Support for Allco Finance Group in the investment community is disappearing fast. Macquarie Equities, which two weeks ago confirmed an outperform recommendation on the stock with a price target of $9.30 a share, issued a note yesterday downgrading its recommendation and revising its price target to $2.The Macquarie report said a number of events, including last year's much-criticised bid for Rubicon Group and this week's margin call on the Allco Principals Trust, have caused brand damage that would be difficult to repair.The report said: "An investment bank's number one asset is its reputation and Allco has failed to adequately protect this asset in the last six months."Macquarie believes risks still lie ahead for the group. Allco is due to refinance a $250 million facility expiring in May. "We are uncertain whether Allco will be extended, refinanced or refused further credit."A further risk is that trading partners involved in Allco's core financing markets of aircraft, shipping and rail may be spooked by what is happening to the company and take their business elsewhere. Macquarie believes Allco's listed fund business have very poor prospects. The stock suffered a heavy fall on Wednesday, against the trend of a recovering market, when it was revealed that Allco Principals Investments, a subsidiary of Allco Principals Trust, was forced by two margin lenders to sell 22.1 million Allco Finance Group shares. Allco Principals Investments still holds 23.7 million Allco Finance Group shares. The future of this holding is uncertain. All the Allco Finance Group shares held by Allco Principals Investments are secured in favour of margin lenders.Allco Principals Investments said it was in discussion with the remaining two margin lenders with a view to completing a standstill agreement to ensure that no further stock is sold. One of these margin lenders is National Australia Bank, which said yesterday it provided a margin loan of $110 million to the Principals Trust.A second margin lender is HBOS. The Herald Sun reported that the HBOS facility is secured against at least 8.6 million AFG shares and 600,000 shares in Allco HIT Ltd. A charge document lodged with the Australian Securities and Investments Commission shows the BOS exposure is capped at $250 million.Another Allco company, Allco HIT Ltd, announced yesterday that it had requested a trading halt. Allco HIT operates the Hybrid Investment Trust, which holds Allco Principals Trust preference units. The Hybrid Investment Trust and Allco Principals Trust were both formed in 2004 with strategies of investing in deals sourced by Allco.These companies had limited success in pursuing their objectives and the lack of diversification in their portfolios has left them exposed to shares or derivatives in other Allco entities.The exercise by the margin lenders of their power of sale of the Allco Finance Group shares has made investors wonder how much more of this web of interrelated holdings will be unravelled.Allco stock rose 65 cents yesterday to close at $2.86.