Weak Cash GenerationPersistent negative operating cash flow across multiple years raises concerns that reported profits rely on non-cash items or timing of portfolio trades. Weak cash conversion undermines sustainable distributable cash, constrains deleveraging, and limits the firm’s ability to fund preferred distributions from operating sources.
Earnings VolatilityMulti-year swings between strong profits and outright losses show earnings are highly sensitive to market cycles and realization timing. This volatility makes future distributable income unpredictable, complicates risk management for leveraged split shares, and can erode investor confidence in steady payouts.
Sizeable Absolute DebtAlthough leverage improved, the company still carries a large absolute debt load (~$700M). High nominal debt increases interest and refinancing risks, limits strategic optionality, and can amplify losses in downturns—heightening the structural risk profile for both preferred and class A shareholders.