Focus Financial Partners Inc.

The stable outlook indicates our expectation that Focus will operate with weighted average leverage of 4x-5x during the next 12 months, as measured by debt to adjusted EBITDA per our calculations, while continuing to acquire wealth managers and generate strong organic growth. We could lower the ratings if Focus operates with debt to adjusted EBITDA above 5.0x on a sustained basis, per our calculations, or if its business deteriorates significantly. We could raise the ratings if the company operates with debt to adjusted EBITDA per our calculations comfortably below 4x on a sustained basis and the business continues to diversify while retaining downside protection. We expect revenue growth of at least 20% in 2022 on growth in assets under management

... into the company's cash flow generation. Focus Financial Partners Inc. retains a cumulative preferred position in the earnings generated at partner firms (not including those that join Connectus). As a result, it receives the corresponding portion of earnings before partners receive any profits. Over 95% of total revenue comes from recurring wealth management fees and about 22% of total revenue comes from sources not correlated with financial markets. We expect the company to operate with leverage on the higher end of 4x-5x per our calculations. Focus increased its net borrowings under its credit facility by $886.55 million over the course of 2021 to fund acquisitions. Focus completed 38 acquisitions in 2021 (14 new partner firms and 24 mergers), adding $71.4 million to base earnings. This follows 25 transactions in 2020. We expect mergers and acquisitions (M&A) to remain a significant driver of growth....

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