blockworks.co
MSCI has partnered with Menai Financial Group as it looks to develop tools for institutional investors who seek to capitalize on the growth of digital assets and blockchain technology.
The New York-based finance company, perhaps best known for its MSCI indexes, also provides portfolio analysis tools and ESG products, among other offerings.
MSCI CEO Henry Fernandez said in a statement that digital assets go beyond cryptocurrencies, noting that applications in the sector are transforming long-established technologies such as payment, trading and settlement systems.
“As we talk to our clients about the space, we understand that investor interest is only accelerating, and there is demand for tools to help understand this new asset class and its underlying technology,” an MSCI spokesperson told Blockworks. “As this demand grows, MSCI has recognized a need for robust frameworks and analytical tools to provide insights into performance, risk, and classification within this emerging asset class.”
Menai Financial Group’s asset management arm aims to give access to the upside of digital assets while reducing exposure to the risks and maintaining portfolio diversity, according to its website. Its investment products currently include a diversified index fund and an actively managed opportunities fund.
The firm also offers market making across digital assets, seeking to provide the same standard of liquidity during challenging markets as during periods of market strength.
“Institutional players are keen to participate in the digital asset markets, but have historically struggled to find the means to do so in a way that meets the high standards of professionalism, scale, risk management, security and rigor required by traditional financial markets,” Menai CEO Zoe Cruz said in a statement.
“We are thrilled to see a sophisticated, norm-setting player like MSCI enter the digital asset space and are honored that they have chosen Menai as one of their partners in this endeavor.”
MSCI intends to tap into Menai’s digital assets expertise to help institutional investors understand the risks and opportunities as the industry drives technological change, the MSCI spokesperson noted.
The representative declined to comment on specific tools it aims to develop, or ways the company might look to get further involved in the digital assets space.
“[The partnership] reinforces the continual and irreversible move of institutional players into digital assets,” Joel Edgerton, head of Americas for Ledger Enterprise Solutions, told Blockworks in an email.
“[Fear of missing out] is now impacting major players, and they realize they need to build up expertise to stay relevant in the long term.”
Reuters reported in June that MSCI was considering launching crypto indexes.
MSCI research professionals wrote in an October blog post that institutional investors may be getting more exposure to the crypto space as companies build capabilities around the asset class and invest in cryptocurrencies.
At least 52 public companies covered by MSCI’s ESG research unit have exposure to cryptocurrencies, as of September, according to the post, including 26 constituents of the MSCI ACWI Index, the company’s flagship global equity index.