Finance Cos and Brokerages/Asset Managers/Exchanges Flashcards
AMERIPRISE FINANCIAL INC (AMP)
Ameriprise Financial operates primarily in wealth and asset management, focusing on fee-based services. The company has shifted away from more volatile insurance products to more predictable, recurring revenue streams. Key Areas: Wealth management, asset management, financial planning.
Second highest quality name in Brokers/Ams/Exchanges
AMP has one of the largest wealth platforms but client flows have been modest and volatile versus peers in recent years. I think event risk is relatively high with net debt-toEBITDA at a multi-year low of 0.7x. Additionally, interest rate risk disclosure indicates lower rates will negatively impact variable annuities and spread income on deposits and brokerage client cash. Spreads look rich 20bp tight of A- corps with similar duration.
A3/A-/A-
Brokerage, Asset Managers & Exchanges - Americas
$2.35bn in index across 4 issues
BLACKSTONE HOLDINGS FINANCE CO LLC (BX)
Blackstone is a leading alternative asset manager with a strong focus on private equity, real estate, credit, and hedge fund solutions. The firm has integrated its credit and insurance businesses to form Blackstone Credit & Insurance (BXCI), aiming for significant growth. Key Areas: Private equity, real estate, credit, insurance, hedge funds.
Top name in Brokers/Ams/Exchanges
Spreads look 20bp cheap relative to SCHW 2.45 2027s (+47bp) and A+ corps (+42bp). BX should benefit from a rise in sponsor lead activity with deal announcements up around 19% y/y in 3Q. This will provide ample opportunity to deploy client assets, which should drive strong fee-related earnings growth of +10-20% in 2025. Cash flow growth will be more modest with $4.8bn of remaining capital commitments, but the liqudity position (53% debt) is signficant relative to upcoming maturities. I think BX should trade flat to SCHW given lower balance sheet leverage and a stronger FFO yield. Spreads at this level would be more consistent with A+ corps with similar duration.
A+/A+/A+
Brokerage, Asset Managers & Exchanges - Americas
$8.25bn in index across 15 issues ($8.25bn 144a)
BROOKFIELD CORP (BNCN)
Brookfield operates a diversified business model with significant investments in real estate, infrastructure, renewable power, and private equity. The company focuses on long-term value creation and has a strong balance sheet. Key Areas: Real estate, infrastructure, renewable energy, private equity. Fourth highest quality name in Brokers/AMs/Exchanges
Spreads look 20bp cheap flat to higher leveraged and lower rated NDAQ 3.85 2026s. Lower rates should, on the margin, improve property level liquidity and drive more opportunities for BNCN to recycle capital accretively. Uncalled private fund commitments sit at a strong C$86bn. Exposure to weaker real estate subsectors like traditional office and retail malls should decline given the company’s focus on expanding insurance solutions through Brookfield Reinsurance. Risk-adjusted profitability is lower than low-A peers like CBOE but leverage is more conservative at the holdco and a material amount of client assets are locked up in long-term (10 years) or perpetual strategies.
A3/A-/A-
Brokerage, Asset Managers & Exchanges - Americas
$9.70bn in index across 14 issues
CBOE GLOBAL MARKETS INC (CBOE)
Cboe operates as a global exchange holding company, providing trading and investment solutions across various asset classes, including options, equities, futures, and FX. The company is known for its innovation in volatility indices. Key Areas: Options, equities, futures, FX, volatility indices.
CBOE has reduced its exposure to transactional revenues in recent years but it continues to have the largest exposure (60-70%) among the exchanges. Product diversification is also limited with SPX and VIX options and futures comprising the majority of net revenues. Fundamentals should remain stable and at strong levels but spreads are rich 12bp tight of similarly rated corps.
A3/A-
Brokerage, Asset Managers & Exchanges - Americas
$1.45bn in index across 3 issues
CITADEL LP (CITADL)
Citadel is a leading hedge fund and market maker, specializing in a diversified, market-neutral approach to investing. The firm trades in corporate bonds, convertible bonds, credit default swaps, and other credit instruments. Key Areas: Hedge funds, market making, credit trading, convertible bonds.
Baa2/BBB
Brokerage, Asset Managers & Exchanges - Americas
$1.10bn in index across 2 issues ($1.10bn 144a)
FMR LLC (FIDINV)
FMR LLC, commonly known as Fidelity Investments, is a diversified financial services company with a strong presence in asset management and brokerage services. The firm focuses on providing investment management, retirement planning, and wealth management services. Key Areas: Asset management, brokerage services, retirement planning.
A1/A+
Brokerage, Asset Managers & Exchanges - Americas
$2.25bn in index across 5 issues ($2.25bn 144a)
INTERCONTINENTAL EXCHANGE INC (ICE)
ICE operates global exchanges and clearing houses, providing data services and technology solutions. The company is known for its strong presence in energy markets and mortgage technology. Key Areas: Exchanges, clearing houses, data services, energy markets, mortgage technology.
I think valuations are rich with spreads 20bp tight of A- corps with similar duration. Valuations also look unattractive versus peers when adjusting for debt-to-assets. Tight 2s5s (17bp) relative to peers but view as more a reflection of tight valuations across the curve. ICE has a more diversified business mix relative to exchange peer CBOE but a significant amount of balance sheet leverage due to an aggressive acquisition strategy. Net debt-to-EBITDA is elevated relative to management’s 2.8-3.0x target and relative to agency downgrade thresholds. ICE also has a large and concentrated ownership interest in central clearing parties, a negative credit differentiator.
A3/A-
Brokerage, Asset Managers & Exchanges - Americas
$18.85bn in index across 16 issues
JEFFERIES GROUP LLC / JEFFERIES GROUP CAPITAL FINANCE INC (JEF)
Jefferies is a full-service investment banking and capital markets firm. The company focuses on providing financial advisory, capital raising, and trading services across various asset classes. Key Areas: Investment banking, capital markets, financial advisory, trading.
Spreads look fair flat to BBB corps with similar duration and relative to peers on a leverage-adjusted basis. 2s5s is consistent with the peer group average at 23bp.
Baa2/BBB/BBB+
Brokerage, Asset Managers & Exchanges - Americas
$7.00bn in index across 9 issues
LAZARD GROUP LLC (LAZ)
Lazard operates as a financial advisory and asset management firm. The company is known for its expertise in mergers and acquisitions, restructuring, and strategic advisory services. Key Areas: Financial advisory, asset management, mergers and acquisitions, restructuring.
Spreads look attractive given a tight 2s5s (6bp) and levels that are 23bp wide of BBB+ corps with similar duration. View is underpinned by improving fundamentals which will be supported by a gradual improvement in M&A activity. Leverage metrics should also benefit from incremental margin expansion after recent headcount reductions across the business. The business is highly cyclical due to the transactional/nonrecurring nature of the advisory business but I see limited rating downgrade risk over the next 12-18 months
Baa3/BBB+/BBB+
Brokerage, Asset Managers & Exchanges - Americas
$1.70bn in index across 4 issues
LPL HOLDINGS INC (LPLA)
LPL is the nation’s largest independent broker-dealer based off total revenues. The company is focused on offering brokerage and investment advisory services to the retail market, providing front-, back- and middle-office support to ~23,500 financial advisors and ~$1.5tn of assets. The three core businesses serve independent advisors, independent RIAs, and institutional services.
Valuations look fair flat to BBB- corps with similar duration. Screens attractively when adjusting for debt-to-assets but one of the widest 2s5s in the peer group.
Baa3/BBB-
Brokerage, Asset Managers & Exchanges - Americas
$3.45bn in index across 6 issues
NASDAQ INC (NDAQ)
Nasdaq operates as a global technology company serving the capital markets. The company provides trading, clearing, exchange technology, regulatory, securities listing, and information services. Key Areas: Trading, clearing, exchange technology, regulatory services, securities listing.
20bp tight to BBB corps with similar duration. Spreads look unattractive given the quantum of leverage. The company has historically operated at or above downgrade triggers due to an aggressive acquisition strategy, which will likely persist given the speed of innovation in the financial infrastructure space. Similar to ICE, the company has a high exposure to CCPs (OCC, Nasdaq Clearing) with large member concentrations, serving as a negative credit differentiator versus similarly rated comps.
Baa2/BBB
Brokerage, Asset Managers & Exchanges - Americas
$6.60bn in index across 9 issues
RAYMOND JAMES FINANCIAL INC. (RJF)
Raymond James offers a wide range of financial services, including investment banking, asset management, and private client group services. The firm focuses on providing personalized financial advice and investment solutions. Key Areas: Investment banking, asset management, private client services.
A3/A-/A-
Brokerage, Asset Managers & Exchanges - Americas
$2.05bn in index across 3 issues
LONDON STOCK EXCHANGE GROUP PLC (LSELN)
LSEG operates global financial markets infrastructure and provides data and analytics services. The company is known for its strong presence in capital markets and post-trade services. Key Areas: Financial markets infrastructure, data and analytics, capital markets, post-trade services.
A3/A
Brokerage, Asset Managers & Exchanges - Europe
$5.25bn in index across 6 issues ($5.25bn 144a)
NOMURA HOLDINGS INC (NOMURA)
Nomura is a global financial services group offering investment banking, asset management, and retail brokerage services. The firm focuses on providing comprehensive financial solutions to clients worldwide. Key Areas: Investment banking, asset management, retail brokerage.
Baa1/BBB+/A-
Brokerage, Asset Managers & Exchanges - Other Developed
$14.25bn in index across 17 issues
UNITED WHOLESALE MORTGAGE LLC (UWMLLC)
The largest wholesale mortgage lender in the U.S., working exclusively with independent mortgage brokers to provide a superior client experience. Their business model focuses on leveraging proprietary technology to streamline the mortgage process, making it faster and more cost-effective. Financially, UWM benefits from a strong market position and consistent revenue from mortgage originations.
Ba3 *+/BB-
Finance Companies - Americas
$2.00bn in index across 3 issues
