S&P turns Grosvenor view to stable

S&P said it revised its outlook on Grosvenor Capital Management Holdings LLLP to stable from negative and affirmed the BB+ ratings on Grosvenor and its first-lien debt. The recovery rating remains 3 (50%), indicating a meaningful recovery in default.

“Grosvenor's fee-paying AUM grew 13% in 2021 to $58.7 billion, supporting 12% growth in fee-related revenue. The company continued to expand its fee-related earnings (FRE) margin through scale, particularly in higher margin products such as secondaries and direct investment, supporting 27% growth in FRE in 2021. Net realized performance fees and carried interest grew nearly 13% supported by strong investment performance in conjunction with the firm's growing share of incentive fees,” S&P noted in a press release.

The outlook reflects the view Grosvenor can keep its leverage at 2x-3x over the next 12 months, while fundraising meets expectations and investment performance remains stable, the agency said.

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