MSCI Inc. (MSCI) Earnings Call Transcript & Summary

All right. Good morning, everybody, or good afternoon, actually to everyone in Europe, and maybe good evening to anyone joining us from Asia as well. My name is Manav Patnaik. I'm Barclays' business and information services analyst. And as much as we'd love to be in person in London doing this, I guess we have yet another year virtual. So we'll make the most of it. But we're very pleased to have with us today, Andrew Wiechmann, who's the CFO of MSCI with us. So Andy, firstly, thank you so much for being here.

Thank you for having me. Very good to see you, and thank you all for joining.

Andy, perhaps, I think the best place to get started is we have traveled with you in the past but under your IR capacity in London and in Europe. But you recently took over the CFO role. You obviously followed some big shoes. But I think you've been at the company long enough. I personally think you explained the company the best. And so you know the ins and outs of the company, but just for the benefit of the audience and a lot of questions we get, can you just talk a little bit about your journey through MSCI and how you got to this role?

Sure. Sure. Yes. No, thank you for the remarks. I -- just to give the full background, I joined MSCI officially 9 years ago in 2012, but actually started my work with the company all the way back to 2006 when they were controlled by Morgan Stanley. I was an investment banker at Morgan Stanley and covered financial technology companies, one of which was MSCI. And so I helped the company look at some acquisitions back then, ultimately helped with the sub-IPO from Morgan Stanley and the separation from Morgan Stanley and then covered them as an independent public company for several years before I had the opportunity to join to lead strategy and corporate development. So when I joined in 2012, it was to oversee strategy and corporate development, which, for us, was 75% M&A-related, 25% broader strategic activities and strategic initiatives. But pretty quickly got sucked into a whole host of other areas. And so it's been quite a journey for me and quite a journey for the company over the last 9 years since I joined, where I spent some time doing capital work and treasury work, helping the company set up its -- the current capital policies that you see today, including things like our approach to share repurchases and dividends and our leverage targets. I also, as you alluded to, oversaw Investor Relations for a period of time. I oversaw financial planning and analysis as well. And then I have been fortunate to have the opportunity to step into the CFO role about 6 or 7 months ago. And I think knowing the company, seeing the journey that we've been on and seeing the unparalleled set of opportunities we have in front of us today, one, it's extremely exciting for me in the CFO role, but it's also daunting. And I think part of the reason why I'm in this seat and part of the opportunity for us is because we need to take a much more strategic lens and strategic focus on financial management. We have so many opportunities in front of us. The company is so much more dynamic than we've ever been in terms of growing across new product areas, at new content areas, new client segments, incorporating new technologies, working with more partners. We have scarce capital, scarce time, scarce resources. And so allocating our resources to the most attractive and important returns is the critical role of my job and one I'm very excited for. And hopefully, looking forward to having an impact on the company going forward.

That's great. That's super helpful, Andy. I guess you kind of alluded to it from the strategic angle. But in your new role, like do you anticipate any particular changes or any particular areas that you feel like can be tweaked now that you're in charge of the finances?

Yes. The -- so as you alluded to, stepping into some big shoes here, I'm fortunate to have had predecessors who have been world-class CFOs. And so I think they've laid a lot of foundation and strong infrastructure within our finance department that will have positioned us for success and will continue to position us for success going forward. But the 2 areas that I am focused on to continue getting ahead of where the company is going and making sure that we are positioned to continue to drive long-term growth and do it in a scalable fashion are on 2 fronts. I call it, financial leadership, and it revolves heavily around what I alluded to in my introductory remarks, which is making sure that we are allocating our resources and capital to the highest returning and best uses. And so that's continuing to refine things like our Triple-Crown framework and our upturn playbook that you've heard us talk about, ensuring that we are taking a strategic angle to our product segments and thinking about things like addressable markets and competitive dynamics and ensuring that we are positioning ourselves for long-term differentiation and going after the most attractive market opportunities and pricing smartly. So that's one angle, is that financial leadership aspect. And then second is scalability. As we continue to grow across all these new dimensions, so all these new client segments and new product areas, working with third-party providers to incorporate technology or third-party content or having distribution arrangements or jointly developing IP. The company is going to necessarily become more complex as we continue to grow. And so I want to make sure that we're setting the right infrastructure and processes today to allow us to continue to grow scalably and continue to generate that nice operating leverage that you've seen in the company and ensuring we can preserve that over the long term.

Got it. I think one kind of high-level question I thought we'd lead into before we go into some specifics was the broad story at MSCI today, right? I think, perhaps when you joined as well, but I forget how many years ago we had first met, but it felt like MSCI was this single pure-play index story, for the lack of a better phrase. But now it feels like there's just so many different angles or I think you referred to them as layers to it. So maybe just help us appreciate what that multi-layer approach is today.

Yes. And I'll walk through the evolution and how we got to where we are today, but one thing that I do want to highlight, and I think this is a huge differentiator for us as an organization and huge competitive advantage is our mission and our strategy and our laser focus on the investment process. And so we are helping investors build better portfolios for a better world. More specifically, we're helping investors understand the drivers of performance and risk in a portfolio and then construct a portfolio to achieve their specific objectives or outcomes, ultimately have a better portfolio for what they're trying to accomplish. And so that is very different than any other company out there, very different than the companies we compete with, very different than broader financial information or info and analytics companies or financial technology companies. And as a result of that, we have been at the forefront of the investment industry where the investment industry is going. And so to your question, the legacy of MSCI. And by the way, we've always had that focus, but the legacy started with providing benchmarks or indexes dating back to the capital group 50-plus years ago who created this benchmark framework for international investing. And clearly, that's expanded into this very powerful index benchmark franchise, which is heavily used by the world's largest -- heavily used by a significant portion of the world's asset owners who use our benchmarks for their asset allocation and then to track the performance of those allocations that they make to managers and those allocations across different geographies and sectors and styles and increasingly areas like ESG and factors. But it started with this index subscription franchise, and that really started to take off, we'll call it, in the late '90s and through the 2000s. You layer on top of that this powerful ETF franchise that started in the early 2000s and started to gain steam and then really gain steam over the last 10 years or so, which is just a whole new avenue of growth on top of that powerful index subscription franchise that we had developed over a long term. And by the way, that index subscription franchise continues to chug along at a very attractive growth rate. When you look at the growth rate that we have for market cap indexes on the subscription side, the asset owners and asset managers, we continue to see quite compelling growth there. You're layering on top of that, the growth we've seen in ETFs, but then we're also seeing growth in non-ETF passive areas. We're seeing tremendous growth in futures and options on those indexes. And so the different product wrappers on top of our indexes have created layers of growth. And then you're seeing growth across different content dimensions. So what was a market cap index franchise is now a factor index franchise. It's an ESG index franchise. We're just at the early stages but potentially seeing opportunities across things like thematic investing and megatrend investing. And then you're starting to see, and we're very early days in this dimensions across different asset classes, where we are both partnering and organically getting into fixed income indexes. And so those are just the dimensions that we're seeing on the index side, but you're also seeing the build-out of things like analytics tools, other data sets. And so you see these potentially massive layers and redefining the company across areas like ESG and climate, and not just the indexes but the research and ratings and broader climate tools and ESG insights. And you're seeing growth across private assets, an area that is, we believe, over the long term, going to start to migrate to some of the disciplines and tools you've seen in public asset classes and that we've developed for public assets, we're trying to bring to private assets. And so as you alluded to and in my opening remarks, the company is so much more dynamic today, and we're just at the -- as Henry would say the ground floor of what's possible across all these new dimensions. So we get very excited about the layers of growth that you alluded to going forward. The one that I didn't touch on is client segments as well. We've moved from this, I'll call it, core institutional investment process, where an asset owner is allocating money to an institutional manager to client segments like wealth management firms, to broker-dealers, to hedge funds, to insurance companies, to corporates themselves, and all these are relatively small in the grand scheme of MSCI but growing incredibly fast and they're massive addressable markets, massive wallet shares that we're just starting to open up. So very exciting new frontiers for us.

Yes. Clearly, a lot to unpack there. So maybe if I can just start on the index side, right? And you talked about the subscription business firstly growing at a healthy rate. And it sounds like -- maybe can you just help us break down how much of that is pricing, these new client segments you talked about? And then just continuous new offerings, I guess, that you guys keep coming up with?

Yes. So the contribution from price increases has been relatively steady if you look past over the last several years. If you look at the composition of new subscription sales on the index side, it's about 1/3 coming from price increase. And that's -- as I alluded to, that's been relatively stable. We recognize, particularly given some of the pressures that investment organizations are feeling that the way we need to continue to drive growth is by adding value to existing clients and opening up new opportunities with new client segments as well. And so for the existing clients, we are helping them transform their organizations into the areas of growth, into areas that the investors are looking for. And so those are across dimensions that I was alluding to already in areas like ESG and factors. We're helping them launch ESG strategies or factor strategies or market themselves across those dimensions, helping them understand the impact of climate on their portfolios. We're continuing to offer them rich data sets so they can develop more systematic strategies and systematically build portfolios because the world is going the direction of outcome-oriented, solution-type portfolios. And these frameworks that we create in our index franchise allow for that systematic portfolio construction for managers. And in the case of asset owners, the systematic asset allocation or strategic asset allocation across all those dimensions. And so as I alluded to in the beginning, we continue to grow at a healthy clip within that traditional institutional investment process and broader -- more broadly within asset managers by continuing to add new value to them, upselling them additional modules, upselling them additional data sets. But then on top of that, we are driving growth across new client segments. And so new client segments I alluded to, like wealth management, whereas wealth managers increasingly go the direction of building model portfolios for their end clients. It's a process very similar to what we do for asset owners who are doing that strategic asset allocation. They're systematically constructing portfolios to achieve an objective. They license our indexes to do that systematic portfolio construction process or model portfolio process. Hedge funds who never used to pick up the phone from us because they said we're an absolute return fund, we don't have a benchmark, now recognize that our benchmark data, our index data is very valuable for them as they want to back test strategies and markets become more quantitative in nature. And then they are increasingly trading in tradable products based on our indexes, whether those are ETFs or futures and options or over-the-counter instruments where we're starting to see an ecosystem grow. They need to license our index content to understand those tradable products. Broker-dealers are creating those tradable products, so tremendous traction, licensing our indexes to broker-dealers who are creating things like over-the-counter derivatives or total return swaps on an index or things like index-linked notes for their private banking or for their wealth clients, they need to license our indexes for those. And then licensing to insurance companies who are creating index-linked annuity products or other insurance products that might have an index tie. And so we see these very compelling additional dimensions of growth within our existing clients but also in some of these new client segments.

Got it. That's super helpful. And just to appreciate on the index side, there's always this chat about active to passive being a strong secular trend. How do you guys think about where we are in that process? And maybe you can split it up by equities and fixed income.

Yes. The -- so it's not totally a zero-sum game, firstly. I think as you've seen and we'll continue to see there is tremendous growth within managed assets and investable assets. I mean the thing that is fueling that and the thing that we try to stay grounded in is global savings. So you're seeing global savings grow at a very attractive growth rate. You have governments and individuals seeing their savings increase and saving more capital. They are deciding to put those savings into professional management or what we call the investment industry. And so you have this fuel continuing to direct money into professional management or the investment industry. And so the opportunity set is going to continue to grow. And the great thing about all the tools that we offer is that we can serve almost every aspect of the investment industry, whether it takes the form of traditional asset managers, index-based managers, private asset managers, various asset classes, whether it's equity or fixed income managers or multi-asset class managers. And so you've got this support continuing to drive growth in the industry. Now there are, to your point, there are structural changes taking place within particularly the active management side of the business. And so you see, in certain instances, outflows, but more importantly, you do see fee pressure among active managers. For those active managers that, at least from an objective third-party basis, are not adding value commensurate with the fees that they are charging. And so what you're starting to see them do is transform and transition into more systematic-type investment strategies that may take the form of an index-linked product or it might be something that is closely linked to index or systematic data input, then we can help on both fronts. But in terms of the -- where we stand in terms of the relative growth rates, I'll start within equities. You see obviously a much larger pool of index-linked assets within the equity investment class relative to fixed income investing. But we also, at the same time, continue to see very compelling growth, and it's not just into ETFs. It's into -- and this is a larger market, non-ETF index-linked products through things like institutional -- what we call institutional passive mandates or index-linked mutual funds increasingly things like direct indexing, which is very much in its infancy but can be massive. And so I think there are a lot of legs and a long way to grow in terms of the -- crudely the passive, we like to call it, index-linked investing within the equity asset class. But I think there always will be a role for active management. And so there will continue to be a balance where the more systematic investing or index-based investing. There is and more opportunities there are for active. It's just active needs to reinvent it -- continually reinvent itself to be adding differentiated value, and there will be an angle for differentiated value. And I think active is positioning itself to be more customized and be more systematic in terms of the portfolios it's constructing, and we can help on that front. The fixed income side, you're seeing index-linked investing much more in its infancy. Infancy is probably too strong a term, but it's very, very much early innings on that front, and that's partially structurally tied to how the markets work and how the ETFs work within fixed income and other index-linked products, but you are seeing extremely rapid growth in index-linked products within fixed income. And the thing we need to stay grounded in is fixed income is a much larger asset class than equities are generally. And so it's the assets in index-linked products within fixed income is much smaller than in equities, and the asset class itself is even slightly larger than equities. And so there should be a long way to go on that front, which is an encouraging thing for us who's very much early in that market and just starting to enter it. And fixed income asset management is just such an active management. It's such a dynamic space more generally that I think there will continue to be large opportunities there. And I think it doesn't suffer from a lot of the same -- it suffers from some but not a lot. In certain areas, not all the same pressures you see in the equity asset class. And in this move towards outcome-oriented solutions and customized portfolios, you're going to increasingly see the mixing of asset classes within portfolios. And you'll start to see blended portfolios or even multi-asset class type index products. And so we're trying to position ourselves to take advantage of that when that does come about.

Okay. Got it. That's super helpful. Just one thing. You talked about direct indexing and that being a massive opportunity. When we think of direct indexing, I guess, we think of maybe self-indexing. And maybe just help clarify that because we often get the question is self-indexing a threat, but it almost sounds like you think of it as a big opportunity for MSCI.

We do. Yes, we spend a lot more time talking about it as a massive opportunity than we do a potential threat to us. And so when you think of what self-indexing is, which is a way -- going back to the comments I've been making along the way here, where investors are increasingly looking for customized outcome -- customized outcomes, customized portfolios that are efficiently and effectively designed to achieve their objectives, an index is a very effective mechanism to implement a strategy like that. And so direct indexing is a way to not only replicate and index the same way an ETF would or other passive products. You do have some direct index solutions that are purely just replicating one of our indexes or another index. And so you've got that opportunity just across another dimension of another wrapper for just straight index tracking for our market cap-weighted indexes. But importantly, and the opportunity for direct indexing is to make an index customized to each specific investor in a scalable fashion. And so with things like the ability to trade fractional shares and transact or trade with low or almost no commissions, it opens up this opportunity for direct indexing as a very efficient mechanism to basically create an index-linked portfolio for each client or each investor. Now to do that, what you need is a systematic framework. And that's exactly what we can do for these direct indexing providers. We provide them with our universe data or index universe data, which is basically all the data you need to construct and index. Or we can license them or indexes directly where it's -- they start as a foundation, one of our existing indexes. And then they can screen out certain companies based on the investor specific objectives. They can overweight certain areas. They can put a factor bent on it and overlay an ESG objective on it. And importantly, they can optimize around all those considerations. Specific investor might have geographic constraints or not be able to invest in or want to invest in certain sectors because they're a broader portfolio. We have an optimizer that they can use to optimize around those specific outcomes. And then importantly, and one of the key motivations for direct indexing to this point and one of the reasons why I can add value is optimize tax optimization, so optimizing around tax lots that an individual may have to minimize the tax friction on a portfolio. And we can help them on that front with some of our analytics tools. And so the approach that we've taken as an organization and that we've taken across our index franchise, where we don't just start with one index, which is tied to the largest companies in a market or on a specific exchange. We start with the global opportunity set and then divide it up systematically across sectors, across geographies, across sizes, across styles, across ESG characteristics, factor characteristics, thematic characteristics in a very cohesive fashion, lends itself perfectly to these direct indexing solutions. And so not surprisingly, we work with many of the main direct indexing platforms today and are looking to just grow those relationships over time.

All right. That's super helpful. Well, it looks like there's a ton going on in index, and we can probably spend the whole time talking about it, but let's move on. Maybe we'll come back to it. And the next area, obviously, that's on everyone's minds today is ESG and climate. And you have some pretty good 40% plus run rate in that business on the top line at the moment. Maybe you can just help frame similarly like you did with the indexing side, like what inning, how early do you think we're in and how you guys see that potential TAM there?

Sure. Yes. It's, as you said, extremely exciting for us. We see enormous opportunities there. The ability to redefine MSCI and redefine everything we do across ESG and climate. And maybe I can just quickly start with the evolution that we've seen in it, and I can talk about the dimensions of growth there. But ESG, for us, started as a screening tool. That was kind of the initial forms of ESG investing, which was investors who couldn't invest in certain types of companies, wanted to avoid gun companies, tobacco companies, needed to have had certain restrictions based on the investors that they have. We provided the tools to help them understand what companies have those exposures. It's evolved into a broad research and ratings framework. And so we have developed the leading research and ratings franchise where we rate over 13,000 issuers around the world on their environmental, social and governance practices. And so we not only have those top company ratings, but we have the research that supports it and all the data that feeds into those ratings. And importantly, and a big differentiator for us, we've done it from a standpoint of investment materiality. So why does this matter from an investor standpoint, not why is it good or bad for the environment or for society. Yes. You can use it for those purposes, but importantly, how can I understand the impact of ESG criteria or characteristics on an investment portfolio and the performance at risk of that portfolio, which has been very different than almost every other provider and part of the reason why we are a leader within the investment landscape. But you're starting to see rapid expansion and enormous opportunities. And you've seen almost this inflection point recently in the adoption of ESG. And so we get very excited when we look across the opportunity across a number of dimensions, firstly, across client segments. And so like everything we've done as an organization, we started within the investment process, where an asset owner allocates to a manager. And we've been serving with our research -- our ESG research and ratings asset owners and asset managers. And that's -- asset managers are the largest portion of our ESG business, but we are starting to see meaningful size and meaningful growth in other areas. So a lot of the areas I was talking about on the index side, we're getting enormous traction in ESG. So wealth management firms and even within wealth management firms, the more retail-oriented firms as well because their clients or their users starting -- are starting to care about ESG. We're starting to see strong traction among hedge funds and broker-dealers. Actually, just to mention some of those, broker-dealers and wealth management firms, this is just on the subscription side. So within the ESG and climate research and ratings, we've seen north of 120% growth or we're seeing 120% growth in the run rate in those areas. So within the broker-dealers and wealth management firms. We're seeing within hedge funds north of 70% growth, within issuers and insurance companies extraordinary growth. Now those are off a lower base and much more in the early innings, but we see big opportunities to go into some of these client segments. So just very excited that we have this door opener now for a lot of areas and client segments we never used to touch. And it's very much in its infancy, given those growth rates that I was alluding to. You also have -- sorry, go ahead, Manav.

No. No, finish. I was just...

I was going to say the other dimensions are asset classes. So we're starting to grow -- and I alluded to this in an earlier discussion, outside of that historical equity franchise we have. We're starting to get strong traction with fixed income managers. Given that we have broad research and ratings for fixed income issues, we're getting enormous traction across many, many different fixed income investors, which is a door opener for MSCI more broadly. And then private assets, we're just starting to release solutions within private assets, things like our real estate climate VAR, value at risk solution, some broader data sets within private assets and brainstorming with our partner, Berges, about how do we release similar capabilities for private equity investors. And so just seeing these dimensions of growth on the asset class dimension. And then lastly, across capabilities, actually, even before capabilities use cases. So the great thing about ESG is we're landing a lot of new logos. So roughly half of the growth is coming from new logos in any period, new logos to ESG, but half the growth is coming from upselling existing clients. And so given that growth rate, you can tell that not only is there a lot of white space of new clients, but there's enormous white space within existing clients. And so we're expanding from screening products into research and ratings used across the investment process more broadly into compliance departments, into risk functions, into investor relations and marketing departments, into regulatory reporting opportunities. And so we've got this very nice trajectory of upsale opportunities within clients. And then lastly, as I alluded to, capabilities, and we're providing deep data sets within specific pillars to enrich the ESG understanding of our clients. And then last, but certainly not least, and maybe most importantly, climate. It's still very early days for us, but for the industry more broadly. And climate has the opportunity to be as big or bigger than ESG in its own right, just given the existential impact that it could have on -- or will likely have on society. Investors are racing to understand what does it mean, what do climate-related events mean for my portfolio. How do I play my part in creating a responsible portfolio and allocate capital to sustainable causes and sustainable investment opportunities. We are uniquely positioned to help on that front, and we're just starting to see strong traction, and there's going to be many layers of growth across the climate solutions that we have. So ESG is -- well, the growth is high, and it's been high for some period of time. We're extremely excited about the runway of growth and the opportunity going forward.

Yes. That excitement is pretty clear. I guess I can keep modeling 40% growth there.

No. You know our long-term target, yes. Our long-term target runs in the 20s. Yes.

Yes. The one quick question on ESG, Henry said before that ESG will eventually just be part of the risk and every index will have some ESG element to it. Does that mean, over time, it will be -- I guess what I'm trying to understand is will that be incremental to your index business? Or will there be some cannibalization eventually?

There will likely be and there has been some cannibalization, where -- just to put it plainly, if you have what was a market cap-weighted index mandate or index benchmark mandate and that switches to a ESG index benchmark mandate. In some instances, that will lead to a sale for an ESG index module, which would have been one of our market cap weighted modules in the past. You will see some of that going forward. But in many instances, it is incremental for us, where you need that market cap-weighted index module at its core because that defines the opportunity set and gives you an understanding of the market itself. And then the ESG, the weightings overlay, if you will, on it, based on the objectives or criteria of that investor. And so in many instances, you need both dimensions. And in the case of asset managers, who aren't even necessarily benchmarked against an ESG benchmark today but are marketing themselves and saying that they are sustainability focused funds, they're adopting our ESG indexes as a secondary benchmark. And so they are benchmarked against the market cap weighted index as their primary benchmark, but then they're also saying here is how we're performing versus an ESG benchmark. And so we get the double sale in that instance or the upsale, if you will. The exciting thing for us, in addition to kind of that additional layer on the benchmarking side, is the opportunities that it opens up for us across all these new wallets and massive markets that we historically haven't had a strong presence in. And so when you look at the ESG space as a proxy -- or sorry, the ETF space as a proxy, you are seeing exceptional growth recently into ESG ETFs, where we are the leader, 70% plus of all AUM in ESG ETFs are in ETFs based on our indexes. And a lot of that is into markets or exposures where we historically haven't had a big presence, namely the U.S. market. And so you're seeing strong flows into U.S. exposure ETFs based on our ESG indexes. And so this is opening up whole new frontiers and markets for us that we historically just haven't had a big presence in. And so that's all incremental and big, big wallet and big upside for us. And we similarly see those opportunities across new asset classes, as I was alluding to. We're seeing growth in ESG fixed income ETFs based on our indexes or indexes that we've partnered to create. And so that's a market we historically had 0 presence in, and we're starting to get some traction through our ESG indexes. And so for us, while there will be some cannibalization, we're much more focused on it, much more excited about the incremental opportunities that result from it.

Got it. Okay. That's helpful. I think -- I just want to ask a few high-level questions. So -- and if there's time, we'll come back to kind of some of the other layers of option talked about. But on the last earnings call, Andy, you talked about pivoting back to your upturn playbook. And I was just hoping you could help us -- I mean, clearly, I think we understand why, because things look like they're reopening, et cetera. But just what is that upturn playbook?

Yes. No, it's -- as you alluded to, very topical for us right now. We are taking the opportunity to continue to drive these growth frontiers that we've been talking about here based on the strong performance of the markets and, as a result, the strong performance of our business year-to-date, where you've seen assets in ETFs linked to our indexes, up about 15% on the year. I think at the end of April, it was at $1.27 trillion. And that is driving some very substantial revenue growth for the company, and we want to reinvest that growth -- reinvest that upside into growth initiatives for us. And so we're turning to our upturn playbook and using our Triple-Crown, not surprisingly, to prioritize the highest growth investment opportunities for us. And so the areas we're putting additional dollars against and spending a lot of time with Henry and Baer over the last month or so, releasing upturn dollars against these. It's into areas like ESG and climate, not surprisingly. And so we've released money into our climate risk center, including accelerating our climate agenda there in terms of the data, the research, the technology that's supporting the climate opportunity for us, more generally across ESG. We're investing in expanding the breadth, efficiency and effectiveness within which we source data. So that's adding additional data sources, incorporating technologies to more effectively source the data and getting the researchers who help interpret this data enhance the quality of it as well as the infrastructure used to access the data by our clients. Sales and marketing resources in ESG and climates, we're putting some investment dollars against some key segments, geographies, particularly internationally, trying to drive adoption of some of our solutions in certain markets. And then marketing, I think ESG is an area where there are some opportunities to market in a very targeted fashion, some of what we do, just given the breadth of potential clients that we're touching. And then some investments in issuers or the corporate opportunity, specifically what we call our issuer communication portal, which is the technology portal that we used to communicate with issuers and share with them the data and research that we're using to develop the rating. We want to make it a much more seamless experience for them to review that data and, over time, hopefully, supplement and enhance that data, and so investments on that front. Also investing in indexes, not surprisingly, and it's the areas we've been talking about, thematic indexes, investing in some of the investment dollars we need to work with third-party experts in areas like circular economy and cybersecurity and some of the big thematic areas we hear, institutions wanting to get focused to or focused on. Investments in fixed income index research as we continue to build out our capabilities there. And then investments in index derivatives, so putting some feet on the ground to continue to drive adoption of listed derivatives, working with our exchange partners to kind of create that ecosystem of liquidity around tradable products, including the listed futures and options. And then we've released some money into technology, just accelerating our speed-to-market and some of the common infrastructure investments that we've been making as an organization.

Got it. Well, again, I mean, it sounds like it's all those different layers that you talked about are pretty exciting. I think we are almost out of time, but I just wanted to touch on one final topic, and that's kind of the capital allocation, but more specifically, what you guys refer to as MP&A, which is partnerships and M&A. You've obviously done a lot of partnerships in the past. You still keep doing them. I guess I'm curious, Andy, in your view, taking over the CFO role, having run strategy before, do you think M&A will start playing a slightly bigger role? I mean, you're seeing a lot of consolidation across the data space, people trying to come into ESG, particularly into other areas. So just curious if that changes your approach at all based on what you're seeing from competition.

Yes. I would say not based on what we're seeing from competition. If anything, it reinforces our approach to MP&A, where a lot of these large mergers you've seen are large acquisitions, and the info and analytics space or financial technology space are motivated by either financial rationales, adding more subscription revenue, diversifying the revenue base or big picture, strategic objectives like scalability or creating the data supermarket, where we're going to have really differentiated data brought together. All that is great, and I can understand in many of their positions why they're doing it. But what it means for us is they are, in many instances, losing the focus on that end customer, the end client and the value delivered to the end client, at least in the spaces within which we operate. So where we might compete with these organizations within that investment process, serving investors, narrowly focused on helping them better build better portfolios, that's now one small set of this massive organizations. And so they're delivering solutions that are more generic in nature for the masses, not designed specifically for that investor to construct the portfolio. And so what we've seen from some of these past ones and hopefully continue to see in -- see from some of these big ones that have taken place recently is that loss of touch with the value delivered to the end client and serving the end client. And so that creates opportunities for us. And so our -- we continue to have conviction around our strong focus. And so we're not looking to do a massive merger just to keep up with these big organizations. Having said all that, we do have a very intense and probably elevated level of focus on MP&A, with a strong focus on the P, the partnership aspect of it, where partnerships are a very effective means for us to enhance the distribution of what we do to incorporate third-party technology, create new content using third-party content. And so you'll continue to see us doing an accelerated pace of partnerships. M&A, we do actively review and probably are more actively reviewing than we have in the past, but they're, by their nature, very opportunistic. And so we continue to have a strong discipline around making sure they're strategically compelling and aligned with where we see that long-term growth and competitive advantage, and they're financially attractive. And we will continue to be opportunistic. We will pursue bolt-on acquisitions and investments where they make sense. But they're likely going to be along the dimensions of growth that we've been talking about here, and we view them much more as accelerators for the very tremendous opportunities we have in front of us, not diversification plays or we're not looking to diversify the company and add a whole new set of product segments for us. It's really we want to enhance and accelerate those opportunities we see in front of us today.

Got it. Well, Andy, I think you timed that perfectly. We're right on the mark to end the session there. So thank you so much for your insights. All sounds really exciting. So looking forward to tracking the progress.

Absolutely. Manav, thank you for having me, and thank you, everybody, for joining. Have a great day.

Thank you, everybody.