EVR - Earnings call transcript Q3 2018

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Operator

Good morning, ladies and gentlemen. Welcome to the Evercore Third Quarter and Nine Months 2018 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. This conference call is being recorded today, Wednesday, October 24, 2018. to Head conference Easton. of like your over now Evercore's host, Investor would turn call the to I Relations, Jamie go ahead, Please ma'am.

Jamie Easton

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

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

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

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

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

Ralph L. Schlosstein

Jamie, Thanks very everyone. and good morning, much,

several past the again sustain that On basis. market optimistic share our in Banking among detail, firms in all we of and more in coming double-digits we grow with broad Year-to-date, grown Investment we we fees are operating a let variety to environment over year-over-year Before built opportunities allowing environment today. advisory on both Evercore meaningful review momentum have are a greater the quarter the to make me and for years. publicly-reported we our comments have a remain once broadly are clients Evercore we by matters, for broadly. We of current to year-to-date that quarters. work few The provides momentum and us has XXXX the projected business on more this a sustain advisory to been basis, a the year, just on the which strong business well-positioned

diversified our fee We continue streams. in talent client both our to broadened relationships investments deepened invest and capabilities, have new that and and

success. helping sector broader and to and position backlog future and capabilities to advisory of bolster term us for strong range broad coverage longer Our are our

as role markets ended a $XX.X have in months compared capital equity XX generated and the the last year we sector reach XX% months, million expanding to XX Our activity up underwriting ago. is revenue in in

ranked on weighted among all you the team accord in independent top row placed just basis, Our or two firms higher the ranked has gives And in all which top number ISI how fifth have. on firms analysts marking Investor higher five We been once which Evercore to basis, ranked team U.S., an value a number a all many again four higher unweighted as that recognized the among by is year firms. in firm research Institutional the do among analysts. firms the

XX number sectors. with analysts also behind ranked achieving one of one analysts the We in number second-highest the JPMorgan, rank their have number

We research corporate, clients institutional under are Management again, worth our ability independent this and committed our serve grew believe we capital globally. to providing revenues world-class net Wealth and team, our assets to And management. our intellectual high steadily clients and strengthens with

this Management time Assets billion ago. than a were year quarter, Investment end under management the businesses $X.X consolidated from more up our at of from XX% the

results. our financial turn now me quarterly Let to

lower last of experienced continue backlogs confident background, as advisory third in we expected past, share by we remain down year. consistently quarter, discussed nine affected strong we As X% this that in time had results of closings, affected a million coming exceeded for no we the over months same quarter Notably, and months as nine XX% healthcare, down of opposite in our market $XX.X were out, we and quarter, ability broaden. were XX% continuing timing transaction have quarter up year. have net which continued while first strong quarter quarters. quarter million significantly grow in year-over-year. advisory sector have $XX.X versus remain effect. advisory in ultimately $X.X that Advisory the third quarter In given by pointed we most our is in from of our to this fees in revenues have to revenues that fees coverage, last the $X results control. are very year. million the in higher we number months ECM Revenues the and revenues the in the a with first up revenues transaction something months, the our its of Advisory momentum positively this achieved history, $XXX revenue any closings. the our $XXX.X third XXXX. third from above of record first were in the year-to-date, were billion, active nine were than the With Notwithstanding fees our X% In XXXX ECM XX% billion the quarter million year, the the first nine to period last the

at and commissions strong backlog a are XXXX. time the the while underwriting diligently were Our building quarter complete Commissions X% the million, to working same essentially announced teams our $XXX.X related down same of million, fees Year-to-date last were for from versus and period year. third XXXX. flat advisory engagements, $XX.X

the pay are under Institutional revenues how the We they consume the and our continue delivery increased and administration XX% to XX% period related XX%, first share months and the XX%, XX% and the assets from earnings the quarter earnings our million year-to-date income clients and for $XXX.X margin for The when and third XX% share X% engage quarter of management research, was In businesses was $XX.X we prior-year of Independent XXXX. the reassess up divested versus they was Fiduciary to and asset and Trust respectively, for period operating and nine per and consolidated fees for year. are management business was for nine quarter respectively, as and service are the excluded. operations respectively, up and appropriately. $X.XX, Net last adjusting $X.XX, actively income was and up Net versus million XX.X%. versus months with Investment X%, per Management,

first of to XXXX. margin nine first the months was Our the for nine XX.X% operating for compared months XX.X%

head remains costs up for X% the quarter the expansion our the count the for period primarily million, $XXX.X for costs due in ratio the million, versus costs period, York. up XX% to compensation X% Our and at occupancy increased were New prior of Non-compensation Non-compensation year-ago nine-month quarter. with $XX.X headquarters versus were year. the increased

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

John S. Weinberg

Ralph. you, Thank

Turning confidence, and credit growing broadly for to market remain place environment. in continued prices, with a accommodative equity business elements and M&A economy interest conditions, the rates, healthy high generally all a strong low markets,

and transactions elevated $XX a European year-over-year in on active to to driven range is XX% and approximately increased increased of volume in the Europe dialogues year. Activism XX% in remained driven increase Overall, also this deal United an the year-over-year XX% have announced in clients. Corresponding we global and continue XXXX, States. this the in XX% volumes environment billion a increase a $X solid XX% our U.S. by with increase billion XX% count globally, of M&A first Focusing M&A volumes. increase announced nine by months in a

in approximately and This volumes the remained reductions increase Europe. Equity volumes to $XXX resulting both high in trend, the from are sell-side. of the pressure equity surpass coupled first activity controlled is Year-to-date, in nine XXXX the this have research market proceeds with Activity issuance strong billion year, in the in period highest management the of volumes. trading and under further commission U.S. expected the decline months Assets of level IPO XX% it was billion total and levels quarter. by to of $XX and continued XXXX. in XXXX. is the nine activist U.S. since strong budgets, prior-year of first with months for IPO raised

healthcare, Let the contributions including sectors business. financial, diverse me briefly advisory composition and review capital TMT, and and revenues advisory. of quarter for from Investment activism, multiple remained Banking The reflected capabilities, our

visibility timing case, control. always, in to reasonable not the we deal into for is as closings, grow, normally and is As QX the however the quarter pipeline have continues our fourth of our

momentum, continued were As $XX.X and ECM million. revenues Ralph latest a mentioned, underwriting months on basis, experienced XX

and healthcare, are our we broadening still sectors. we particularly active While real estate sector transportation in in are energy, reach

to a transactions participated of XX largest we deals IPO date, bookrunner. our for Elanco we quarter, Health. the Notably, IPO During completed equity $X.X bookrun in Animal as with billion XX the X

teams to remain Our capital refinancings, active, management, focus and on continuing liability debt advisory and debt advisory globally. restructuring

year joining senior directors managing date. have efforts been recruiting to this Our us successful seven with

will XX for managing new to ended XXXX We in additions market directors our recruiting coming teams our class. with our we expect leading. weeks build We to Productivity hope the additional and managing senior are and directors. to be advisory continues begin to quarter equities in candidates senior advisory advisory with the talented who announce discussions

discuss and other Let me to call results turn GAAP matters. Bob the now to financial our

Robert B. Walsh

revenues, John. Thank net with a year-to-date net our $X.X were on of respectively, just as million a billion, record Beginning a the $X.XX, income an and results, you, for EPS were record on period and GAAP they basis. basis $XXX.X adjusted GAAP

income net share were $XX.X a earnings net and and the respectively. quarter, revenues, million, per basis on $XXX.X third million For $X.XX, GAAP

adopted we under ASC year. of revenue new release, earnings this the As recognition the January noted X in XXX on guidance

adoption, near recognized we period not period. review transactions any for open conditions would material of been anticipate period for met are we as have reversal in revenue significant would it been closing a Following to all closing probable now and have whether, a at transactions end those occur that which of end, future determine

the our under Consistent prior revenue quarter, been with acquisitions would fees of principally count exclude million our dispositions, that have the for recognized consideration the periods, items also $XX.X During and acquisitions. relate included recognition those advisory the certain share variable to guidance. prior that quarter not associated we in with full adjusted third and results quarter as include third

conjunction J Class in Specifically, acquisition. with of adjusted vesting costs we LP Units the granted for associated with the ISI

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

related for our Our from million to exclude results depreciation related of Mexico operations, New paid accelerated charges special of $X York charges million leasehold the to severance also and and improvements employees our in adjusted $X quarter related to headquarters.

to non-compensation costs. on Moving

to per Our basis, firm-wide X% lower as headquarters outlined year-over-year expansion costs with in higher higher and for our last $XX,XXX quarter, due rent on the associated we York the employee non-compensation quarter. sequentially New a X% were principally

in of as Our GAAP in impacted year. in period the XXXX the for prior was quarter as the XX.X% the enactment the rate for XX.X% prior last the Tax was U.S. This tax the rate for quarter the points U.S. same quarter XX.X% and in Act, in XX percentage well and rates points and as The to resulted XXXX in our and years. Jobs which a adjusted decrease percentage in effective future of tax in XX Cuts decrease in rates in a resulted our GAAP quarter. for of compared the the by quarter rate third income tax

and price driven we earnings shareholders prior offset share was by higher share quarter, for basis, shares higher to Turning the principally XX.X XX.X the units meaningful our including quarterly awards of with the time for count, million of million offsetting a remain $XX.XX. the returned On share of was $XXX.X earnings and million repurchases at committed hires dilution QX strategy, in in count million returning quarter. portion a a We comparison repurchases, per as potential bonus long-term Year-to-date, average a per adjusted our an share to share X.X dividend of while share by dividends. share through dividends $X.XX investments GAAP price capital new and shares, share shares or over from count the repurchases. annual return to

the updated first of and we issued to XXXX. for will new XXXX shares sufficient we quarter, both dividend with this of In repurchased As XXXX of schedule, bonuses offset have our the year-end quarter shares review accordance hires. in our end policy for

it year this customarily level expansion account be for buybacks for at compliance, by to strong cash opportunistic questions. XX, also bonuses. of funds assets us Finally, liabilities regulatory million. of with does current we'll the liquidity $XXX to also This cash earmarked for as our the at operating approximately remainder hold and around have facilities Operator, $XXX.X year. of securities future now open and position overall allows current million And of further cash time requirements. marketable September improvements, during and the remains We exceeding we line stock

Operator

Thank you, sir.

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

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

Brennan Hawken

pull relating just Thanks forward the impact. Bob, confirm that but when question. matching morning, would pull and that that guys. corresponding guys would would for forward thanks purposes, for for to revenue change you comp Good assume is you the the so flagging right. – accounting mean I if taking wanted assumption

Robert B. Walsh

ratios same comp stayed the XX%. Yes. at The

Brennan Hawken

fixed thumb when the is about much then, – expense of there variable, you as how we would as leverage? decent And Perfect. just rule a what far all thinking when versus be base for about portion about think we're here, operating

Robert B. Walsh

of rule reliable a thumb. isn't There

composition, the I is you like if obvious look think rent. it at some of

that's For times, we've many our quite us, and that cost said is our essentially was more is has remained driving what some because and flat. for employee, as time metric important the cost base, again, per

Brennan Hawken

one me. And Okay. last right. All then for

the we volatility backlog, to proved really that do and end just beyond on folks your rather it's we the and can that seeing proved comments see And is of is pipeline be publicly. sort that pullbacks significant the about made I'm sort deals happening that the think how look I at if means volatility guys some much for seen, should to think risk think how You And you and haircut risk sustainable? sustainable, backlog? should see comment up you those very we and what's certainly was when – very, about of when of the be adjustments this strength strong. it we've your there applying the how pipeline to can on so then we equity public But the even sure what in markets and

Ralph L. Schlosstein

Yeah.

of to with Let couple me respond a comments. that

were our Brennan, of us as the GAAP forward strong of backlog And there. obviously recognize quarter all, and into part required you at the chronological third backlogs commented, of the third that end it effectively to First quarter. pull

Our backlogs today, equally that, are strong. notwithstanding

comments. we a I couple the So, volatility experienced position. weeks, over would strong that three in couple to feel respect last weeks, a the make very we've With

with But of of volatility by today, volatility level caused none those of on you equity the period been we've a perhaps the each precipitated a that the hesitation And debt in now, precipitated affectionately if of the to absolutely effect tantrum. what some momentary in during affected activity, of the precipitated but the protracted leaders activity. a all, spreads referred the see had on of we activity. part periods budget, that. none taper businesses, a them if markets have difficulties markets have of overall of M&A handful First markets widening of of experienced years remember, caused protracted Obviously, by by and some of the which would over of as in and we number as healthy Brexit, downturn a there was of

Brennan Hawken

oh, Okay. Well Please ahead. – go sorry.

John S. Weinberg

just add that pipeline be that, say clients is even And as I would the though volatile, they that the they broadly, to look are general out, quite with our markets addition would to financeable. the strong. conversations in our activity really in I been think in continues have that, I that think deals I economic see

now, activity. right at don't I think that in strategic people really about And see so, thinking how any are least we change

Brennan Hawken

and that. color, Okay. John Thanks. that Thanks Ralph. I for appreciate

you certainly – is before. not that than month-to-month that works quite see us attention has there it of I from global say on going I'm and through, guessing and a we running would to just folks One up September, could at just big of touch pace true been the see that, how But this that maybe expectation okay, fluctuations. remains of follow-up have investors' to announced, maybe we've pace this bit about activity that? some things chalk is there follow in think is you a or you just that wasn't the summertime, recent there that there would while would coming get got calm remains it's summer, pickup your seasonally to holding there more and are some was that back was a comments that a on as the that been quite if out? or off back has anything What it stuff that at, and would

Ralph L. Schlosstein

four slice row. in $X.X the advisory time. systemic in what's a of if add expanding, dollar because trend like XXXX, M&A Brennan I thing – look, of We and were four to of was share like pie haven't not able suggested trillion There That the growing. the advisory ups to throughout pie who to any our it's at in row XXXX because vacillations our is years of on in that, a of – you share this through to were market a that and of advisory revenues business mid-double-digits, within mistake And as been affected by time. our this goes was looked the volume think the gained up bit of aggregate ignore three is by actual business month-to-month announcements a everyone we revenue. grow $X.X activity again, quarters period $X.X terms for trillion, trillion, would period is when years year other XXXX advisory has where in obviously, I were continued M&A kind to higher than one point think would activity that period announced the lake. has one between the we've here And a perceived downs the Yet, but market quite we pool. But and and or M&A through seen was chalk going of that I investors fee that back and they

So, to our expectation it's suggest certainly continue and our that will would that happen. backlogs

we So, business. our good about reasonably that's the reason feel

Brennan Hawken

Okay, great. that Thanks color. for all

Operator

you. Thank

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

James Mitchell

like – of months? to What's as of it talking there? over a XX bit We're your next starting with sense equity lot in the in about growth just How think Maybe talk equity deals do morning. that on you the to cash. private to of Good see see opportunity a last but looks years Do some for client activity the pickup about still like most you been base? XX couple an that levels firms, strategic-driven. it has activity over the activity, little private seems sitting

John S. Weinberg

question very, lot there groups. dialogues that to no where point market of pile private levels is in. just we watching carefully private a them the come price And very down for of I that watching continue the think levels go the to of are equity the to with There Well, equity hoping an to accumulation to people it's price and make going sense work. very most there that capital strong is waiting

about is think that as think say they much, to money of of things strong. have of there a deals. I quite do be very, dialogues for change And with though lot we levels with wants work. to and but I one them be will that don't out, go the said to competition, Having equity really and private looking do relationships dialogues because our our to continue think that, look prices good and see activity continue I that when feel come very watchful the we a is see firms to bit are very levels as we that the down, really and you there

James Mitchell

sort of mean, you the a macro maybe we've coming the how stimulative, little not about see of you concerned is firms? heard worried slowdown? don't them And it, a you your in bit of you concern think do that recessionary actually a I price being little how for modeling down that view potential about build into PE bit buy

John S. Weinberg

– both kind It know, you of goes both ways. it go Yeah. as

hand, look and will judge recession On the recession. to and they how able they businesses perform versus be try various one at

said, sidelines down. equities till and the price the other the have on On things prices, kind high of of have of come wait a lot been let's quite levels hand, them the

can balance, of operationally on those different is, environment the firms abilities different and do as as a point economic under in think you'll conditions, it's and I various So, see businesses. what having what well perform they to that businesses, different view a

Ralph L. Schlosstein

firms By respect. planning the leader public know equity no who than for business from anybody in that doesn't don't different I contingency less environments, way, are good or single business a else do and

James Mitchell

go stock through in more trigger of thought whether how get about you any there's being remaining? do And you at you or on remind authorization what the buyback. talked think you and you point, Maybe Bob, No. That if about process? opportunistic terms point this that price makes us sense Can for helpful. just the of that's aggressive how the you on kind have buybacks,

Robert B. Walsh

have a and the lot remaining, it's of Jim, specifics not constraint. authorization a the because don't I

it important. if get you could that Someone for were

James Mitchell

Well, I right? year $XXX think ago, a million, it's

Robert B. Walsh

Yeah.

to said but we on So, the business in hires. cash And you and further know as we drive we from our growth, left. We buybacks. our bonuses the Look, there's a the lot to than a new from offset on other through want bought small some grow bit, our our dilution project philosophy dividends business capital and building globally, some going growing return keeping and rest I SMD buybacks.

in accomplished the baseline. the we've So, current new in We've offset opportunistic all from be and hires the dilution the environment, bonuses, and we'll therein, market.

Ralph L. Schlosstein

Yeah. could And $X.XX just were year. we've anybody in – I nine is quarter, that and were add would math exactly this don't the remember $X.XX-something. plain in just they what but think the I earned first our $X-something, do, months fourth earnings that I the of

in flow pretty EPS of free $X.XX indicated, times as at Earnings XX in XXX% we're historically, Bob from less its returns, XX a that trailing our months XX a that's of and the its mid-teens trailing is That's point decent cash that's range, to months. growing So, view. investment trading company shareholders. at my

James Mitchell

Thanks. it. Appreciate Okay.

Operator

you. Thank

with Our next of question JMP Ryan Securities. line from is Devin the

Devin Ryan

Thanks. guys. Good morning,

Ralph L. Schlosstein

morning. Good

John S. Weinberg

morning. Good

Devin Ryan

on So, first here just question environment. the

do So, change, tax powerful, it the just catalyst, growth. reform the or be as dynamics now a seem global strategic reasons search for right technological whether very to deals

here. so, lived And through you have cycles some guys

question to corporate your always cycle how would as get characterize different clients factors. prior the maybe that just M&A about perspective some and And about give of to today seems thinking cycle? the this priorities But relative by driven you be Each cycles, kind of so, their thinking strategic kind of importance they're us of to strategic breadth to perspective. to of some wanted

John S. Weinberg

It is the things accelerating. very the of of about, all managements very general, and our is a your about say many see to think for lot operate I we you that in come a that that I'll how of is that I'd question. Well, forms. growing also, how the but a talk and this in to start. trying how it really large time one your value board some is business. can are the level and and shareholders extent, you subjective changing out on expanding in and clients about create can the change strategically can that, world to figure come your And comes to is everybody company Obviously, think thinking enlightened very continue business

point I trying what to can and think about see growing. And many, how you think they enlightened view of changing teams keep are is we many their and expansively who are management said, very, business very there that as my there's that people and of are put markets into whether pushing of change that's technology, well growth, it's lot development that whether markets. things with and the are pushing expansion the a how and technology also dealing you those

environment, So, and at generally look about business the positive environment longer-term will we and I think very the M&A think how strategically companies broader the feel about growing through M&A.

Ralph L. Schlosstein

a business. far – that secular I fortunate very in by business is our growth that Yeah. The add largest consider only thing we're is us would I a

M&A back market nominal is years, look XX to total global highly you If cap correlated activity of over to GDP. equities the and

we an a had long been those things there's certainly of but those have setbacks, world, bias over time. recessions Obviously, the growing and for market Fortunately, to upward pretty period steadily.

area, whether sort really little to thing tend the period time the where a line. affect I we that technology business. to John activity the sorts they're be you or that's line tends good have, stimulate change whether And of those change more would are And that things it's as a And for minimum little of you average. part above the that happen So, a talked of argue, certainly in our things, or the below of rethinking at or things in chain you activity. a change on average about technological the to of and and supply managements both certainly above is nature, average. And and John suggested, a average

Devin Ryan

then, but I at four one to effectively than guys if out you difficult, that doubled than a And think, back even laid and go revenues. revenues, years, more And helpful. may in you advisory Very that faster, doubling you three bit or that little time, did the I this to it. path. Got your be was path back XXXX, remember what it you've

about the And to there's that's there's talking so, sleeves capabilities. we're also then ability very element powerful, business but take within growth of the a share secular and and add new market

this as because here question you get, the step today, and to is going of environment do so, call help there's benefits I already about we over secular enough And in all a next had? really stair be space you've it if ask but to how that is there think against time that the or white question growth? that And will, higher sit double this doubling, type the opportunistically we firm, success obviously, next that again in the the bankers

Ralph L. Schlosstein

Sure.

people largest in the used competitor did that largest one to I large advisory in when asked competitor. Evercore could advisory $X.X So, year billion our independent business our glibly revenues, respond how get firm

achieved. we're to So, growth. white is be of, And use I reality your for a quite the now opportunities Well, considerable we could bit there. see knew that which term, offers space

close pool or fee now anything advisory do, is in XX% were capabilities innings six have those early you've we're all, more industrial two sectoral of view, very sector both as the seen the Those the significant where hires last year, the that of be and in point of market-leading we didn't consumer first sector. sectors So, we've over those. a we to sectors but And of generated. some happen of pure made the the to just and in

So, that expect number to in market us. are grow. for iterate, sectors I would are not I'm subsectors, space going a of There which not similar our opportunities that offer would white small share those that

of to have that tautological firm other same focus grow. with equity serve firms, have two we're the the we honestly directors Europe success we've their equity the than do, our to other firm. They markets The second others, managing two business Evercore more any comparable do business in believe with and market-leading their much clients can and us first statement, capital area in they birth advisory practices roughly important capabilities are if And and is which I over bigger firm and senior not certainly than frequently independent businesses that next recruiting by to at an has, of advisory clients. three because five which can practice firm underwriting three assured revenues. to debt to independent our independent the independent all inclining by the Obviously, then all, activism to say go have, no that's a have largest there, which firm that's virtue of other we feel competitors, of and markets a years. I independent geographic. that we to finally, an can they they our their equal of continue – at an that capital is expect we those we to any they're

opportunities where tap they this tell possibly sitting certainly, company. here sitting going leadership and couldn't John are whether pretty forward and the for here opportunities But for about I out. think today, I here of today, the the or you So, I Roger us out tap team the excited and rest

Devin Ryan

Real Ralph. the just you, quick revenue model Thank on great accounting. question for That's color. recognition Bob,

far forward? the fees, were in the next just to then, into going And just period, M&A period could trying that meet Just all $XX million advisory? deals criteria, think effectively how about this the

Robert B. Walsh

circumstances. by and facts case decision, case It's Devin. It's a

in us our would you one might the and likely any get that or it several around So, you it the I terms draw within closing line is. of not a into were revenue. further might the look, quarter, when in not occur recognize advisory And the probability the less of businesses. or areas can't intuit But think fees shouldn't

Devin Ryan

Great. you. Thank

Operator

Thank you.

question Research. the from Wolfe Chubak next Our Steven of is with line

Your now line is open.

Steven Chubak

morning. Good Hi.

Ralph L. Schlosstein

Good morning.

Steven Chubak

about or nontraditional whether placements, to So, it's quite advisory, been private it's capital The wanted areas from these businesses. of meaningful. contribution some ancillary funds M&A the I ask

expanding really You've years in recent those those job scaling capabilities. businesses, nice done a

the You spent some I'm just seen of fact a base. the give lot drivers us become some we've this of time wondering call, your businesses, the talking you that's if about the outlook as much for contributor revenue a both perspective given can those overall on volatility and well as of bigger recent to Ralph, John and in M&A

Ralph L. Schlosstein

and share of generally, our the has market two a business, our is set businesses raising not whether business. both debt or it activity. growth say that growing equity, has specifically to strong but gains, certainly traditional raising would dominant of of or it's part become It's by capital part I opportunity virtue you competitive M&A more rate with certainly that our a for capital raising the and capital referred

heavily I if that of capabilities hearing their is and provide mute could those think invested you I a alternative in pretty the additional we're crinkling. think somebody things they referred for line, – that we've us. they you. two Thank accomplish lot really One one to is

Steven Chubak

Oh, that. sorry about

Ralph L. Schlosstein

additional They right. unwrapping. – an that wasn't it hope you provide candy all I were That's

Steven Chubak

Sadly, no.

Ralph L. Schlosstein

revenue additional out year growing in of which an They has and year for us. provide been source

provide that that five the be sole they the thing case may set or ago. for lead longer us broadly with advisor recognized years skill Evercore second be time of a would The the than they have as of been period advisor is not that to do the

the sole sometimes where client have and M&A either examples, in way our the role of in our them – be affects but And those that none or or of us structures. transactions, in going transaction through we disproportionately strong our share role different been So, given might market help there to this lead I'm how specifically certain react very on are advisor negotiating a XXX%, which transaction course to favor. which a have all market to views equity we fee a of where with go call, through allowed sometimes many the for have the on on sole financing the

effects our those happening view. are of in both So,

John S. Weinberg

something many time do performing challenges. of The thing medium-sized we're when offer helping level, only in client what every things able with our of addressing in the that exhibit that and that are is we to add that, to we which we areas these And is that the issues very – other very very, us clients a capability. performance excellence think at those each high and to can well, one you'll a we as really areas cases, reputation growing add for we're is I'd how and opinion. firm and appreciate really to to our And and like best-in-class problems

actually of our brand, of in And so, capability. terms somewhat accomplish reputation, terms catalytic to are our what those we're in that areas and we think trying our

Steven Chubak

follow-up for that more me Yeah. and note just your press we pressures encouraging I'm and should revenue on on ensuring clients? can as all the Thanks to you're of to that appropriate levels release, interesting remarks just been quarter. it And research was some in providing for dialogue at level muted also we with looking us that saw just that color. see it's you MiFID, some helpful of Ralph, you the the just these some you're focused for you U.S. of if Maybe that compensation one on providing did that how potential receive commission the levels. interpret your if wondering at give has color signaling European support mention

Ralph L. Schlosstein

negative is Yeah. I'm people obviously, going pretty the that is who comment to much in effect the on have focused clearly in this I've businesses. we're going some make made earnings two last are sense, very the to MiFID and the same overall calls research-based that, broadest on

around if quality it's out. field quarter, I really comps believe, certainly we're were but early early first that, going – victory checks we're the XX%; the I were guess, they the On down the quarter, really this or market or we down – all X% the highest were commissions too and it's over gain research some year precisely I say, believe the in quarters, doing a you think think – or what we before last at laps. how three But take think it's quarter-to-quarter be second I that encouragements about probable the this and I will it's quarter, the know other they two shakes were I equally innings share. and likely flat. X%; to to look from hand, not running we

Steven Chubak

taking questions. right. Thank Understood. All you, my both, for

Ralph L. Schlosstein

Sure.

Operator

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

Michael Needham

Hey. Good everyone. morning,

is You but just a us in – kind call, on question earlier Germany, first not I you the is The think dominated give an noted and banker And the senior that industrials I firms. have Europe hired recently. by of banks in market is Can two update kind Germany big Europe. of you independent there?

receptive leaving has how firms? So, been talent those to

Ralph L. Schlosstein

say more our see ultimately than there. would receptive that I ever, how we'll affects hiring path and today

including we this hired of a We advisory announced, so that we which another – total hire haven't SMDs year our year. course, capital business, earlier real we will yet the this of will hire estate in that have eight mean team that advisory

with have months, is last encouraged execution. certainly six we the we're the now of people the discussion So, are proof in but nine by over the and in that to quality been right obviously,

John S. Weinberg

our hire talk Yeah. And watching is we we keep And we as want up watching continue carefully as make the to organization. much move us. I we're we're think forward to finding people to said, very quality Ralph that that definitely sure definitely what to and of that are

and add are good we And people. so, And to as forward continue to we we here, very opportunity grow conversations. move those have think

Ralph L. Schlosstein

number Europe firms their been go of the businesses a validated share any of productivity and successful Yeah. increasing always refer corporates, and of probably is that have there, by it I I and up the where do market be we think years enough, on true market we and of we as is our differentiated there had I by XXX-some share the the And And well, would have would firms Rothschild drive just can and their respectively. because what gains. market contribution people who significant very made popped intellectual that back it's the add has an success, Europe a and kiosks there own would been and leading XXX business indicative share had intellectual does it's taken senior which that taken have PE our add years, receptive and who Lazard have differentiated model. I of organizations to appreciation among directors. a that content would the U.S., the is as bring to Evercore share we I is here, believe one have managing which market independent is firms argue and of market the of firms, overall relationships always marketplace. Interestingly have advisory There have think those true capital and relationships. of thing, believe part independent

that to talent suggested. quality, continuing So, highest there John it's add of is the really about as

Michael Needham

ECM think topic, Okay. the Got hiring hires people revenue is those so a new Are and you make equities on adds environment The difficult. that you earnings one bit follow-up it. going are more just are new I revenue business, Thank your the pending. mentioned you. on to are to these adding accretive? sure expand continuing to And little how adds focused Thanks.

Ralph L. Schlosstein

commissions both the obviously, research think, position revenue And in underwriting we equity stream be unique and both an to in of one to among independent the a and that obviously or we a I have are are additive checks designed in stream. that firms Well, hires we those. revenues make revenue

Michael Needham

great. you. Okay, Thank

Operator

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

Jeffery J. Harte

morning, Good guys.

revenue slows growth the me. MD you over that couple you count Just for Can if down, it planning really people of don't talk with of recruiting seem the M&A I comes think intentions contingency how plenty expanding but and some has left you hiring One, which will, and the bit driven years, expenses. guys cycle to? earlier you a but about strong also mentioned think actually for a

Ralph L. Schlosstein

about we growing that know downturn Yeah. the and our downturns different. thought one think we adding about share To most have and, think that we what we our Well, do market strategic a are business. one Every we always obviously, like – have of the people talented the orientation to look, long-term in I snowflakes. will by a is that we thing extent

a three not talent that's from to our But add a ourselves share one to continuing to a here I some we pain. stronger is would market in is of But very which two So, plan. of cognizant occur, ball good up feel shareholders, a be that there goal of. that that the inevitable firm Obviously, the have view. we're Evercore so out in expect have the needs of foolish hopefully does that that years of team we position we and to point a you going to just crawl be you'd would deliver that to internally weakness when is downturn specific articulated and our going or our balance of when come be to watch principles to earnings to have

John S. Weinberg

to way Said to same as volume. thematically, and people people serve slightly opportunity clients. but hire people, We're we're differently, add hiring maybe really to hiring the we not capability add

much now the of think so, are people long-term hiring that very we're for And people at excellent point we this that are and cycle, are our the franchise.

perform And the those cycle and allow so, from people well a perspective, out. to us secular very through to going are

Jeffery J. Harte

recently you be think and/or being growth Okay. been. continental more on Europe more difficult are I it think seems UK-heavy to for your Thanks. And How kind Europe penetrate? I least guys, of to tend continent, efforts when has few of come guess, and much you competitive the of the times. to I up of it with to finding a opportunity franchise a at grow historically where Europe have

Ralph L. Schlosstein

Well, part our and that isn't difficult. there business is competitive no of

brand really grown again, let's But just brand few quality the establish our So, does down really the it the come years. to Evercore's simple. to has And But of is places fact. obviously, the important, and that approach right last you is the here have – ground to over a right to we've need in that people successful. articulated past be on on this I in think the hiring this call as

the hire A+ else but looking use constantly for on wait. we to A, if or we that this term an call. We're space, to white can't someone people an used have white fill We space,

that have obvious we genius we where have for sector, geographic take those. to of firms not doesn't to bunch industry, large find lot unlike and a we're and constantly is those looking holes have someone have But out a it – can't are we approach. to sector, what this say, our if of they have a Europe, we in talent fill and to that whole So, figure

don't the build they produce when run, in have way the hire who by but believe wait. can't a firm. deals we'll sectors Our in or our someone to go it's capabilities, if frustrating metrics, we you approach that revenue can long great we to comparable is believe especially and And it's right relationships

Jeffery J. Harte

Okay. Thank you.

Operator

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

Ralph L. Schlosstein

and everyone, much, you And your XXXX. talking very look entirety the to to for much very January Thanks forward in attention. time we of talking about

Operator

concludes third quarter financial today's conference results This months Evercore nine XXXX call. and

now You disconnect. may

Evercore (EVR) 24 Oct 182018 Q3 Earnings call transcript