Institutional Shareholder Services put up for sale by parent MSCI

“Strategic alternatives” sought for leading proxy firm

MSCI, the index and ESG firm, says it is exploring “strategic alternatives” for its Institutional Shareholder Services (ISS) proxy voting firm, arguably the leading governance advisory business in the world.
It said it marks the “start of a process that may eventually lead to a full separation of ISS from MSCI”.
MSCI acquired the Rockville, Maryland-based ISS business as part of its $1.55bn (€1.1bn) acquisition of RiskMetrics in 2010. At the time MSCI Chief Executive Henry Fernandez characterised ISS as “non-core” to the deal.
As RI reported at the time, there had been another competing offer from a bidder known as ‘Company A’ which had lined up six potential buyers for ISS.

“The senior ISS management team is very supportive ofMSCI’s decision and confident about the future prospects of the business,” said ISS President Gary Retelny today.

He added he expects the current ISS management team to remain in place. ISS said it has recently seen record high client retention rates.

Just this week, ISS was involved in an industry initiative to create a set of principles for the proxy voting industry.

ISS competes with rivals such as Glass Lewis, which is owned by the Ontario Teachers’ Pension Plan and the Alberta Investment Management Corporation (AIMCo). ISS was founded in 1985 and has more than 1,700 clients worldwide.

Morgan Stanley is serving as financial advisor to MSCI and Davis Polk is serving as legal advisor.