Major Investment Trend (1): Financial Blue-Chip Stocks Riding the 'Passivization' Wave

• Asset management companies must pay MSCI to use its indices. MSCI enjoys extremely strong pricing power in this business, commanding very high gross margins. Its index licensing fees are renegotiated annually—and routinely increased by double-digit percentages. These fees are exorbitant, yet asset managers have no choice but to pay: their investment products require benchmark indices for performance reporting, and portfolio managers must understand index composition to execute active over- or under-weighting decisions. Reports indicate many asset managers face fee hikes of over 10% year-on-year. • When ETF providers launch ETFs tracking MSCI indices, they too must pay MSCI licensing fees—calculated as a percentage of the ETF’s assets under management (AUM). Revenue from MSCI index-related services accounts for roughly half of MSCI’s total revenue—but contributes nearly 80% of its profits. 2. Analytics Services: This segment accounts for nearly 40% of MSCI’s revenue and centers on its Barra software suite. Barra is exceptionally powerful and has become an industry standard across financial institutions for risk analysis and quantitative investing—supporting multi-factor modeling, performance attribution, risk scenario simulation, and more. According to a London-based trader’s firsthand experience, annual Barra subscription fees are astronomical, with similarly sky-high gross margins. MSCI’s Financial Profile: Once MSCI reaches scale, its fixed costs are largely amortized; the marginal cost of selling additional index licenses or Barra subscriptions approaches zero—yielding extraordinarily high marginal profitability and jaw-dropping gross margins. (London trader interjects: This is precisely why Facebook—whose ad platform is fully automated—generates far higher advertising efficiency than Twitter, which relies heavily on human sales teams.) Thanks to this ‘cash-cow’ business model, MSCI’s average gross margin over the past five years stood at 66%, its free cash flow yield reached 29%, and its ROE peaked at 42.8% in 2016. The company holds massive cash reserves and enjoys outstanding cash flow generation. Yet despite this enviable position, since 2015 MSCI has deployed most of its cash toward share repurchases—driving its outstanding share count steadily downward and further boosting EPS. Valuation: Current valuation is not cheap: its forward P/E ratio stands at 28.3—near the upper end of its historical range over recent years. Its PEG ratio of 2.1 is likewise elevated. However, given its exceptional cash flow profile, MSCI is likely to continue aggressive buybacks to lift EPS. Moreover, the ongoing rise of passive investing will continue to benefit the firm. So long as its fundamental drivers remain intact, every price pullback presents a compelling buying opportunity. Where lies the risk? What if ETF providers—especially iShares—stop tracking MSCI indices altogether? In Q4 2012, Vanguard—the world’s largest ETF provider—announced that 22 of its ETFs would cease tracking MSCI indices and instead switch to cheaper FTSE benchmarks. MSCI’s stock plunged 30% overnight. Could iShares repeat such a move? Greg Walker, Head of iShares ETFs, responded: “We’ve debated index selection for years—and cost is only one factor.”

Behind Tencent’s Major Shareholder’s Share Sale: Naspers—the ‘Watcher’s’ Achievements and Dilemmas (Part II)

The previous article addressed two key questions: first, Naspers’ equity structure; second, who exactly controls Naspers. The answer is the gentleman pictured above—Koos Bekker—a rather dashing figure. Regarding cross-shareholding between Naspers and Prosus, the prior article offered only a high-level summary. Here, I’ll elaborate briefly for clarity. If you prefer fast-paced narrative, feel free to skip ahead—the best stories lie just beyond this section. Trust me. Now comes the math: First, Prosus’s share issuance structure (see diagram below). Next, Naspers’s share issuance structure. ① Prosus’s total issued share capital increased—from 1.62 billion shares at end-March 2021 to 2.0 billion shares at end-June 2022—following a share issuance. Publicly held shares rose from 440 million to 823 million, while Naspers’s stake remained unchanged in absolute terms. ② As of end-March 2021, there was no cross-holding between the two entities. By end-June 2022, cross-holdings totaled 584 million shares. Cross-holding is calculated as follows: Cross-holding = (Naspers-held Prosus shares × Prosus-held Naspers shares) ÷ [Naspers’s total issued shares − Naspers treasury shares not held by Prosus + 20% × Naspers Class A shares issued] That is: 1,180,250,012 × 213,400,419 ÷ (435,511,058 − 4,701,806 + 20% × 961,193) = 584,373,494. This dizzying number corresponds to the ‘cross-holding shares’ figure shown in the blue table above. ③ Naspers’s net holding in Prosus stands at 596 million shares = 1.18 billion shares held − 584 million cross-held shares. ④ Prosus’s net outstanding shares total 1.42 billion = 823 million publicly held + 596 million net held by Naspers. ⑤ Naspers’s effective ownership stake in Prosus is 42% = 596 ÷ 1,420. Math done—now the structural picture is crystal clear, and we can finally dive into the story. Naspers was founded in Stellenbosch, South Africa, to publish a Dutch-language newspaper. Source: Naspers official website Naspers’s Origins Naspers calls itself the ‘South African Newspaper Group’, yet its official website describes it as: ‘a global internet group—and one of the world’s largest technology investors.’ There’s hardly a trace left of its old-world newspaper roots. Yet the original Naspers truly *was* a newspaper publisher—producing magazines and delivering news. To understand how it evolved, we must go back to 1915. South Africa’s journalism tradition dates to 1795—but Naspers entered the scene relatively late. Founded in Cape Town in 1915, Naspers emerged just five years after South Africa achieved political unification. World War I was already in its second year—and in China, it was the fourth year of the Republic of China, the year Yuan Shikai attempted to proclaim himself emperor.

Pzena Investment Management Reports 926,505-Share Passive Stake in Koppers Holdings

Oct 19, 2026

Pzena Investment Management disclosed a 4.9% beneficial ownership stake in Koppers Holdings Inc. via an SEC Schedule 13G/A filing as of September 30, 2026. The firm holds sole voting power over the majority of the 926,505 shares acquired.

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