MSCI Inc. (MSCI) Earnings Call Transcript & Summary

Good morning, everybody, again, and thank you for being here in person. For those of you who don't know, I'm Manav Patnaik, I'm Barclays' Business and information services analyst. And I'm personally really happy to be back here in person, have the lang doing this again. And we're very pleased to have with us from MSCI, Baer Pettit, the COO. So Baer, thank you for being here. So maybe just to -- I'll be doing a fireside chat obviously with Baer. We will leave some time at the end for questions. If you have any, please just raise your hand. I'll prompt that towards the end there.

But Baer, maybe just to start, you've been, I believe, COOs since 2000 -- at the company for a long time.

Yes.

But I guess my question is more around, MSCI has changed a lot since that time frame.

Sure.

A lot of transformation occurred. So maybe just some high level from your perspective. What are the key changes that you've observed from the product strategy standpoint?

Yes. So look, it's a large topic. Just as a matter of clarification, I've been COO since 2016. I've been president since 2017. But going back in time, my first role was -- and for the first 12 years, I was Head of -- Global Head of Client Coverage. So look, I think the -- there are an enormous -- a variety of ways that you can tackle this topic. But I think the -- a few things which are -- apology -- apologies if they're self-evident. Clearly, the role of indexation in the world as dramatically changed during that period. And -- but I think perhaps more interestingly, the -- if you go back 20 years, you had an environment that was in essence -- and this was even before the -- just at the beginning of ETFs becoming a significant part of the investment landscape. But you had, in essence, an active world which was, you could call it, overwhelming a stock picking world, and then a subcomponent of 1/4 of them which were kind of the quants. And then you had the index world, which is very black and white, which was the replication of market cap indexes through -- by a relatively small number of players. So if we fast forward today, what I think is striking is that, that whole universe has become much more of a gray scale from one end to the other. And when you think about a lot of what today is in an index and products linked to indexes are really rules-based active portfolios. They're active insofar as they are taking a bet against the market, but they're rules-based active. And so that's observation #1. And then I think the other component is that the varieties of exposures that clients can get through those vehicles have increased dramatically. And then I would say -- so that's one big observation. And then I would say the other one which has become clearly a pretty dramatic and central part of investing in the last, call it, 5, 7 years has been the rise of ESG and climate concerns. And I think on the one hand, MSCI deserves a little credit for being prescient in this area. I could not personally entirely claim credit for that by supporting it, the various businesses that reported to me. But I think that, that emphasis, I think, is a really pretty significant development in investing generally. And it has always been our contention and thesis, which I think is a very important point, which, while we labor it, still sometimes gets missed. That from the very outset of our presence in this business area, it has been our thesis that ESG risks in an issuer, in a security are a financial risk. Now alleviating those also has societal benefit. So there's an element of kind of a Catch-22 or whatever you want to call it. Chicken and egg is maybe the better expression. But I think that, that has proven to be the case over time. And I think that, that is what has meant that this from being a niche category which was, in essence, crudely, you can say -- again, this is a very crude generalization, so forgive me. A group of people who wanted to change the world has now become -- people have come to realize that it's an important material category to understand an investment full stock. Even if you could say you're purely a financial investor, you can't ignore, right. So those are some of the big themes.

Makes sense. So maybe let's start with the index side of the equation.

Sure.

And you said, it was initially black and white, and now it's grayscale across metro. So the question that we've always asked is, how far are we in this kind of active to passive shift? It was probably easy to ask someone who was black and white and grayscale format but how would you answer that? We get a lot of questions about how much runway is left in all this?

Yes. So look, I think -- so again, a large topic. So going back to the old fashion, the old world, crude league, where you say you have a given company and it has x number of indexed investors. And let's assume that their position in that company is solely because they're getting a geographical exposure to the U.S. or where have you. I think the element that I always thought that was understated is insofar as those are index investors, and people would say, oh, this is bad because the active investors are no longer there. These people are just passive. Actually, if you think about it, it's a form of leverage for the active investor because it's crude to the 50% of the owners of the company are there through another means, and you're an active investor. Your percent as an owner of that company is increased in impact, right? So that's just a general observation I would make. I think more generally, there are things which are continuing the expansion of the category. So just like the clearly, the ETF revolution was a big thing in bringing different types of indexes, including initially market cap and then other strategies. So we're now seeing notably in the U.S., but in other places too, a large growth in direct indexing for wealth portfolios, which combines some -- the elements of -- to a degree, customized indexes and strategies, but also with the tax component for an individual, right? So this creates a lot of benefits. But -- so I don't know exactly, honestly, I don't have the answer. But maybe you could say, in the balance of total assets, will it change dramatically? I don't know. It may shift a bit more. I don't think it will shift enormously. But I do think that the variety of vehicles available to clients continues to grow, including active rackers through ETFs and other things, right? So I think it's a continuously evolving landscape, which doesn't look like it's going to settle down into a simple pattern in the short run.

And so then maybe from MSCI's perspective, these are the exposures that you talked about, do you guys have your feet in all those? So just to try and appreciate the sustainability in MSCI's world.

Sure. So well, we hope we do. So look, our mission is to help our clients build better portfolios. It's not just a buzzword that we put on the website. It very much influences all of our marginal decisions. Clearly, some of those we get right. Some of them, clearly, we don't get as right. But when you think about that environment, what are the sort of -- leaving aside the specifics of factor data, ESG data, climate data, and we want to compete in all of those and invest in them. I think it's more -- what is an even higher overarching theme across all of that? You have an environment that has an enormous amounts of data and information. You need filters to be able to apply to that as an investor. Then you -- of course, you want to make your own discrete judgments. You -- some -- and again, depending on the category, and let's say if you -- a typical pattern is whether it be in ESG, we'll take the rating first. And then the client says, well, actually you know what? Your rating is great, but we want to make our own judgment. We want the data underneath that, right? And that can be true for risk models or indexes. So there's a drive for ever more data, but there's a need to have that in some form of framework or methodology that can make sense of it and creates a common language in the industry. So those are the type of things that we're thinking about the whole time. And then in turn, we need to have the tools that help people to manage that, whether it's purely data management tools, whether it's portfolio construction tools. So that's kind of how we see what we're doing. And maybe just one further point there, that generally keeps us within, you could call the -- with the traditionally defined investment ecosystem, which is some form of asset owner who is in wealth or institutional, some form of manager of assets, could be a hedge fund or a traditional long-only manager, and then clearly, our clients within investment banking, et cetera. That's our most traditional triangle. But if you look now in ESG and climate, clearly, we have enormous interaction with corporations, with issuers, and they are very hungry for this data. So do we -- are corporations a target client base for MSCI? No, not central to our strategy. But in order to grow our capabilities in ESG and climate, we have to be present with them, and we have to be able to make them understand what we're doing. So I think that, that's kind of an example of how we both, I think, are pretty disciplined about how we think what we're doing, but we need to have some flexibility at the margins depending on what category we're operating.

Got it. Just to touch on the 25% of your revenue that is exposed to AUM and the fluctuations in market. Maybe you could just help address the crowd, how you think about the different pieces of the exposure. Do you have any natural offsets in down markets?

Yes. So first of all, I guess the way that I've sort of -- sometimes, people ask about the mix. And I guess the simplest answer to that is we want both categories to grow. And then the mix sometimes changes over time. But first of all, I think we have a very broad and diversified range of exposures in that -- in the 25% category. Now if we are in a very sustained bear market that affects all equity markets and all shades of equity investment the same, then that's not good. We've had some pretty unpleasant weeks here over the last few days. . But I think the sheer -- if you look at the portfolio of exposures that we have, it is significantly more diversified than many of our competitors who have very much more concentrated exposures. And so then I think the other thing is, recently, although the market levels have come down, the flows have remained decent. That could revert. We'll see what happens. But the flows have stayed reasonable. And we now also have an attractively growing futures and options business there. It's clearly a smaller component of it. But -- and I was speaking to the head of that business yesterday. But in a volatile environment, we would expect to have some upside there in that category, right? So look, there is market beta in there. There is also structural value for the future. And I think really in the -- how does that play out? What is the most tricky element of that as a business decision is most of our investing in the short run or in the short run, let's say, in the coming year, is clearly not in a narrow sense necessarily linked to the equity market product. So let's say, we're investing heavily in ESG research. We're investing heavily in time research. It feels a bit myopic to not invest in a very large growth category because equity market levels have come down a bit. Equally, we realize we're a public company with quarterly earnings, and it's not nice to show up with sticker shock. So I think that's a balancing act. We'll have to see where that goes, whether we're here in some nasty volatility for a few weeks or months or if things look more sustainably challenging. But I think the main balance there is trying to balance shorter-term shareholder interests, and you may recall, I'm a shareholder myself, with kind of medium-term growth opportunities. That's kind of what we're trying to play off.

Got it. And just that futures and options business, it's obviously been growing nicely, but it's still much smaller than your competitors. So just talk about what the long-term potential there is? And is there -- is driven more just by volatility or new partnerships?

Look, I mean I think there -- so I -- who went to the -- there's the FIA Conference in Boca. I was there in March, and a lot of our counterparties around the world are there. And so I think we've got some great partnerships now. We have an existing, what I call, we have an existing pipeline of products which have a lot of growth potential. We've got an enormous variety of products, for example, with Eurex that we're invested in. We've got some new things we're thinking about of doing with ICE and others. So I think that we're very far from -- I don't know. These things are hard to tell. But based on the size of the underlying investment categories in which we're present and the scale of what we have now in those products, I still think there's a lot of upside. And I think the next 6 to 12 months will be very interesting in telling just how much we can get out of it, right? Ultimately, there's a lot we can do to set the stage. But when those products are out, there are a lot of the decisions getting made by the trading community. So I think we're at an interesting inflection point where I would hope in this environment that we would see quite a bit of progress in the next 6 to 12 months. All right.

Got it. That's helpful. Maybe a broad comment on the 75% of your revenue. Now that's more SaaS, subscription like. What are some of the sensitivities there in -- should half years of the slowdown, et cetera, occur? Like what are some of the sensitivity you guys look for there?

So look, my observations are not very creative. So first of all, I would say that, clearly, if we are in a very sustained difficult markets, there is an element of cost pressure which will come on our clients. I think we're pretty pleased with our retention rates here at present, which I think shows the strength and resilience of our franchise. Our retention rates are now like 98% of ESG and climate, which is crazy. It's almost like there's always some natural churn in the client case. So that's pretty -- that's very positive. So I think that what that likely means -- so the obvious downside is that our clients come under pressure, and they want to squeeze all providers, including us. But I think there's also a more positive story there, is there's a longer-term trend of firms wanting to have fewer higher quality counterparties, right? If you -- the people having all these disparate types of vendors doing different things within their firm. So I think that with the -- both the range and quality of what we do and the enormous effort that we're putting in our senior relationship management at the top of the house of all of our clients. I also think that there is part of that environment which could be positive for us, where people have to say, we want to -- we need to go with -- we need to eliminate the second tier of staff, that we need to go with a counterparty who we can rely on in a number of fields. And I would hope that MSCI would be the choice in a number of instances, right?

Yes. Got it. To your point on your customers potentially facing pressure, I mean I think you've been over the last 10 years and more, I think customers generally have been facing. But yet, in your index subscription things of the business, I think this was your 33rd quarter in a row of double-digit growth. So how does that -- maybe you started leading to a bit. But how does that pressure on your road? What is the -- how does that bridge the gap there?

So look, I think we have a strong franchise. I think, fairly self-evident. But I think what's also noteworthy about that growth is the relative -- well, the almost other absence of volatility in it, right? So I think in that business has -- clearly been a very attractive growth business, but it's also been a very solid, consistent business, right? Now again, I don't want to be Pollyanna. Under circumstances that became tougher, there might be some challenges to that. But I think it's a very resilient franchise. I think we have pricing power, to a degree, which we're not going to abuse, but we have some pricing power. We continue to innovate and bring out more products. So that within that percentage growth, the mix has actually changed. The products has changed a fair amount over that -- those 33 quarters. So it used to be much more heavily weighted towards market cap. Now there's a much greater component of factoring strategy and thematic indexes in there, ESG and climate. So we've managed to both innovate. And I think we have a strong and resilient franchise. So look, we'll see. If the environment gets tough, there will be pressure, but it's a pretty attractive franchise.

Got it. And we are going to touch on ESG. But before we get there, analytics, as you define as you second largest segment. And I think there's been a lot of hopes in the past of getting that growth accelerate, but we've kind of been in that mid-single-digit range. Can you just talk about some of the moving pieces? What planning to get that going?

So first of all, we're -- look, we're still not happy with the growth rate. So that's headline #1. Look, headline #2, which I don't think we should entirely forget, is the margin has been expanding in analytics. And we've been able to, in that sense, take money from analytics and reinvest it into other areas. So in that sense, this is -- on a stand-alone basis, this is a pretty attractive business. It's not an incredible business, but it's got good margin. It's got decent growth. And our frustration continues to be the growth level. So we're -- we had actually a strategy offsite with our executive committee last week. And one of our -- our strategy already has been to try to pivot more to front office users. We're also really building a technology strategy, which means that we want to be the most flexible and the fastest of being able to integrate into our clients' environments. So we're -- we've got -- we've already in the last, whatever, 6 months, I don't know the exact numbers, but back of an envelope, we've already hit numbers to reduce the implementation time of any analytics, I think, by like several months. And so our goal is to make that product line more flexible, enabled by the fact that the most modern technology, but very importantly, be able to integrate very fast and defines environments. Because one of the pain points, as many of you know, sitting here are assets managers is every time you have a systems change, every time you have a new portfolio management or risk system, these are multiyear things, and there's so much blood, sweat and tears. So if we feel like if we can have the best cutting-edge analytics, we can be more flexible in implementation and more flexible in how we operate and we leverage more of our margin intellectual property, like ESG and climate, that those should provide us continued competitive strengths. And look, we'll see, but that's the plan.

Got it. Well, that's a good segue then into ESG and climate, right? It's obviously a big topic. From what we can see, at least on the research and data side, perhaps indices as well, you guys are the clear leader there at the moment. So maybe just to be a brief background on how you got to this position. And then more importantly, can you maintain this #1 position?

Sure. So look, I think we've got to this position -- well, first of all, I have to give credit to a company we bought, right? So RiskMetrics were kind of the initial investor in this area. And they were very prescient in realizing that ESG risks are and would become even more visibly financial risks to invest. So this was not prudently about saving the planet. It was about the fact that if a company -- another crude way of saying it, if a company does bad things, bad things will happen to that company. So when we sold because IFS -- ISS had been part of RiskMetrics. We sold ISS because we don't want to be in the proxy voting business. But we kept the ESG research. And our -- a gentleman, Remy Briand, who is now our Global Head of Products, he just got that role at the beginning of the year. He's kind of the godfather of this product area. And I think he -- and so how did we -- why did we decide to nurture that? I think it goes back to our mission, is that we'll always be thinking about how do we help our clients build better portfolios. And I would say intuition is the wrong word. But through our analysis and understanding, we thought this will be a much more major driver of clients' investments in 5 or 10 years, right? So that's kind of the path that we're on. And then we got into a virtuous circle of funding the business and growth and all of that. But I think -- so this has clearly been a big win. But I think more generally, in our culture as a research-driven firm arm, we are always trying to think and we won't always get the bets right. But we're always trying to think what are the next big drivers of risk and return in clients' portfolios? Is there something we do there? Do we have data? Do we have analytics that can help clients build better portfolios. And that's basically how we got into this area.

Got it. And just to appreciate the competitive advantage, maybe you could give us a flavor of the scale and infrastructure you're going? Because one of the questions we get often is, if suddenly companies are going to report more data, it's going to be commoditized. So how do you maintain your lead in that situation?

Look, I think -- so one, from a -- I think there is a, what I would call, there's clearly purely a scale and execution thing here, right? Everyone wants more data, more companies, more securities. I need muni bonds. I need asset-backed securities. So there's just a lot of just running on the treadmill to cover all of that. So there's -- and that involves investing in better technology, it's more scalable, making sure our methodologies are transparent and all of that. But I think, look, a very important point which I think is -- has been central to our success at MSCI is that is necessary but not sufficient. You -- I think they're probably -- the interaction of our researchers with clients and the quality of our commercial organization and our engagement with our senior clients, I think, is really important in this area, right? So because there will be -- as in any of these categories, there will be more data that is available for more people to grab. And so that will happen. And then there will be people who use clever technology to find that data and sell it. But I think the important -- the very important elements there are, what's your taxonomies for that data? What's the quality of that data? Who's cleaned it? Who's not cleaned it? Is it comparable? How do you think about the methodology? All those things. So the pure data on a stand-alone basis will have value, but it's the overlay of all of that, that I think is critically important. And related to that is, am I transacting or am I have a relationship with the counterparty who I trust has authority in this field and has quality standards and all of that, right? So I think all of those things will continue to matter. It is definitely -- like in any business, there's an execution element. There's a data coverage element. But I think there's also a broader context of do you as a firm have authority on this subject matter? What's your credibility? Who are your researchers? Do you understand the client context? And those things we believe are really important to our competitive advantage as well.

Got it. And it's clearly one of the big investment areas in MSCI. So maybe just some flavor on where that investment is going?

Sure, sure. So it's definitely going to research, researchers, human beings. It's going into data and technology, sort of split. By data, also typically means human beings who work in data who do a lot of the work to execute the ratings infrastructure and to parse the data. We're continuously changing the tires on the car, i.e., the infrastructure, the technology infrastructure that we have to manage all of that data has to keep pace because we're dealing with so much more information than we were dealing with 5, 7, 10 years ago. And then we can -- we also continue to invest in our client coverage organization. And I think that, that is both to a crude catalyst thing, which is no salespeople, no sales. But it's also -- those need to be high-quality people, right? So they -- I do think that the fact that we have informed client coverage people and that they -- they're not the authorities on the subject. Like the researchers are, but they have credibility, that makes an enormous difference in the growth store.

Got it. And just the climate piece, I mean, Henry, you and the company, and you've been pretty clear that, that you even called your segment ESG and climate. So just some perspective on why you think it's a separate piece. And I think as of the last quarter, it was $50 million, going 100%. Like what's the runway there?

Sure. So I think it's one of -- so there is clearly an overlap with climate with the E in ESG. The element which I think is discrete is that there is a lot of reporting, notably, and a lot of data, which is becoming increasingly necessary in either a regulatory, you could call it a strictly regulatory context or what I call it, a standard setting context, right? So there's both kind of companies' commitments to get to net 0 and how that is measured and tracked. There's reporting like TCFD. There are specific categories like physical risk, which, for example, real estate matters a great deal. So I think they do overlap. And clearly, they very much overlap to a degree from a client communication and interaction. But we wanted to separate them because there are discrete strategic drivers. And some of -- and while there are commonalities, they are sufficiently discrete, and it's worth separating them. And I think notably, if you could then pinpoint that as a very practical matter, in essence, the ESG business started with the notion of the rating. Now it's gone far beyond that, and people want the underlying data. They want all sorts of information on controversies essentially, whereas the climate topic doesn't have nor will it have an analogous kind of top-level number sort of that, right? So what that means is, I think, in the short run, I would say that it's kind of a little bit kind of the -- one is the opposite of the other, which is ESG started, in some regards, narrow, and it's going broad order. Climate is, in our world, starting narrow in the sense that you have certain specific reporting you need to do. But clearly, this topic will affect every industry and every company on the planet. And so I think for us, from a strategic point of view, we're not really faced with that challenge yet because we've got so much work to do and we're just again running on the treadmill. But I think in the next few years, it will be important for us just to make a reasonable judgment of saying, yes, we have authority in this field. But this is a giant topic, and we are, with rounding error, 5,000 human beings on the planet. So I think we'll have to be more disciplined about where we make our strategic bets going forward. But in the short run, we're not quite there yet. There's still tons of open highway where we can -- where we have growth upside.

Got it. I'm sure there will be some ESG questions. I wanted to pivot real quickly to the other -- like the private, primary real estate. There's been a lot of articles around private credit being raised, 1.3 trillion, et cetera, the strategic going after. But maybe just some perspective on where -- like your position there today and like what you need to do is to become more prominent there.

Sure. So look, I think our position is relatively modest. But the good news is everyone's position is relatively modest in this space. There are no huge providers in this category, right? There have been a lot, and it's quite fragmented. There's a lot of different players. Some CRM space, some are very specialized in a particular asset class. So if we go back to the premise that our goal is to help clients build better portfolio. So we were present in public markets. Initially, we were very heavily equity. Would we did more stuff in fixed income, and then the end investors started saying, well, you guys are very helpful in public markets, but you're not really helping me in private markets. So then we started to bring private data into some of our risk models. Looked slightly opportunistically that IPD was for sale. We bought that. We now have this RCA acquisition, and we have this minority stake in Berges. Berges itself is a very LP focused firm. So most of its revenue comes from the asset owner/LP. So that is aligned with our strategy historically. So if we play that out, I think we have a -- we're on a path, and the next few years will be telling to have an LP focused strategy. I think from the GP side, we're present in real estate. But honestly, we're nowhere -- or very little. Berges has some GP clients, but relatively few. So I think we -- that's the area where we have a lot of work to do. But we also think that there, our wedge or course of competitive advantage can be ESG and climate because there's an enormous growth in demand for ESG and climate information for private investments, for private companies. So we're kind of fleshing out that strategy now. So in addition to what we're doing with Berges, we think that we have a very interesting opportunity there, which I would hope that in the next 6 to 12 months, I'd be able to be more specific with you about. All right?

Got it. I'm going to keep asking. I'm going to keep asking that if there's any questions now, I think for us this evening. If anybody has anything, that they want to ask there. Maybe just staying on this topic, right? You guys typically -- you guys like to use the acronym MP&A. Meaning you like P for partnerships. Berges has along those lines, have done it a long way. But RCA was perhaps -- I mean it's still small for you, but a bigger one that you've done. So what was it about RCA and what kind of value does it add to that ambition?

It's a wonderfully simple business. It's -- say, crude, it's a pricing data stores that has become a leader in real estate. It's a data business. It's not conceptually difficult. It aligns well with what we already have in real estate. So for example, we do a lot of benchmarking in real estate. We'll be able to make that much more timely with the transaction data that RCA has. And they have some neat little lightweight technology that they use related to the enormous database of buildings they have. So I think it's just a -- I hope and believe it will be a -- it's not a complex or hard to understand. It's just -- yes, it's pricing data in a major asset class, which adds value to what we're already doing.

And is it fair to assume in these, I'll just call them, emerging growth areas for you, ESG, I mean in private, that that's where your M&A focus is going to be?

Yes. I think that's fair.

It's probably more outright versus partnerships?

I think so. So I've been -- so if you -- again, this is back of an envelope. Of all the little due diligence meetings, et cetera, I've been in the last year, overwhelmingly, they were either ESG and climate or private markets. There's a lot of small businesses in there which have a lot of hopes and dreams. Interesting now you mentioned. So we'll continue looking, and then maybe something will come up, right? But it's an interesting process. But I think, yes, you're -- so my -- I think your directional emphasis would be correct.

Yes. And one of the things I wanted to end with was, I should have maybe brought it up earlier, but it was just the -- you brought Jigar on for talent, as the CTO role. You have a partnership with Microsoft. You're going to be I guess you can call it iSaaS or SaaS. So just help us appreciate. I mean, you guys have already been delivering pretty good results, churning out new products, but this should enhance, how do you think of that?

No look, so actually, I had a meeting, and this is not like price sensitive information so I can say it. I had a meeting with Jigar yesterday preparing rating an offsite with our Board, right? So what are the 3 main themes? Enormous -- facilitating all forms of data acquisition using the most modern technology, because that whole category is becoming way more complex, getting money -- getting data from corporations, getting data from investors, getting data to the whole modernizing, the whole data infrastructure. 2, and this is linked analytics, but other things, to climate, enormous flexibility in data distribution, through APIs, through reports, through our own applications, through third-party applications, making it extremely easy for anyone who wants to get it, from Snowflake, whatever, anyone wants MSCI data in any way, they should be able to get it in the way they want it, right? And third is an integrated application building environment. Historically, we've been very siloed, that even within analytics, we had some of the legacy and new legacy RiskMetrics. Everything we're building is on a new common framework. But it's incremental. It's not like a giant big bet. So that will give us enormous more flexibility. So look, I'm pretty excited about it. And look, Jigar had to come in and do some heavy lifting for the first few years. He said he is the one who created the path of our cloud migration that we're on. But I feel like we're really at an inflection point where he's going to be able to have a much higher impact on the next year or 2. So we're pretty excited about all that.

And just to conclude that, does that help -- you guys have always been known for our Triple-Crown framework, the balance and the investments. So does this allow you to invest in more at a lower cost?

Yes. I think the reduction of duplication or triplication, if that's a word, doing something in one way rather than doing it 3 ways is more -- definitely increase efficiencies over time. And the marginal cost to innovate should definitely be lower, absolutely going forward. I mean those were things which -- I mean, I used to joke when I first took over the index business in 2011, that every time we'd ask for new index methodology, the technology team would come back and say, like 6 months and $2 million, to do a prune value index patent or something. So we've made enormous progress in efficiency in the last decade for sure.

Got it. And if there's no further questions. And the absolute last one I have for you is just broader capital allocation. You talked about MP&A. But a lot of things seem to be on the sale or at least cheaper than they were a month ago, such as you stop. So how do you think about balancing MP&A versus buybacks and so forth, sort?

Yes. So look, I think public markets have got cheaper more quickly than niche private company that has $50 million worth of revenue and is telling you that it's going to grow at 900%, some arcane corner of climate, and is telling you the $1 billion is a cheap price. I'm exaggerating a little bit, but not too much. But look, I think in that, notably -- so public markets, we can all see, I think in private markets, in the categories that we are -- want to be in, are still very competitive. So I think it will take a little bit more bad news for more value to emerge. So it's a double-edged sword, right? It's a double-edged sword. But I think, look, I joined MSCI just as the Internet bubble collapsed. So my first few years were in that environment. So look, we're resilient. I think we've got a very strong and disciplined team. And I hope and believe we will be able to navigate what could be a pretty choppy environment.

Got it. All right. Cool. We'll end it there.

So thank you so much and happy to all.

So thank you. I appreciate it.