MSCI Inc. has launched a Private Credit Factor Model to address the transparency challenges faced by investors in the burgeoning private credit market. Available through MSCI’s analytics platform, the model helps investors assess long-term risks by integrating private credit into a systematic, factor-based framework, providing a comprehensive view of risk across public and private markets.
The rapid growth of private credit, driven by investors seeking yield and shifts in capital markets, has outpaced existing risk management tools. This model aims to fill that gap by offering insights into how private credit exposures react to macroeconomic changes and credit conditions. It uses MSCI’s proprietary techniques to model private credit exposures despite limited data availability, addressing issues like illiquidity and sparse pricing.
Luke Flemmer, Head of Private Assets at MSCI, stated, “Private credit requires enhanced analytical tools and insights as it plays an increasingly important role in diversified investment portfolios.” The model is designed to support smarter decision-making by providing transparency and consistency in understanding private credit risk.
The Private Credit Factor Model is part of MSCI’s expanding suite of private credit analytics, complementing tools like the MSCI | Moody’s Private Credit Risk Assessment. Jorge Mina, Head of Analytics at MSCI, highlighted the company’s commitment to evolving with client needs, stating, “Our platform is built to help risk teams not only keep pace with the growing complexity of their portfolios, but also deliver strategic insight to their investment teams.”
This launch marks a significant enhancement to MSCI’s multi-asset class analytics suite, available through MSCI Barra One, further solidifying MSCI’s role in advancing risk modelling across asset classes.
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