MSCI announced that it has acquired Foxberry, an index creation and analysis platform with a modern user interface. Many WealthTech players in the US may not know Foxberry because (1) it is based in the UK and (2) it serves institutional clients. However, we thought it worth mentioning since the press release seems to indicate that the acquisition was driven by the desire to add "a new client-centric, interactive experience" to custom index construction. We see this as an example of the desirability of an optimized user experience and also as an example of the power of buying vs building in certain cases.
While we were not involved in the deal, the usual reasons we see for going the acquisition route include: (1) time to market, (2) cost savings, and (3) significantly de-risking the project at the corporate level. Terms of the deal were not disclosed but are expected to be immaterial to MSCI's finances, according to the release.
The release also suggests that custom indexing solutions are in demand on the institutional investing side of the fence. At the institutional level one of the big draws is in dealing with "the challenge of balancing competing investment objectives" while in the wealth space we talk more of tax efficiency, flexibility, client preferences, and demonstrating additional value to the client.