Sherwood Parentco Ltd. Credit Rating Report

This document is a credit rating report for Sherwood Parentco Ltd., detailing the company's financial performance, business risks, and outlook. It outlines key strengths such as ongoing growth in the integrated fund management business model, which supports higher free cash flow and lower leverage. The report notes significant financial leverage and elevated exposure to real estate, impacting cash flow volatility. It presents a base-case scenario indicating expected growth in cash revenue and adjusted EBITDA for 2024, alongside projected declines in collections in subsequent years due to reduced proprietary investments. The stable outlook suggests that the company may gradually reduce its leverage, with adjusted debt to EBITDA expected to decline. The document also compares Sherwood's financial metrics with peers in the distressed debt market, highlighting its relatively small scale and high financial leverage. It concludes with an analysis of the company's strategic shift towards an integrated fund management model, emphasizing its focus on investment management and servicing.