MSCI Inc. (NYSE:MSCI) and Moody’s Corporation (NYSE:MCO) will jointly create a solution to provide independent risk assessments for private credit investments at scale.
As the private credit market continues to evolve and grow, the need for consistent standards and better tools has “become essential for investors to assess, compare and communicate the risk of their investments.”
MSCI offers a rane of private capital data, sourced from original documents provided by managers, “including data on more than 2,800 private credit funds and 14,000+ individual underlying companies.”
As part of this joint offering, Moody’s will “extend its EDF-X models into MSCI’s private credit solutions.”
EDF-X delivers risk insights using credit models and early warning signals to help investors “assess the financial strength of public and private companies globally.”
The combination of Moody’s flagship EDF-X credit risk modeling solutions with MSCI’s universe of private credit investment data “will produce proprietary third-party risk assessments for private credit investments available at the underlying company and facility level using transparent metrics.”
Rob Fauber, President and CEO of Moody’s said:
“As the private credit market evolves, investors are looking for trusted independent assessments to help benchmark credit risk and inform investments and monitor portfolios. Our partnership with MSCI will play a critical role in providing these insights, helping market participants make informed decisions.”
Henry A. Fernandez, Chairman and CEO of MSCI said:
“The rapid growth of private credit continues to transform the global investment landscape while highlighting the need for increased transparency, consistent standards and independent risk assessment. We are proud to partner with Moody’s to deliver innovative solutions that can help drive greater clarity and confidence.”
The solution will be distinct from the services “provided by Moody’s Ratings, the credit rating agency, to the issuers in the private credit market.”
In a world shaped by interconnected risks, Moody’s data, insights, and technologies “help customers develop a holistic view of their world and unlock opportunities.”
With experience in global markets and a workforce of approximately 16,000 across more than 40 countries, Moody’s gives customers “the comprehensive perspective needed to act with confidence and thrive.”
As noted in the update, MSCI is a provider of “critical decision support tools and services for the global investment community.”
With expertise in research, data, and technology, they aim to power better investment decisions by “enabling clients to understand and analyze key drivers of risk and return and confidently build more effective portfolios.”
They reportedly create research-enhanced solutions that clients “use to gain insight into and improve transparency across the investment process.”