Index provider MSCI Inc. (MSCI) is in advanced talks to acquire
IPD Group Ltd., a London provider of real-estate performance
analysis for funds, investors, managers and occupiers.
MSCI, a provider of stock indexes, portfolio-risk evaluation and
performance data to mostly institutional investors, saw its shares
plummet Tuesday after mutual-fund giant Vanguard Group said it
would use a different yardstick for 22 of its index funds, starting
in January. Vanguard said cost was the main factor behind its
decision.
Competition is heating up in the lucrative index industry as
exchange-traded funds, which often track a collection of shares or
other financial instruments, continue to proliferate. Companies
such as MSCI decide the components and the weight of those
components in various indexes. Mutual-fund companies and ETF
providers in turn pay index companies a fee, usually a small
percentage of assets under management.
MSCI has worked to expand its offerings, most notably through
its $1.55 billion acquisition of proxy adviser RiskMetricsGroup in
2010. But the company saw its second-quarter profit drop 18% on
hefty restructuring charges and a decline in asset-based fees
revenue.
MSCI said IPD has about 325 employees and generated revenue of
30.5 million pounds for the year ended June 30.
MSCI shares were recently trading 4% higher at $27.28.
Write to Melodie Warner at melodie.warner@dowjones.com
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