Citadel Limited Partnership

The stable outlook indicates S&P Global Ratings' view that CLP will generate strong adjusted EBITDA margins above 80% (net of expense reimbursements), leverage below 1.5x (as measured by debt to adjusted EBITDA), and interest coverage above 15.0x in the next 18-24 months. The stable outlook also reflects our expectation that CLP will maintain or modestly build its AUM and keep up its solid investment performance. We could lower the rating if earnings decline so that leverage increases to 2.0x or more on a sustained basis, if investment performance or profitability seriously deteriorates, or if Citadel experiences large net outflows beyond distributions in the ordinary course of business. While it's unlikely, we could raise the rating if CLP increases earnings from

...Citadel Limited Partnership (CLP) maintains solid investment returns. Returns across CLP's four feeder funds were strong (all over 20%) in 2022 and were led by CLP's flagship Wellington fund, which produced a 38.2% return. We anticipate CLP operating with leverage below 1.5x over the next two years. Strong performance boosted AUM to $53 billion as of Jan. 1, 2023, net of more than $8 billion in profit distribution in 2022 across the four feeder funds. High returns boosted EBITDA as well, and we now expect CLP to operate at debt to adjusted EBITDA below 1.5x over the next two years, even with a potential of debt issuance in 2023. The company's sizable internal capital aligns the interests of CLP principals and employees with those of external investors. Internal capital from Citadel principals and employees constituted about 25% of investment capital. The interests of internal and external stakeholders are therefore strongly aligned because they're subject to the same fee structure....

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