Good morning, everybody. Thank you for being here on Day Two of our Americas Select Conference. We appreciate your attendance. For those of you who don't know me, my name is Manav Patnaik. I'm Barclays' Business and Information Services Analyst, and we're extremely happy to kick off Day Two here with MSCI. We have Baer Pettit, who's the COO of the company. So, Baer, thank you for being here again. Always happy to host you. So I guess, Baer, the best place to start, obviously, is the first quarter results.
Sure.
It was, you know, there was a little bit of element of surprise for a lot of us, and I think.
Sure.
We saw that in the stock reaction.
Sure.
Maybe if from your vantage point, if you can just summarize what happened there.
Yeah.
Maybe what elements were surprised to you as well?
Sure. So, look, by the way, nothing says relaxation like coming into a windowless room at 9:00 A.M. on Monday and having a spotlight put in your eyes. I can't see any of your faces. I don't know if that's good or bad. But, anyway, yeah, so look, clearly it was a disappointing quarter. You know, there was one, you know, material component, which was the large bank merger, which we discussed. But nonetheless, I think notably, so I would say, you know, suboptimal sales, but, you know, not bad sales, and, and disappointing cancels. So, you know, so, so I would say two, two, two things. One is, you know, we're very focused on remedying that. And, you know, we have a lot of tactical plans in place to ensure that we, you know, get in, into a better direction in terms of our results.
Equally, I really do not want this to sound complacent at all because we're not, and we never, we are not, and never have been in my almost 25 years at MSCI, complacent. We're not a different firm than we were the previous quarter, right? We're not a different firm. It's not like our clients have changed. It's not like our strategy or our use case has changed. So I think that, you know, we need to sharpen the pencil in a few areas. We need to accelerate some new product development across pretty much all the product lines. You know, we need to ensure that we're, you know, staying as close to our clients as possible as always. So all of those things are, you know, central.
You know, we're very focused on trying to deliver the next quarter, you know, more strongly and the second half of the year more strongly. But I, you know, I was thinking about this on the way in, and I was actually reflecting on the, you know, the changes in the U.K. from quarterly reporting to, you know, semi-annual. And I think that the issue that we have just generally is, and by the way, I'm a big believer that quarterly reporting increases companies' performance. So I'm not complaining about it. And I'm totally in favor of the transparency, and I think we're extremely transparent. But it can make things very noisy, right? And we saw the previous quarter, you know, the stock had popped up dramatically.
and so I just think, you know, I would advise a little bit of caution.
Mm-hmm.
Of not overreacting to a given quarter's numbers, you know, whether for the good or for the bad because we've got a pretty steady franchise, and I think we've got pretty tough financial management. So, you know, generally speaking, I, I think we can, you know, steady the ship and get back to some stronger numbers.
Got it. Maybe just to follow up a few on a few points. So on the elevated cancels.
Yes.
That was called out.
Yeah.
So to your point on quarterly reporting that.
Yeah.
So was that just cancels that could have happened in the fourth quarter and second quarter, happened in the first quarter? Like, how many of these were known and just.
Yeah. Look, I think it's a bit of that. I think there's some elements. Look, there's always the nature so still today, the overwhelming number of cancellations that we take are client events. And client events, by definition, are not that predictable. Shutting down a strategy, you know, clearly the big obvious one was the merger. So client events are not necessarily predictable, and they don't necessarily come in a given quarter. So there's a bit of a random element to that. I think there's also been, you know, some cost pressure on long-only managers. And in particular, I would say there's been increasing differentiation.
You know, with the numbers that we showed, in the quarterly report related to the size of the client, you know, we see that those larger clients that use more of our products have significantly higher retention rate. And the smaller medium clients who may have bought something, and then they're not quite sure whether they're gonna use it fully, and then maybe they're under a bit of cost pressure, that's where we have seen more cancellation pressure.
Got it. And then, you know, since you pointed out the suboptimal sales, I guess.
Yeah.
And you referred to asset managers under pressure.
Yeah. Yeah.
You have a very good vantage point into what's going on there.
Yeah.
Maybe just give us a flavor of, like, what are the challenges?
Sure.
These the buy side is facing.
Yeah. So look, I think it's quite different across, you know, yeah, as I said, it's a very differentiated landscape. We've had more discussions in the past with clients of the type of, you know, "We're under pressure now. Give us a bit of breathing room, and then we'll maybe put an increase next year or the year after," type of thing. And we have structural contracts like that. So I would just say generally that, and this goes to a point that we've made previously. We're something of a lagging indicator to markets in terms of our subscription.
And this goes back, that pattern goes back a long way, including I remember at the very beginning of my period at, you know, MSCI where, you know, after the bubble burst in 1999 and in 2000, we had a great few years, and then we came under pressure in 2003, actually, when the markets were reviving. So, so I think there's a little bit of a lagging effect from last year's budgets. There are some idiosyncratic client events. And I think that's really, you know, the sum of it. I don't, I don't think that there's. I'm not seeing anything, you know, more than that at present that I.
Yeah.
Kind of that sticks out, right? Yeah.
So, I guess the way to try and summarize it would be you think it's more cyclical, not structural, and then.
Well, no. I think the area where we could have improved is, you know, we've had, I would say, a less new product coming to market than I would have liked.
Okay.
You know, we had a new head of index come in at the end of the year. I think we're gonna see a lot of innovation in index, and that includes, you know, across a variety of things, new types of content, focusing more strongly on use cases. I think our what we can do in custom indexes is, you know, just at the beginning, and we did a new, you know, an acquisition of Foxberry there, a London-based firm who I think is really gonna help us accelerate that. I think in Analytics, we have a really interesting pipeline of stuff we're bringing out. I think what I would call our first significant AI product in analytics in June, which allows clients, especially those who are using us across their entire firm in risk and portfolio management, to gain, you know, stronger insights much more quickly.
Look, that's, that's you know, that's a very new development. Clearly, there's some interesting parts of what AI can do. There's also a little bit of hype as to what it can do, but we're excited about that launch. We continue to be very focused on the mostly right now on the regulatory opportunity in ESG and Climate, notably in Europe. And there has clearly been a bit of a split now between the U.S. and Europe on ESG. But on Climate, I would say the separation between the U.S. and Europe is overstated or is not so obvious. And we're actually seeing quite a lot of focus on Climate by, you know, the large pools of capital in the U.S. and, well, obviously in Canada, very much so in Canada.
Yeah.
But in large pension funds and in, insurance companies in the U.S. as well. So I think we got a healthy pipeline there as well.
Got it. And just to go back to the quarter, I mean, you know, naturally.
Yeah.
When you have one of these bunched-up quarters.
Yeah.
You get the question of, "Are you losing share?
Right.
So it just anything you can add there.
Now, look, we don't, we look. It's, it's, it is the most imperfect of data because not every time do we get told. It's not like clients show up, and they sometimes tell you. Sometimes they don't. But going back to the observation I made at the beginning, the overwhelming number are client-driven events, are still client-driven events. So we don't have any observable, you know, any factual evidence that we're losing share in any particular category that we're aware of, so.
Got it.
Yeah. Yeah.
And then, you know, you also said you have tactical plans in place to.
Sure.
You know, fix this. And.
Yeah.
One of them is clearly this new product pipeline.
Yeah, yeah, yeah.
You have to do.
Yeah.
What else is part of the.
Look, I mean, there's a lot of things. So, for example, I think we're being very creative. You know, generally, the sell side in capital markets are doing pretty well right now. There continues to be a lot of interest in structured products, in a lot of data for trading. You know, the type of sales we can get in index often involve specialist data, historical data, you know, things of that kind. You know, there's a big focus on expanding what we're doing in wealth. I, you know, I think just across the board, we're trying to both continue to invest in the longer term, but and we actually have some, you know, and I'm cautious talking about it because it goes exactly to my quarterly earnings number.
But we've actually have some very interesting, pretty material deals in ESG in the pipeline as well. So I think just across the board, you know, we're very focused on continuing to do bring new ideas to clients, you know, across the range of what we do. Yeah.
Got it. So maybe we can shift gears and talk by segment since you brought up.
Sure.
ESG toward the end. Let's start with that one.
Sure.
You know, I think the growth obviously has decelerated.
Yeah.
Maybe just for perspective from your standpoint, obviously, I don't think anyone expected you to keep up the 50%.
Yeah.
It did seem to decelerate faster than maybe we all expected. What happened?
Yeah.
From your perspective?
Look, I think clearly, and so I think the way we're separated is into a few different categories. One is the slowing of the issuance of ESG-related products for retail investors. So that slowed dramatically. So and clearly, we had the strong performance of those funds a number of years ago in the pandemic. Their performance got a little weaker. And so whenever that slowing of new funds, slowing of new ETFs occurs, that's gonna be a challenge for us, right? Now, I'm not sure it you know, it's too early to tell whether that is, you know, just a small trough we're in and it will be revived. But we still have a lot of ongoing discussions, notably in Europe, about bringing new products to market. So that's one thing.
I do think that, you know, the interest in, and I would say that that product issuance story is true both in the U.S. and in EMEA. Actually, we've done well, but on a much smaller, you know, starting point in Asia on ESG-related product. And then I would say that, you know, to put it crudely, within the absence of the regulatory drivers that are present in Europe, you know, a lot of the clients had been, I guess you could say, on a kind of an ESG data and services buying, you know, sort of binge during the previous years. And a lot of them are now in the process of integrating that data into their investment process.
And so I don't think it's actually the fact that people are not using this data and information, but I do think it's a moment where people are thinking harder about how they wanna use this in the investment process, what elements are most important to them, what elements do they wanna make their personal decisions, does their firm wanna make a judgment about, and what elements do they wanna rely on a third party for information. So all of those things, I think, are going on right now. And, you know, clearly, we're close to the market, and we speak to our clients about it. But I'm not entirely clear what, you know, the degree to which this will, you know, stay slow.
I think there's plenty of evidence from our client interactions that, you know, this will remain a very attractive growth category for us. And we have in almost all of our product lines, including in index, by the way, had periods of where things slowed down before they, you know.
Accelerated.
Growth accelerated again, right? So that's kind of the best overview.
Okay.
I can give, you know, but we'll have to, I think. I'm bringing it back to your comment at the beginning. I think the main thing we wanna try to do is, you know, in quotes, "show you the money," right? So we have to.
Yeah.
We'll have to figure out how what we deliver in the next quarter and the quarter after that and the quarter after that.
Got it. And just to follow up on the comment on.
Yeah.
You know, the regulatory distraction, I guess.
Yeah.
Earlier, you said, you know, one of the new product pipelines you're working on.
Yeah.
Is ESG regulatory?
Yes.
So, what kind of, you know, just some flavor of what the product is?
Yeah, yeah, yeah. So for sure. So look, both for ESG and Climate, notably in Europe, you know, regulation is quite a good thing for us. It's not a bad thing, right? So I think that there are a lot of, you know, and so the way I would say it is, if the nature of regulation is such that one can have a debate about it, you know, about a particular approach to a particular topic, but by definition, it's a necessary thing to do, right? So those, notably, the EU directives on, you know, on sustainability generally are relatively prescriptive and require a lot of work from the client and a lot of justification of their actions.
And by the way, I would say not just in the EU, but also, for example, recently, in Australia, the regulator has become, you know, very focused on what they refer to as greenwashing, which, again, we don't have enough time to get into that whole debate.
Right.
Right now, whether it's greenwashing or not. But let's just say that they are very focused on being very narrow and very prescriptive about how certain categories of fund activity are placed before clients. So quite literally, in the last few weeks, we're bringing out some specialized products just for Australia related to various regulatory disclosures. That's just but one example. There's actually regulation coming in in Japan as well relating to this topic. So all of those things are very positive for us, because, you know, people need to create transparency. They need to prove that they've sourced the data adequately. They need to prove that the data comes from a reliable source, that's reputable. And all those things are good news for us.
Got it.
Yeah.
You know, in terms of the geographic divide you were talking.
Yeah.
About, you know, I think in your numbers, EMEA and APAC are growing strong, double digits.
Yes.
And then America's is growing 9.
Yes.
From your perspective.
Yeah.
Just a flavor of, like, is it just Florida, Texas? Like, what's, what's, what's the real issue in the U.S. that's playing in your business there?
Well, look, barring a few large asset owners who are extremely important to us and we value, we're slightly underweight Texas as a state for MSCI. But those are very valuable clients. No, but, joking aside, I think the main thing in the US is the point I made earlier. It's the slowdown in the issuance of ESG-related products. I think that's. Research and our head of ESG Research, about this. The thing that we're gonna become much more pointed about is and it's ironic that we have been in various articles over the last five years sort of in quotes, "accused of this," which is that, you know, our version of ESG or where I could say we've been the leader is about financial materiality. It's 100% about financial materiality.
I think, amidst a lot of the, you know, the financial noise and the, you know, surrounding the topic, you know, these, these and, and so it's always been about financial materiality, and the G or the governance component is always been the most heavily weighted in our score, right? And, you know, some of you may have noticed that, you know, Mr. Musk, who called, you know, ESG a scam and the devil, which is an interesting way to refer to it, you know, had some corporate governance challenges in a court in Delaware recently, right? And so, so these things we believe these things to be very material to investors.
We don't think that. We have no "woke agenda." We just think that there are significant extra-financial material elements that can affect a given investment, whether it's a stock or a bond's performance. And, you know, we continue to believe that those will continue to have an effect on the performance of securities. And, you know, so that's the furrow that we're plowing, and we'll have to see, you know, how that plays out in the quarters ahead, right?
Got it.
Yeah.
And then maybe one more, like, you know, Climate is within your ESG run rate.
Yes.
It's almost.
Yes.
20% of it, growing.
Yes.
40.
Yes.
But Henry mentioned that he thinks Climate could be, you know, even bigger than ESG overall.
Sure.
Just your take on.
Sure.
What drives that?
Sure.
Yeah.
Sure. So look, I think the Climate category is a little bit linked to what I would call disclosure, is more linked to disclosure and materiality. And we look, we do this ourselves as a U.S. public company, right? So we, we have corporate responsibility, and we make disclosure about, you know, our own carbon footprint, etc. There was actually a news story that just in last week, which by the way there were some weird interpretations of the story, which I don't think are, you know, relevant, but that CalSTRS had delayed slightly their Climate reporting. So all the underlying Climate data that CalSTRS use for their reporting is from MSCI, right?
So we're in a world where a very major pool of capital like CalSTRS feels they need to make a press release if their Climate reporting is slightly delayed, right? So this is where, this is Henry's point, is, like, we cannot see a future where all these major large pools of capital will not be significantly focused on Climate reporting. And there may be some exceptions to that rule, but certainly from, you know, our vantage point, it's the case, right? And, you know, next, I was mentioning to you before we, you know, started here today, I'm going off to, I'm doing a trip to Australia and Singapore in a few weeks' time. We're running a Climate conference in Singapore.
And, you know, look, I've lined up to meet with all the biggest investors in the region, and there's enormous interest in this topic and also enormous concern about how do you track this data, you know, adequately for a, you know, we'll call it choose a number, a $500 billion portfolio with, you know, hundreds of thousands, if not millions of positions in all sorts of instruments. So the mechanics of understanding Climate risk, understanding Climate exposures in securities in portfolios, we 100% think is not going away. And it's a complex topic. And, you know, we wanna be there helping our clients deal with it, you know?
Got it. So clearly, the long-term targets, and your belief in ESG stays. So maybe just a final question.
Yeah.
In terms of your breadth of offerings that you have, do you have the portfolio you want, or should we expect to see a lot of kind of M&A over the next many years in this sector in this?
Yeah. It's a good question. You know, look, we will continue to look at things to maybe bolt on in this area. You know, we looked at a company who shall remain nameless in the last few weeks. And honestly, you know, the quality of what they were doing, we were kind of underwhelmed by, right? It's so, so the bar is pretty high here in terms of data quality. You know, we continue to modernize our data acquisition infrastructure, including some big changes we're using. This is actually really interesting. This is a very interesting use of AI. So if you're gathering things, you know, like controversy data in ESG or a variety of Climate data, we've got great uses for AI in that.
So we may have some bolt-on acquisitions, but I think we also have, you know, we're pretty clear in terms of the work being cut out for us with our current resources.
Got it.
Yeah.
If we move segments a little bit, you know, the other buzzword out there is private assets, private credit.
Sure. Sure.
You know, you've made an acquisition of Burgiss. There's some other.
Yeah.
Stuff going there. So maybe, you know, a lot of our companies are talking about that sector, trying to go after it.
Yes. Yes.
You guys tend to be very focused, very targeted about it.
Yes.
From your perspective, what exactly within private are?
Sure.
Should we hold you accountable?
Sure. Okay. So let's just be very specific, okay? So there's basically currently, in what we have, what you could call two layers of services. One is total private markets portfolio coverage, which today is generally, you know, a product for investors rather than managers, so for LPs or asset owners rather than GPs. So that is the core of what Burgiss does. It does that also both for the total private market portfolio, and it integrates it into the broader, you know, portfolio, which is our, you know, our goal is to, you know, not our goal. Our actions currently are to integrate that so that an asset owner or, you know, a wealth organization can have a total view of all their investments across public and private markets.
So that's the core of what we have there from Burgiss. Then we also have a strategy to build out in, you know, in individual asset classes. So we have clearly quite a lot of stuff in real estate, which, where the market is under challenge right now. So, you know, you don't need a PhD to figure that one out. But I think we're very, you know, we're happy with the range of products and services we have there. It's just that the commercial real estate again, it's a, it's a, it's a fragmented market. Some parts of it are doing well. Some parts of it are doing it less well. But, but, you know, but in short, we have a, a, a range of real estate-related services, you know.
And what we wanna do is to do the same, build out more products and services discretely within, you know, private equity with its various subcomponents, in private credit, you know. And there's a lot of interesting overlap between what we can do with private credit and debt and public credit and debt, and then in other, you know, asset classes like infrastructure. So in essence, it's both the portfolio of private markets and the individual asset classes. Those are the solutions that we're trying to build out.
Got it.
Yeah.
And I think the last few quarters, Burgiss was growing in the teens and the mid-teens.
Yeah. I think 17% run rate.
So what's the growth drive? Is it just penetration, or what's the?
Yeah. Overwhelmingly penetration. Overwhelmingly penetration. So I think we, you know, it's still very much a U.S. company. Interestingly, we've got some, you know, we've got some big, you know, we've got some big Asian asset owners who use it. We've got a few in the, you know, in the Middle East. I think they're, you know, I think there's, I think there's a lot of upside for us improving that service. I think there's actually, you know, we get paid a relatively modest amount of some money for the value we create. So I think we can create both more value for our clients and monetize more of that for ourselves.
but, you know, so I think there's just a, you know, and for example, we were having strategy meetings all this week, actually, or the management team yesterday, today after I finish here, and tomorrow. And we were discussing private credit, quite literally one of the last things we were discussing yesterday, last night. And, you know, we're actually, you know, so in order to provide more granular and insightful, you know, private credit analysis, we need to basically go and gather more data, often directly from GPs, you know, with the support of the LPs. And we find so far in the work that we're doing that, you know, it's been very positive, right?
And then I think the other thing on top of that is we want to make a much more significant presence for ourselves in benchmarking and indexes within private markets. So there's generally, you know, an absence of quality benchmarks. So we've you know, it's part of a kind of due diligence where we've taken over the what Burgiss had there in terms of benchmarking. We wanted to, you know, make sure it's MSCI standard, which, by the way, to be fair, it mostly was. So we're gonna be rebranding those MSCI. And those are fund-level private market indexes. Now clearly, within real estate, we even have asset-level indexes too. So we've got very transparent, granular level on real estate down to the asset level.
We hope with time that we can do the same in other markets in private equity and because we have the largest database of, you know, basically, exhaustive, not cherry-picked 'cause it's the LPs portfolio. So it's not a selective group of funds, which some GP is trying to push as being the best performance. We have an exhaustive database and a lot of history, you know, on all this information. I think we can do a great job of bringing more transparency to the market there.
Got it.
Yeah.
And so if I had to make two conclusions.
Yeah.
That corrects me from wrong. One, it sounds like this would be an area where you'd still probably like to do a lot more M&A to bring in capabilities. And then two, it feels like ESG was in the mid-2010s where it's probably a little bit while longer before it can really explode.
Yeah. Look, it's I think it's always, you know, a little bit difficult to make excessive extrapolations between asset classes. But for sure, you know, the way that I see it is right now, there were historically a bunch of sort of modestly sized, independent companies providing services to the private markets. Some of those have already been bought by, you know, whatever you wanna call, someone like MSCI, medium-sized, medium to whatever - depends who you compare us to - you know, firms who have more capabilities. I think that will accelerate. So I think that there's gonna be you know, a large opportunity here. But it's also these you know, these markets have to be made. It's like in ESG, you know, we had to be bold. We had to create new services.
We had to create new value for clients. So for sure, we don't take it for granted that there's kind of a natural biological evolution of the market, which will give us this opportunity. I think we have to go create it, right?
Got it.
Yeah.
You know, you mentioned you have troves and troves of data, basically.
Yeah.
you know, that naturally brings the question of Gen AI.
Yes.
You know, last year, I think you mentioned you had, like, 13 pilots or something.
Yes. Yeah, yeah.
Going on. You just talked about your first AI analytics release.
Yes.
Just your latest thoughts on.
Yes.
You know, you also said it's real, but there's a hype. So just your latest thoughts.
Yeah.
On what MSCI can do with it.
So look, we're using the area where for sure we are having the most success is, you know, what I would call behind the scenes in data management, operations, quality control, and even things like in you know, making our coders more efficient, right? So it's generally, it's a good story, but it's more of a doing getting a better outcome in an existing category rather than transforming the category, right? So it's making a certain category of data more accurate, making it easier to get that data, making it faster to get that data, having fewer humans involved in cleaning it, you know, things of that kind. And I think that's 100% what AI is great at.
Then there is a sort of what I would call the thing we're doing in analytics is sort of a halfway between that and the third category. So what we're doing in analytics is basically creating insights out of enormous amounts of portfolio holdings so that you don't have to literally be like trawling the equivalent of trawling through a spreadsheet or a report and with a, you know, highlighter pen. So that's also AI is very good at that and framing for you, you know, framing for you correlations or linkages that you might not have seen. The last category, which has proved trickier so far, is what I would call fundamentally, look, re-altering a category, how you think about it in investments. So I think we're clearly looking at how we apply it to some of our risk models.
We've had modest, you know, sort of gains there, I would say. So I think really that's the category that I would hope that we'll see more of, you know, in the next year or so is where can we, you know, are there categories of investment challenges where AI can make us see an investment topic from a different angle, like a new perspective.
Okay.
That we might not have seen from yet. We don't, we're not quite there yet. But we've got, you know, we've got a number of things going on. I do think that the release of AI Insights will be really critical because it will be then putting this in front of a lot of clients' hands. And I think that process is really important to get clients' feedback. And I think, look, the other thing, and we were having this discussion internally the other day. I think that there is a sort of an excessive focus on people wanting a whiz-bang type of almost gimmicky response to AI.
I think what's really interesting - and I was pushing our research team to do this - is I think, you know, what I hope we're gonna do when we release this AI Insights is accompany it by some white papers which say, "Look, what can you really expect where AI can help you a lot in these categories and where you can maybe accelerate what you do? And what do you have to be cautious about?" So I think it's, it's like I think there will become less of a, you know, what I would call this first phase has had a little bit of a hype and a little bit of gimmicky stuff. But I think we will become more thoughtful about AI, and that's when we'll start to really get a lot more value out of it, right?
Got it. Okay. You touched a little bit of it on analytics, but maybe in the interest of time, let's end.
Sure.
With index.
Sure.
So, you know, the AUM piece or the ABF piece.
Yes.
I think we all understand.
Yes.
You know, it's kind of a market call.
Yes.
But on the index subscription side, so maybe the first part is, you know, I think last, last quarter, the run rate.
Yeah.
Was 9.3. The first time.
Yeah.
It's dropped below 10 in a long time.
I know, I know.
Is that just the elevated cancels and stuff?
Yeah.
Are you worried about that?
Yeah. So look, I don't wanna brush over ABF, right, because or just generally what I would call the non-subscription side and I will come to the subscription side.
Yeah.
In a moment. But look, I think we've got some really interesting opportunities there. The category which in the U.S. and elsewhere is being branded as active ETFs is in some regards literally that. It's an active fund which has become transparent. But it also has elements of more kind of like a structured product type of thing. It's the sort of thing that might be wrapped as a structured product for wealth distribution. So we've got some really interesting first steps there in working with clients on active ETFs, which have things like, you know, 70% exposure to an index and 30% exposure to some kind of a, you know, an income strategy. So I do think that there's a lot of interesting stuff happening there.
And in particular, the work that we're doing in wealth, which sits in analytics, which is, you know, helping wealth organizations with model portfolios and building those, I think will have a huge impact on index and index, you know, products. So then coming back to subscription, look, I, for sure, it was one of those things that, you know, for, after a while, we were gonna, you know, we were saying, "Look, at some stage, this number's gonna go, you know, below 10." And, you know, so it's a little bit of a, you know, magic of round numbers sort of thing. You know what I mean? Like, if it had gone from whatever it was, 11.3 to 10.7, I don't think there, you know, it's not the same thing.
But I think, look, I don't think we're in a funk. It goes back to my very beginning comments today. I don't think we're in a different world. I don't think this is a different index business. It's a great business. It has great growth characteristics. We're gonna be bringing some more products to market. Like, as I said, we've had some softness, particularly with some of the long-only managers. But I don't think we're in a—you know—I don't think this is, like, a paradigm shift. I don't think we're going into a different world with index subscriptions, right?
Got it. And so then maybe just to end with the index subscription.
Yeah.
Let's just say it's a 10% grower.
Yes.
What are the components of that 10% that, you know, will keep driving that growth?
Yeah. Look, I think the thing that we're trying to do now, which is, you know, also both, I would say, a little bit from our own something our own philosophy, you know, our own mindset and a little bit of investor feedback and a little bit of client feedback is, you know, ideally, we want to, you know, we don't want the percentage of price increase to keep, you know, pushing up, right? So we wanna steady that a bit. Look, there was the sort of inflationary moment when we moved the price, you know, the price increases up a bit. You know, it's one of those double-edged swords. It's like, you know, it's one of those things, like, such a shame that you have so much pricing power, but imagine if we did not, right? So it's a little bit of a double-edged sword.
And so I think we want to keep focusing on innovation, bringing new products to market. But I think also in index, then to continue to expand in new client segments is enormously important. The wealth part of the thing is extremely important. We've actually had great growth from hedge funds in index. You know, we continue to have strong growth on the buy side, excuse me, the sell side, you know, in capital markets generally, and with, you know, with asset owners. So I think the key thing is we both need to continue to innovate in terms of content, and we need to diversify, you know, then continue to diversify the client base, right?
Got it.
Yeah.
All right. We're just about out of time. So, Baer.
Yeah.
Thank you so much for being in.
My pleasure.
Thank you to you as well.
Thank you.
Thank you.
Thank you very much.