MSCI Puts ISS on Block amid Proxy Firm Headwinds

November 1, 2013 Leave a comment

October 31, 2013, 6:09 PM ET

MSCI Puts ISS on Block amid Proxy Firm Headwinds

CFO Report Editor, WSJ Pro

This article was originally posted on our sister blog, Risk & Compliance Journal.

By Gregory J. Millman

MSCI Inc. announced in its third quarter earnings release that it was exploring strategic alternatives for its influential proxy advisor and governance-services provider ISS. The announcement comes as the proxy advisory business is facing regulatory scrutiny, market headwinds, and questions about the validity of its analytical models. The announcement quoted Henry A Fernandez, chairman and chief executive of MSCI, saying of ISS that,  “Over the past three years, MSCI has worked hard to return that business to a growth track.” Mr. Fernandez further said, “the Governance business reported organic revenue growth of 7% and Adjusted [earnings before interest, tax, depreciation and amortization] growth of 12%. We believe the time is right to explore our strategic alternatives.” A spokesman for ISS declined to comment beyond the release.

 

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Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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