MSCI’s proxy research and voting revenues slump in fourth quarter

Index and ESG revenues surge by 28%

Index firm MSCI says revenues from its proxy research and voting services – the Institutional Shareholder Services business acquired as part of its acquisition of RiskMetrics – slumped by almost 10% in the fourth quarter of 2010.

Governance revenues were $28.3m in the period, down a seasonally adjusted 9.4% or $2.9m compared to the pro forma figure of $32.4m a year before. MSCI said the decline was “led by a decline of 12.3% in proxy research and voting revenues”. On top of that, governance revenues in the quarter were down 6.7% from the $30.3m posted in the preceding third quarter.

The governance segment “run rate”, forward-looking fees for the next year, was down 5.6% at $105.5m.

In October, MSCI reported that third-quarter governance revenues slipped $1.2m, or 3.7%, to $30.3m. MSCI’s governance products consist of corporategovernance products and services, including proxy research, recommendation and voting services for asset owners and asset managers as well as governance advisory and compensation services for corporations.

When MSCI bought RiskMetrics in a $1.55bn deal last year, chief executive Henry Fernandez said the ISS business was “non-core” although it’s now understood that MSCI is fully behind the business.

Meanwhile, total revenues related to MSCI’s Index and ESG (environmental, social and governance) rose by $19.9m (27.8%) to $91.2m, with ESG products contributing revenue growth of $4.7m.

Overall, MSCI’s group net income for the fourth quarter was $30.3m, up from the year-before’s $24.5m while operating revenue rose nearly 80% to $213.3m. MSCI announcement