Evercore (EVR) 25 Apr 182018 Q1 Earnings call transcript

Company Profile

Participants

Jamie Easton	Evercore, Inc.
Ralph L. Schlosstein	Evercore, Inc.
John S. Weinberg	Evercore, Inc.
Robert B. Walsh	Evercore, Inc.
Conor Fitzgerald	Goldman Sachs & Co. LLC
Jeffery J. Harte	Sandler O'Neill & Partners LP
Ann Dai	Keefe, Bruyette & Woods, Inc.
James Mitchell	The Buckingham Research Group, Inc.
Brennan Hawken	UBS Securities LLC
Devin P. Ryan	JMP Securities LLC
Michael Needham	Bank of America Merrill Lynch

Call transcript

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Operator

Good morning, ladies and gentlemen. Thank you for standing by. Welcome to the Evercore First Quarter 2019 Financial Results Conference Call.

During today's presentation, all parties will be in listen-only mode.

Following the presentation, the conference call will be open for questions. being Wednesday, is XX, call conference recorded April today, XXXX. This the now of over Easton. like would conference Investor to Jamie Head I Evercore's turn call host, to Relations, your ma'am. ahead, go Please

Jamie Easton

us and today financial you conference Jamie Relations. of I'm Evercore's call. morning, Good for results for first quarter thank Evercore's XXXX Head Investor Easton, joining

evercore.com. including will Bob Chief For John discussion call Weinberg, we our me on call, call during are beginning the today actual indicated, I today after the of prepared Officer; XX to Joining that statements. measures open duty CFO. in update current of These is these the statements. to Ralph and Schlosstein, limited Evercore's you non-GAAP our of Chairman; to evaluating financial webcast live make quarterly a reports remind in approximately otherwise complementary uncertainties presentation annual section first XX-K, results cause but being Investors when we reports number factors it The differ that forward-looking XX-Q, This questions. discussed Executive company forward-looking Commission, we for hour we Form indicated on will and performance. course and conference Walsh, may XXXX to subject include the point materially for and press those on the be statements. is will of assumes website These outcomes release, which our our are After filings company's an on adjusted conference Form the President is release company's financial meaningful days results. are this measures, our various important out our any Earlier and Securities a are one discussing unless we and the are could the available which this want those issued call report X-K. that Executive on that risks want website forward-looking quarter announcing today, remarks, on to of from on Exchange available today, believe no Evercore's In to archive call. I statements and factors conclusion are with to be that Form not our at the our there press

For previously which, contained measures detailed data release, and you GAAP refer press within posted these disclosure on the mentioned, reconciliations, as should the to our website. our is a on financial

it's on that evaluate an performance basis. believe to to important Evercore's continue annual We

any over noted transaction by particular Ralph. we've previously, our turn As results for quarter to the now of I'll call influenced the are closing. timing

Ralph L. Schlosstein

not by what all income and power net results well. most results, results environment These we regions the important when teams significant per firms tax help yet, our a as contribute. to among that because effective ups in Advisory almost adjusted Thank enhanced The say morning, a our contributed the share say but everyone. reported, our quarter, in a continued earnings ever things many to of enabling and I a it pool certainly won't you, surpassed Underwriting certainly to our increase quarter our have was geographic firms. showcased those is in history best nearly Fees this favorable our Advisory our lower in all measures. reported every working is market Advisory by the view our Advisory today, Jamie, the for and our of happen. does quarter a of it are enjoyable and we're quarter, history start amount. were good take with quarter Fee almost highest among doubt were must will have that I traded firms downs, but have publicly flat pleased the with But say when There quarter, ever. share, the revenues of quarter in if guess, represent for those reasonably best ever sectors first no cover or actually to these firms, in the last Obviously, happen a the that is business quarter roughly history Well, you earnings I by XXXX. and the and of the the be also are all highest little. all first best one and we rate, best of reported, of that have in revenues who the market generally off

more than our broad to almost we revenues activism, including certainly a serve gain. market again a Advisory strategic XX% miniscule not lead capital advisory. will on gain array and matters M&A, So, share Significantly, in of restructuring clients

in continue contribution grow to quarter. Our a and emerging capital defense advisory significant and made quickly and capabilities this in activism

Our another conversations are those and we'll were year. six color completion. very more on strong complementing in our results likely XXXX firm that couple with a later have talent is of equally Advisory still at And close managing the to in beginning Five number we the of join process provide have recruiting and senior remarks. very a directors to recruiting promoted the to exceptional. in cultivating this professionals to-date, be committed of the year,

capital strategy encouraged sustained quarter. the assessment this our return to us to Our momentum accelerate of annual

cash stronger plan This increased has dividend share. In done as level, earnings it in re-assessment in when October keep generation. the Our to dividend to competitive increase per payout or quarterly to annual reflects and future, reflects April a previously. more to have our we adjusts we $X.XX flow the board opposed the and our

sure noted presentation of Let me the results. segment. that Banking results, few Investment briefly review I'm to our changes our particularly a have in you

will excruciating let here There Bob I in is and show were go what is also operating through by Our more clearly required those changes driving GAAP, goal some to performance. detail.

same year million, million, the clients Strengthened and $XXX.X continue versus were comment net this Fees services. year. Advisory versus $XX quarter as quarter, will how that. the revenues period consume our investor prior and John Related first they and down Our execution Underwriting and more and institutional Fees on drove research last success XXXX to up reassess XX% our for pay Commissions were

up continue in excluding work Fiduciary of Trust with we transition Independent We the are operations XXXX, adjusting Institutional our to clients related as In asset fourth and this Management, delivery to which quarter and evolves, business, sold the service Investment our and appropriately. revenues respectively for year-over-year. $XXX.X quarter were the the were million assets XX.X%. and Operating from management income fees was consolidated respectively. and and XX% quarter Net XX% businesses margins XX% for per under share $X.XX, XX%, management and increased earnings

is income both for you'll reflect tax of to the is price when And results higher provision than Our showed expensed corporate this X.X% deducted U.S. and last tax the time accounting for as lower purposes. tax rates year. first benefit at a a in quarter. The up effect in first reduction arises the attributed that first recall, the the quarter for deferred compensation in taxes

was reflects full-year Our XX% expectations. the current best about judgment our our ratio compensation quarter, which for

efforts X% and well revenues, versus and for costs XX.X% strong XXXX have year we which another noted, essentially flat that, year. as I as year compensation strong As for XXXX. recruiting the estimated $XX of the Non-compensation up were last in recruiting and sequentially ratio effect million residual reflects a anticipate of or

to to the market our current Let operations. on call me and over Investment now the comment turn John discuss Banking environment

John S. Weinberg

The you, favorable. remains Thank broadly Ralph. market environment

sponsor of having M&A We first conditions continue to and all actions activity, experience are strategic continue activity be globally. strategic to dialog and a quarter the clients and that as driver and supportive of Multiple discussions of including raising. economic are level high the catalysts client with ongoing during activism motivated our we consolidation, capital

corporate diversified strong sectors and and we is strong of And globally remains execution serve. each for with key and capital financial backlog sponsor clients. both remains raising across Our demand advice the our

the our greater review Banking Investment of briefly me Let business results in detail.

years; our quarter with of $XX L.P. transactions team healthcare, a in growth. of announced chemicals on Communications and in Energy of We XX in XXXX Fees Advisory ago in ever Advisory million, XX, from Energy underwriting, sale for the highest $XXX multiple Equity, were quarter and quarter. the the Group Capital and the on with TMT. Compression $XX Partners, than billion billion L.P. in First of And the highest Advisory are Notably, Activity and Future months as quarter sponsors Chapter performance the improved Carlyle managing year Specialty largest SMDs. energy, financials, we to the billion of Underwriting we the underwriting The XX period. directors capabilities, We particularly particular March for of a XX XX for sectors billion transactions participating bookrunner. Productivity quarter plan strengths globally reflected Holdings its XXX%, with XX% first the revenues. Chemicals the strong the $XX once were business were quarter XX relating AkzoNobel private advising contributions XX year-ago acquisition Interoute to and Energy and last Communications; assignments on Group Transfer on on in again strategic our that Investment million, in Fees L.P., history. Partners, senior our equity series in European our Riverstone ended XX General in financial $X up of pleased CSRA revenues of and Advisory LBO healthcare contributed to the activity with our with Advisory from drove $XX The composition LBO LLC Advisory Dynamics; USA our its a higher globally to sale also a Transfer ended largest its GTT reorganization;

the directors, to and help recruiting Both we continue wanted the Williamson. one board will to will that Ellen At Before new I highly new professionals, other directors, two recent as for and highlight firm. and comment Sarah meetings, are offer our I development. accomplished call important build to fresh turn Ellen us our perspectives Futter Sarah our on welcomed year, to Ralph back

Now, to Ralph.

Ralph L. Schlosstein

John. Thanks,

to recruits clients. the to with April. I Advisory quarter, team As committed have the first opening our bankers during more to joining we having the model, directors advisory in as the success capabilities in SMD to to considerable starting mentioned as firm recruiting and we and join continue gravitate of senior can managing one that Five independent deliver my are in breadth remarks, two

completion the third following join during of We expect commitments. the their two leave other and garden second the quarters to

pleased the and Adam particularly be Wilco are in led initially We Consumer a Faessen. dedicated sector, launching and to Retail by Taetle team

recruiting we done important As been we many the are we have have said to in this that. we that just years, team confident right for and committed have sector

Stanley Eduard expanding focused as remain well on expanding we on large focusing Discussions with We continue focused Morgan strategic to on Kostadinov focus join are coverage geographic we to Europe, this and company the where also global industrials sector has us that as in for And committed building coverage, others capabilities Germany, in see sector globally. from on and sector country. industrial progress. right fit. our in

director office industry. have And in expect being raising of new strong is, addition another Dallas private in four important and teams. SMDs it range a appears At this one our course, Advisory of capital to announce strongest We real our this primary capabilities discussing a is we seven. added restructuring the larger capital advisory estate And of our senior team to that one to that's than for market. team, historic opened likely announced in managing will focused the and actively shortly of hire our strong our which on has point, advisory, Peter we Brundage to XXXX number in already

noted beginning the the call, year expectations level this our compensation of recruiting. of for the at higher As I anticipate

call to Let the Bob. me over turn now

Robert B. Walsh

Ralph. you, Thank

me results. with Let on a GAAP our begin few comments

effort quarter, within which businesses. of on Related for been Administration into to Advisory provide Management Asset an statements all revenue includes has Fees, investments now Fees, private and losses at revenue. Investment presented. equity reclassified Management Management Gains Banking our presented and on from ECB and and Commissions Investment presentations certain Asset Fees. we been are income to peers, renamed greater and Wealth the our During fees balances in Underwriting the our Management other to periods and has revenue have Institutional Fees, disaggregated and our comparability

expenses and on $X.XX, presented acquisitions presentation, $XXX.X Underwriting the been per for on adjusted as for in share expenses were adopted line and Contracts item, Advisory from with adoption our our We were clearing on a transactions the expense related which represents quarter us Also, The from adjusted U.S. and with statement during of exclude quarter the items an did this relative expenses client-related quarter, a million comprehensive not earnings record standard. our in professional first impact presented for amounts have by standard Revenue have we increases they quarter. following underwriting presented on of for consistent periods, grossed net both directly to the revenue respectively, purposes, for expenses revenues, other Fees. the which of accounting recognition operating this for have the significant new our Net relevant a for fees results dispositions. results basis. quarter. the GAAP adjusted million our separate adoption Customers, revenue have to $X.X new the Also, further of standard, and a standard execution, net record we $XX.X These of just and that us, for operations, prior for custody income a million, fees. Consistent expenses historical rewrite practice are with GAAP basis a reclassifying from certain a and as and

in As in vesting our ISI associated quarters, LP costs Units we of acquisition. with conjunction prior adjusted the the with granted

quarter, related the we For J LP Class expensed Units. $X.X to these million

incurred charges on trading in platform During the of the UK. U.S. presented GAAP $X.X with special expenses the quarter, have closing costs a our associated been basis. of in we agency These million

rate percentage for points, effective Moving and for resulted resulted decrease XXXX, of the first enactment rate which result quarter points, effective January compensation XXXX in decrease of adjusted points quarter. and and in rates the decrease a a and XX.X% GAAP adjusted points a in XXXX GAAP in GAAP year. on GAAP in respectively, the rate respectively, Act XX.X on the tax Similarly, December percentage the quarter rates is for the the XX.X in well future XX.X as quarter treatment of in the U.S. as in quarter. the stock in to same the quarter The last U.S. XX our of tax to decrease percentage impact first in tax for the to in income resulted taxes, XXX.X% Jobs rates were for in period a X.X% quarter in Tax impacted prior of and was as points, and impact prior XXXX the This rates and Cuts XXXX by compared years. adopted U.S. of of our expected the in percentage decrease in respectively. and effective Further, resulted the XX.X percentage in tax points and a the XX accounting U.S. the of tax percentage of for adjusted the

of the the in Lastly, tax assuming our Tax expect adjusted effective Jobs of and mix approximately to to the and tax XX% level XXXX, geographic lower be XXXX comparable structure would we for reflecting Act. rate is Cuts earnings XXXX,

year-over-year lower we firm-wide costs, for costs employee, on focus lower Turning a to X% $XX,XXX on, metric a quarter, non-compensation the X% per were basis. and sequentially,

prior a our million the transactions On quarter increase $XX.XX the in was in increases XXXX an shares. Our count GAAP with the average that higher earnings when to shares, net comparison repurchases per of QX these share principally was of XX.X share $X quarter. X.X cost basis, million QX a driven line cost In price average occurs million at million $XX.XX cash questions. count With shares were of to of repurchased for shares related XX.X we by share. current share we'll We purchased with hold $XXX,XXX share. the per million. $XXX of repurchase adjusted open in settlement of stock-based $XXX.X quarter, share share at by $XX.XX compensation were marketable that, at liabilities end the an an cash operator, and for awards strong. pursuant And share. at open repurchased in our assets average current and of program finally, market remains securities per position cost per the exceeding our the million

Unknown Speaker

you, Thank sir.

We session. will question-and-answer begin now the

from Our Goldman from of is Sachs. Conor first question the line Fitzgerald

Your line open. is now

Conor Fitzgerald

Hi. Good morning.

Ralph L. Schlosstein

Morning.

Conor Fitzgerald

same the XX% Advisory by excess it's modest revenue disclosure at on little a is growth If in and that's on bit of your this and Advisory is Underwriting to it XX% you and of transaction business a XX% strong dig lagging the million, $X Advisory your and for look Advisory obviously in I in but ballpark wanted respectively, your Just up quarter. which Fees saw amount.

that that pace. that strength and least in businesses? activism other fees, it's read revenue you're a of on at Is those fair whether some some So is the north defense of to some just that kind me lower year-over-year comment non-transaction implies growing of a well seeing your recurring and at type your can you of or of pace XX% more

Ralph L. Schlosstein

I are wouldn't quarter doing conclusion but reach on based businesses very numbers. one necessarily of well Those the

as reality we're far the at starts in that – as – we quarter Fees best visibility it are have we think very that for business where little gains sources we're as success supportive. the activity environment market-leading little well is our the and the then Advisory that we're today. capital continue. and after having and restructuring; foggier market M&A we're of is see, get advisory traditional can the the a that well, And that a to where in misty goes see in, for obviously to doing they're practice quite I the we in as all but really contributing moment, the very a our share defense activism practice, can quarter And broadly and

Conor Fitzgerald

And and environment could really any some have on impact of there's which just M&A. quite this potential quarter you pursue if and whether adjusting you're Obviously the quarter sense impact in strong. to clients political an further their trade hearing could thanks. the willingness to from this didn't curious they're your what impact But how have been announcements increasing were the on helpful, and then the That's focus tensions this M&A. in

John S. Weinberg

for going say hard business seen pullback clearly, to have really look been whether any impact. optimistic in robust. there have always into don't play. What in We see an we about the But quite we're we've that been that forward, have It's we come And dialogues our us as to factors market. having. dialogues is the it's very the are that

Conor Fitzgerald

Thanks for questions. taking my

Ralph L. Schlosstein

You're welcome.

Operator

you. Thank

the Sandler Harte question next O'Neill. is of Our with Jeff from line

now is Your line open.

Jeffery J. Harte

we kind I Hey. could it of only we accurately the to what in least second Touching revenues, us best bit what revenues pipeline little one kind suggested visible that on better stronger can an been visible or but quarter. was always back at idea – else of and see. much tough kind maybe transactions of Good of seem Nice But, granted see quarter least forecasting has ever. look reconcile morning, of at it's to for kind you of help get to the undershoot quarter to from outside kind of what the Advisory than guys. mean, pipeline Can at – give this quarter. the this because really quarter for a us your kind

Ralph L. Schlosstein

Yeah. that if we've going of of said the to. I the me many But that, not is particularly for a Well first good times, revenues. apologize I'm our as predictor is, publicly not you're all, visible to look, reality think Advisory pipeline expecting available

pipeline, our revenues be out, a always would not of Advisory revenues of a pipeline, the were example, if unto itself you're are historical in as our to good simply predictor visible any that it particular For take quarter. above pointing one well recognizing and in that multiplier

given things advice, activism or lots retainer that. when in available and for raising capital pipelines, There's there honestly restructuring lots it's those fees show whether higher that we business, quite and of our we capital that the would more are don't defense, Now are be, for advice, get and broader between a do of the purely reasons advisory publicly up guess, reporting continues it business and to available stay traditional although widen. And nature that the data of engagements. publicly we Advisory relationship strategic probably or what is wide guess the fees actually my

Robert B. Walsh

confidentiality making comment transparency obviously to website this will any anticipate. that include continue we circumstances are transactions where that Jeff, would There and that our where of it's they're on respect you us the are comfortable as was with We our Bob. lack exaggerated would not, I simply quarter. disclosure. clients

Jeffery J. Harte

Okay.

as on guys if, at to, you're of now how ramp least and guys you I'm Secondly, seeing seeing wondering view UK up specifically for been historically environment, B, the where Europe. strong? overall on public opposed kind we're say, are A, then, Evercore, always positioned in a in as the having you more I Continental real data that; Europe

Ralph L. Schlosstein

have Well XX% roughly, non-U.S. don't Asia predominantly I but in, also think to if in of historically, in well. both see from revenues that. clients, in particular our you as look Europe at any and our we XX% actually that's come have We business, change

significant independent been XXX-plus a have Evercore and point Europe greater as both from will a own as not larger and on but of pickup basis results My transactions our the and business in versus the actual show if things XXX-plus some in would that been think payment guess what may years. it case be Rothschild you �� may of competitors in in revenues – U.S., of there do our a announced more that information is than in space, in the two be than our while on in would. at U.S, little still in were not a Rothschild, be Lazard that going narrow I own largest that would much the transactions they if bit the look lag have Lazard percentage that on U.S. for years say the I those in Europe, beneficiary very Europe – and up fees picking they in are we born

John S. Weinberg

and as for look and a in same and Continental appropriate doing continue – consistently, that just is we that carefully, people slow which and in you we're do do hopefully was the would intend to the other that strong where building in thought us Europe slowly, we business it which we're focus areas I always like it it very We where steady way we add saw are do way, to but a focus where people could we we're add to as is really hire the Consumer carefully in is we a Retail going go. it us. there for

Ralph L. Schlosstein

Kostadinov a who do, three always probably hired second in is We've good our we office. example from looking partner And Morgan or as if Eduard years we that. four for And been a we Stanley of A-plus can't attract are, that. or and we focused earlier get able firm. we an A, to certainly the an very continuing to wait we're fortunate year John do to him as said, on to be this for And Frankfurt

Jeffery J. Harte

And the say, actually versus touch Advisory give just can revenues? thanks. of size generally kind you size Okay, to relative any on of just us first traditional capital big guys the question, versus contributors a to restructuring kind for, to advisory

Ralph L. Schlosstein

and of Not that between each a those It's not that really, line reason truculence. not activities is the or just intransigence the line. bright is for

ends we and each fact of investment financing that considered the negotiating Generally, and fact working advice to do is Similarly, separate but give we're of specific have. we providing a participating be be ends just an with of are raise have fee grade, helping not acquisition, advising examples, the activities lower in and negotiate a for their also doing acquisition fees out-of-court of if them. certainly traditional lot the in them broad of we upper to don't client is those a at a the activities. talents a example, the with on them structure for the significant that might liabilities where you're which many of couple for we you that be non-investment even we are that. be that we So, of a not to company restructuring, We may in-court utilizes grade of ones, may there engagements but or in that work on them it we capabilities on or range in at or

between activities – various are not just very they're lines the So blurry. those very,

chosen to every try and them identify really we've not of each hard. because so it's and one And

Robert B. Walsh

first what raised fees broader services is delivering estimated Dealogic or question which the the Ralph be remarks And fact, you the transaction. Jeff, a those of has underlie may, from composition that in that on contribute than for we're

Ralph L. Schlosstein

it's you with lot your breadth Yes. can agreement our you time make a exploring, independent of the we there any with could base that independent you fees all, And our allow one clients. much platform in Look, to is are people statement is our in those client capabilities. do at the which capabilities interested for us markets many sole in firm capital which of have, or for other our on advisory, we competitors because interacting we part a independent which model. do are them, to or tax; And universal that we been at talking the operate our thing do firm. the and of joining the advisor of activism to an they The people who they three more markets spend would've you at the who on longer second an working One, revenues, the equity capital of more defense haven't Evercore is that from for believe terms time of whether as four of practice, advisory, two when lead at Evercore, investments or they or than whatever a years consequential five than look period is and to made things. all debt case our ago allow us and capture of our broader case

Jeffery J. Harte

Okay. Thanks, guys.

Ralph L. Schlosstein

Yeah.

Operator

Thank you.

question Our KBW. Dai the Ann from line next from of is

line now Your open. is

Ann Dai

my taking Thanks morning. Good for Hi. question.

the see you think of business comments, a prior on (XX:XX) years. that if the I ECM, in a think dependent and I completely quarter $XX.X a mentioned But a commentary this I business of back to of we be years has to was this potential It's clearly, ago handful lumpy. environment. some that market just couple in your your understand that that billion Underwriting. had for nice said guys you be So on activity can

not guess getting read it status deals feel of in that I'm I named where incremental we and So just good it or traction wondering finally quarter? too this inflection getting very that a you're just was bookrunner does reaching should point like on getting and out quarter much we're

Ralph L. Schlosstein

so. chain named I Well, element we add the or some say the frequently the affects progress, factor of being that each guess transactions. feels I transactions, and it more hope while bigger might up And economics being obviously bookrunner and to active is some answer I certainly bookrunner that there's finally. progress, good that would in source we're the more share food that of an the is of a moving we're of quarter, making these like the we and our which that's that on economics And also that all number but capabilities of of look have with on I were rejecting if distribution that way of situations at with of quality them, where think being the position a first are and we in fair we the one the exists by commensurate the research were don't involved the believe we bookrunner combination firm. provided the a you and a transactions a in in

John S. Weinberg

be with out we we more transactions to that clients. that base And successful clearly like in when like go to and which in add we and certainly us we're not continued to I of begets a have starting in we feel to but the which we feel more new that talk and success helps momentum. And transactions and have working, have would as an to over-represent places you're market. we other bookrunner know, would as that success, are we the just want a experience are you be business,

add transactions. hire to continuing into we're more where marketing look of value addition, places In in can we side the to

and like forward. that continue respects, in trying investing success we're use feel So all and to some move to we're we're we to getting

and we'll see the that's on. as hope quarters certainly we case go So

Ann Dai

quarter year-over-year expected should this with the discussions reflective Okay, if you the side, about equities coming just would've commission on business. the for And what you trends back for the MiFID? full other And commission the thinking line around guess we based be year, your into as prior year? the moving trends we your secondly, expectations I expect color. this this then trend clients thanks to in look at might quarter's with were of

Ralph L. Schlosstein

what the word expected and would've used that what are strong expected, word for the what we It's seems rather what guessed at they all line uncertainty myself indicative expect they we clear whole guessed. in I the a might've speak probably I'll certainly think or to year. would too might've there are was word – guessed so – with for than not and me. much of I I that

impact example, For quarter But of few than it's first last terms the they're and of early relative the second the MiFID form of very little mean, think wallet first a and to of what we the it. year. I research for in quarter I better which for the really both clients the realignment innings in had the weeks pay in

two. in my year We distinguishing another having part think two world-class intellectual guess the clients We are your fully the going deeply a guess, the quarter be to would not it's research rather of and part or committed once is serve And be, question or in of capital the but to of again capability. of to to that a answer ability Evercore revealed another firm.

Ann Dai

sense. Thank you Makes much. very

Ralph L. Schlosstein

Okay.

Operator

you. Thank

Research. next of Mitchell the Buckingham is line with Our from Jim question

now line open. is Your

James Mitchell

Maybe diving Okay, morning. a just advisory. little deeper thanks. into Good markets capital

as that's growth. think cited I increasingly been driver a of

it's been to maybe dynamic that a you're that guess a feel secondly, some you in you competitively positioned have think does us. like driving growth? space how give what's And not sense of as Can what's little it your that peers been well-positioned? given do been, I of feel of the I kind opaque

Ralph L. Schlosstein

that. elements are to Well two in the broadest sense, there

private we our capital advisory funds The first is business our private business. what call and

James Mitchell

Right.

Ralph L. Schlosstein

connected And added Historically, by business team and infrastructure debt mezzanine raises firms. firms, we've asset earlier funds firms, people. done this you of private real primary both saw businesses week, as business. hiring in alternative And for capital. that The private as and we capabilities to the a of management to area well those equity estate are the our

their one increase is products. interest LP primary another. those So advising two interests manager interest and related are either fundraising sell to of firms sale advisory, recapitalizing of also alternative these across providing clients fills key asset And In are in sectors. the to that management sort to investment their bucket primarily alternative on that – the perhaps who we that's investors want or liquidity capability down in in capital funds, private out the one so business involved our in

services. more advisory second capital into investments or in strategic some clients. The bundled wrapped specifically And debt broader that's capital advisory, broad equity which to said we've service with times a and fees fee that related M&A made bucket markets many advisory that markets of activities general to are is earlier, the providing actually as are I together those

larger providing or that because our broader the we're that four that, know we we our services that be years clients also of time might've case sole advisor and from can or by providing they services much three advisor we're the So period ago. or than getting clients of that been we longer know value five and we primary those know the for fees a the to

John S. Weinberg

add to to Just that.

acquisitions view most to that parts mergers that give perspective clients make a it's allows capital best advice. full have to One of a finance matters, markets the is we have the sure advising we're or important that the and of when on, or about advisory us really different whether issues other corporate

So we and in our be is sure that is advice very all different to along we've comprehensive that invested respects, make many lines. comfortable really we've what thoughtful can done

as of quality anything this an is the So clients. as really, investment providing we're else, what much in

the is the give advice important that the the day, there seen sure said, to Ralph quality at excellent. the and it make As that. for also, most to we end is economic having us we've thing of of benefit is But

James Mitchell

it a some or just markets been markets bigger get is from. just it? of out it's Great, that's debt just coming scrutiny has of are they advisory taking or because in helpful. there rapidly the share sense from capital that's equity so trying But greater deals to there players the is conflicted past where growing of for and you or I'm more of of than been demand capital a why

Ralph L. Schlosstein

capital of if business Well capital advisory the business debt Europe of first equity in the markets And more historically you prevalent States than there it was obtaining all, debt to and clients look independent most historically. in is back of markets a United advisory was that them. explosive, an financing when modest value at some, of is say but wouldn't advisor side certainly of embracement they're specifically the some part having I on their amount

I at relationship at opposite. client between simply And highest a I company, wants very of side, in the the and an not think most participants that on for the toughest lender terms, huge a area of is but greatest is companies that is trend. and a call particularly rate, the be deluge think having fees, markets, potential look it single an I if part wouldn't amount wants there companies A of you the a it clients are can that are acceptance the the debt added. I is the and conflict. regular where think highest relationship that their value advisor that more has lender definitely

James Mitchell

Okay, quick maybe that's question rate. tax And the really for Thanks. Bob, helpful. one on

the of of going mid-XXs, a full you XX% I run sense to Is think XX%. still – that now think be had XX%. forward you of quarter if it'd close or what's year because use just don't of trying think get I said to I driving for the and like change rate I that said XX%, kind kind last any kind the XX% of to that

Robert B. Walsh

little XX% bit between is a to There's insight now. great more how at no XX% our on clarity or new and significant the Act just gap. going work It's business

James Mitchell

Okay. Thanks.

Operator

Thank you.

the Our with UBS. Brennan of next line question Hawken from is

now line Your is open.

Brennan Hawken

morning. Thanks Good the question. taking for

power capital after was just in confidence suggest improved maybe just tax on especially returns kind Could nice prioritization capital. us the on how see, any very those change one strong, think the Dividend update the reform? Does of you and of there encouraging. you about dividend to returns? First hike capital or your earnings

Ralph L. Schlosstein

rather the the it say than would former. I latter reflects

behind the change you I we ratio we steadily I think that in the that for rates. when last feel the when look We do. board's our last change, flow And recover is back as a point the might path, did at of October, for each parenthetically year continue here is October issue where historically, sit what you our I dividend, occur we And earnings years mid-XXs to we didn't the beginning, think the an the from of all had know to a because said in sort few in to to tax predilection think this it's power better intending we we the the have certain our and quarter those that. we strong drifted going if October corporate earnings we high-XXs. if a of tax of to the know updated said April effort made over was rates. to we of sort that think corporate increase payout now said that when company some very consider we And happen what to that because time of in made to mid I changes – were this one obviously, back down on with add and today, as you cash I than changes I us. result go

is visibility as we decent October, the got in the remainder to of We very what to second we've to have looks little what year. like. going pretty and year as as have visibility look following Whereas quarter the visibility what like, good to the

So, know will going in does but don't than that a it essentially we by I rather our which the caught of once forward, was policy, year, our review if are occur what board April saying is occur October. dividend

Brennan Hawken

you wanted reference believe that expand balance they sheet to an you your business research. makes want of on should don't guess put I you know had that, I you just review a some Thanks, then, pay to update lot follow-up bit. dig considering one expect on intent I business. to clients an the that you broad said change a – of be on mean, cash a as Ralph. That plans reported sense. and Could And what pretty bulge little when does the the equities there? I we in here contrast weakness. for might derivatives contributing, bracket different strokes made hugely But business how in the contributing. therefore, results models your of Obviously, the sharp mouth, words very folks. maybe with It with out but stand – by not in surprised to

Ralph L. Schlosstein

As out. is all how view, I my – it early in to conclude think too said I the shake before, this will way

of U.S.-based two have concluded prepared conclusions. firms true pay are certainly research rules to somewhat, compensating are long-only they that very don't what the ours is so and that like the larger are I particularly long-short I among by shrinkage to global, will maintain have firms who for MiFID. MiFID that's think One of that wallet. required the to there managers some are are there firms the that same long-only they clients that the not affected And firms likely ways But reached the almost and multiple the and in I add broad be for is conclusion. be it's inevitable adopted managers think think research, might down research by large, research. the I basically wallet larger want that global

that share services the increase. is to almost hand, research is other that products and going the I the second is of that On the true think the thing to highest quality tautologically goes wallet

and by of quarter. shakes research gain share how wallet by research. for highest out, in quality And the the shrinkage we market the the you to positively be expect so, results first that And saw all negatively effective the the

month quarter, a be second – not little quarter, to so conclusion reach And, wouldn't on and are balance the literally think seem for nature, checks other look, be they I the derivatives different said, will business. into a certainly model the very in making business. We're that you're second products and of that that's that commissions very, from the and Volatility business I firms a just that markets and business to thing but our the is in happy very are different firms. referring different a is larger not I it we're sheet-oriented even As models in the our there quarter. second

Brennan Hawken

Yes. Thanks for the color.

Ralph L. Schlosstein

Okay.

Robert B. Walsh

Brennan. Thanks,

Operator

you. Thank

GMP question of [JMP with next (sic) Our Ryan from is line Devin the Securities Securities].

line now Your open. is

Devin P. Ryan

morning, great. Hey, everyone. Good

Ralph L. Schlosstein

Morning.

Devin P. Ryan

the from like sounds announcements will there's start three, the market way growth secular things, earning and share picture theme start focused pace kind that the of we of the there's to cycle; continue; we gains where two, that a question the given that think It's record the and then, just the is a here, that's for year. Evercore, is get few bigger Maybe the M&A and clients. firm market. you're with But it question it of a about

outside is And the the at to share, level. pretty anything suggest that were control, degree, there's on healthy You of ways a which, here? there so, market that go some cycle would you can still to

that the compelling market as values, about more still is higher can cycle trying get the will you companies, gives on and of quite that of you like the pie will growth you kind feel more secular, then continue have things think And you you well. look bit businesses, Obviously, just you do So, the there? a kind or that grow. at that better to have comfort have advisory anything but suggest to

secular. and cycle the really So,

John S. Weinberg

hard Well, turn as quarters. that forward first, Ralph to to or go us look that don't south things actually of cycle, anything are as on the forward, we're dialogs going to to things our trying clients We a to we said, believe like look the the really that constructive, going that couple the really it having, going beyond looks see see it's and We would address down. look lead of issues think M&A, healthy to that pretty kinds be continue. and are strong. that And through we we see it's and

go all I can hard couple ahead. as things looks change We very all quarters really fine But I to know perspective, that from very, couple a a said, beyond think it Now, cycle quickly. a quarters. it's

the cases, change what business basis, liquidity. adjust absolutely over are be side, some are that technological many we that like more like that you and technological secular There cycle-down there tax they're healthy. into terms think, or where some a this will time, M&A and, are has inorganically you really, M&A. to trying people given There broader are trends through change, companies feeling things cycle-ups playing have, to is secular said right, In doing clearly in a of a in view have whether I clarity is the some

deregulation, is giving we is in economies change relative a had bigger, out which markets to be And which continue that that have get seeing change, get as change. a markets confidence. money the just M&A. to be for there If the some we're companies people We favorable, to room more would favorable. generally go longer regulatory cyclical raise secular no and the generally, as were is people think bigger, overlay, not Clearly, the do a

standpoint, solid feel And of feel the generally, say, about the right pretty I'd footing on So, good now. like secular cycle business. we're a we basis from we

Devin P. Ryan

John. quick Okay. And follow-up Terrific. here. maybe Thanks,

thinking state parse the ratio yet? maybe of mid-XXs investment ramped is is included the of And the to haven't there's through should comp not quite we that the to comp up, in comp right comp right expense on kind understanding as of there of kind new Just in of still kind a now how the now much really kind about people just a well, extent hiring business way and were hires, into ratio with number? be any the as outlook ratio of investment natural bit

Ralph L. Schlosstein

XXXX, to make that upper in with or the year to in year. XXXX, make ultimate time a of I out, significant any in shareholder Bob? that would if run beginning believe given two comp or ratio, the still sort years said you beginning we that of opportunity which ages it ratio. dark that towards we right, a over steady year the comp at had that we expect compensation at the we this that. year today ratio, to we a And – to the said we also and we're that get XX%. progress the expected those in believe same very and can a we a year. make XXXX, which going the we accruing capital, to value significant two, And I mean, doing back a have thing I mid-XXs. will Is mid ratio year, view, business we to a to nine slopped investments year XX.X%. produce, would year, I of strong this in I XXXX stick to we ago had that of X said to to in our if last strong and a year I at comp this that started joined go so recruiting firm have a lower investments I we because when human ultimately, we toward in hiring by At or high-XXs, was forsake said at had be high last time, ratio would comp recall, made a had which three years progress by and mid we never And expect two you that year I And if in statement hiring the we're that have

Okay?

Devin P. Ryan

Ralph, congratulations you, Thank and it. yeah, Got great a on quarter.

Ralph L. Schlosstein

Thanks.

John S. Weinberg

Thank you.

Operator

you. Thank

of from with Bank is question next of America. line Our Needham the Mike

is line Your open. now

Michael Needham

Hey. Good everyone. morning,

Ralph L. Schlosstein

Good morning.

Michael Needham

Advisory the on the So, comments business. I guess, for first, thanks

higher Is a the fair you ago? bridge focus the what on you been of I it your and could public there's active guys in think versus the or between quarter. advisory little seeing. a more was are help mandates hoping of a amount given gap pipeline pipeline But year beat lower bit I the

Ralph L. Schlosstein

We don't disclose thanks that, but for asking.

Michael Needham

anything like... there of in Is terms

Unknown Speaker

strong. (XX:XX:XX)

Michael Needham

Just strong.

Okay.

not fine. you're okay. seeing That's anything – changed So, and

see to that cash. you'll and dilution, and ratio, The the ongoing a buying more nice some I raise dividend to excess build think second normal continue stock offset payout It's question to the I even have with is back cash.

excess? million $XXX point, have, much at fine take view you as that it or, Are down? want you of guys level keeping this how you the to So, do some you that do at

Robert B. Walsh

have for the offset of still some we the to year. to expected just remainder dilution Mike, buybacks do

not that return of naturally things – We'll changed. offices it for we're where earn uses countries earlier, our cash strategy, deploy it We're the the open will to new the to cash. grows we cash. as and had we'll grow. and some regulated, amount capital said So, paying we has some all attention as as But Ralph Obviously, business we time. we in have hold have

Michael Needham

Okay. seeing are be expect it as willing just that broadly healthy labor attractive anything areas one more pay last the just Is And existing sign market? for hiring you to in in guys a as a And you said speaking, contributors of being the you the been at then, you would, your for platform high Have to change on are guys talent? base? up people? pace these

Ralph L. Schlosstein

question the certain. them, know. don't And think wouldn't answer assume so or is we but is answer is of what second our Evercore the always – mean, so and is the said never of generally the pull. we're I've push of to have the people be Well, the seems question combination we absolutely to the is join to really so be could increasing. having the pull hired I firms of some I first for having changed and that – that hope Push We amount I have independent hasn't strengthening to and dialogue a reason that the assume the you specifically us that of lot we're pull

Michael Needham

Okay. Thank you.

Operator

turn no floor questions to to comments. be would to Schlosstein There any now closing you. at Thank time. appears Ralph this the I for like

Ralph L. Schlosstein

talk will months. to and three we you very Thanks in much,

Operator

concludes results Evercore quarter This financial first XXXX today's conference call.

disconnect. You now may

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