S&P: Affiliated Managers outlook negative

Standard & Poor's said it revised its outlook on Affiliated Managers Group Inc. to negative from stable and affirmed all its ratings, including the BBB-/A-3 counterparty credit ratings.

The agency said that in its opinion, the recent announcement of three acquisitions and the funding of the majority of their purchase prices with debt reversed the conservative financial strategy that the company had been operating under during the challenging period of the past 24 months.

Affiliated Managers' assets under management has benefited from the year-long rebound in equity markets, but S&P said it remains concerned because the company continues to have net outflows in its investment products. The agency said these operational issues heighten its concern over the deterioration in debt service measures because it causes S&P to be more pessimistic about Affiliated Managers' ability to meet projections.

If the company does not quickly reduce its debt burden, either through the issuance of common stock or from operating cash flows, the ratings could be lowered, the agency said.

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