Hedge funds, asset managers, investors, wealth managers, banks, and others in the financial world manage billions of dollars. And in order to allocate their assets efficiently, they need access to credible and reliable data.

That’s where MSCI (MSCI) comes in.

MSCI is primarily associated with indexes such as the MSCI All Country World Index, Frontier Markets Index, MSCI Emerging Market Index, as well as other indexes that cover other categories such as small caps, fixed income, private assets, and others.

Aside from its indexes, the firm specializes in providing mission-critical investment research and data analytics on different asset classes. It caters primarily to asset managers, hedge funds, banks, insurers, investors, and the likes. At present, it has $21 trillion in assets under management (“AUM”) benchmarked to it.

MSCI offers multiple solutions such as fixed income offerings, private asset solutions, real estate data and analytics, wealth management, portfolio management, risk management, sustainability, climate, and rules-based index solutions.

The company made acquisitions earlier this year to bolster its operations. Among these are Vantager, an AI-powered due diligence platform, Compass Financial Technologies, an index provider, and PM Insights, a private markets data firm.

The firm generates its revenues primarily through subscriptions and asset-based fees. Since MSCI provides mission-critical data, the cost of switching to different providers becomes too high and time intensive, leading to high retention.

MSCI boasts quarterly retention rates of 95%. Meanwhile, the company’s run rate, as of Q1 2026, is at $3.4 billion.

The “stickiness” of the MSCI’s offerings has enabled it to grow its revenues in recent years. Revenues have nearly doubled from $1.7 billion in 2020 to $3 billion in 2025. Meanwhile, the company’s returns have followed a similar trend.

MSCI’s Uniform return on assets (“ROA”) saw a steep ascent, going from 59% in 2020 to 206% in 2025. Aside from posting strong returns, the company generated a Uniform asset growth of 16% last year.

MSCI currently trades at a Uniform P/E of 26x, just slightly above corporate averages. This valuation signals that the market has priced in durable growth while remaining mindful of market-specific trends.

That said, MSCI’s recurring revenue model, strong subscription retention rates, and global benchmark dominance support sustained earnings growth and high returns.

This could make for a stock that investors are underestimating.

Best regards,

Joel Litman & Rob Spivey
Chief Investment Officer &
Director of Research
at Valens Research

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