MSCI’s Asia head exits to build new business

Chris Ryan, who headed the index provider's Asia-Pacific operations for four years, has left to run an independent investment consultancy.
MSCI’s Asia head exits to build new business

Influential index provider MSCI has seen Chris Ryan leave after four years as head of Asia Pacific to run a fund management consultancy that is in the process of setting up.

He has become the first chairman and chief executive of First Harbour Capital Partners, which was established in 2012. It has so far largely acted as a private investment company but has now applied for additional licences with the aim of becoming a consultancy for the asset management industry.

"There are many businesses out there that have the same business models today as they had 20 years ago, whether you are talking about products, distribution, governance or investment management processes," Ryan said.

He declined to offer more detail on the licences being applied for, but said First Harbour hopes to receive them in the coming weeks.

MSCI legacy

Ryan told AsianInvestor that he handed in his notice to US-based MSCI last year and left on the last day of January. "The company has been very good to me [over my departure]; they're one of the best teams I've ever worked with," the industry veteran said.

MSCI, whose indexes are widely used as benchmarks by asset managers and owners, hired Ryan in October 2012 to take on what was a newly created role to run its operations in Asia Pacific. He moved from Australian asset manager Perpetual, where he had been CEO.

Ryan's appointment was part of MSCI’s efforts to improve its coverage of the region and coordination between its various divisions, at a time when the region’s institutional investors and asset management industry were enjoying rapid growth. He is a veteran of the investment industry, having also worked in senior roles at Citi’s global transaction services, Fidelity and ING Investment Management, among other firms.

MSCI is believed to be still seeking a replacement for Ryan to head its Asia-Pacific operations. A spokeswoman for the firm declined to comment on the reasons for Ryan’s departure and whether it would replace him.

On Ryan’s watch MSCI’s regional revenue has risen, albeit at a slower rate than its US operations. In a filing to the US Securities and Exchange Commission, MSCI said its Asia and Australia revenue increased by 16% to $143.95 million in 2016 from $124.14 million in 2014 (versus 18% growth over the same period in the Americas and 11% growth in Europe, the Middle East and Africa). Japan accounts for more than half of MSCI’s regional revenues.

The number of funds referencing MSCI’s indices has also risen in Asia. In its SEC filing, MSCI said 82 exchange-traded funds using its equity indices were listed in 2016, up from 59 in 2015 and 39 in 2014.

China cooperation

MSCI appears particularly keen to build its business products relating to China. MSCI chairman and CEO Henry Fernandez told AsianInvestor in October that the organisation was working with China to help the country tighten its stock regulations so that A-shares could be included in MSCI’s global emerging market indices. But that goal has again been missed, even though the country has applied for MSCI inclusion for the last three years in a row.

Some observers now wonder whether including A-shares in the index is of such urgency to China’s authorities, given their twin need to push through a pipeline of new equity listings whilst maintaining control of their evolving equity market.

Fernandez said MSCI was also interested in delivering indices and products for smart-beta strategies, an area where he believes some Asian investors have become more sophisticated than their peers in other regions such as North America.

Given these priorities, the US company will likely look to replace Ryan quickly with another senior individual, either internally or externally, to help keep its regional plans on track. 

In addition to joining First Harbour, Ryan last month co-founded Digital Finance Media, a financial technology-focused publication, with Jame DiBiasio, AsianInvestor's founding editor and former editorial director of Haymarket Financial Media.

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