The Caribbean Information & Credit Rating Services Limited (CariCRIS), has given Cornerstone Financial Holdings Limited (CFHL) positive ratings, which affirm its status as a major investment finance house in the region.

Cornerstone, an investment company founded by Paul Simpson in 2013, is behind some of the more recent notable deals as it rapidly extends its portfolio. In 2018, it announced it was a player in a major way, acquiring Barita Investments for more than J$3 billion.

In commenting on CFHL’s principal portfolio company, Barita Investments, the report indicated that Barita has maintained a history of strong capitalisation with capital adequacy ratios well in excess of regulatory
requirements.

According to CariCRIS,” Barita remains robustly capitalized with a capital adequacy ratio of over three times the regulatory minimum, and ranks among the highest in the domestic financial sector as at
September 2022. The report goes on to indicate that Barita’s high level of capitalization indicates that it is better able to withstand material changes in market risk relative to its competitors. This significant level
of shock resilience, according to the rating agency, implies minimal parental support from CFHL is required in times of stress, therefore allowing CFHL to execute on its strategic priorities, even in times of heightened economic uncertainty.”

On the local scale, CariCRIS assigned Cornerstone a corporate credit rating of jmA (Local Currency Rating) and jmA- (Foreign Currency Rating). On the regional rating scale it awarded a CariBBB+ (Local Currency Rating) and CariBBB (Foreign Currency Rating).

The ratings come with a stable outlook all above the minimum investment grade ratting of CariBBB-.

This is remarkable given that Cornerstone in effect was kickstarted in 2018, five years ago, and now is in the same rating ball park as entrenched players like NCB, Sagicor, Victoria Mutual and Jamaica National.

Cornerstone now has J$360 billion in assets under management. It started out with less than J$20 billion.under management.

Explaining its thinking behind these assigned ratings for Cornerstone, CariCRIS pointed to CFHL’s ownership of one of the most established securities dealers, Barita Investments. It also noted Cornerstone’s diversified operations and revenue streams in other industries and markets.

Cornerstone Financial Holding Limited USA did not escape CariCRIS’s attention and what it brings to the table. This entity is principally involved in the holding and trading of proprietary investments with a focus on energy infrastructure projects and real estate developments in the Caribbean and Latin America.

“The ratings are underpinned by CFHL’s consistent asset growth, history of profitable operations, good capitalisation and liquidity levels, and low leverage. As at September 2022, total assets of CFHL stood at US$779 million with shareholders’ equity of US$480 million reflecting best- in-class healthy capitalization levels and low leverage. According to the ratings rationale, CFHL’s leverage was low as measured by debt divided by tangible net worth, which stood at 0.4 times as at September 2022, better than CariCRIS’ peer sample average of 4.4 times. CFHL’s governance structure and risk management architecture which operate within a groupwide enterprise risk management (ERM) process and the Three Lines of Defence framework were also recognised as key supporting factors to the rating,” read CariCRIS’ report.

Founder, president, & CEO of the Cornerstone Group, Paul Simpson expressed that “The achievement of the investment grade rating, reflects another step forward in the execution of Cornerstone Group’s
strategy and will support some of our growth initiatives that will become more evident over the next few months as we seek to continue to create value for Jamaica and the region by transforming the access of
Caribbean nationals across all socio-economic classes to wealth, banking, and other financial services.”