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Estimating MSCI Barra’s Share of Institutional Risk Models

Article Quant Q&A · Author: Slow Learner
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Summary

The document asks how widely institutions use MSCI Barra equity risk models, ideally measured by the fraction of assets under management relying on Barra rather than competing providers. It reports a single published estimate from a 2018 paper on portfolio construction and crowding: Barra was believed to lead providers with roughly half the market. This offers a directional indication of its standing among institutional risk-model vendors.

The cited estimate is not an AUM-weighted measurement and the document gives no underlying survey, methodology, or breakdown by institution type. It therefore does not establish a precise market share or confirm current adoption. The result should be treated as a reported industry estimate from the cited period, rather than a comprehensive or up-to-date count.

Key ideas

  • A 2018 paper is cited as estimating that Barra led risk-model providers with around half the market.
  • The document defines the desired market-share measure as institutional use, preferably weighted by assets under management.
  • It gives no survey details or AUM-weighted calculation to validate the estimate.
  • The reported figure is historical and does not establish present-day adoption.

Tags

EquitiesPortfolio constructionRisk management
Full text
# What is the market share of MSCI Barra Equity Model?


# What is the market share of MSCI Barra Equity Model?












My understanding is that MSCI/Barra's model has a very large market share in funds and banks, but I cannot find out how large is the exact market share.

Is there any data on this, or can someone familiar with this give an estimate? By market share, I mean the (ideally AUM-weighted) fraction of institutions that use this, rather than some other, model. Thanks!

## Answer by J-F (score 2)

https://quant.stackexchange.com/a/68211

The only reference I know of is from this 2018 JEF paper on "risk model crowding".

> Barra is believed to lead most providers with around a 50% market share.

Bruno, S., Chincarini, L. B., & Ohara, F. (2018). Portfolio construction and crowding. Journal of Empirical Finance, 47, 190-206.

https://ludwigbc.com/pubs/Crowding_JEF_2018

Shown in full with attribution under the source's licence. Licence: CC BY-SA 4.0 (Stack Exchange)

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.