EVR - Earnings call transcript Q2 2020

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Operator

Welcome to the Evercore Second Quarter 2020 Financial Results Conference Call. [Operator Instructions] This conference call is being recorded today, Wednesday, July 22, 2020. I would now like to turn the conference call over to your host, Evercore's Head of Investor Relations, Hallie Miller. Please go ahead, ma'am.

Hallie Miller

Thank you, Jennifer. you Financial us Results thank Second for and XXXX Quarter Conference morning, for today joining Evercore's Good Call. I'm Investor Hallie Relations. of Miller, Evercore's Head

conclusion which and call website CFO. After one at on are our prepared remarks, in website, call and Joining hour call open our to point and call. John up will XX our of will being of Schlosstein, course the the may second of the is the the during call, Co-CEOs; archive our an today Co-Chairman webcast for respect to results. of it The number make evercore.com. financial questions. we a live issued XXXX to This Weinberg, conference the Earlier and this Walsh, me a Bob that on be complementary with press we COVID-XX. discussion our want of for including I available section quarter approximately results of For today, press is out beginning release, the Investors release conference announcing Ralph forward-looking Evercore's available statements, today we this today company's is after days,

earnings it worldwide is important to including cause uncertainties, in to and market reports uncertain including subject associated but the outcomes how are affected not effect SEC, are and X-K. our those want which to, remind time, to measures risks release filed discussed believe company our its on and Form are our filings you downturn. we and X-K, we various XX-Q Form forward-looking COVID-XX negatively on company's adjusted COVID-XX we morning, and will assumes the statements. by to there economic reports factors to affected limited continue our As actual negatively to discussed and are the are include, today, about statements. statements business and Form Any In business. no could our otherwise indicated factors be COVID-XX current presentation discussing that this that indicated, make, that when with duty materially and business, the At in the on negatively has forward-looking annual XX-K, expected pandemic this our is significantly performance. business affect evaluating measures, these that quarterly our report be on Evercore's I unless differ those financial non-GAAP in update any These on those from meaningful long Form will

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

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

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

Ralph Schlosstein

Thank to you, Hallie. everyone. morning good And

start is me as that of call to it Co-CEOs first by Let Evercore. with John a Co-Chairman saying pleasure my be doing and

turning to direction the As four for of in we firm business. partnership been on we the built our almost great press of management John in the here, have all important and collaborating has last week, our years strategic release a that said decisions the

future to forward new to And press, that you am have already. whose changed very sure have years for the Roger, been will significant. for roles formalize we the I with the all, has quarter at and greatly look doing Our agree we Evercore. titles been myriad of along several contrary not reports challenges what a past some successful in

health then up, became stay in applied unemployment in with in rapidity. markets call size and social the clients commitment My in a currently economic then the down economy. our levels an a unprecedented of both reasonably environment Roger, they around been predictably partnership and the pandemic all drove COVID-XX this has downturn, of diversity Financial of needed has of vaccines. of unprecedented to for that gave pandemic has but to much real The and culture firm record and race and the spread and are inspired lockdowns and rapid and and our to and with global justice helped monetary inclusion the more workplace. people. equality level our our stimulus and the John broadly within higher and diagnostics, stark challenging volatile, society develop a And response, lockdown navigate midst to First, healthy us world significantly this, a in treatments on greater and to fiscal contrast and rise focused first the

Before firm to have on majority to how, back move and an a communities half in our remotely protect I events results, happening to as business and people want from their our I provide government in responded on continues a to work standpoint. to both we office, local transition, designed the directives pace, operational vast return This with offices. protect contrast our first to update team to to comment which our of and we of work these at are a that policies some the own the in working consistent measured families. beginning The directors, in our is we working to an to remotely, our

And diverse needs and technologies our has our broad a clients resulted that and capabilities. physical despite us focus clients, focused in leveraging allow our remain our We by of of them things. have number distance. communicate helping our on new with This we embraced colleagues, to the

history. markets if dramatically higher restructuring in in our both been in an will remarks. Wealth to the our expedited John be occurring a First, M&A performance detail in or unprecedented research basis; our equity transactions, raising in surge time our and we refinancing engagement highly sense levels clients finally, business, And often and seen investing at at in before than of any have made at a his than have time assignments strategic with assignments, on have and our debt cover been that have Management any completed. Capital history. on downturn the announced greater continued announced, and greater

call Minnesota, strongly also social a workplace elsewhere, saw higher for more in commitment U.S. needed much of the embrace. tragic to in a extensive the call that level in we we the events inclusion justice and and Following and diversity a

We persist the have racism time today. to taken about thought reflect for our calls and on have still justice society prejudice hard that social and in

and diversity that have with inclusion own need come to our Evercore. away strengthen awareness We commitment here and efforts at the we

but focus have impact a market live. initiatives, ourselves in a we on which communities we and and our try more diversity are will energy the the accomplishments, for not to inclusion our leader and We positive same business to make and better, on and our extend world just

set following are similar As we second look months half are of very of with the year, that those principles operating to the three that ago. we to we a you discussed

and to the to inclusion our safety and families, team their committed ensuring our remained wellness, achieving diversity and of health, we First, and goals.

Second, our of needs eventual them investor teams clients, while be Management addressing are recovery. economic corporate better Wealth immediate our helping on the and positioned focused institutional for the

finally, strong our plan maintaining arrangements our a and balance and we on Third, sheet. efficient we liquid and working as sustaining operating to to basis. support our to thoughtful we return office And implement disciplined infrastructure and flexible committed remain are

we the pandemic meet to onset M&A financial and needs of Our the second challenging had currently to markets. before economic in and and our pivot the reflect momentum changing first results for ability our that quarter the the in half clients' both

on several the As M&A built last most we their that a and general announced to broader over and clients have and previously matter, the financial strengthened us towards continue allowed strategic completion, years continued transactions to advisory our pressing capabilities serve issues. have

turn specifically to me numbers. Let the

Second XXXX. quarter versus X% decreased net second million quarter adjusted $XXX.X revenues of of the

months adjusted net $XXX.X revenues versus For the the million decreased year. of X% first prior XXXX six of

revenues Investment Banking our versus commissions Although the by advisory fees prior that is fees, increased X% from underwriting and period.

quarter declined million was $XXX.X XXXX, compared which of quarter. XX% strong of second fees advisory quarter to unusually an the Second

In year advisory third XX% of the Advisory were months fact, $XXX.X prior best million, to for our six in the decline period. fees our a compared XXXX of history. for fees

fees to market at market We end and basis, share among a X.X% month advisory all X.X% XX XXXX. expect publicly share our trailing to be firms reported compared our advisory on year –

increased our the quarter quarter record the XXXX. fees than second year higher of fees Underwriting in in of Second million underwriting underwriting second fees to was more than us. a all XXXX, for underwriting quarter XXX% were compared fees which for $XX.X of

$XXX.X versus For first than were the six year months the underwriting million, year fees more an of period. the prior of increase XXX%

are to off of second of Third XX% strong quarter momentum. we XXXX. hard this are a related fees already Commissions to and quarter versus the and increased $XX.X sustain working million fees start underwriting

billion, For the and the related commissions prior year increased fees first $XXX.X six versus period. of months of XX% XXXX

quarter businesses consolidated were to our administration increase and X% second million, management fees XXXX. compared the of Asset from $XX.X an of

XXXX $XX.X of fees asset months prior and from at our increase year X% from million, six an the first of management consolidated period. administration the businesses For were

Turning A ratio, XX.X%. first it explanation XX.X% XXXX an full compensation. compensation to the quarter word includes our as the of compensation compensation in first XXXX has is And year incentive years, for an for estimate for the in past expenses, estimate our second ratio is XX%. the months the six ratio half which of about compensation the ratio, accrual for reflects

about in market about uncertainty XXXX, and level younger have years. prior the our uncertainty of more the compensation compensation in uncertainty about the year at than the full the ratio this year of remainder revenues Given employees the significantly we for for time

we earnings pay has to of than that the and team future longer-term more revenue market our senior the to higher that for employees pay a XXXX our longer-term the our employees reduced in interest as is this talent and always interest new at year XXXX in short-term in being younger of and keeping $X the rates, more way our interest and growth. investing fairly billion in and together balances intention Our have, shareholders, short-term

year within So second to outcomes ratio employees from considerably the we six-month the possible prior although to are revenues of second and for range quarter doing compensation million for have in than both in the quarter compensation full declined of XXXX. is of XX% uncertainty be higher years. $XX.X our market our the about costs our the Non-compensation best

and six his adjusted and of the versus first and share second this $X.XX income XX%, adjusted declined costs of $XXX.X income further XX% remarks. operating non-compensation will X%. respectively, of months comment Adjusted net quarter $XXX.X all the declined of XX% per in earnings million, declined $XX.X XXXX. For million on million Bob

months and and adjusted adjusted million per operating the share $X.XX XX% income Year-to-date, And adjusted XXXX $XXX X.X net earnings of income declined of repurchase of $XX.XX. million price million the focused shares capital strategy. remain we prior an six-month return dividends of to on our and and at through period. of average XX% We returned For and management $XXX.X $XXX.X declined respectively. million first six versus XX% shareholders

with We have associated year. the offset the dilution grants equity for

in strong second So on will additional and dependent our by share liquidity any XXXX earnings maintain repurchase intention position. be balanced our our half to revenues

reflective dividend our consistent the a prior declared of with of Board Our quarters quarter. $X.XX results and for

Our become that our more as revenues Board of significant dividend current dividend will decline the will in on be management steep clear, any maintained. although revenues expectation, continue to reduction evaluate the our absent the and cash extraordinary a effect quarterly current in on a is basis pandemic and the position

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

John Weinberg

opportunities regions has sectors. Thank environment industry The across market volatile created and geographic you, products, Ralph.

of activity through the began, clients impact the sudden as As muted the was quarter COVID-XX pandemic. managed of dislocation merger the

have to advisory our as opportunity with had well restructuring assignments, broad-based fortunate are to them challenges. We issuance, debt on as advising equity the clients assist

and we both capital group has while liquidity innovative time as in had sectors, equity And energy, continue the companies of significant more quarter, business in recently. will has a pace but credit capital Private markets to our focused consumer, of debt we liability Investor to but restructuring has believe on materially opportunity markets transactions markets the both debt the diligence accommodative recover up opportunity activities slowed the as considerably capital number extensive to more summarized. during have giving not opportunity opportunities had for several of the capital their slowed the advisory ever debt become in there down announced Our clients there assignments to businesses Wealth beginning the slowed clients sponsors equity high. financial underwriting. including continued our needs in In comfortable Institutional M&A quarter, assignments. virtually. and were our assist inward, in do number assist and of the the into public started appropriately been The has in period the industrials. and in been believe picked quarter. private activity conducting down clients We Activism as the remained We busy. volumes and We the driving to issuers M&A both Significantly, early raises, clients of level recover. momentum I of clients third throughout XX% on trading and months equity the raising and turned participate in in announced in markets the retail it's the similarly XX%. strongest just management many public quarter, recently, activity first arenas. remained XXXX, quarter, six capital assist Management, address especially are dramatically is is of and transactions Announced markets,

announced year's volumes and of the for declined quarter M&A in sectors XX%. absent the market key more second last absent M&A today. were were remain was Several XX% second to of conditions The necessary global Announced healthy during quarter a of compared economy and number down quarter, than transactions the particularly the most weak. generally

strategic but communicate However, help confidence activity. them slowly forming. the and continue about are eventual financing base. the around and granted the to quarter, drive The credit will weeks discussions slightly readily as markets and overall. strategic and have confidence market the sustained the available increase to in to to and began recovery. guardedly the will last of grow, sectors. began them sponsors the beginning begin the pick currently few during be and closed, current When improve will improve CEO an Until may strong markets begun be many basis merger up we to CEO for clients to a then, there for actively to are Access throughout clients quarter processes the with from moment equity show recovery capital new. involving and challenges opportunities optimistic am with Dialogues low I engage financial stability, which navigate during to our a with a

in Banking. Let Investment performance me now turn our to

over both second revenues our M&A We Our challenging the conditions. of well, volume and among Number during announced X firms. independent ranking in transactions XXXX the six of quarter the held-up U.S. sustained despite last for months, months globally increasingly and first XX XX transactions the announced among all we for six Among again are over we the all months. Number of firms number the And and once volume Number the on ranked in based X X XXXX. months last first in U.S. U.S. firms of

pleased hard We United the were XX half, five our global transactions market. of assignments of share first M&A the to continue to increase three advise work and of the on M&A continue largest to the largest M&A States. including to transactions of the the some important We in of four most

advisory teams and extremely debt restructuring Our are busy.

team restructuring did of as the U.S. the XXXX. on number it Our has half first same for worked entire assignments of year the in

number of first league all ranked completed in deals that for in been the half the firms year, from restructuring accomplishments are U.S. we've by the announced and largest tables and XX among number of We experts restructuring our the our and our in restructuring we X pleased bankers. involved of of Number year-to-date. total bankruptcies integrating actual of seven the These debt model liabilities and stem industry-focused deals in

the number a Two an to work $XX were markets also our and a for pipe an on markets, we restructuring Boeing in expertise Deep pipes, to financing and Ford in deep to deals debt matters central work before a include, with we of advised of notes, expertise on financing. billion ability senior for where reopened. to five our examples recent example, billion offering clients. new catalyst on announced debt four was of Our its was large adviser adviser $X specialized

active book Our underwriting on when largest in half runner six transaction book the offering its extremely year-to-date. PNC BlackRock. ever book IPOs Danaher the preferred in our the its an And on We and billion active of business co-manager well served the XX secondary completed market. of the has XXXX. advised run was this the of performed largest of We or we offering, as stake an active advised were XX% stock IPO in split At which between announcement, non-health runner care first on SelectQuote, stock. convertible upsized deal in on COVID the largest common the We the was environment. deal time $X.X first we

ability these overall the a last broad is the to compared work period also And While while more our of contributed our issuance year. the large more our months six transactions same many sectors, first in than across assignments diverse demonstrating to meaningfully and share board, up doubled we areas across quarterly results in we participated to also range in markets.

Our our capital move progress, assignments and defense, shareholder in in advisory towards advisory businesses and we already private activism and are many. completion and

investors. assignment new proud to a in on virtual the attracted and insights valuable annual volatile was a our and have first fully successful clients which to virtual the we've investor our of remains continue as elevated private our completed on oversubscribed client. contest significant become are in We meeting. and first In our connectivity funds, advised our In proxy current execute with a ever our for fundraise, outcome period help advisory markets. It market Equities to have for both traders was they dislocation, to during and rely us have business, decided

team. remarks, to I Before to I like exceptional take my a moment wrap would up our acknowledge

John welcome Technology their Advisory Director, environment practice commitment have our Scuorzo if would I are enhancing our Managing one clients strengthening as I Advisory Our of the and an to with be the to sector. our and Markets responded our and summarized coverage Senior the to served clients not another. challenges have testament firm Capital their the did I to results remiss to of just current and people teamwork The distinction.

bring will open opportunistically who to We clients. adding remain to individuals high-quality other value can our

of aware look of a focus towards with uncertainties course, much clients. defines us is year, of working the ahead. of a this eventual Finally, ahead half are apart, ongoing our to of extremely It we the as to the demonstrate together collaboration our second are Despite our results kind in on consistent Ralph I we of excited the and team a power headwinds continuing so believe XXXX far and well this challenges with opportunities the very and that is ingredient downturn through in the many of lead of working and forward looking I'm success. and our and truly key us partnership direction to am best Evercore Roger. prospects firm. I recovery by that

Let financial Bob GAAP Bob? other it now over me discuss to our matters. turn to and results

Bob Walsh

our GAAP with Starting morning. Good results.

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

and income full For GAAP on our the our prior XXXX, million, first principally also net items include certain respectively. were net $XX.X and and count million exclude acquisitions half and per share with that $XXX share relate acquisitions. earnings results periods, the of $X.XX dispositions a those revenues, with to basis adjusted Consistent associated

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

J $X.X the units J LP million For first have related we The half, fully Class units. Class LP expensed. the been expensed to

of Our that began items results related for the quarter exclude the fourth strategy XXXX. quarter to the adjusted in realignment also certain

costs quarter, $XX.X our charges approximately related expect excluded of as the Year-to-date, to million, As recorded we of charges XXXX. have quarter we from which special and benefits as in These $XX adjusted realignment we incur to second $X.X of transition was separation results. last recorded initiative. million million related are special charges noted the and

expected broker-dealer requested the in our into is with approval after our is of We've on approval in which services. last entered to we shortly subject have mentioned granted. sale approval. investment our this leaders an business Mexico to to agreement occur management we and of June call, provides there, As closing principally purchase is Completion regulatory that

which completed These continue And to review XXXX, the second smaller in was during a separately, additional of the sale business trust we charges could in We part of opportunities if markets. result quarter. in to completion. ECB further opportunities pursued

quarter depreciation special to Our charges million, six adjusted the respectively, and $X.X also for results $X.X accelerated excluded expenses. first related and months million of

revenues. other to Turning

loss for used of quarter quarter investment the compared year of hedge which of gains as program. against the first our drove will, other the Second economic a this prior revenues decreased the on revenue million rebound the prior portion This deferred an significant the $XX.X primarily year, as amount portfolio. and of gains. cash versus result Other six period a funding primarily increased months in fluctuate million market of net to quarterly compensation portfolio, course, XXXX a funds during investment of reflecting a $X.X is

first market The though non-compensation more – gains quarter not non-compensation quarter, professional quarter $XX,XXX employee per cost and in Firm-wide were With per non-compensation costs. regard and the year gains offset approximately to costs XX% a While decrease the to were travel on second primarily quarter for decline. related enough than the basis. expenses fees. the down year-over-year lower reflects versus last employee

mentioned thorough we a non-compensation of we COVID-XX the our last costs pandemic. on began our As before review call,

our capital travel, continue projects. our related to reducing response current and downturn cost non-compensation subscriptions We and operations and cutting focused deferring certain research to on non-essential including remain to the costs, in adapt

the well we downturn, as into well So positioned as throughout inevitable are the recovery.

the tax share the for XX.X% basis, rate the prior year a second compared quarter to for the was XX.X% GAAP quarter. count second in period. On GAAP Our was million XX.X

earnings a shares, by XX adjusted the share was lower per period, share driven price. Our share average share our for prior versus count and down year million repurchases

of the hold and in equivalents the all regard to financial assets of first of cash and transitioned $X the have as position, we with Finally, quarter, we cash cash liquid billion securities $XXX cash approximately half. to equivalents nearly and as investment end million in our

current assets million. approximately exceed current $XXX liabilities Our by

pleased obligations requirements, We'd monitor Ralph to debt noted, other questions. contractual regulatory levels, our our liquidity, to any and we capital regularly continue covenants, be and now cash answer of As carefully. all

Operator

you. Thank

from [Operator Devin Instructions] comes session. JMP line of Our first with question-and-answer Securities. begin Ryan now question the will We

may proceed. You

Devin Ryan

great. everyone. Good Okay, morning,

soft advisory get guess little I as we environment? businesses' point. How M&A can bit? slower the restructuring be the has half we and the moving the revenues will into likely restructuring M&A come of time the the a really, slowed, takes question how we model back guess first into for business, to to think those is all that to model. about here, about the some So to I as respect and XXXX, on base starting ball M&A capital call a we ability recover crystal level at With the But perhaps question, the appreciate out of start can of And commentary backdrop. bit non-M&A year and to it, should some mean as but parts that look think of these I businesses specifically, those offset I other, what a this of look

Ralph Schlosstein

with start to and have sure me John that, I'm Let something will add.

though they year, that be in But most first in working the an would affected pretty in First In announced the hadn't half announced are in transactions through system, these on activity. second announced half half we historically, affected in near of second M&A revenues the sort first of by would which the be activity the all, the the so in of activity extremely is given quarter. – as year M&A the that M&A their year. half M&A the – previously expect we decline which the are M&A activity what now, there's of first and would our first sharp this – We the largest of or active we're revenue way even happened businesses business, offset a decline they of year and did. anticipated doing the pointed out element our call, half right previous sufficient to of specifically in

was eight and go I we I the name, book characterized questions, prior it back year year this that two significantly financial financial if been was stimulus think that stimulus XXXX occur. and fiscal M&A by applied the to And financially the three unprecedented that and from crisis said Different, is And economy the in and real is rapidity. was This the longer. you Carmen Devin then was in strong the be applied written and I to already XXXX, unprecedented and of that a recessions would hypothesized time sharpest how Obviously one but the is interesting be experienced. down downturn and affected this the quickly have about of of very biggest in And other to what the – a that, be does cycles. basically monetary induced if about areas. that it X cycles huge The pretty in and I not it the to recoveries question markets back clear after called XXXX a, recovery in and did think is upturn to in XX-year ever the Reinhart sharpest have And forget but longer. times long going this we screeching seem M&A it's I until slower like quite a And recovery we've halt came incredible and literally are to that answer, all in in M&A had to back possible slower it's M&A the this with we've and certainly guy's the businesses that period improving five year. both there Time middle, economy Is talked by early ups these activity by crisis had

quarter even before the pieces third had – GDP. first stimulus the of report passed were a we our legislation GDP, whereas, passed of of legislation legislation The two in was in financial decline in first crisis, stimulus the

and already the market shortest debt and be I activity. the the this stimulus stimulus fiscal of the really action possible downturn Fed think on in that this M&A don't it's of monetary had the quite and effects equity we effect could on markets at that the But because and the it's cyclical obvious point. know

little I still starting that see more ground bit we're but three, before make decisions. having top-up we're two, weeks we're to green that, maybe to about the dialogue that of confident certainly little greater want the to John, shoots we're need even add to our the going direction visibility to even – starting bit think are economy to to larger going that confidence four have shoots, see we the some a can with of clients, and the in ago CEOs green out strategic M&A we're actually you recovery, before that? say future a

John Weinberg

is now, into start Sure, seeing strategic we really lot those anecdotally, and of it'll will opportunistic on it of are that clearly going terms larger mergers are Ralph. turn start see to in but strategic I in, I really the come I'd that initiatives. we Right a say when dialogue, hard things believe activity estimate when smaller. to start think dialogues are to

our that XXXX. businesses fees and don't we Clearly, back. powers right merger just continue, the when know aptly, going no said like terms don't those restructuring those dialogues now, just the be restructuring in big In will as in. of seeing going know. But to really, but very are exactly well will and businesses for be kicks what financing, our engine is us. the we're activity, the often very back-loaded, in, are And existing so and you coming We

often some it a that up ends talking about takes thing merger other know that revenue about in deal, source to firm. time you it being you gather business, is probably starts, before takes the time a it start once which The momentum for deal the some when

but and in And It's time. three or so we'll it certainly next see the will take not goes. see, it how four weeks, we'll

very we've is, got and good strong our to you think The us with we be, as it's said feel much clients. crystal dialogues news we've going, I going stayed like in ball. touch very for

about we like much the the terms So in forward. the fore talking very feel of and at we're go strategy

Devin Ryan

Okay, that on maybe follow-up appreciate terrific. costs. And Bob I all just, color. a for quicker non-compensation

the pretty You a looking bit. around unusual at maybe know, I areas other the quarter; a some on so environment of belt items hand tighten heard kind unique here. your have And you for to second comment potentially the

appreciating off that T&E, positive of of there's implications the that non-compensation trajectory, base could quarter's about, of some could permanent just trying and have you travel kind that items But of unusual more any think think the kind around look negative? to So this items or what kind maybe specifically. expense of like to

Bob Walsh

fully of the how fees underwriting higher puts and travel may and drives spending data. of in them, may days and continue course. going use this takes subscriptions a to after but It's kind which soon XX happy the those expenses how of remotely. we're first hard level quarter, annualize days professional costs. XX of The level there's of in lot we're zip We're of given we quarter, technology, a set for now Devin, commissions to for sure and exceptionally too about our and higher push working to make of thinking obviously the then that is to how numbers. of change time change, code lot second We're

Devin Ryan

Okay. Great. Thanks everyone.

Operator

Morgan And Manan Gosalia our next question with from comes Stanley.

proceed. may You

Manan Gosalia

you it talk through. You comes environment. to mentioned to result as strategic But see see activity can of through it's coming when that you're about a stressed deal starting anecdotally a its hard but dialogue,

their sheets funds environment, So in businesses companies companies to a as dry especially or powder more by is and of the activity have given that selling willing might up there result sell to any that are balance PE that uncertainty want asset managers the lot shore a from of more coming here?

John Weinberg

I'm their as think downturn this lot powder. making protected lot of Clearly a see sure Initially, that fill start sponsors portfolio companies. Ralph financial beginning at the activity that, in. and with We sure looking internally of they have much portfolios very those Let dry period, in now. they I and will right a of sponsors were me focused, the

saying, terms who I think be opportunities observations related strong this be Now, are I stress on have we themselves our going who relative some and time a and are doing that that and period looking there the dialogue in of there, – through there's pretty material at are looking. are and and this those would when lot activity should types we looking out The there companies thinking looking have more therefore deals ones is of a are things. strengths are are and at very clearly think people come about

so is sheet strong believes there whose there. dialogues and and some we're so really companies having opportunity, have who definitely is very with And an they balance intact the that activity that of

some opportunities see those Initially, assets deals. think are that kinds big themselves, at probably trying the that where and kinds very implied, I for themselves. in you companies deals begin to that at strengthen of that mix of that, also create are As also. liquidity you'll I merger there stabilize that of those very opportunities are under bigger say things activities and which are they're And sell-off and those of will the be of them. market those looking with buy say some are and to stress to transactions don't and trying And and, at some implied, opportunities you looking the smaller companies strategic a companies seeing on looking to smaller we're the And will beginning the and both. are I'd

very that, noting that I that healthcare levels. mention The continue at markets they to valued the rates clearly that other and markets and They're you technology are in be easily, accessing that quite is high thing worth didn't healthy public think being public sectors. and is

are and opportunity looking is those those those in at those I there welcomed in being so And definitely sectors to be – at looking sectors, sectors opportunities, received. think different well of lot are those are that a ones for activity being because there are and companies on

Ralph Schlosstein

add pipes and often most sheet. equity convertible of linked shore long of was wanted the there and that I that somebody in second balance equity that is company their record whatever. happened sheet, form of buyers in levels was depressed if the debt for to up April certainly security thing provision the would obviously form the for issuance the of is only and the think that balance record the levels immediate saw issuance. liquidity And we in of quarter, form I Restoration in not or order was a offerings of anything. most reason line in real a is And or to division sell

became So be now be starting sheets. less to more restoration. the balance consider strengthening the they of forms at look sheet seriously companies of dilutive initial to I markets consider would are – balance public what would And means their to

Manan Gosalia

a mentioned that lower point, on to half wondering seen. Got that pipeline the I'm that I on had was clearly was underwriting mean, times you a first to color business, what strong XQ announcement previously than your completion if the assuming maybe you've is in more I from it. off but And you start, and you great there. can give

I should than a forward XQ of wondering was the. about of and bit we should expect them XQ? still think ratably or a XQ we there pull maybe think for So but was XQ we there, coming a revenues how rest stronger little the about Should over more

Ralph Schlosstein

reasons. M&A utility, lesser that there in again. there because starting – generally – just Well, still true for of and strong well. picked pipeline which to underwriting up underwriting are pipeline The have put are been they're are the things pipelines that's moment pipelines lesser The our pause, as pipeline of is that get our of at – are the both – different are utility of is somewhat on

BlackRock the by couple different getting pop-up in, transactions example, the it received the runner backlog. And are the in was two that any of pipeline the quickly first the an less in can uncertainty. so they active that until weeks announcement The reason, useful we the from time a just priced, been literally is have for P&C of and don't for realization which wouldn't in in call it not to that the and pipeline very is probability M&A actually mean, their stake, in transaction we disposition were I was book weeks. we pipeline a because of they and underwriting come and to of know revenue

they're out environment I in equity that in in are figure activity to as important equity all in as of useful and they guys is we made weeks continued of stability/strength to the but that think our would activity. a more public strong. stable And pretty markets not is obviously, first continued you the this July, be information, comment backlogs strong, sustenance the and be the it's underwriting, can So only three the because

Manan Gosalia

Great. Thank you.

Operator

Brown And KBW. Michael with our comes next question from

proceed. may You

Michael Brown

guys. morning, Good

restructuring; that about ask up the and stimulus. you brought So wanted monetary to fiscal Ralph,

You it is But ever. business like guys profound than sounds had markets. impact restructuring a on the busier

to So really months the we a changed than XXXX? facing to Or a very still work for set out outlook out support your to result few is there opportunity restructuring enough more has strong at all? ago, relative restructuring as there look

Ralph Schlosstein

that. to with want start you John,

John Weinberg

along restructuring go way. very believe a I’ll to Sure, We start. that continuing our in is business powerful

capability have are partners because leading situations area. have We over that – have our ever dialogues, before. more looking very we at than in we we years, built strong And strong several more very in

to we've addition, the In our trained the in firm industry work actually seamlessly bankers restructuring. with

our of assignments more take. some capacity, frankly our about is of what we done of even been So volumes the we've have to we and lot a selective tried upgrade we've at we've quality and business looked and the

our answer question forward quarters very, source, very that continues of optimistic some able skills opportunity restructuring applying bankruptcy number next management and assignments, in we're think the the and that see of your which of, not to continue a clients, be real liability to So we in that out revenue to real in is short only of going business. we're it over also We to but I and will bankruptcy quality, advisory restructuring revenue also. provide real because in terms terms of generate larger the see

forward, So – question your we from answer being the this see that the to short optimistic quite and it's we're is, about moving business. revenue and

Ralph Schlosstein

environments. would restructuring certain of even equity there's very add I in that economic and strong just that level debt occurs a activity

down quarter, will all slow and equity out, year obviously debt that reasonable the and as was But if For opening takes a real highest economy it assignment market with it the John a example, recovers somewhat. to that not restructuring our distress. a assignments consistent market restructuring the But and remarks, was the year year the his pace quarters, in and would multiple pointed of recognize one be for revenues, of than assumption last new way in economic more an it. of of restructuring-related revenue potential think in I

Michael Brown

half. all exclude to appreciate this on It's ratio ratio looks It closer gears, quarter, comp shift the revenue. you other guidepost to And for Thanks XX% guys for color comp the I to have is the outlook. we that to just the gave like were that. if second helpful

did uncertainty make kind bit to just to manage for obviously, target? help bonus your typical harder of mean, full through. represent a accrual year So makes the quarter half it this I the a of quarter, higher second the than

to as just the kind this played color Thanks. So how there full of you year. any have quarter into

Ralph Schlosstein

and with we'll start do chime then that want you to Bob in.

Bob Walsh

Sure.

comp As are you would know, many expense. drive that there elements

very the takes are costs, up of in the our overall they're the would there, expense result there's our Ralph, of of up strong day, granted parts. obviously anything all we're team focused on Many a take with of the reflect in really puts we net-net, net-net, our in that of probably you aligned in so And costs Our end which the and incentive But for I seniority, programs But bit shape as fixed half. is year-over-year. first and as those else? years, comp awards whole prior amortization half, well. think and if at well. the end be first up the the had the revenue a comp incentive of

Ralph Schlosstein

that to comp sitting two as the be. in the is here which would thing full normally XX, ratio Yes year I it my is is I would what July add visibility clear today not just with elements only critically important remarks, of respect repeat our I on said opening as would

total again. that through able going And here revenue. and more on running our produced XXXX, and why normal of that $X here The reason somewhat markets a that be become shareholders. We see XXXX our we're market billion is longer-term of first obviously very second markets in part no And focused rate the won't interest is the over We've in decent got for what to we be compensation do that business business is short-term balancing revenue. non-SMB to populous.

than the in makes bone, intermediate that particularly "downturn point of one risk does from view, to – not become to a relatively so And to our it less we of you that be this M&A", sense the in the shareholders, and possibility or consider need to not, work that if interest of we the when comp could we that continue that also which, longer-term place of invest short an continue longer-term muscle our fact to ratio us for in on business. did the would talent, we of our to to And grow to effect if are for reported revenue, $X billion-plus of year, best conscious course, year. this beyond have in also the cut

business. in moving recognize in be the the of tight there as the absolutely business fairly a as revenue can also third that weaker sure our of own valuable work our same the So the come business. parts work company we the and who obligations lot when One more way, we we inevitably possibly a who in right out of year, are them, just of this will We're time, year, have of all now. people focused making this. very we be on at people almost a shareholders to to by terms between sharing what the And

Michael Brown

color. for Thanks all the it. Got

Operator

comes Hawken And our next question from from UBS. Brennan

Your may proceed.

Brennan Hawken

around I this that but comments very year, a taking the I point wanted to just know question. put comp. to is to just for it. unusual understand Thanks my try to a finer

half, First XX.X%.

around caveats environment? best that all comp an year, guess your ratio the the are given revenue the on is So saying that side, for you for the ratio of uncertain

Ralph Schlosstein

it's we I said thought saying is what and of it's exactly think outcomes. carefully what what the said, we I within range possible we're about very that

Brennan Hawken

why here. rather It And follow-up, cycle not seems this a so last though Okay. out then, working little than guess, cycle. as controversial different try. a give it is But bit I

both on firms You had your huge that on bracket a had heels, some for source of weighed bracket trading competitors, that was their pain most you which of were comp.

revenue the of pretty some that via the seeing up done elevated strong retain instead sources seen to strong. it's main and defensive can competitors able to this mean some we've this actually trading squad have this downturn saw And in through line. the that's that guys at you in we of you Does so end to and keep We've inverse. made that of hire far, Evercore other lean your a we time, investments the were deliver quite way. you cyclical actually offensive, could We've for But comp whereas and last seen strong seen cycle, field? ensure comp these on

Ralph Schlosstein

that, underwriting Brennan, the that they've that in quite last the are position know. volatility second those windfall windfalls somewhat they the go choose predominantly there's that But who issuance the share gotten don't – downturn downturn, get think to exclusively the we and is, know – and from answer versus don't certainly different a this We the a with shareholders firms profits chance to very I quarter, the employees. just financially certainly that. there don't large large the is answer in shared to or from in

If you you you've know on those if might calls been better – with executives.

they that. made. by haven't activity offset credit and reserves Our many profit the cases that impression chosen so in investments trading is They impairments been they've And do that and far to focus underwriting their in on in pickup more has shareholders. also direct

going and year-end. and they really don't tell John both with with do I So these spoken, view periodically least have companies, as to to senior with at they the whom yet which ones you I are to I've would that – either executives what a of speak

prepared we in to Director, for materially. might of turnover. comp, that not add. uncertainty, we're do But have it possible and typical obviously, It's have we And to and be the to the because it's it's deal affect M&A, comp more comp because to do I comp not because fairly. we that. they of going to continue do, comp, I whatever culture, virtually no have respond – to to are of or pretty pay it's we they'll because M&A less decline we materially it choose It's really to be that possible possible just by a their it's So great that VP have Brennan make and will affected

Brennan Hawken

controversial Okay, humoring fairly thanks the for question.

Just one final…

Ralph Schlosstein

the thought hell the ISI I be, question did was why Brennan acquisition? to you controversial do your going

Brennan Hawken

that doing, this higher the of Or those just bit from raises ECAs the year? I down such? restructuring expenses about Ralph. types should as lead we think given little quarter actually salaries efforts that How of can should them sorry, we think benefits? to or and be you're the and shores questions about this asked – a Are just those

Bob Walsh

they Brennan little a the a down. little down, of the raises moment, and such team. the are given is shape lot and headcount not the a higher At bit bit

it's higher. So shape team, heavier, of the been so a it's little

Brennan Hawken

appreciate Thanks see for you it. deal ISI thank I’m given were you. excited that, I Okay, And the and ECM sure Ralph, like. pretty the come the to through

of tip solid a cap was the that there. So

Ralph Schlosstein

Okay, thank you.

Operator

And Coad Research. question with our from comes next Matt Autonomous

proceed. may Your

Matt Coad

my Hey And morning. and taking guys, so the you question for far. information of good thank thanks for all

precise be my question. I'll So with

over the might when think, was that last quarter's conclusions in I begin. from recovery knows M&A generalized one announcements no calls, a earnings

based commentary the earlier, So to say on that bit clarity margin, more a fair now? you on your is it do have

Ralph Schlosstein

want that with start John do to you or…

John Weinberg

more dialogue, we are and whereas because to more and I'd true we clarity more specific see don't real absolutely types of Sure. the say dialogues a say it's lot having much strategic have we're that and it's tangible be this targeted more will much and and when execution-oriented much and actionable, become rather to much know more in and hard begin really to than thinking. kick really

to bit best it's point the this a take it's I because way in closer to we that before time really is So initiatives, really have to that but going and at I more guess with that the say to hard see strategic clarity say to it really we're respect beginning momentum do. real think kicking little we we

Ralph Schlosstein

will and the clarity cheeky comment, clearly, months today occurring just that are little a three begin, the would true. those to know that Yes, closer we're three just that like John don't we we We occurring were there more than than more when three recovery recovery add amount robustness a to than sound huge it's we're as chronologically ago, I months have fact other as that a the ago. and but to there's months bit but indicated, seriousness discussions

are happening, things right but could derailed. be So they the

Brennan Hawken

guys. thanks Awesome,

Operator

from Piper And question our next with Sandler. Jeff Harte comes

may proceed. Your

Jeff Harte

factual XQ – Just And guess, end-of-period of was any from Bob. from ones, the or a pulled were for I What into revenues count? XQ into SMD couple XQ closings?

Bob Walsh

million, $X $XXX million. and approximately

Jeff Harte

M&A on secondly, qualified little strong. I a call, the earlier hear surprised And Okay. being was as to the pipeline

because bit of we talk Given in that, announcements kind exactly you so a that that is visible pipeline your to maybe more wrong continue is little remind us have and see closings been heading sluggish. the Can pipeline, what could way?

Ralph Schlosstein

of continues as built – what reliable I but not things, said think lot it Yes, with this historically it's anymore, working things in been it's in be it there a have was we're for moment. number interested as to nearly two the a while, the that I intense we're who one, discussions which at there with, strong, said, not parties because was but I aren't having active

quantity. make the sense? that that's Does So

Jeff Harte

of very You dropped end off that. the for

Ralph Schlosstein

is going might it contains look that the I of sorry, we're of pipeline, dialogue if transactions lot whom not the with intensity parties level elements, it at – working, very abandoned I’m than or was to potential you said a convert otherwise quickly. but it been have the if of be which by – the less still

said, because this before businesses They've care abandoning them, the level be. in pipeline dialogue of things pick existing but or our issue care the the discussion, this it to of take what of of below well said would or of drawing in the want of this. are there we're client So up are in take the boards, balance that all them, part we but in pipeline still this is in not our on we hasn't of They're sheet some lot again. a intensity of

reconcile guess, sense. how, that I the that's would two if I makes statements, So

Jeff Harte

Does a taking the And of big but seat? U.S. kind U.S. yes. would does a thought a maybe that a of much election up this is dialogues? in year really election we source Okay, back curiosity, come uncertainty. client the ago, Or be

John Weinberg

Right now…

Ralph Schlosstein

Go ahead.

John Weinberg

ahead Ralph. Go

Ralph Schlosstein

No, you no go.

John Weinberg

front crisis the am they'll more right to with how that going of certainty and respect to say election, boards is CEOs, main be teams we trying the closer economy, really out. now a focus the I as get to I the management to health and will health certain was play implications focus respect and and get focused things that. how that regimes to going from right with this play is But say, I'd crisis to the the people follow be And is economy make on to with something would respect the as out. projections. they tax now, center

Ralph Schlosstein

I agree.

Jeff Harte

Okay, thank you.

Operator

And Ramsden with Goldman Sachs. our question comes Richard next from

You may proceed.

line. please line un-mute your on have you your If mute,

Sal Saroni

hear you can me? Hello,

Ralph Schlosstein

can. we Yes

Sal Saroni

Sal your your environment it could you is strong talent understand invest for point? you on on I recruiting on that. Sorry a the cycle. actually Yes, investing Certainly, this through Saroni Richard just as opportunity today and about see comments the and today. elaborate in at spend to But moment this

Ralph Schlosstein

sit other capability, you underwriting practice, independent firm. that much Well, who as pull do recruiting a that with I with said say with on or breadth attraction think are that, so quarter. I years, at defense only reason can the the like which working number them, the the independent obviously tautologically can The firm with we're handful equity to their pull to business in say any Evercore, majority that clients spend call, of we – is bankers your the as Evercore that you do one the over things important interested of vast that client than this adviser, we if fact of you last any than and to the the of able – front John their can can have say firm of to of we pursuing the changed here, a changed we dramatically. and model, inclined trusted the other want environment are the because which base of time hasn't hasn't to allows at last clients firm really more recruit independent can if are in was we business you you And activist the

a practice. top-tier have We top, absolutely restructuring

couldn't restructuring, it go able business have here, thinking which when us, have, he of was to in team's also could example, he re-equify, clients that year have then done banker, to firm, I'm this prior firms, able to at of his and he to any revenue sector who's other this but at firm. year, been his wouldn't and the do we generating one So he going think of almost do independent in not do will I into and joined for I'm last be start this independent those other he any all

before, definitely the generally be end, hired We've range and it's two And four in we that year. So range. senior But we I Evercore, certainly well. at that end is the is it's we we to of so I higher time have that we Maybe – to just this end seven because really, big in discussed compensation John what ever the is suspicion in will don't year. points the year, to the that as The far. this than uncertain particularly, of year, pull by strong we'll the I been. get think, my hired – for be of is the the think, push every as going the most but be in lower know people think firms the people as we rather

Sal Saroni

your than anticipated? prioritize and how for Great, dividend, your obligations that peers cycle we is This current you. of of remain cash, previously one covering on use Can in And thank investing dividend something particularly then between briefly you has public should you for discuss a down the longer indicated. the business?

revenue cash a how getting tougher management just you're prioritizing your sense backdrop? So a on in

Bob Walsh

to and hard can strong. a position cash would cash where scenario investing business as see our is dividend the be see, – – you It's a the we Yes. our very because choosing between in

Sal Saroni

thank you much. Okay, very

Operator

any now remarks. I to the would floor turn closing for like

Ralph Schlosstein

excited to being new about the to thank and future to you are for and just and we No, work titles. the I our continue and of opportunity you John together on, extremely all in

months. Thank see you you. So in three

Operator

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

You may disconnect. now

Evercore (EVR) 22 Jul 202020 Q2 Earnings call transcript