Fitch lifts Russell Investments view to stable

Fitch Ratings said it affirmed the long-term issuer default ratings and senior secured debt ratings at BB on Russell Investments Cayman Midco, Ltd., Russell Investments U.S. Institutional Holdco, Inc., and Russell Investments U.S. Retail Holdco, Inc.

The outlook was also revised to stable from negative.

The outlook revision reflects a sustained track record of executing on cost-reduction initiatives, maintenance of leverage at or less than 4x, reasonable investment performance and improvement of client flows supported by acquisitions of institutional mandates in the first quarter of 2019, Fitch said.

The ratings consider Russell's strong franchise, AUM diversification across geographies and product sets, scalable business model, demonstrated track record of delivering strong fund performance relative to benchmarks and margin expansion as a result of solid realization of cost synergies, the agency said.

The ratings are constrained by the relatively high leverage, low interest and fixed-charge coverage and lower margins relative to higher rated peers, Fitch said.

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