CUSIP Global Services and MSCI extend identifiers to private companies

Under a collaboration announced October 6, CUSIP Global Services will extend CUSIP identifiers to U.S.-domiciled, late-stage venture-backed private companies, with MSCI supplying the company-level data that travels alongside each nine-character code. The release names no participants beyond the two firms, so its account of the private-market data gap is theirs alone, and what the codes will plug into remains unstated.

MSCI's contribution, Private Company Insights, is described in the release as a database of U.S.-domiciled late-stage VC-backed companies with at least one share class. Its records carry jurisdiction of domicile, dividend details, company name, asset type, and a sector and geography classification drawn from PACS, MSCI's Private Asset Classification Standard, groundwork MSCI says it laid before this arrangement.

CUSIP Global Services, managed by FactSet, issues the nine-character alphanumeric identifier used for issuers and instruments across the U.S. and Canada, and the release leans on that public-market record: the CUSIP, it says, is a building block for trading, clearing, settlement and data management across dozens of asset classes. Private markets, the same announcement says, have historically gone without a standard identifier, leaving manual, error-prone workarounds for tracking securities and resolving which entity is which.

The commercial argument is secondary trading. "The ability to quickly, consistently and accurately identify private market companies with the equivalent level of rigor and standardization that exists in public markets is a critical step in facilitating the secondary trading of private shares," said Scott Preiss, managing director and global head of CGS at FactSet. Luke Flemmer, MSCI's head of private assets, said private markets "still lack the foundational infrastructure that has long underpinned public markets," and that common identifiers are what allow investors to "identify, compare, and act on private market exposures with confidence."

Set against that ambition, the attribute list is modest: domicile, dividends, name, asset type and classification are administrative facts about an issuer, and the release says nothing about pricing, share-class economics, ownership or the transfer restrictions that decide whether a private position can change hands. Standardizing an issuer's name is real work, and it is what reconciliation and portfolio-monitoring systems need before any of them can be wired together, but the identifier is arriving well ahead of the market structure it would serve.

Whether anything follows depends on adoption elsewhere in the stack rather than on the two vendors. MSCI's own polling has already shown where private-market appetite sits: its survey of 450 advisers, covered in PWD's September issue, found fee tolerance concentrated where exposures are hardest to reach, a finding about access rather than enthusiasm.

A private-company CUSIP starts earning its keep when fund administrators, secondary venues and portfolio-monitoring systems key their records to it, and the release does not identify any of them yet.