MSCI Inc. (MSCI) Earnings Call Transcript & Summary

Good day, ladies and gentlemen. Welcome to the MSCI Second Quarter 2026 Earnings Conference Call. As a reminder, this call is being recorded. [Operator Instructions] I would now like to turn the call over to Jeremy Ulan, Head of Investor Relations and Treasurer. You may begin.

Thank you. Good day, and welcome to the MSCI Second Quarter 2026 Earnings Conference Call. Earlier this morning, we issued a press release announcing our results for the second quarter 2026. This press release, along with an earnings presentation are available on our website, msci.com, under the Investor Relations tab. Let me remind you that this call contains forward-looking statements, which are governed by the language on the second slide of the presentation. You are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date on which they are made, are based on current expectations and current economic conditions and are subject to risks and uncertainties that may cause actual results to differ materially from the results anticipated in these forward-looking statements. For a discussion of additional risks and uncertainties, please see the risk factors and forward-looking statements disclaimer in our most recent Form 10-K and in our other SEC filings. During today's call, in addition to results presented on the basis of U.S. GAAP, we also refer to non-GAAP measures. You'll find a reconciliation of our non-GAAP measures to the equivalent GAAP measures in the appendix of the earnings presentation. We will also discuss operating metrics such as run rate and retention rate, important information regarding our use of operating metrics such as run rate and retention rate are available in the earnings presentation. On the call today are Henry Fernandez, our Chairman and CEO; and Andy Wichman, our Chief Financial Officer. With that, let me now turn the call over to Henry Fernandez. Henry?

Thank you, Jeremy. Good day, everyone, and thank you all for joining us. In the second quarter, MSCI delivered very strong financial results along with an acceleration in run rate growth in both index and private assets are 2 key engines of growth in the company. We also showed strength in recurring net new sales across client segments and geographies despite continued challenges and sustainability. Meanwhile, record ETF and non ETF AUM balances in products linked to MSCI indices, help us achieve our best ever asset-based fee run rate. MSCI is building momentum in the second half of 2026 with a strong pipeline of opportunities an exciting AI fuel innovation. AI is enabling MSCI to move even faster in building new products, enhancing our existing solutions and strengthening our foundational mission-critical role in global investing and a rapidly growing ecosystem around our solutions. MSCI's Q2 financial metrics included organic revenue growth of over 12%, adjusted EPS growth of nearly 19% and adjusted EBITDA growth of 14%. We further demonstrated our commitment to driving attractive shareholder returns and our confidence in MSCI by repurchasing $147 million of MSCI shares at an average price of about $558 per share during the quarter and through yesterday. Our Q2 operating metrics included total run rate growth of 12%, fueled by ABF run rate of $948 million, growing 25%. This reflected record AUM levels in both ETF and non-ETF products linked to MSCI indices, supported by another quarter of solid inflows of nearly $40 billion in ETF linked to MSCI indices. Over the past 15 months, total ETF AUM linked to MSCI indices has grown by more than $1 trillion. During credible scale of MSCI's ABF franchise, and the recent volumes of inflows into products linked to MSCI indices is the ultimate endorsement of trust in our IP, research and standards. Turning back to our Q2 performance. MSCI achieved organic subscription run rate growth of over 8% with a retention rate of over 95%. This growth is enabled by our success in scaling our footprint across key client segments. Among traders and hedge funds, a category that collectively includes market makers, patients, broker-dealers and exchanges, MSCI delivered subscription run rate growth of 15%. Among hedge funds, specifically, we posted our best quarter on record with 19% subscription run rate growth and nearly $15 million in recurring new sales and recurring net new sales for a growth of 75% including 3 separate 7-figure deals in index analytics. So for example, MSCI won a 7-figure index deal with one of the world's largest multi-strategy hedge funds, covering our ETF link unknown ETF linked custom index modules along with our constituent AUM packages. All told, we more than triple our index recurring net new sales with hedge funds from a year earlier reaching $8.6 million in total. These results highlight 4 overlapping trends in the segment of traders and hedge funds for us. First, MSCI's indices are becoming increasingly embedded in the core trading and liquidity infrastructure used by active and passive investors alike. Second, the growth of systematic and quantitative investing has contributed to rising demand for our index content. Third, as traders and hedge funds have expanded their role in global investing, MSCI has gained new opportunities to make our index franchise more diversified and resilient. And fourth, as clients demand faster, more specialized indices and structured products and derivatives in larger volumes, AI is helping us accelerate our index production and deliver customization at scale. Shifting from traders and hedge funds to asset owners, we delivered 9% subscription run rate growth, along with our best Q2 on record for recurring net new sales at $8.4 million and growing 43%. For example, one of the world's largest pension funds -- public pension funds, signed a major new agreement for MSCI's private capital indices and expanded access to our private capital Intel solution. We also completed a 7-figure deal with a large sovereign wealth fund for our total portfolio solution, which includes private assets and analytics. Among asset managers, we posted 6% organic subscription run rate growth, along with 9% recurring net new sales growth. This includes a large deal with one of the world's largest asset managers for our enterprise risk and performance tools to support their ongoing initiatives to incorporate factors and enhance the risk reporting across asset classes. In addition, we continue making steady progress with our ETF and other tradable product solutions for active managers. During the quarter, we signed a handful of clients to support their launch of active strategies, leveraging MSCI's Index universe, research and IP. Overall, some of the biggest themes of Q2 included the rapidly expanding ecosystem around MSCI indices, our momentum in private assets and a rapid pace of innovation has enabled by our AI transformation and laser targeted acquisitions to unlock additional layers of growth. Turning more specifically to our product lines. In index, we delivered 41% growth in recurring net new sales, 17% growth in total run rate more than 11% growth in subscription run rate and a retention rate of more than 97%. In Private Assets, MSCI achieved 57% recurring net new sales growth with more and more pension funds and sovereign wealth funds embracing our total portfolio solutions. Earlier this month, we announced a new strategic partnership with UBS that will extend the reach of our private asset solutions and enable wealth managers to better connect high net worth clients with GP opportunities while promoting greater transparency for the entire investment ecosystem. By combining MSCI's independent data, analytics, models and AI power platforms with UBS's global client insights and expertise in alternative investments, we can help make private markets more understandable more accessible and enable stronger connectivities between GPs and the wealth channel. This private asset platform for wealth channels is only 1 example of how we are using AI to improve our solutions and the client experience. We already have over 1,000 clients using index AI insights, which we just launched in February. Meanwhile, hundreds of companies and end users are now accessing our total plant manager and private capital intel solutions through their preferred AI models. Innovation remains the lifeblood of MSCI's product development, but we're also expanding our capability through highly strategic acquisitions. Last month, for example, we announced that MSCI would acquire First Street, a leading provider of physics-based climate risk data and analytics enabling physical risk assessment across over 2 billion building infrastructures. Combining our respective tools will help us deliver the insight clients need as physical risk becomes a more immediate priority. We're also addressing the broader category of emerging risks, along with issues such as energy access, tariffs and supply chain and AI. Much of our product innovation in sustainability and climate is now focused on this emerging risks, which have become increasingly significant to investors. At the same time, MSCI working climate is separate and distinct from our work in sustainability as we are seeing the opportunities there. Sustainability faces persisting market challenges, and we do not expect that to change in the near future. Even still, MSCI remains the provider of choice in this industry and our sustainability tools continue to help us in other business areas, most notably in index. They are now close to $1.3 trillion in index fund assets benchmarked to MSCI sustainability and climate indices with over 1/3 of those assets benchmarked to our climate indices. MSCI also took several other steps to advance our AI transformation. In Q1, we brought into the firm Dinesh Gupta from Goldman Sachs to serve as our new Chief Data Officer and Global Head of Operations. In Q2, we welcome [indiscernible] from Intuit as our new Chief Technology Officer and Head of Product Engineering and we announced that [indiscernible] will lead the creation of a new MSCI office in Silicon Valley focused on AI, product engineering and technology. Given his background, Kashi is the perfect leader to help us maximize the benefits of AI across client segments, product lines and asset classes. We have also established a technology and data committee of our Board of Directors. Looking ahead, we remain confident in our pipeline. In our resource allocation, and in our ability to leverage AI. MSCI plays a key role in virtually every stage of the global investment process, and we are well positioned to save new opportunities for growth. And with that, let me turn things over to Andy.

Thank you, Henry, and hi, everyone. We're excited to see the large pipeline and strong momentum in key growth areas across the business with further accelerations in our index and private asset segments. As Henry mentioned, we have had several large client wins that reaffirm the growing ecosystem around our frameworks and solutions. Index subscription run rate growth accelerated to over 11% driven by a strong quarter for recurring net new subscription sales of over $28 million, which was up nearly 41% year-over-year. This reflected some large deals with traders and hedge funds across numerous modules, including our custom index modules. These help power the custom index organic subscription run rate growth to 23%, excluding contributions from the Compass acquisition. And the retention rate among hedge funds within our index product line was in line with the overall index retention rate at more than 97%. Additionally, we saw another quarter of very strong growth in asset-based fees, with the ABF run rate reaching nearly $950 million and growing 25% year-over-year. This growth was fueled by close to $40 billion of cash inflows in the quarter, driving AUM and ETFs linked to our indexes up to more than $2.8 trillion. The asset growth and cash inflows predominantly occurred in clients' products linked to our developed markets ex U.S. and all country indexes, some of which carry lower fees. Within Analytics, we had organic subscription run rate growth of 7% driven by demand for our factor content and factor solutions, where we continue to innovate rapidly. We are also seeing steadily growing demand for multi-asset class total portfolio solutions, including for front office use cases. Analytics organic revenue growth was 7% tracking with run rate growth. In Private Capital Solutions, subscription run rate growth accelerated to over 16%. During the quarter, we had solid traction across existing solutions like our transparency, private capital intel and total plan offerings. We also see growing demand with new offerings like our data platform and our asset and deal level metrics. The acceleration is supported by both our deep private asset insights and our strong multi-asset class total portfolio capabilities. Additionally, we are seeing success with Vantage having already closed a few sales of our diligent solutions offering. In real assets, organic subscription run rate growth accelerated modestly as we benefited from recent product and service enhancements. And we won a large deal to be the exclusive provider to a large property technology firm that will leverage RCA content and our global index intel offering delivered through Snowflake. In the Sustainability and Climate reportable segment, we drove nearly $6 million of new recurring sales and sustainability in Q2 and over $3 million of new recurring sales in Climate. However, cancels, particularly in the Americas, were a significant headwind as clients are rightsizing their sustainability spend. As Henry mentioned, we are capturing share gains in a consolidating market and are strongly positioned from a competitive standpoint based on our trusted reputation for quality, depth and breadth of coverage as well as the broad suite of interoperable solutions that we offer. Meanwhile, in Climate, run rate growth across MSCI product lines was nearly 12%. And we are seeing significant demand for physical risk solutions, which are increasingly woven into the investment process. In the quarter, we won several physical risk deals, including a large deal for a geo-spatial and asset location solution with the European bank. And MSCI's announced acquisition of First Street, a company which has developed a truly unique climate forecasting models, enables us to capture the increasing demand for physical risk and broader climate solutions across a wider range of client segments and use cases. Upon the close of the acquisition in Q3, we would expect First Street to add about $10 million of subscription run rate to the SNC reporting segment. Between the significant emerging opportunities and the pressure on parts of the sustainability franchise, we expect recurring net new sales to be roughly 0 to slightly negative for the combined sustainability and climate reporting segment across the next 2 quarters. As always, we remain intensely focused on driving strong capital returns to shareholders, and we will continue driving value creation through capital allocation, as we have done year-to-date between our disciplined repurchases and acquisitions. On expense guidance, we've seen strong AUM growth within investment products linked to MSCI indexes. These AUM levels have been higher than the assumption we noted last quarter. When we released earnings in April, we indicated that we would be towards the high end of the expense guidance ranges based on the assumption of relatively flat markets in Q2. Given the strong top line momentum and very attractive opportunities, we've been investing in key growth areas. Additionally, there are a few notable factors driving the increased expense guidance range. Firstly, the impact of the recent acquisitions with the largest impact expected from First Street. Secondly, performance stock-based comp and bonus accruals related to the significant increase in AUM and products linked to MSCI indexes. The adjustment to the D&A guidance is driven by the First Street acquisition and the increase in the interest expense is driven by the higher revolver balances related to the First Street acquisition and recent share repurchases. Importantly, we have the levers to flex investments up and expenses down based on the environment and business performance, which allows us to consistently deliver strong results. We remain well positioned and committed to delivering attractive profitability growth in all environments while investing for the long term. Overall, I'm incredibly excited by our growing momentum and a strong pipeline across the business. We are only just starting to see the benefits of the new and enhanced solutions that we've recently introduced and which are adding to our momentum. We look forward to keeping you posted on our progress. And with that, operator, please open the line for questions.

[Operator Instructions] Our first question comes from the line of Manav Patnaik with Barclays.

Henry, I guess, in your commentary, you talked about a lot of record new sales and categories and so forth. So just broadly, in terms of the environment for subscription sales, like looking forward, how would you characterize the momentum there versus maybe the numbers this quarter, I guess, fell a little short of expectations. Just curious on anything seasonal or any other characteristics you would call out?

We are pretty bullish on our outlook and you know me well, Manav, that I speak my mind and I basically tell exactly what I believe. And we have introduced a very large number of new products, 80-plus in the last 2 quarters compared to 40 plus in all of '24. Many of those new products are just beginning to show traction in sales because in our business, it takes time. It's an institutional budget, it's an institutional setting. So it takes time to go showcase it, discuss it, go through the use cases, go through the approval processes in our clients, et cetera. So that is why I have -- Dan and I have made the specific comments a few times in our remarks about a very good pipeline in the next few quarters. I think we need to look at this quarter in the context of the progression that we have seen in the last few quarters, starting mid last year, and I think we had 3 quarters of outperformance relative to consensus. And the feeling by us that our prospects and the pipeline are pretty good. And therefore, 1 quarter in a process like ours of reigniting much higher growth in the run rate, we're selling what we got and also with a lot of new products at launch, I think we need to be cognizant that there will be more variability quarter-by-quarter because many of the new products we're launching have high ticket items, high value adding. So they may -- if they fall in 1 line versus another line of the day, at the end of the quarter, then we flip from one place to another. Lastly, Manav, what I would say is we're very aggressive risk takers but we're a very prudent financial manager -- prudent financial management. The reason why we are indicating a higher expense guidance is not because things are being forced upon us is because we voluntarily feel that we will want to invest more in the business because we remain more positive than we have in the past. Alvise Munari, one of our key senior managers was telling us this morning is if we have the pipeline that we have to -- if we have had the pipeline that we have today, last year, we have felt a lot better, right, meaning it's -- a lot of things have changed. And of course, the overall environment is pretty positive among hedge funds and traders and given the active managers, I think we are making more progress than in the last few years because we're putting in new products.

Our next question comes from the line of Toni Kaplan with Morgan Stanley.

I wanted to follow up, Henry, on you just mentioned maybe higher volatility because of the higher ticket price products, higher-priced products. I was wondering if you could maybe talk about your having really good success selling to hedge fund clients. You mentioned the tripling of net new sales there. Does that inherently lead to revenue volatility in the future? I know right now, it seems like that's not an issue, but does that lead to volatility? And then maybe also -- like are you getting traction and adoption on selling data through MCP and does that lead to increased pricing this year, but then when you lap it in the future, does that sort of add some volatility as well?

Toni, I believe that there will be some, not a lot, but some volatility quarter-by-quarter as we ramp up growth. But I don't think that, that volatility will necessarily come from traders and hedge funds. Historically, when you come back quite a few years, there was a meaningful amount of volatility in that segment. And a lot of it was because there was a long tail of hedge funds that we were selling into, which would disappear or I go out of business or they would cancel. Our strategy today is much more focused on the largest hedge funds that are multi-strategy, much more stable than has been in the past. So that is one factor that I don't think will lead to volatility. The other strategic factors that I would want to mention is, for a very long period of time, we had MSCI in our index franchise, we're very focused on the assets, the AUM levels of our clients our price increases with the active managers were kind of correlated to that, our solutions were correlated to that. And of course, the ASPs were highly correlated to to the level of assets. What we have discovered in the last few years that there is a large trading and liquidity ecosystem around the AUM, which we were not strategically focused on as much. And that's what we've started to do in the last year or so, and we have started launching new products and the like. So I think that, that is a secular and consistent source of profitability of sales, of course, but profitability for us, and it's not like a yoyo, it doesn't go up and down. It's very secular, very structural.

Our next question comes from the line of Ashish Sabadra with RBC Capital Markets.

I wanted to drill down further on the analytics front. Particularly, you talked about really strong demand for factor content and factor solutions, but if you look at the subscription sales growth there, that was a bit soft. So I was just wondering any particular puts or takes that you would call out? Is it mostly around tougher comps? And how do we think about the pipeline and analytics going forward?

It's all lumpiness. The pipeline going into the second half of the year is pretty strong in analytics. And therefore, I would really advise you not to focus too much attention in this quarter's softness, so to speak, in the analytics results because it's very, very largely lumpiness from one quarter to the next.

Our next question comes from the line of Alex Kramm with UBS.

Hopefully, this is not a repeat, my phone just dropped. But I wanted to come back to the index sales, in particular from hedge funds because you did point out strong demand, and I think this was mentioned again just now in terms of the multi-managers, but there's obviously been a bunch of articles around how much money some of these firms are minting in terms of index arbitrage strategies, et cetera. So just wondering, do you think there's a large TAM for this? Do you think there's a lot of firms that you're talking to that want to get bigger in that space? Because clearly, there's money to be made? Or do you think it's a very concentrated group of folks that you can sell to here? And then hopefully, at some point, do you meet that demand, but maybe it's finite.

Alex, I think it's both. Definitely both as I was saying, probably when your phone dropped. The very strategic sort of breakthrough that we have had in the last kind of 12, 18 months of MSCI is that we used to sell to the traders and hedge funds as a derivative almost like we would take the products that we will sell to the active managers and sell it to them. And we started recognizing that in addition to the very large AUM levels of active and passive managed AUM linked to our indices. There is a very large ecosystem around that. trading ecosystem, liquidity ecosystem around that, that needs lubrication that needs products, data products and models and all of that to make it flow better, and we're the ones that can provide that because we help create that AUM levels. So I think the large hedge funds, we're definitely getting paid too little for the index arbitrage, right? [indiscernible] For sure. And there are a number of other hedge funds that are obviously wanting to get into that, especially given the recent good news about the profitability there. But there are a lot of other venues for growth in terms of custom index. One of the things we've been highlighting to our hedge fund clients is they are focused very much on the market cap index arbitrage, but 30-plus percent of the AUM of the ETFs linked to MSCI indices are not in market cap. They are factors and ESG and climate and many of them are more customized. So we're creating those data sets for them to do to the index arbitrage. Now remember, the index arbitrage also helps the active managers and passive manager, particularly [indiscernible] managers because somebody's got to supply the shares in that 1 last hour of trading in the quarter when people are rebalancing. And the people that do that are the hedge funds and the broker dealers. So there is a big ecosystem that we're just beginning to scratch the surface area.

Our next question comes from the line of Owen Lau with Clear Street.

Could you please add more color on the drivers of the fee compression for the asset-based fee in the last 2 quarters. The drop was quite meaningful for 2 quarters compared to last year. How much of that was because of your kind of like the tier pricing structure? And how much of it is driven by competitive dynamics? And how should we think about this fee rate going forward?

Sure, sure. Yes. So Owen, first and foremost, it is important to keep in mind that our primary focus is on driving overall run rate growth and revenue growth and maximizing the AUM capture with our ETF partners. And you've seen tremendous success on that front with nearly $1 trillion of AUM growth and 30% growth in ETF run rate over the last year, 25% overall growth in asset-based fee run rate and so that is our predominant focus. As we commented on with the year-end earnings, around the new BlackRock agreement, the extension of the BlackRock agreement. There was a change to the floors on certain products, which caused the drop in the first quarter of basis points. When you look at the second quarter, it was predominantly driven by tremendous asset growth and mix shift. And so we saw significant growth in AUM skewed towards developed markets outside the U.S. and all country products where we tend to have a wider range of pricing schedules, particularly relative to emerging market exposure. Correspondingly, you saw far less cash flows in emerging markets in the second quarter relative to what we've seen in the past year recently. And so there were a number of dynamics at play. In this case, it was heavily mixshift driven. I do want to highlight, and we mentioned this at year-end, we do now have lower floors on certain large products and we've got a somewhat dynamic framework built around the pricing. So the overall basis points are going to be dynamic and a function of how much growth we see and where we see that growth. And if you do see significant growth in lower fee products, you can see a higher contribution from mix shift as we saw in the second quarter here. The opposite can be true as well, where when you see a higher contribution from the higher fee products. You can see stability or even increases in the basis points. So it really is path-dependent here, but overall, our focus is on driving overall run rate growth and we continue to be very bullish about the opportunity here. And even over the last few weeks in the third quarter, we've continued to see exceptional cash flows in the ETFs linked to our indexes. And so continue to believe there's a long trajectory of upward movement there.

Our next question comes from the line of Alex Hess with JPMorgan.

Could you briefly refresh us how much -- what is your AUM level to end the quarter in non-ETF products? And then shifting to the active ETF discussion. I know you guys threw out some points there. But just maybe give us an update on how active ETF penetration is going. Should we expect more attach of subscription products in the back half of the year for nascent active ETFs. Any sort of dynamics about how that should flow through your P&L in the back half of the year and just the momentum in that business would be really helpful.

Sure. So the non-ETF passive AUM is around $5 trillion as of June 30. It continues to be an area where we see tremendous growth across a number of dimensions. The revenue growth can deviate from ETF growth because of a number of factors, including different AUM growth dynamics, less impact from inflows, contract adjustments through ups true-downs in certain cases, we can have mandates that shift their assets, which can cause impact to run rate and revenue, which is why you've seen some lower growth in non-ETF passive relative to the ETF growth, but we do expect this to continue to be an attractive longer-term growth opportunity for us. On the active ETF front, this is an exciting area for us. As you know, we've got a notable presence as a benchmark provider to many of the -- actually, most of the managers that are launching active ETFs, and we are increasingly having dialogues with them about how we can help them beyond just being the benchmark and play an integral role in the active portfolio construction through using our content sets, our tools, our analytics. And so we have started to get traction there. So we actually recently launched our active financial product license, which is a specific license to an active ETF manager where they have the ability to use our content as a key input into the active management of their strategies. And so we have had some wins on that front in the second quarter, and we are in active dialogues with many organizations to do more for them on that front. So this is something that's benefiting us both on the subscription side and we believe over time should help play a role on the asset-based fee side of the equation as well.

Our next question comes from the line of Kelsey Zhu with Autonomous.

Analytics margin was a bit softer than expected this quarter. Could you maybe talk about the main drivers there? And how we should think about the margin trajectory in the second half of the year?

Yes. As you know, firstly, I would say we don't focus heavily on the margin in any specific segment or even in a quarter. Our overall goal is allocating our investment dollars and our resources towards the highest returning areas. So I wouldn't read too much into one quarter's margin or expense growth just to provide a bit more color on analytics expenses. I would highlight that a year ago in the second quarter, we had a sizable contingent consideration reversal associated with the contingent consideration on the Fabric acquisition. That skewed a little bit the year-over-year expense comparison and ultimately, the margin comparison. We did also have, as I mentioned in the prepared remarks, we had elevated comp accruals and performance stock expense impacts, a chunk of those end up hitting analytics. And beyond that, there are factors like FX and capitalization in any given quarter that can cause the margin to swing around. But within analytics, as Henry alluded to, we continue to see very attractive opportunities, we continue to invest behind areas like or factor franchise areas like our total portfolio solutions integrating our private asset capabilities. But there are parts of the analytics where we are much more measured on our investments. But overall, as I said, I wouldn't focus too much on the margin or expense growth in any one quarter.

Our next question comes from the line of Craig Huber with Huber Research Partners.

I want to focus on all other private assets segment. What do you guys think these change here to sort of get out of this. You have about 8% subscription run rate growth this last quarter, yes, that's an acceleration from recent quarters. Although it's not strong as I think you think the potential is long term or what it used to grow historically for some quarters. What needs to change in the marketplace? Is it more the product? Is it the sales effort and sales team size or some of the change in the marketplace? Is it an education to the marketplace? What do you think is a change to accelerate that even further?

So Craig, in some much higher growth rate and all of the above. We're just getting started on the acceleration of private assets. And we took control of Burgiss on 3-plus years ago. It took us maybe 1.5 years to make sure that we were totally comfortable with the data sets, with the collection processes, with the existing client base and all of that. And then it took another year so to change the management team of the business. These kinds of people are not easy to find. So over the last, say, 18 months, we put a new management team and with, let's say, half a dozen to a dozen senior leaders there. We started innovating significantly launching a lot of new products. And all of that, at the moment, it's only beginning to show -- only beginning to show in the growth rate of what we call PCS. On real estate, I think that the approach we have been taking before, which was not the right one was we had a management team there and it was basically focused on all places, all things and all that. So we've brought in a great new leader to that space about maybe 3, 4 months ago. We're beginning to show the results of that to revamp the strategy. Real estate is a huge asset class, and there are a lot of subsegments of real estate, some of which are growing pretty fast, like private debt into real estate and infrastructure and some of which are challenged like [indiscernible] City office space, right? So it's a question of picking your spots and creating new products for that. So overall, we feel that the growth rate, so in saying all of the above is new products, new management, new management team, expansion into new client segments. So for example, in PCS, the older business, we were very much focused on the institutional LP, you saw our announcement on -- with UBS on focusing on the wealth LP. One of the biggest contributions we can make is creating transparency and valuations and private asset funds for the wealth segment, the wealth channel, that will significantly increase the allocations in wealth, and we will do that starting with our lead client, UBS, and talking to -- all the talking and subscribing all the big wealth managers in the world. So that's a significant opportunity. And then we have also taken significant steps of creating products and penetrating the GPs in which our run rate for private assets and GPs is extremely small compared to the potential that exists there, which is very, very large.