MSCI Inc. and Moody’s Corporation have announced a partnership to create a new solution designed to provide independent risk assessments for private credit investments. It aims to address the growing need for consistent standards and tools to evaluate and manage risks in the expanding private credit market.
Under the partnership, MSCI will leverage its data set, which includes information on more than 2,800 private credit funds and over 14,000 individual underlying companies. Moody’s will integrate its EDF-X credit risk models into MSCI’s private credit solutions. These models are intended to offer insights into the financial stability of both public and private companies, providing early warning signals to investors.
By combining MSCI’s private credit investment data with Moody’s EDF-X credit risk models, the partnership will offer independent third-party risk assessments at both the company and facility level. The solution will provide transparent metrics to investors, particularly in the context of managing private credit portfolios, and is expected to assist in decision-making for those in the insurance sector.
Rob Fauber, president and CEO of Moody’s, noted that the partnership will provide valuable insights to help investors, including insurers, assess credit risk and make informed decisions. Henry Fernandez, chairman and CEO of MSCI, emphasized the need for greater transparency and clarity in the private credit market, which is seen as essential for the insurance industry’s risk management processes.
The new offering will differ from Moody’s traditional credit ratings and will not involve the credit ratings provided by Moody’s Ratings agency to issuers in the private credit market. The solution is expected to provide insurers with enhanced tools to assess risk in private credit portfolios, supporting more informed underwriting and investment decisions.
In related developments, Aon has partnered with Moody’s to deliver insurance and risk management solutions to its clients. The collaboration will use Moody’s credit data and analytics to track large volumes of data, providing Aon’s finance teams with deeper insights into creditworthiness and potential exposures.
Cytora, a digital risk processing platform, has also announced a partnership with Moody’s RMS to integrate its Location Intelligence API into Cytora’s platform. This move aims to enhance property and casualty (P&C) insurers’ ability to assess climate and natural disaster risks. The Location Intelligence API provides catastrophe peril insights for more than 100 countries.
