The shift into passive investments has helped to boost MSCI’s annual revenues from $370m in 2007, when it first became a publicly listed company, to $1.2bn. Annual net profits have increased from $81m to $261m over the same period.
Active management is “clearly in a long downcycle” in equity markets, says Mr Fernandez, but he willingly acknowledges the importance of its wider role in allocating capital.
“What planet are we on with this talk of the death of active investment? We are still far from creating efficient allocations across capital markets globally,” he says.
Among his many interests outside of MSCI, Mr Fernandez serves on the board of trustees of Stanford University and the board of the Memorial Sloan Kettering Cancer Center. These roles have fuelled a deep interest in technology and the potential for advances in computing to bring benefits to modern societies.
“Passive investing is another technological advance. It will free up resources to focus on less-efficient markets such as real estate, infrastructure and private debt. This will be good for society,” he says.