ask him a question around the competitive landscape in ESG. And this is coming from Manav Patnaik at Barclays. So he says, could you talk about the competitive landscape? Some of your major public peers are spending a lot of money organically and larger companies like exchanges and indexes are acquiring your competition. So do you have any concerns there? And how do you think about the competitive landscape over time have you had to adjust your strategy at all?

Well, thank you, Salli. Obviously, space has always been a competitive one. So we haven't seen necessarily change there. But our strategy has always been very focused on having a superior product, and we continue to focus on that, having a very broad coverage of security, and we continue to expand there. And then as we discussed a bit earlier, developing the ecosystem, so that we serve as the common language and the conduit for this massive reallocation of capital. So those elements have always been there. And we continue to focus on those. So no change in strategy. But the more we develop the product, the more we develop the coverage and the more we ingrain in the ecosystem, the more difficult it is actually to replicate that, if you're a new entrant. So that's why we feel our competitive position is quite strong.

That's great. Thank you, Remy. Could I ask a follow-on for that one? Just a question that's come in a few times here around. How do we make sure that we become a standard in the ESG market?

Yes. So the standard comes with this ubiquity, if you want, across the entire industry and the fact that all the players are essentially using very similar approaches. Now the nature of the new market means that there are lots of people making claims. So the level of noise is always a little bit high. But when you look in reality, when people are using products with solution, it end up being most of the time our products. So we will continue focusing on this.

That's great. I appreciate the follow-on as well. I'd like to actually go over to Diana. I have a great question from Chris Shutler at William Blair. He asks regarding the investment solutions as a service press release that we put out earlier this week, can you talk more about index solutions as a service? What do you expect to be the main client segments and use cases? And then how should we think about a time line for the rollout?

Great. Yes, thank you so much for this question. I love to talk about this topic. It's very exciting. We've worked very closely with our clients and lots of feedback in the development of these tools. So what are the tools, clients will be unable to create customized indexes through simulations. Many of them at their fingertips. It will be a streamlined tool, very quick. And they'll also be able to subscribe to the customized index again right there on the tool of purchasing them as well. So what this enables our clients to do is really test their thesis right there and perhaps deliver themselves out to market faster. The tool will be exactly the same as our own researchers are using. So it actually harnesses the strength of MSCI's content and tools from across the firm into screens for the customized indexes. Timing is, we're looking at the first release in early of the second half of this year and a modern release schedule, where we're ongoing, updating and adding new releases from there forward. In terms of the client segments, as we've talked about today, we do see an envision and index for every portfolio. And this tool is a great example where the early demand came from broker-dealers, asset owners, and asset managers. So we've -- actually, as we started sharing it and doing demos for some of the clients, we've seen use cases that initially, we didn't even think of such as direct indexing and the potential use cases there. So we're really excited about it.

That's great. It is exciting. I'd actually like to go to Baer with a question that's come in from Owen Lau at Oppenheimer. He's saying for the high-growth segments and regions that we talked about, could we call out some of the key products and use cases that they're demanding? And what are the competing products in those sectors or regions? And ultimately, why do users choose MSCI over our competitors?

Sure. So look, I think in these new segments, a lot of our emphasis is about understanding the client, speaking their language. And hence, it's really sort of a sales and marketing topic very much linked to the points that Alvise was making earlier. So we're not -- in many instances, we're not reinventing things. We're not creating new products. We're just taking the best of what we have and putting it into the client use cases in those geographies or client segments. Having said that, in many of those segments that we're approaching, the 3 big things that are really differentiating is all of our index capabilities for sure and the breadth and depth of that linked to what Diana just said. The second category is ESG and climate, which is an enormous door-opener for us and really gets us access to senior clients in all client segments. And finally, a lot of specific analytics use cases, notably in wealth, we've had some very large deals, which are related to the suitability of products related to managing risk across hundreds of thousands or millions of portfolios. So I think those are the 3 main buckets that are kind of driving our growth in those categories. And in many instances, to answer another part of the question, we're not necessarily up against a direct competitor who's in place. In many instances, we're really filling new use cases that these clients haven't really had a provider for before end.

Good, right? So actually, while we're on the topic of clients, I wanted to go back to Alvise and ask him how the year is going so far? What he's hearing from our clients and perspective clients? How sales and cancels are coming along, at least for the part of the year that we've gotten through to date?

Thank you, Salli. So the first observation I would make is that client engagements going back to a more normal level. And we are starting to see demand functions normalize across the globe. So in particular, we see, for instance, clients in APAC that were clearly affected by the pandemic first last year, and they also affected for most of the year, come back with more interest, more demand, more desire to build differentiating products and acquiring tools. So the sales pipeline is building up quite nicely for the time of the year, and we'll keep on building it very legally for the rest of the year. I also noticed with relief and satisfaction that cancel levels are normalizing. And certainly, what we're seeing here to date is pretty encouraging compared to what we saw in Q1 and Q2 of last year. And then the last observation I would make is that out of the gate, the supercharge segments -- the supercharge growth segments, we've been discussing also in this Q&A like wealth found very, very strong. So year-to-date, recurring venues with wealth managers are very, very strong and growing on last year, already very impressive growth.

It's good to hear. I have a question that will go back to Remy on ESG. And this one is on Slide 70. Could you please elaborate a bit more on the predictive powers that MSCI ESG ratings have from a quantitative standpoint? Does it have a better predictive power of corporate earnings or stock performance or other indicators?

Yes. So there, we are actually referring to a recent study by professor from Harvard and one from Kellogg, looking at how various rating providers anticipate ESG events, if you want, so really whether the rating is actually anticipating an issue. And then they've done a comparison, which shows that of the rating do predict events. And clearly, we do -- MSCI rating do predict ESG event and do it in a much better way than anybody else. So again, it's a third-party study, academic study. And that's one example, but we've been analyzed by many, many academic over the years. So the body of evidence is actually very strong.

Right. That's great. And I do want to go back to Baer and ask the question that's come in from Alex Kramm over at UBS. He says, could you talk about the potential for more regulatory oversight of you? There's a new administration in the U.S., and there's more noise around the position that index companies are in.

Sure. Yes. So look, I think for certain, the trend towards regulation in the world, I think, is pretty strong. And I think that as you mentioned, Alex, that's precisely because of the visibility and presence of index providers across the world. As you're aware, we have been regulated now in Europe for quite a number of years. And it's really had no negative impact on our business at all. In fact, in some awards, we were -- there are elements of the regulation, which serve to reinforce the really high standards that we've had at MSCI over the years, and it was very smooth for us to implement them. So I think the direction of travel is likely more scrutiny of index providers, maybe regulation in new jurisdictions across the world. And we -- I think we've got a very strong team to deal with that. So the way -- the only way I think that we can think about that is allowing for the direction of travel, how will MSCI do on a relative basis, and I think we'll do well in an environment, where there's more regulatory scrutiny because our standards are very high, and our relationships with regulators across the world have always been very strong.

Yes. That makes sense. I'm actually going to go back to Henry on this one. We had a question from Greg Simpson at BNP. The growth by region bubbles on Slide 38 shows China at the top right of high growth but low penetration. Could you talk about your current exposure to the Chinese domestic market? And what steps MSCI is taking to benefit as the market opens up? Also, are there partnership opportunities here?

So as many of you know, I've been speaking about China for quite a long time. And actually, I've been visiting China for about 42 years now. So that probably dates me quite a lot. And I view China as an enormous opportunity for us, both in 3 different businesses, global investors going into China, Chinese investors investing outside of China and Chinese investors investing in China in Chinese assets. So far, the majority of our business in China is actually the last one, which is providing Chinese investors with quantitative tools, particularly in equity for the managing of their own portfolios inside China. I think the opportunity is significant as the country opens up this financial markets. But that is the key. The key is that unless you have a very fungible market in which money flows in and out, the facility will not unlock that much. But we're beginning to see a normal sign that the regulators want to do that. So we're now very focused on providing tools for global investors into China, such as obviously, the inclusion of the China A shares into our indices, the ESG of Chinese companies. A lot of the quantitative tools that we allow -- that we sell to our clients and the like. The market for Chinese investors going outside of China is still a little bit muted because of the capital controls that the Chinese government has, but that's also another area that will grow over time. We are very positioned -- well positioned. We have great relationship with a lot of the key players in the industry, and we have good business plans, and it's now a question of executing as the markets open up.

Yes, absolutely. We actually only have time for one more. We're already to the end of the first Q&A session. And just as a reminder, if I haven't been able to get to your question or if it relates more to the second half presenters, I'll aim to bring it up in the second Q&A session. So I'd like to ask this last question toward Diana as it relates to indexes and pricing. So this question is could you talk about whether index as a service is price dilutive or accretive or neutral? And it is more broadly about the pricing environment in general in index? And whether that's a key driver in your growth algorithm going forward?

Yes. Absolutely. Thank you for the question. So index as a service, I think, is a fundamental aspect of how we'll be operating going forward. I don't think there's a lot more to say there regarding specific pricing. It's a huge facilitator for our business as clients can use our tools to create indexes, MSCI customized indexes. The more they can do that, the faster we imagine the more they'll do it. In terms of pricing overall, we look at pricing and volume. And so in terms of pricing itself, we imagine that will continue at about the levels it has. So we're about 30% on price, the remainder on volume. We see huge opportunity to continue to drive volume and revenue. So in terms of -- all I talked about today, the new innovations, the drive in, factor investing, global investing, thematic investing, ESG, climate and more, we see huge potential on the volume side.

That's a great way to close out our first Q&A session. So we're going to go ahead and take a short 5-minute break, and we look forward to seeing you for the second half in just a few minutes. Thank you. [Break]

Hello. It's great to be with you again at another Investor Day, albeit it virtually this time. My name is Jorge Mina. I have been Head of Analytics since 2017 and I also serve as the Chair of the Executive Diversity Council at MSCI. I am based in New York. And as you might have noticed early in the presentation, I have been with MSCI since 1998 and I'm proud to be the second longest-serving member of the management team. I'm very excited to have the opportunity to tell you about the continued evolution of the Analytics product line. During the recent listening to our [ M ] perception study we conducted, there were some questions about analytics in terms of what we do, how we integrate it into other parts of MSCI and whether we can grow faster. I will try to address those questions throughout this presentation. I will tell you how we're repositioning Analytics by increasing our focus on portfolio management, consistent with the company's mission to build better portfolios for a better work, how we're driving growth in risk management solutions by helping clients manage new risks in a changing world and how the Analytics product line benefits from and contributes to the integrated MSCI franchise by helping build and distribute products in Index, ESG and Private Assets. Let me start by summarizing what we do for our clients. At the highest level, we provide asset owners, managers of assets and intermediaries, such as broker-dealers with models and tools that help them understand the drivers of risk and return, so they can build and manage portfolios that meet the specific objectives and preferences of their clients. A good way to further understand the Analytics product line is to break it down by use cases. On one hand, we have risk management, which is currently the largest part of the business at roughly 60% of the total run rate and more than 600 client organizations, where we help investors manage the risk of all their portfolios across asset classes, meet regulatory requirements and provide reports to their investors. The second use case is portfolio management, where we help clients build and manage portfolios. That is a little over 30% of our run rate and more than 500 client organizations. Portfolio management can be further split by asset class into equity, fixed income and multi-asset portfolio management. We have a large franchise in equities and newer but fast-growing businesses in fixed income and multi-asset portfolio management. While risk management is currently the largest part of the business, we are increasingly investing in portfolio management and we expect it to drive significant growth in the future. Finally, while these 2 use cases are highly complementary, portfolio management is becoming increasingly integrated with the enterprise risk and performance function and being able to serve both functions is critically important to our clients. We leverage many incumbent models, data and technologies across these use cases, which creates consistency for our clients and allows us to deliver products very efficiently. And as we will discuss, these common components or building blocks are used not only in Analytics but also across Index, ESG and Private Assets. To illustrate these use cases, let me give you 2 concrete examples of how we solve mission-critical problems for clients. The first example is a public pension fund in the U.S. In this case, their equity investment team manages a large book of global equities with a mix of internally and externally managed portfolios across indexed and active strategies. They use our analytics to allocate assets to various strategies and select external managers. They also use our tools to manage return on portfolios, including the portfolio linked to a custom multifactor MSCI Index. The second example is a large multi-strategy hedge investing globally across asset classes. They run a series of analytics across all their portfolios and use that information to identify investment opportunities, size portfolios, allocate capital to various strategies and control risk across the entire firm. They also use our reporting services to provide transparency to their investors. I just described what Analytics does as a segment. Now let me tell you how Analytics benefits from and also how it contributes to the rest of the company. In Analytics, we integrate content from every product line within our products. Our tools allow our clients to build portfolios and manage and report on those portfolios using our indexes, our ESG and climate ratings and data and our Private Asset content, all in a single platform. This rich combination of content is a powerful differentiator as clients need to integrate risk and performance with ESG and climate across older public and private assets. So as you can see, the combination of capabilities across MSCI makes Analytics strong. Analytics also contributes to the Index, ESG and Private Assets. Our enterprise risk platform is extremely important for senior executives of our clients because it touches every single portfolio of those organizations. It allows us to establish relationships and a dialogue with those key people about what else we can do for them across all product lines at MSCI. For example, our strong TotalPlan risk relationships with asset owners allow our Index product line to win more mandates. Analytics also provides models, data and technology that accelerates product development and distribution in Index, ESG and Private Assets. For example, our analytics component tools are used by our Index product line to launch new products, such as Factor Indexes, ESG, Climate and Thematic Indexes, Fixed Income Indexes as well as tools to customize indexes. In ESG, we leverage the analytics reporting infrastructure to fulfill new ESG and climate regulatory requirements. And the models and tools that were initially built to help clients manage multi-asset class risks are now being repurposed to drive growth in Fixed Income, not only for Analytics but also Index, ESG, and in the future, even Private Assets, specifically in private credit. These are all examples of the power of the integrated MSCI franchise. Let me now tell you how we will drive higher growth in Analytics. Remember, investment decision tools is higher than ever in a complex and fast-changing world. Our ambition is the right tools for every investment decision. And as we do that, we will prioritize areas with high client demand, where we have very strong capabilities. Specifically, we will drive growth in portfolio management solutions across equities, fixed income and multi-asset solutions by leveraging the trend towards mass customization, by integrating our Equity and Fixed Income Indexes into our tools and by capitalizing on the large opportunity to help investors integrate ESG and climate into portfolio construction. We will also drive growth in risk management, where we have ample opportunity as investors need to deal with new risks, such as liquidity and climate, and they also need to deal with constantly changing regulations. The growth in private asset investing will also generate opportunities as investors demand complete solutions across public and private assets. We're working closely with Burgiss on this opportunity, as Jay will describe later. Finally, the modernization of our technology stack will drive growth across all of these areas. As you heard from Baer, we're focused on improving the user experience and will make it easier to consume our content through various mechanisms, such as client-facing applications, APIs and through tight integration into our partners and clients on systems. Let me break this down in a little more detail. We estimate roughly a $1 billion addressable market within equity portfolio management solutions, where we have opportunities to grow in each one of our client segments. Asset owners are increasingly using Factors for portfolio construction and asset allocation. We can accelerate growth by integrating ESG and Climate, which are extremely important to asset owners, into portfolio management. For example, last year, we released the first ever Global Equity Model that allows investors to attribute the risk and performance in their portfolios to ESG drivers. Asset managers are aligned on portfolio innovation more than ever to grow their businesses and maintain their margins. We will grow by providing the tools to build customized portfolios through client-facing applications by integrating ESG, climate and thematic characteristics in portfolio construction And as Diana mentioned, by integrating capabilities to customize indexes into our tools. Hedge funds and broker-dealers are huge consumers of data. We're constantly innovating and creating new models, and these institutions generally want to consume all the models and data we create. We will make it much easier for them to consume more data through better technology, such as cloud-hosted data lakes and APIs and by making our content available through more partners. We're very excited about fixed income portfolio management, which is a relatively new area for us and where we estimate a roughly $200 million addressable market. Our solutions are gaining strong traction with clients and growing very fast on a relatively small pace. We're winning by cross-selling our fixed income solutions into our existing multi-asset class risk clients as well as gaining new clients, such as fixed income specialist firms that might not have previously used any of our products. As you heard from Alvise, fixed income will also allow us to enter new segments, such as insurance companies that are large fixed income investors. What we have learned is that fixed income investors are dissatisfied with legacy solutions and are looking for more innovation and higher levels of service. We are developing new solutions with the latest models and data, and we're making these solutions easy to use by making them available through stand-alone applications and APIs for integrated indoor time systems. Synergies in fixed income across product lines will also accelerate growth. Specifically, Fixed Income Indexes and Analytics, together, will provide a complete toolkit for clients to build and manage portfolios. Within multi-asset class solutions, we estimate roughly a $2 billion addressable market. In this area, we combined equities and fixed income with private assets to allow clients to do 2 things. The first is to build portfolios of securities from various asset classes and the second is to manage all their portfolios across multiple asset classes. Investors need to understand what is driving their entire portfolio in a consistent way. This is driving demand for multi-asset solutions, and we have strong capabilities to meet that demand. We will grow by providing tools for 3 types of clients: multi-asset solution teams at asset managers; asset allocation for total plan teams at asset owners; and importantly, to wealth managers looking for mass personalization of client portfolios. Within our risk management solutions, asset managers and asset owners are constantly facing new and complex challenges. For example, they need to grapple with financial risk management of climate change with the growth of private asset investing and with ever-changing regulatory requirements. There is a large demand for solutions to these critical problems, and we have a very strong track record of meeting these demands, as illustrated by our recent liquidity solutions. We will continue to innovate further to capitalize on this opportunity. Finally, best-in-class investors make risk management an integral part of their investment process. We're helping clients integrate their investment and risk functions through better technology and integration into the tools they are already using. Going back 5 years, in 2016, Analytics had low growth and low profitability, and at the time, we put in place a strategy to set the product line on a better trajectory. As part of that strategy, we focused on providing solutions for portfolio management and risk management and rationalized and focused our investments. We focused on improving our technology and divested of nonstrategic assets. As a result, we have seen a dramatic improvement in profitability. And while growth has improved, we still have work to do. 2020 slowed down our progress. But as we discussed, we have tremendous opportunities in front of us and the capabilities to capitalize them. For this reason, we remain highly confident growth in Analytics will accelerate going forward. We have attractive near-term and long-term market opportunities. In the near term, we estimate our addressable market at approximately $3.5 billion with large opportunities across portfolio management and risk management. We have lots of room to up-sell additional products and services to our largest clients, and we also have plenty of runway to increase penetration with midsized institutions across all client segments. In the long run, the secular trends we discussed will open up greenfield opportunities driven by large changes in the financial industry, such as climate change and the adoption of new technologies. We will continue to see opportunities related to clients outsourcing more of their internal development, and we will seek to displace providers with niche offerings to help clients achieve a more integrated and efficient investment workflow. We are selectively investing to improve our capabilities in key areas to drive growth. We will continue to invest in content that drives innovation in areas of high demand, such as fixed income, ESG and climate integration in portfolio construction and risk and private assets. We are investing in developing additional partnerships that either help us create new products or help us distribute existing products. And as Alvise mentioned, we are transforming client servicing and account management to reduce cancellations and grow with our existing clients. As Jigar will discuss later, we will continue to invest in modernizing our technology. We have made substantial progress, but there is more we need to do. Specifically, we continue to invest in improving the user experience and we will move all our existing products to the cloud. Every new service going forward will be cloud-enabled. To summarize, we're capitalizing on growing opportunities to help clients build portfolios by strongly increasing our focus on portfolio management, which importantly is also the core focus of all of MSCI. Increasing complexity is driving opportunities in risk management, and we're ready to capitalize on them. We will continue to transform Analytics through technology to deliver an outstanding client experience. And last but not least, we will leverage Analytics to enable product innovation and distribution across the entire firm. With that, I would like to thank you for listening and turn the program over to a special guest this morning, Jay McNamara, President of Burgiss, who many of you know very well from when he was leading MSCI's Real Estate franchise. Jay, over to you.

Thank you, Jorge. Good morning, everyone. My name is Jay McNamara, and I'm President of Burgiss. I'm based in Burgiss, Hoboken, New Jersey headquarters. Some of you may recall that I spoke to you at MSCI's last Investor Day in my prior role as Head of Real Estate at MSCI. I joined Burgiss in October of 2020 as President. That was after 18.5 years in MSCI. My final 3 years, I oversaw the Real Estate segment, and prior to that, I spent nearly 6 years running the Americas client coverage organization as well as a number of years prior to that overseeing global pension and sovereign wealth team. Back at the last MSCI Investor Day, I spoke about MSCI's vision to build the MSCI of Private Assets. The vision then, and what I'm going to share with you here today, is that the pivot towards private markets is not only still upon us, it's actually accelerating. We're seeing more than ever at Burgiss our LPs and our GP clients demanding significant upgrades to their operational, to their investment, to their capital raising infrastructures, and we are best positioned to capitalize on this trend. So over the next 10 minutes, I want to introduce you to Burgiss and I want to leave you with 4 key takeaways. One, the opportunity in private markets is enormous and is growing. You heard this from other speakers today. The need for more robust tools, whether they be data, analytics, models and the like is only going to grow. Two, Burgiss' 3 decades in the private capital space best positions us to deliver on the demands that are being made by investors and allocators around the world. Three, alongside MSCI, Burgiss is driving the innovation to deliver the data-driven standards and tools that are being required today. And four, Burgiss, together with MSCI, are relentlessly focusing on transforming private capital investing. Now 2 years ago, I shared a similar slide and the data on that slide underpins MSCI's vision of building MSCI Private Assets. As you can see here today, the assets are only continuing to grow. But in addition, we've included data which show the market participants growing as well. This space is no longer just the most sophisticated LPs, pension sovereign funds around the world. We're actually seeing more traditional money managers want to get into the space that previously was largely the domain of these large sophisticated institutional managers. This is occurring across all private capital. We believe the opportunity set is large today and it will only continue to grow. The demand for the types of tools we, at Burgiss, can provide is increasing. Now private markets and investing in private markets is just that, it's private. The opaqueness, the lack of consistency, these sorts of things are not going to change overnight. However, as allocations increase and the demands from multi-asset class solutions expand, Burgiss will lead, together with MSCI in partnership, we will lead the expansion of the data and tools that are being required to meet the allocators' demands. We're relentlessly focused on innovating, so that the private capital industry has those data-driven standards that they seek. No one can rival our expertise, the depth, the breadth and the history of our data, all of which makes me very excited at the opportunities that lie ahead. Now I'm conscious that some of you may be asking the question, who is Burgiss and why would MSCI take a 40% equity stake in this Hoboken, New Jersey-headquartered company? Well, Burgiss is nearly 400 individuals focused on the private capital space. We service more than 1,000 clients in 32 countries around the world. We were founded in the late 1980s by our CEO, Jim Kocis, to serve the nascent private equity programs at the likes of AT&T's pension plan, University of Notre Dame and Commonfund. We've always supported a wide spectrum of clients from our very beginning. Every day, we're working with almost $11 trillion in capital coming from over 10,500 funds, including data that goes back to the 1970s. And it's important to note, we cover all forms of private capital, it's not just private equity. We work with private equity, debt, capital, infrastructure, real estate, natural resources and the like. The potential is enormous, and I could not be more excited to be part of this team here at Burgiss. When one thinks about the investment process in the public markets, words such as optimization, portfolio construction, performance attribution, these are all terms, which are ubiquitous. Perhaps this is because of the ready availability of data and analytics as well as modern technology facilitating research and data-driven tools. Now coming to the private markets, the investment process and the absence of such tools is largely driven by relationships, branding, personalities and the like, not much different than public markets -- the public equity space 20 to 30 years ago. Why is that? I would propose one reason is the absence of robust data-driven analytics and tools because of the perceived lack of data in pricing. Well, I'm here to share that actually that data does exist. We, at Burgiss, have it and it will be the underpinning and the transformation that we intend to lead in private asset investing. Now data is at the core of everything we do at Burgiss. Our data is LP sourced and it's enriched by a large global team of data operations professionals with multiple decades of experience in the space. Our data is at both the fund level and the holding level. We will have, for example, 150 unique entities, whether that's a single property or a company inside a GP's portfolio. In addition to the standard operating metrics one we come to expect that we would have, revenue, EBITDA and net debt and the like, we also have difficult-to-source data points such as terms and conditions for private credit or leverage at the fund level, which thereby allows an LP to truly assess a GP's performance. This table starkly highlights that we are able to build tools using over $11 trillion in capital coming from over 10,500 funds. And because our data is sourced directly from the investors, this is very important, we at Burgiss do not scrape the web. We're not relying upon Freedom of Information Act, FOIA Act, request. Because our data comes directly from the investors, it credibly can serve as the foundation of the transformation I've spoken about. It can credibly serve as the foundation of the types of tools LPs and GPs going forward will be demanding. Now what is it that Burgiss does? We work directly with LPs and GPs to benchmark their managers, to manage their cash flows, to help them conduct risk management. We provide them with data to research new managers and new strategies. Knowing that so much in the private markets is reliant upon cash flows, the foundation of everything we do are those very cash flows. We provide clients with 3 solutions on our unified platform. The first of those solutions is the portfolio management solution. This is the solution that clients will use to track all the cash flows resulting from their investments. This is the tool that they will use to manage capital calls coming up in, let's say, the next 6 months. This is the tool that they will use to ensure that they are able to accurately model distributions coming in the year ahead. Two, manage transparency. The manager transparency solution on our platform is the one that clients will use to understand what do I indirectly own through these GPs to whom I've allocated? What sort of exposures do I have? What sort of unintended bets, sector or geographic, might I have in the portfolio? And three, Manager Universe data. This is the tool on our platform that clients will use to benchmark their managers and interrogate the data to research future strategies. Now I've spoken a bit about who Burgiss is and what we do, let me tell you a bit about where we're investing. I would put our investments in 3 key areas. The first is go-to-market. We're building out teams in regions that we have not historically had a presence, for example, Asia Pacific. In addition, we're building out teams in regions like EMEA, where we've had a limited presence historically. We'll continue to build out our marketing and communications as well as put more individuals into client-facing roles to better support our global client base. The second area of investment is in research, data, product and the like. We're building out our applied research team so that we can continue to produce market-orientated content that many of you have come to expect to see from MSCI, we ourselves at Burgiss want to expand in this area as well. Additionally, we want to expose our data, our IP, our analytics more flexibly. We want to continue to build out our platform and our user interface. We're continuing to build out relationships with third-parties. We want to allow our clients to consume all of our solutions however they choose to consume it. And finally, we have a relentless focus on our operating metrics, KPIs. We're introducing an institutional rigor that will accelerate our growth and hopefully allow us to achieve the potential that I've spoken about. Now that you have a deeper understanding who Burgiss is, the opportunity and the like, I want to spend a few minutes on the partnership with MSCI. Burgiss' DNA is rooted in private capital, I've spoken about this more than a few times. MSCI's DNA is rooted in listed capital. However, it's very important not to forget that there are deep roots in the private asset space, the MSCI Real Estate segment as well as the expanding multi-asset class solutions. Combined, the 2 organizations have almost $15 trillion in capital data with which we can use to build solutions to help clients solve their private asset problems. It's a very powerful partnership. As you can see, the roots for both organizations go back to the 1980s. While the publicly disclosed investment in January of 2020 appeared to be the start of the relationship between the 2 organizations, in actuality, MSCI and Burgiss have been working together since late 2011, early 2012, at which time, MSCI licensed Burgiss data to build their first private equity risk model. That has since been extended to private infrastructure. Our missions are complementary. We want to build asset class-specific tools as well as support the growing trends in the multi-asset class space, unlike any others are able to do. Now I think it's fair for you to be asking me in what areas might Burgiss and MSCI collaborate going forward. I would suggest there could be 3 areas where you would see our 2 organizations publicly disclose an investment. One, indexes, expansion of our private capital index spend; secondary will be Analytics, maybe extending beyond the private equity, private infrastructure model into areas like evaluated pricing models and so forth; and three, ESG and climate, a number of our joint clients are currently using MSCI's public market ESG solutions and Climate solutions and are asking both our organizations how we could support their efforts to do something similar for their private asset portfolios. In conclusion, I hope you can hear my excitement in what lies ahead. The excitement has only grown since I've been fortunate enough to join Jim and the executives here at Burgiss and get to see firsthand the potential. I want to make sure that you all have a better understanding of who Burgiss is, what we do and for whom and also leave here with those 4 takeaways I spoke about at the start. One, the private asset space is a significant opportunity and it's growing; two, Burgiss has long history in the private asset space and the depth and the breadth of our data is unrivaled; three, Burgiss, along with MSCI, will drive the innovation that's demanded to set those data-driven standards; and four, truly transform the private capital industry. And with that, I'll pass the floor to Peter Zangari, MSCI's Global Head of Research & Product Development. Peter?

Thanks, Jay. It's great to be back, and I appreciate another opportunity to present to you at Investor Day. As you may remember, I'm based in New York and I currently run research and product development at MSCI. What I'd like to speak to you about over the next several minutes is the investment process and the role that MSCI plays in advancing the investment process for our clients and for the industry. Specifically, I would like to talk to you about how -- or I should say, first and foremost, what within research and product development, the organization that I run, what we do to affect that, how we do it, how we work with clients to ensure that they get the most value out of the content that we create. First, let's talk about what we do. So simply put, we are a team of experts that is responsible for creating our content, the content that underpins MSCI's competitive advantage. So what do we mean by content? Examples include our risk models, our ESG ratings, our index methodologies and so on. So think of it as all the material that we create that goes into the products and support our services that we offer to clients. I talked about what we do. Now let's talk about how we do it. To understand how we do, how we operate, we need to understand 3 key components. First is understanding the investment process. It's really first and foremost, absolutely key. Internally, we are the experts of understanding and reflecting the investment process. Now we know that there isn't a monolithic investment process. Different portfolio management teams, investment teams, have various variations of the investment process. But that is the starting point. Next, it is the focus on algorithms and models. Why? Because when we develop solutions for investors that they incorporate in their investment process, we need algorithms and models to do that to help them evaluate risk, to help them create portfolios and so on. And then third, the foundation of it all is on data and technology. So understanding advances in data and technology is critically important. So that we can develop those algorithms and models and we can make sure they're appropriately fitted in the investment process. Let's look more specifically at the investment process. So here, we see 3 colors: portfolio management, where we help clients create portfolios, manage portfolios on an ongoing basis. Portfolio produce performance. So we have analytics, we have research to help clients understand the drivers of their performance and we do that in various ways. And then there's pricing and risk. So for clients who have derivatives in their portfolios, for example, we have pricing models for that. And then more broadly, we help clients assess the risk, both at the enterprise level as well as risk and risk management as part of the portfolio management function. Now a word on our team. As you can see from the slide, we're a global team. We are located in the Americas, Europe and Asia Pacific. And when we think about our team, we think of us as one that has an entrepreneurial culture. So what does that mean? We are a team of entrepreneurs, but within a corporate structure. And we need to think that way and operate in that way because creativity is a key source of producing the type of research that we do. And if you look at the composition of the team, we're about roughly 80% of us have advanced degrees, mostly technical degrees, master's degree level or higher, PhD. Now the way we're organized is a collection of specialized teams. So for example, we have the ESG research team, the climate team, the risk modeling team and so on. But those teams are highly interconnected, high levels of collaboration across the teams. And that is significant. In fact, it's the interrelation the interconnectedness of the teams is what creates tremendous value. Why? Because when we think of our client solutions, those solutions often require expertise from these disparate teams, collected together and provide it in one solution. Now one question that we often get, me in particular, is how does our research -- how does MSCI's research differ from other research? The investment in financial industry is awash in research. So what makes us so special if we are? So the way we address this question is that there's not any singular aspect or characteristic of what we do that's differentiating. It is, as we write here, it's a combination and interaction of a few things. It's our client engagement, working with some of the most sophisticated clients in the world. It is what we refer to as our data science platform, that is our research and product development platform that allows us to quickly and efficiently and proactively do research, test ideas, prototype products and so on. It is our network beyond our clients that includes maybe regulators, maybe academics and other third-parties. And last, it is the way we approach research. It is helping clients develop solutions to their investment problems, but also in the area of thought leadership. So thought leadership is where we conduct research that has the potential to have a profound effect on the investment landscape, to have the potential to shape the investment industry. So here, what we show is research that we've produced over the last year. And the key point here is underscoring the breadth of research that we produce, spanning equity, multi-asset class, sustainability and so on, but also to underscore the depth of our research. Now it's not immediate from this slide to see the depth and detail of the research, but it's where we put heavy emphasis, and we need to. Why? Because our clients are domain experts. So we have a very high bar to meet to ensure that when we're serving those domain experts, we meet their requirements and exceed them as well. Now over the past year, we've been publishing quite a bit of research, and we've done it more or less in response to questions we've been receiving from clients related to the pandemic. And here, what we show is the significant increase in publications as well as the increase in readership. Now I never like to talk about the quantity of the research, I'd like to focus more on the quality. But we're underscoring it here because the readership increased and also we leverage the data science platform to become much more productive in a very short period of time, and we're proud of that accomplishment. Next, let me spend time on 3 examples that encapsulates what I spoke about to you earlier. The first one relates to customized indexes. Jorge and Diana spoke about the acceleration of customized indexes over the past few years. The research and development team plays a key role in developing and creating our customized indexes, taking that content that we create and blending that content into indexes so that clients can use those indexes in various ways. One example is where clients try to replicate or near replicate those customized indexes. So other than creating those customized indexes, we work with clients to help them understand the attributes and characteristics of those customized indexes. Next area is around fixed income. So as you know, we have a leading franchise in what we refer to as middle office fixed income through our multi-asset class offering. More recently, over the past few years, we have had a concerted effort to focus on fixed income that is geared to the front office, that is fixed income that is geared towards portfolio managers and risk managers, who support the portfolio management function in the fixed income space. And to do that, we had a very ambitious research agenda: research around mortgages, research around the CMO markets or the ABS markets, around bank loans and so on. And through our research, we've elevated our credibility in this space, where we are now at a point of winning business along these portfolio managers and risk managers. Last example relates to a government agency who put out consultation papers to seek feedback on establishing guidelines for environmental risk. And we responded to these consultation papers. We had discussions with this government agency and we presented to them the metrics that we have provided to other clients around climate metrics and ESG metrics. So they were impressed with what we produced. They subscribed to our climate and ESG metrics and they're now incorporating those into guidelines that they impose on the entities that they have jurisdiction over. More exciting areas of research and product development is in leveraging new formats of data and new technology to do 2 things: one is to improve our research quality; and two, is to improve the way that we engage clients. So regarding client engagement, a few examples. One, as you can see on the screen, is what we refer to as our Insights Gallery that hosts interactive charts. Interactive charts are a chart that encapsulates a research blog or a research paper that we produce. And we've been producing these recently and we found them very effective in engaging clients. And you could see examples of these not only on our home page, but also via LinkedIn. It's a new way of engaging our clients, and we find it again, thus far, very successful. Now in addition to that, we are exploring areas where we construct Jupyter research notebooks. These are electronic notebooks that contain code and subject to permissions data that support a blog or a research paper. And this would be a very different way and a much better way of engaging clients because when clients read our papers or blog, they now have the opportunity to have access to the code and the data that went into that research. So really excited about this development. And last, we are investigating the rapid development of prototypes, prototypes that are reflections of potential future products from MSCI. To date, per usual, is that one waits until the final product comes out to see the results of recent research and new capabilities. We believe that through rapidly developing prototypes, and when I say rapidly, I mean, rapidly and low cost developing these prototypes, we can engage clients earlier on in the research and product development process to get their feedback and to steer us in the appropriate direction. In closing, let me end where I began. Research and product development, its mission is to create the content that defines MSCI's competitive advantage. And we do this through, clearly, our research, but also in our knowledge and awareness and use of data and technology. Intellectual rigor, for sure, is a hallmark of our research, though we always put the investor and the knowledge of the investment process first. Thank you very much for your attention. And next, I'll turn it over to Jigar Thakkar, who is responsible for data and technology and who is a key partner for research and product development.

Thank you, Peter. Always great to hear from our Head of Research. Hello, everyone. My name is Jigar Thakkar, I'm the Chief Technology Officer at MSCI. That's been close to 1,000 days since I moved from the beautiful city of Seattle to the dynamic New York City. I've a long history in the technology space. Prior to joining MSCI in 2019, I spent nearly 20 years at Microsoft developing software. My entire career, 2 major events stand out for me personally. The first was launching Microsoft Teams that turned into the fastest-growing enterprise platform in history. The second major event is right now, this movement at MSCI. I truly believe we are in a position to transform ourselves and the industry through technology and data. I will share the aspects of technology and data where MSCI is already a differentiator for our clients and introduce the next phase of our strategy. There also have been 4 exciting new services that we are launching this year. MSCI has been a leader in investment data and technology for decades. We have created a leading data infrastructure that operates at massive scale while maintaining incredibly high levels of quality. To follow the next phase of growth at MSCI, we're revamping every line of code and every byte of data to offer Investment Solutions-as-a-service. I'll walk you through the details of 4 exciting new services that we are launching in this framework this year. Our ability to execute on this challenge will be bolstered by our strategic partnership with Microsoft announced in July of 2020. At the backdrop of our industry, in the simplest possible terms, we do 3 things. For our clients, we provide models, we provide data and we provide technology. We spoke about the exciting work happening in the model space and research. I will now focus on data and technology capabilities and how they help clients power better investment decisions. MSCI has created a data infrastructure that supports massive scale. There are 1,800 world-class engineers and data scientists who develop industrial strength engine at MSCI with several more joining us from technology companies like Google and Microsoft and to see a strong vision for the investment industry. Just to give you one example of our scale. Every day, we clean, enhance and manage nearly 30 million different securities, which help us compute over 800 billion instrument pricing, over 1 trillion on a peak day. Despite the scale at which we're offering, we never compromise on data quality. We are an industry leader across all data types and have built differentiated capabilities in the space for decades. To achieve this data colony, we rely on cutting-edge data processing technologies. We are constantly building and partnering on artificial intelligence, natural language processing and data science capabilities to further strengthen our competitive advantage. With our strong foundation and scale and data quality, MSCI is well positioned to move into the next phase of our strategy by offering Investment Solutions-as-a-service. Alvise described the need to focus on technological transformation to make it easier to do business with MSCI. Investment Solutions-as-a-service offers exactly that capability to enhance the end-to-end client experience. We are modernizing every touch point for our clients with us whether it's using our applications, our APIs, manage data services and even post-sales servicing. We're deeply focused on providing 4 things, seamless access to every solution we develop; rapid onboarding for faster deployments, billing and servicing; customization and personalization on a large hyperscale; and modern client experiences to delight our clients. In 2021, we're launching 4 important services within the Investment Solutions-as-a-service framework. ESG, building a new application in partnership with Microsoft for climate analytics. For Index, we will be releasing a customized index application with subscription services built in. For MSCI Data Lake and Data Explorer, we'll enable self-service capabilities to distribute and access our world-class content. Lastly, we are releasing an MSCI Developer Portal with MSCI APIs to empower the investment developer ecosystem. As Alvise said, we are in the epicenter of a radical industry transformation. We frequently hear from clients asking to understand various elements of [ their ESG rating ]. Clients want access to understand the underlying data for improving their own ratings, comparing with industry leaders or even to gain a better understanding of their own climate risk. To address that demand, we are pleased to announce the launch of the new ESG as a service with advanced climate analytics. For the new application and APIs, we will expose 4,000 data points of ESG and climate risk, which are the building blocks of the ESG rating and climate exposure. This application is built on the new as-a-service framework. It is cloud native, based on open architecture, uses power PI and mapping APIs, built in partnership with Microsoft to offer unique access to MSCI's underlying content. Here's an example of the power and speed of that open architecture. The optionality you see on the screen, we are creating hurricane risk for a group of peer companies. The application level modern search experience, ability to create custom visualizations and reports out of the box and the ability to drill down to thousands of data points to compare to various companies or industries. This rapid development of a modern application was possible because of the fundamentally reusable building blocks we have developed in an internally and externally open architecture model. Up next. We're announcing a new MSCI customized index service. It was 1969 when a man put a foot on the moon for the first time and was Woodstock was [indiscernible] in New York. That is a year when the first series of indexes were released, can you imagine, over 50 years ago. Printed on paper, delivered in a binder. We have come a long way since then, do you ever think? Using 250,000 indexes without having to print them. Over the next 10 years, we are scaling up for fifty-fold increase or up to 15 million highly customized and personalized indexes. We're opening up the entire MSCI index platform with a new application and subscription as a service. This will help us meet the client demand for tremendous flexibility of customized and personalized indexes, supported by the quality infrastructure and processing scale that MSCI has delivered for the decades. Clients [indiscernible] from having a new hypothesis and investment strategy. The experimentation and practicing on their own within hours. One common use case from clients is to combine specific ESG ratings or the underlying data points to create a customized index. A customized index application platform will enable our clients to seamlessly plan ESG characteristics with other equity index components to generate an index based on their exact specifications. You can imagine how this architecture that we saw offering ESG index with enabled meeting highly customized use cases in other areas like real estate, private asset classes, equity performance and risk analytics and so on. So this customized service, our clients can make the MSCI platform their own platform to build better portfolios. Now let us talk about data, the lifeblood of our industry. The hunt for new sources of alpha is omnipresent across the industry. It requires systematic evaluation of massive amounts of data. Our clients rely on the developers, data scientists, quants and researchers to help them evaluate the utility of various data sources and implement that data into their investment process. MSCI is creating services, which will cater specifically to this technical client pains to help them reduce complexity and focus on the hunt for alpha. Today, we are announcing MSCI Data Explorer and the Data Lake for this key audience. Hundreds of our data sets will be at our clients' fingertips eventually. We're building features for search, exploration, test, purchase and integration of these data sets into our clients' own investment process. Like Baer mentioned, MSCI stands for an open architecture. We strive to help our clients, choose and integrate the right set of data and APIs into their existing investment architecture. MSCI Data Explorer provides one-stop shop for open access to our unique, high-quality repository of curated content. MSCI Data Lake will democratize the decades of MSCI data, APIs and content. It includes multiple levels of data sets, such as entity, company, instrument, country and markets. The content of MSCI Data Lake is augmented with data sets like extensive asset allocation, interest rate curves, single security analytics and volatility surfaces. If data is the lifeblood of our industry, APIs and analytics are the veins and arteries. Clients increasingly rely on APIs to combine many sources of data to construct a unique investment process. To help our clients capture the full benefit of MSCI capabilities, we're launching the MSCI Developer Portal with MSCI APIs. With this announcement, we advance our vision to create an open investment architecture. This portal will provide direct access to MSCI analytic services for risk performance and other areas like ESG and real estate and [ index ]. This will enable our clients to build their own investment applications or blend our IP with theirs. This goes hand-in-hand with the Data Explorer and Data Lake to win the hearts and minds of the technologists in the investment industry. Our developer portal will provide code samples, documentation, and have built-in sandbox to test new innovative ideas. With this portal, we will define an access to the full suite of services across our entire product line. This would enable self-service and develop a network of engineers in our industry who can share their feedback and best practices. These modular components will enable development of cross-cutting use cases, connecting our data and APIs across our entire product line in unique ways. In closing, MSCI has pushed a tremendous franchise around the quality of our data and the scale of our processing technologies. We are now in a rapid execution mode for the next evolution of our technology and data strategy. This year, we launched the first 4 services within the Investment Solutions as a Service framework. Our ability to launch these services just a few months after announcing the strategic alliance with Microsoft, shows the speed with which we are operating on our vision for technology at MSCI. Speed of innovation is a key capability we have developed at MSCI. And it will become a major differentiator for years to come. But the challenge of industry transformation is like preparing for a marathon, not a sprint. It is not just about speed. In our technology strategy and architecture for the software, I hope you realize that we are laced up ready for this long run. I truly believe many years down the line, I will be reflecting on this day as a start of a revolution in Investment Solutions as a Service, that delight our stakeholders for years to come. This is why I'm so charged up at this inflection point of our company and our industry. I will now be inviting our Chief Financial Officer, Andy Wiechmann, to give you a financial view of MSCI.

Thanks, Jigar, and hi, everyone. For the 9 years or so that I've been at MSCI, I'm leading areas like strategy and corporate development, FP&A, Treasury and Investor Relations. I've been heavily involved in setting up and refining many of the frameworks that we use today around capital allocation, financial management and the strategy process more broadly. Today as CFO, I'm intensely focused on using these frameworks to unlock the enormous potential that you've heard the team talk about today. The number of investment choices that we have in front of us is enormous. And I'm confident that we have the management team and experience to continue generating compounding shareholder returns well into the future. You've heard from our team about the unique position, competitive advantages and amazing assets of MSCI. However, this is more than just a great business. It's an incredible financial model. You can see on the page that the story kind of sells itself. We have a lot of charts going up and to the right. Since 2016, our revenue has been growing at a double-digit pace and 97% of our revenue base is recurring. Our growth has inherent operating leverage, which combined with an intense focus on driving operational efficiencies has generated mid-teens adjusted EBITDA growth. This EBITDA growth, coupled with disciplined capital allocation, including highly effective share repurchases and improvements in our tax rate has driven 27% adjusted EPS growth. Importantly, we license our IP-based content and services through evergreen subscription contract, where clients typically pay us upfront annually. This, coupled with disciplined working capital management, has driven strong free cash flow growth and high free cash flow conversion. The track record of financial success and compounding returns has been built on the massive market opportunities in front of us. We have huge opportunities. We're just scratching the surface of providing an index for every portfolio and a tool for every investment decision. As Henry highlighted, there are nearly $200 trillion of professionally managed portfolios across the managers of assets and owners of assets. And most of those portfolios need indexes. Additionally, the addressable market for decision tools is massive and growing. The opportunities to establish leadership positions in potentially significant new content in product areas such as ESG & Climate, private assets and fixed income or new client segments like wealth, insurance and corporates are massive. In all of these areas, we're providing truly differentiated solutions relative to what's in the market, and we have the disciplined execution and financial management expertise to unlock these. As we capitalize on these long-term trends, we have uniquely stable all-weather franchise that can capitalize in both rising markets and periods of significant volatility. Close to 3 quarters of our revenue is recurring subscriptions that maintained annual retention rates of 93% or higher in each of the last 5 years. We've had 13 consecutive quarters of organic subscription run rate growth of 9% or higher and we've had 28 consecutive quarters of double-digit index subscription run rate growth. Our asset-based fee revenue, which has historically been largely AUM-based tied to ETFs and non-ETF passive products is increasingly balanced by futures and options revenue, which tends to benefit in periods of higher volatility. Furthermore, both our subscription revenue base and the AUM and passive products linked to our indexes is highly diversified across geographies. Approximately 70% of the assets in ETFs linked to our indexes has exposure to markets outside the U.S., and more than half of our operating revenues come from clients outside the Americas. We have products that are mission-critical in all environments. And importantly, we have a well-developed upturn and downturn playbook, which we have and will continue to use to generate stable performance through all environments. The upturn playbook allows us to flex our cost base up with a focus on accelerating investments when markets are rising, and the downturn playbook enables us to flex our cost base down. We focus on less critical expense categories during sustained market pullbacks. A good example of this was in the second quarter of 2020. After the sharp drop in market levels in March, we took aggressive actions, pulling multiple levers in our downturn playbook. These actions resulted in nearly a $9 million drop in quarterly expenses from the first quarter to the second quarter. For the future, I would highlight that we typically expect a 1 to 2-quarter lag from when we see market swings to when we take action into when the expense base is impacted from our upturn or downturn actions. The strength of the franchise and trajectory of shareholder returns are not by accident. This management team is fully aligned with shareholder value creation because we're shareholders ourselves. And we're paid based on the financial performance of the company and the total shareholder returns of the stock. We shun traditional corporate bureaucracy. We don't have divisions. As Baer highlighted, we're truly integrated, and we pride ourselves on being innovative and nimble. A top priority for all of us is effective capital allocation because we know it's the backbone of our sustainable value creation. We're very deliberate and disciplined with our capital. And we have an intense focus on capital allocation that has 4 pillars: firstly, we optimize our capital structure; then we maximize organic investments in the highest returning and fastest payback Triple-Crown areas, leveraging our internal capital allocation process; third, we return a portion of our excess capital through a steady quarterly dividend, which targets 40% to 50% of adjusted EPS, and as such, grows very nicely with the business; and last but not least, we use our remaining excess capital for optimistic mergers, partnerships and acquisitions, including the repurchase of our own shares. This is to drive returns above our cost of capital and strategically enhance the positioning of the business. As a foundation of our financial model, we have a fortress balance sheet, where we target 3.0 to 3.5x gross debt-to-LTM adjusted EBITDA. This level optimizes our cost of capital, maximizes available capital for investment while preserving flexibility to be nimble in all environments. Given this policy, our outstanding debt grows with our adjusted EBITDA and is comprised of long-term notes that we view as permanent capital. These notes match the tremendous long-lived subscription revenue base for the company. We have no maturities for the next 5 years and our notes are entirely fixed rate with call protection, providing us with nice optionality and the potential to improve our funding costs even further. While the balance sheet positions us for strength, the lifeblood of our company is the compounding returns and our compounding returns is our free cash flow. This is a simple slide, but we have a simple focus on maximizing free cash flow conversion and free cash flow growth. We accomplished this on 3 fronts: tight control and rigorous management of working capital; preserving optimal client payment terms and driving overall operational excellence at all levels of [Audio Gap] and that free cash flow fuels the perpetual growth machine of our internal capital allocation framework that we use to drive organic investments, which are the highest returning and best use of our capital. Within our internal capital allocation framework, we break down our expenditures into 2 primary categories: firstly, I'll run the business expenditures or those supporting products, capabilities and client segments that are already developed and continue to have a long trajectory of growth; and secondly, our change in the business expenditures, which capture expenditures related to the development of new products, new client segments and new capabilities. Our change in the business expenditures reflect only those initiatives that have begun in the last few years. And as such, we're continually adding new layers of growth to the business and feeding into and enhancing to run the business base. We use our Triple-Crown process on our change the business investments to ensure we are prioritizing the highest returning, fastest payback and most valuable strategic and sustainable growth areas. This, in turn, drives incremental growth and cash flow which combined with a rigorous focus on driving operational efficiencies and stopping less productive activities is continually adding even more capacity for investment all the time. When you drill into our change of the business investment spend, which we're projecting to comprise about $160 million of our forecasted 2021 OpEx and CapEx, we have balanced investments across 3 main areas: firstly, across efficiency initiatives that are focused on areas like enhancing our data capabilities, building out our cloud-based technology infrastructure and driving broader operational enhancements across parts of our business that will increase productivity well into the future; secondly, slightly more than half of our change of the business spend is focused on improving and enhancing our existing established franchises, such as expanding our ESG securities coverage, expanding the footprint of our futures and options franchise and continuing to enhance our index offerings; and lastly, through new growth areas, such as investments in our customized index capability or what we call Index 2.0, additionally, the build-out of our fixed income index business and expansion into new client segments like corporates and insurance. This portfolio is highly dynamic and actively managed as we had new investments. We adjust allocations based on the success or failure of existing projects, and we dial it up or dial it down with our upturn and downturn playbooks. All of the investments you've heard the team talk about today are put through this rigorous process to ensure we generate returns and effectively execute on these opportunities. In addition to maximizing and optimizing our internal investment spend, we opportunistically pursue mergers, partnerships and acquisitions, with an emphasis on the PE or partnerships as a way to both accelerate our growth in key strategic growth areas and generate returns well above our cost of capital. Because we're narrowly focused on only the most strategic opportunities, we have a track record of unlocking significant value when the acquired company or capabilities of our partners are placed on the MSCI platform. As you've seen in our most recent transactions, our focus tends to be around areas of content and capabilities that are aligned with our key growth areas like ESG, like private assets and like fixed income. I would also highlight that many of our most important high-growth capabilities and product areas today, build through acquisitions that we acquired at relatively attractive values where we partnered to develop. And we're not only disciplined about acquisitions and partnerships. We're ruthless about products or capabilities that we own, which we believe might be worth more outside MSCI and are less strategic for us. We've divested of nearly as many businesses and investments as we've acquired or made. Importantly, we always compare acquisitions against alternative uses of capital, including most significantly repurchases of our own shares, which we do opportunistically based on 3 factors: firstly, we generally repurchase more during periods of heightened volatility; secondly, we try to take advantage of attractive values; and thirdly, we're generally more active when we have a higher amount of excess cash. We've been highly effective at doing this generating returns of greater than 40% on close to $4 billion of repurchases since we began buying back our shares in 2012. And we've reduced our share count by over 1/3 or close to 45 million shares over that time. Let me now describe what these investments mean for our financial model this year and in the coming years. Regarding our guidance for 2021, we are slightly lowering our tax rate guidance to 16% to 19%, largely as a result of the windfall benefit associated with vesting of stock being larger than expected, favorably impacting the first quarter rate. Also, I want to remind you that our expense guidance assumed relatively flat market levels for the year. Given that the AUM and equity ETFs linked to MSCI indexes is up nearly $100 billion on the year and close to $1.2 trillion as of last week, we will likely trend towards the high end of expense guidance if the markets hold. And we could increase expenses even further if markets improved notably. I would also highlight that we are expecting seasonally high expenses in the first quarter as we usually do. This is driven by the elevated payroll taxes and benefits expenses of about $9 million that we experienced in the first quarter, partially driven by bonus payments. Lastly, turning to our long-term targets. We believe we have a very successful financial algorithm. And as such, we're only making refinements to the prior targets. In index, we continue to target low double-digit subscription revenue growth where we see a total addressable market that's even bigger today than it was in the past. Within analytics, we're slightly revising our target, changing our growth expectation to high single-digit -- from high single-digit to low double-digit. While we continue to drive hard towards driving double-digit growth in this segment, we're setting a target for analytics around which we have a higher degree of confidence. This partially reflects that we're allocating a higher amount of investment spend to Triple-Crown priority areas like index and ESG & Climate. Importantly, and you've heard Jorge talk about this, analytics continues to be a key source of innovation and benefits for all the other segments, including a particular index. For ESG & Climate, we are increasing our revenue growth target to mid [Audio Gap.] achieving mid-teens growth despite some very recent headwinds, partially related to the impact of COVID on the real estate investment market. We're also now providing targets for expense growth within each of ESG and real estate. We're reporting these as separate segments and want to highlight our significant level of investment in these key growth areas. Finally, as Baer mentioned, we run a highly integrated franchise with numerous areas of cross-segment benefits that are not reflected in our segment financials. As a result, our primary focus is on the enterprise level targets, where we continue to target low double-digit non-ABF revenue growth. Additionally, we continue to focus on delivering positive operating leverage, although at a more modest pace than in the past. Two items that I want to highlight that are embedded in our expense targets as well as our guidance. Firstly, we expect to feel some additional upward pressure on adjusted EBITDA expense growth as we move our tech infrastructure into the cloud and transition expenses that were previously in CapEx into OpEx. Also, we will feel some upward expense pressure from an increasing number of high-growth partnerships with revenue shares. In these structures, we recognize the share of revenue owed to our partners as an expense. Both of these items are reflected in our long-term targets and our guidance. Lastly, this low double-digit revenue growth, combined with positive operating leverage, allows us to target low to mid-teens adjusted EBITDA growth. Overall, we're very excited by this financial model. We believe it allows us to invest in a long list of highly attractive opportunities in front of us and extend the runway of growth and compounding returns well into the future. I'm proud to be working. It's such an amazing company with such an amazing group of people. I very much look forward to keeping you posted on our progress as we continue our track record of success. Now let me turn it back to Henry for some closing remarks before we open it up for Q&A. Thanks So much.