Index provider MSCI announced on Monday its plan to complete the acquisition of the remaining 66% stake in Burgiss Group, a prominent New Jersey-based data and analytics solutions provider for investors, in a cash deal valued at $697 million. The move marks a strategic expansion for MSCI into the private asset data analytics realm, leveraging Burgiss’s extensive dataset covering more than 13,000 private asset funds across the globe. These funds collectively represent a staggering $15 trillion in cumulative investments spanning 195 countries.
In the midst of subdued deal-making activity attributed to elevated interest rates and the consequential liquidity drought, the acquisition of Burgiss Group by MSCI comes as a noteworthy development. The acquisition aligns with MSCI’s strategic growth trajectory, allowing the company to fortify its position in the private asset data analytics segment, which holds immense potential for transforming investment strategies and decision-making processes.
Global mergers and acquisitions (M&A) volumes have faced a significant decline since 2022, plummeting by 39% to $1.38 trillion during the first half of 2023, according to data from Dealogic. This slump has been exacerbated by the ripple effects of higher interest rates, resulting in diminished investor confidence and triggering widespread job cuts at major financial institutions on Wall Street. Despite these challenges, recent investor optimism has been underpinned by mounting expectations that the Federal Reserve is poised to conclude its monetary tightening policy.
MSCI has outlined its intention to finance the Burgiss Group acquisition through existing liquidity sources. The transaction is earmarked for completion in the fourth quarter of 2023. MSCI’s involvement with Burgiss dates back to 2020 when the company initially secured a substantial minority investment in Burgiss, amounting to $190 million. The latest acquisition will bring MSCI’s total investment in Burgiss to a sum of $913 million.
The acquisition, however, comes against a backdrop of increased scrutiny. Earlier this month, the U.S. congressional committee on China launched an investigation into MSCI over allegations of facilitating the flow of American capital into Chinese companies implicated in human rights violations and contributing to the country’s military advancements. MSCI has confirmed its awareness of the inquiry and expressed its commitment to thoroughly reviewing the matter.
Amid these developments, MSCI’s stock performance remains a bright spot, registering a notable 18% uptick in the year-to-date period. The acquisition of Burgiss Group signifies the resolute commitment of MSCI to advancing its foothold in the private asset data analytics sector. By harnessing Burgiss’s comprehensive dataset and analytical prowess, MSCI aims to refine its product offerings, foster market growth, and cement its status as a pivotal player in the dynamic world of investment data analytics.
In summation, the acquisition of Burgiss Group by MSCI underscores its strategic ambitions to capitalize on the burgeoning opportunities within the private asset data analytics domain. With the transaction on the horizon, MSCI is poised to steer its trajectory toward innovation, expansion, and heightened market influence, all while navigating the intricacies of a fluid global financial landscape.