MSCI and Moody’s Corporation will jointly create a solution to provide independent risk assessments for private credit investments at scale.

The solution, a first-of-its-kind in the market, seeks to promote transparency and strengthen investors' private credit asset allocation strategies.

As the private credit market continues to evolve and grow, investors see the need for consistent standards and better tools to assess, compare, and communicate the risk of their investments.

MSCI offers a unique and comprehensive universe of high-quality private capital data, sourced from original documents provided by managers, including data on more than 2,800 private credit funds and over 14,000 individual underlying companies.

As part of this joint offering, Moody’s will extend its flagship EDF-X models into MSCI’s private credit solutions. EDF-X delivers risk insights using best-in-class credit models and early warning signals to help investors assess the financial strength of public and private companies globally.

The combination of Moody’s EDF-X credit risk modeling solutions with MSCI’s universe of private credit investment data will produce proprietary third-party risk assessments for private credit investments available at the underlying company and facility level using transparent metrics.

“As the private credit market evolves, investors are looking for trusted independent assessments to help benchmark credit risk and inform investments and monitor portfolios,” says Moody’s president and chief executive officer Rob Fauber. “Our partnership with MSCI will play a critical role in providing these insights, helping market participants make informed decisions.”

Henry Fernandez, chairman and CEO of MSCI, adds: “The rapid growth of private credit continues to transform the global investment landscape while highlighting the need for increased transparency, consistent standards and independent risk assessment. We are proud to partner with Moody’s to deliver innovative solutions that can help drive greater clarity and confidence.”

The solution will be distinct from the services provided by credit rating agency Moody’s Ratings to the issuers in the private credit market.