UBS has singled out three information-services providers that it says stand to benefit from rising institutional demand for private markets data and analytics. The bank's assessment points to differentiated exposures across Morningstar, MSCI and S&P Global, with each firm offering a unique combination of products that help investors monitor deals, loans, companies and portfolio performance in private assets.
Analysts at UBS see continued strong growth for private markets in coming years and view the major information-services companies as well-placed to capture a meaningful share of that expansion. The firms provide tools that institutional investors increasingly want as they seek consistent measurement and cross-comparison of private holdings alongside public investments.
Morningstar
Among the trio, Morningstar has the largest current exposure to private markets. A sizeable portion of its operations is already anchored to products that allow clients to track transactions, private companies and private loans. The company's leading data platform, PitchBook, has experienced a slowdown in growth recently. UBS attributes that softness in part to a lull in corporate deal-making, an area where many of PitchBook's customers operate.
UBS notes that a rebound in deal activity combined with an updated sales strategy could rekindle growth for PitchBook. However, the bank stresses that Morningstar must demonstrate execution on those fronts before the investment case is fully realized.
MSCI
MSCI currently has a smaller footprint in private markets relative to Morningstar, but UBS highlights it as one of the more compelling growth narratives. The firm's private-markets business has been expanding rapidly, with especially strong positioning in benchmarking and valuation products.
Those benchmarking and valuation segments are still at an early stage, UBS says, but they are gaining traction as more investors demand tools to measure and compare private holdings. MSCI also benefits from capabilities that span both public and private investments, a consolidation that increasingly appeals to large institutional clients seeking unified portfolio management.
S&P Global
S&P Global offers the broadest roster of private-markets products among the three firms. Its coverage ranges from private-loan credit ratings to portfolio-tracking software used by fund managers. While private markets currently account for a relatively small share of S&P Global's overall business, UBS points out that the segment is growing quickly and could become a more significant driver of sentiment for the stock.
A recent acquisition added fund and manager intelligence data to S&P Global's capabilities, broadening its private-markets offering. UBS suggests that even modest continued growth in this area could visibly improve the company's overall trajectory.
Bottom line
UBS's review portrays Morningstar, MSCI and S&P Global as differently positioned beneficiaries of an expanding private-markets ecosystem. Each company brings complementary products to institutional investors who are demanding better measurement and comparison tools for private assets; however, UBS also flags execution and market-activity risks that will influence how those opportunities translate into performance.