Kestra Holdings doubled its debt and interest payments after adding a new private equity investor last year. According to a Moody's Investors Service report, Kestra's debt increased 87 percent over 14 months to $850 million.
Recruiter Jon Henschen of Henschen & Associates shared that broker-dealers should be cutting debt, not increasing it in the current economic environment. Henschen told FinancialPlanning.com that while wealth management is generally seen as relatively recession-proof, concerns about an economic downturn are growing.
On the other hand, Kestra's CEO, James Poer, reaffirmed that the company remains in a strong financial condition with a healthy balance sheet and continuously growing earnings. Indeed, Moody's report concluded that despite the elevated debt and higher costs for interest payment, Kestra's leverage would likely fall significantly this year.
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