Another key relationship is the one with Research Affiliates for the creation of non-market capitalization weighted indices, or the FTSE RAFI Index Series. In that case index constituents are weighted using four fundamental factors, rather than market capitalization. These factors include total cash dividends, free cash flow, total sales and book equity value. We have licenses all of over the world both for standard mutual funds and for ETFs. Since we started marketing that product aggressively two years ago, it has been one of our fastest growing index series.

We also have an exciting relationship with two organizations, EPRA and NAREIT, which are the European and the North American Real Estate Associations, to create the FTSE EPRA/NAREIT Global Real Estate Index Series. They have asked us to calculate for them benchmark and tradable indices, and the growth has been outstanding. We’ve expanded these series by adding high-yield versions due to market demand.

In the hedge fund space in the UK, we work with an organization called MSS for the FTSE Hedge index series. Our most recent addition is a clean technology index in a partnership with Impax Asset Managers, a specialist manager in the environmental technology sector. We will be taking over the calculation of their ET 50 and branding it as FTSE ET 50. Currently, we are in discussions about ETF and mutual fund licensing in that space. Then we’ll be creating a whole series of environmental indices on the back of that relationship.

So there are many areas of activity but, most importantly, FTSE grows very fast each year. One of the ways is by knowing our customers and their needs, and by getting really close to those clients. The second way is by creating successful partnerships. No two partnerships are ever the same because they exist for different reasons and are handled in different ways, but we bring to those partnerships the index expertise and the knowledge of the financial markets and the participants. Our partners bring knowledge either about a specific geography, or about a particular asset class or market segment. That has proven to be successful strategy.

Q: What opportunities do you find in Eastern Europe?

A: At this stage, we don’t have stock exchange relationships in Eastern Europe, but we have a relationship with the Athens Stock Exchange, which is one of the areas of influence. Money managers in that region want us to pursue development on their behalf in the Balkan region.

I believe that especially central Europe will see increasing interest and activity. We classify countries according to their stage of market development, such as developed market, advanced emerging market, and secondary emerging market. The classification is based on a number of criteria around the function of the financial markets, which include economic size, wealth, quality of markets, as well as depth and breadth of markets. Recently Israel was promoted from advanced emerging markets to developed markets status, while Poland and Hungary were promoted from secondary to advanced emerging market. The point is that from the total of $3.5 trillion worth of assets that are benchmarked against the indices around the world, the majority is invested in the developed markets. Clearly, if a market is upgraded in its status, investment flows are likely to increase, so we expect increased interest in Poland and Hungary.

Q: What are the main challenges in managing this type of growth?

A: One of the challenges is learning to say “no” sometimes. Many new ideas are brought to our attention, but we have to assess and consider in a structured way the real growth opportunities. We have to prioritize them because the challenge is that there aren’t enough hours in a day.

We are a global company in terms of our client base, revenue distribution, and product distribution. Nevertheless, we are better known in certain pockets around the world. One of the fast growing areas right now is the Middle East, which is the real new territory. Also, some people consider Europe to be a large entity, but the truth is that the European countries have very different characteristics. So there are places where we might not be as strong as some of our competitors, but we are closing the gap where we need to and we are pulling further ahead where we have a lead. We have a lot of momentum but we continue to work on the principles of learning to understand and anticipate the clients’ needs and build the products quickly.