KBRA Affirms Ratings for Corient Holdings Inc.

KBRA affirms the issuer and senior unsecured debt ratings of A- for Corient Holdings Inc. ("Corient" or "the firm"). The rating Outlook is Stable.

The ratings are supported by Corient’s resilient business model, underpinned by an integrated professional services partnership that offers employees equity stakes in the RIA business, driving alignment of interests and incentivizing employees, while creating value for the firm’s client base. Following its unique partnership model, Corient has grown rapidly since its inception in 2020 via a combination of organic and acquisitive growth that has encompassed targets that meet the firm’s stringent criteria. Corient has continued to demonstrate solid growth in more recent periods despite a challenging operating landscape, while the various acquisitions completed also tempered the impact of broader market declines. We acknowledge Corient’s limited standalone operating history, though note that the firm’s parent has a long track record and strong brand recognition. Corient’s granular client base of high net worth and ultra-high net worth individuals has access to a broad range of wealth management, investment, and family office services that benefit from expertise and extensive networking. Rigorous risk management practices govern customized investment portfolio construction with active monitoring and rebalancing functions. EBITDA margins are high and projected to trend in the mid to high-40% range over the forecast period, which compares well versus many peers. Any future debt obligations are expected to be issued in accordance with the firm’s current debt financing strategy and leverage targets, including projected debt/EBITDA of <1.1x while interest coverage (as measured by EBITDA/interest) is expected to remain adequate through the medium term.

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