Investing.com -- MSCI Inc . (NYSE: MSCI ) and Moody’s Corporation (NYSE: MCO ) are joining forces to launch an innovative solution for independent risk assessments of private credit investments. This first-of-its-kind initiative aims to enhance transparency and bolster investors’ strategies for allocating assets in the private credit sector.

As the private credit market continues to expand and evolve, the demand for consistent standards and superior tools has become crucial for investors. These tools will enable them to evaluate, compare, and explain the risk associated with their investments.

MSCI provides an extensive and unique array of high-quality private capital data. This data is derived from original documents supplied by managers and includes information on over 2,800 private credit funds and more than 14,000 individual companies. Moody’s will expand its flagship EDF-X models into MSCI’s private credit solutions as part of this collaboration. EDF-X offers risk insights through top-tier credit models and early warning signals, assisting investors in evaluating the financial strength of both public and private companies worldwide.

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

Rob Fauber, President and CEO of Moody’s, stated that as the private credit market evolves, investors require dependable independent assessments to help benchmark credit risk and inform investments and portfolio monitoring. The partnership with MSCI will play a crucial role in providing these insights, aiding market participants in making informed decisions.

Henry A. Fernandez, Chairman and CEO of MSCI, highlighted the rapid growth of private credit and its transformation of the global investment landscape. This growth underscores the need for increased transparency, consistent standards, and independent risk assessments. He expressed pride in partnering with Moody’s to offer innovative solutions that can enhance clarity and confidence.

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

Shares in both companies fell on Monday, with Moody’s down 3.3% and MSCI down 3.5%, as markets dropped on U.S. President Donald Trump’s tariff policy and attacks on Federal Reserve Chair Jerome Powell.

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