EVR - Earnings call transcript Q4 2020

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Operator

Good morning, ladies and gentlemen. Thank you for standing by. Welcome to the Evercore Fourth Quarter and Full Year 2020 Financial Results Conference Call. [Operator Instructions] This conference call is being recorded today, Wednesday, February 3, 2021. I would now like to turn the conference call over to your host, Evercore's Head of Investor Relations, Hallie Miller. ma'am. ahead, go Please

Hallie Miller

reports Head press Good for and full Co-CEOs; the prepared and remarks, for open the Evercore's conference Miller, financial Joelle. Bob today we me And and discussion joining financial a our conference Any year these could subject to, to release make, is you on release, year in announcing us various make factors are outcomes results we discussing performance. and its These believe that the to results will evaluating actual Evercore's cause our available that forward-looking In financial quarter Evercore's during Form indicated, meaningful questions. call, complementary company's which Weinberg, This are full unless remind website Hallie statements may differ measures CFO. I'm discussed today The call fourth of call. is are are Investor uncertainties that to Form Form morning, company's you, SEC, report X-K. from evercore.com. those press forward-looking XX-Q and I Relations. thank fourth our the factors joining which the annual the risks and our we not results. presentation assumes indicated are the business everyone, a on will XX you with effect statements. duty for XXXX company days, including and of of include, today important we forward-looking to call approximately in adjusted materially we non-GAAP on those the that Walsh, Thank on XXXX quarter there measures, filings issued be Earlier of webcast to Schlosstein, our no XX-K, section Ralph to limited archive statements. number John Co-Chairman this and quarterly on this want our Evercore's statements. call when Investors today, call. After point an our and up we after that in want reports of on those and beginning about for of it otherwise on and any website, conference update is will course available I today, conclusion of that out current being For COVID-XX the are one but hour be including our live at

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

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

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

Ralph Schlosstein

to XXXX very everyone. Our was when our believe reported at hard you And year we energized to this morning for It's earnings ready much, good New was Year. time "normal." team the and last Thank Hallie. that everything

investor on conferences probably however Our year but been the to wrap attending The looking months season earnings call XX expectations and up of forward this have in for strong many analysts investors and were and normal. another Miami. past were anything

economic of please life in entire faced simultaneous pandemic When two of crises, So brief me our with the and and way a the a business indulge mid-March review sharpest global in year. disrupted. downturn decades,

monetary were and liquidity both of in on leaders build helped capital we that balance the while covenants strengthening opportunity and cost restructuring debt to hold. advice the many M&A second fiscal strategic their placed M&A demand stabilized beginning cases Corporate the quarter financial essentially initiate third and particularly execution M&A activity most quarter. almost previously and strategic drove their the needs amending and clients' increasing sheets. were assignments and Our recapitalization to completed liquidity, change of plans raising the Later and control, transactions and into equity committed And spending, new stopped. services dominated capital markets, for sponsors second exclusively became focused on initiatives, sheet These in certain reducing stimulus their rapidly liquidity-focused equity transactions. debt capitalize the debt markets and balance advisory and clients quarter in the which our large on in and

months the evolved, quarter March, revenues beginning of resume. third decline discussions which flat Despite the lasted months. As first M&A M&A through year-over-year sharp essentially to our and were several began starting activity, in the nine strategic the

debt our spins, the sponsors we added made underwriting private research, First, underwriting capabilities the added SPAC provide team. shareholder We in advisory materially best-in-class team adding our We corporate few SMDs enhanced our have over entire merger We capital reverse Trust, our And materially capital and broadened capabilities. and that We strengthened investments to industry. dramatically that So enhanced Morris public team last activist the which our services defense can capabilities. capabilities raising Trust in We clients. restructuring we for distribution have by capabilities our in and equity acquired how happen? greatly significant enhanced split-offs, advice. companies. and restructuring, new globally, cetera, our and five this best Morris SPAC ISI, raising engagement years, did strengthened we and best-in-class private both et

began was place to X% the largest the spirit would down fueled spectacular in of M&A a review of capabilities of revenue, the of months by that and led of in widely simple. team we measure The firms has of this in globally. all deals rapidly momentum XX% largest our source M&A advise to In coupled And volume any latter In talent have for is many nine half. XXXX. And market in global advise market The firm of the as anticipated. and we our in many US that XXXX. in our records recovery support the perhaps described clients many first the increased continued Still analysts that compared respectively. quarter that to was environments. Evercore, M&A the XXXX, the increased demonstrated we much and I our our M&A we first to respectively volume that for XXXX, capabilities broader XXX%, the and with And down and fourth paid advisory recover deploy XX% and M&A We and still M&A while number move advice these US XX%. entrepreneurial half for the US, XX%, our year, we the and achieved broader demonstrated capabilities even meaningfully. in to the best-in-class to Global M&A clients particularly, capabilities that of varied to is first and is than volume point So clients. our just for our a have shareholders and be

our significant widely business a are while that needs on clients So advise by environments; environments; to generate very no-capital-risk firm all-weather much can we in and most religiously of some advice their while our our providing revenues clients and fee-only truly in there varied parts to sticking an that important clearly model. various that business, firm varied cyclicality all capital in the widely is can financial strategic,

markets. and and companies and advice. research, continue public access dialogues sponsors private M&A And in continue strategic other public capital. institutional Financial high-quality the to for strong. seeking acquisitions markets activity to XXXX, the businesses and value begin we analysis investment private discussions investors capital As are Growth are and

our strong. So momentum is In be to of very level backlog high of XXXX, significant. and enter as activity we our our remains of continues the all businesses teams our

have to XXXX enormous related in challenges us are still the have very and position. we been the certainly society as for there begin empathy fortunate as strong economy a those of all While most pandemic we in Evercore our been, certainly who and have not at

important decisions. forward, them As prospective strategic, determined and long-term we on current we continue look relationships their both with on financial and capital trusted advise focus clients to to and most

We return our safety to our these globally eventual plans. offices health with of paramount we the and are team for develop as our planning

by grow repurchases. both balance capital business our our our values product contributors to through discipline returning to continue key culture and resuming many delivering the And our ability are XXXX. sectors dividends to significant see to our is in we add course, focused collaboration recruit of talent are and approach our sheet of to in talent. deepening shareholders We expanding opportunities and capabilities. our to grounded continuing our we optimistic firm strategically and excess this liquid both by are and accomplishments committed geographies opportunities that actively maintaining on strong which We strong to pursuing and a our shareholders, in important our to with are are about hugely strong of coverage of financial core any while maintaining We, share historical returns and operate throughout to

million Fourth net leverage. quarter fourth results. XX% billion our of driven highest firms. quarter now We in estimates our and $XXX adjusted adjusted on turn among Based to $X.XX revenue to XX% income, grew and compared current billion also me million we XXXX highest And adjusted and year all consensus expect fees firms. of record full grow strong full in advisory of also number annual actual advisory adjusted adjusted and investment year-over-year XXXX, by net among history. income ranking XX% history. revenues, market good $XXX.X to $X.XX adjusted were operating revenues advisory grew X% fees results, growth our revenues our we extremely full our expect and quarter grew the grew net revenues Let year Fourth EPS share and the financial publicly-traded year-over-year achieved operating and compared to banking of retain on year these four fees to

we administration million X%, and to and compared and were variety full XXXX. increased quarter increased as year of and transactions prominent commissions fees with, well CAPS, IPOs, SPACs $XX.X management for our a million full compared and $XXX.X fees increased all a and follow-ons, million combined work firms year-over-year the asset us top two million virtually $XX fees year-over-year revenues part administration Fourth between of us and full asset gap of $XX.X which firms related $XXX.X to on in due Evercore one XXXX. year-over-year. million, quarter year XX% the Fourth as including This $XX.X bulge in in narrowed Importantly, our fees firm. the XXXX three underwriting our in number of underwriting nearly the and three that bracket the quarter to the allowed advisory large gap XX% step-up of year and experienced XXXX and declining more ranked million well. the between capabilities resulted reduction and at with -- And tripled fees of role related played in growth X% involved. we each to convertibles, business increased than XX% commissions assignments fees we number Fourth of as true a expansion number clients, more in of

expenses. to Turning

margin Our Full XXXX. for share XXXX. quarter operating basis adjusted net compensation $XXX.X -- declined and and full XX.X%. and of ratio for Fourth versus and and non-compensation and the year of XX.X% operating XX% adjusted XX%, million XX% XXX%, increased $X.XX $XXX.X XXXX. declined earnings of increased increased the income million of of of net share and million adjusted full adjusted operating adjusted million XXX fourth million of XX% costs XXX% Fourth adjusted And increased margin to XX.X% year-over-year roughly is million $XXX.X produced $XXX.X full And versus respectively. quarter respectively. XXXX. non-compensation points $XX.X $XXX.X XXX% of compared of per earnings costs income income income adjusted operating versus per a year is the quarter year and XX% quarter expansion fourth We $X.XX year

capital our excess Finally, we returning remain to to shareholders. committed

sheet. on repurchases. RSU RSU the buybacks. dividend provide declared reinvested dilution excess April. of through results on will And our that our historical reassessment upcoming detail a assume grants new later business bonus, normal in and dividends our We returning and $X.XX our remain not resume will comment to earnings and our Bob through we share GAAP additional our to policy we of offsetting hires to Board of balance Our in shareholders dividend share annual committed and will of the grants

for Let growth to discuss me call to our Thank XXXX now some achievements John? turn in and of the beyond. XXXX our opportunities over in you. John and

John Weinberg

Thank Ralph. you

future. advising league as a on We globally of transactions set fourth XX four Our firm. we for the one particular in, announced leader the earlier many demonstrate quarter, a and M&A that number the are year deal we year largest every and we strength that the to participate In and we which assignments was participated independent XXXX. that AstraZeneca and firms in of business the volume of ranking for its revenues advising since in virtually acquisition in contributed results of care are the largest cross-border will the U.S. onset in many our fourth in for we table This started announced fourth in transactions the in a significantly announced full health which the transactions includes deals sustained pandemic. we and is quarter both the and clearly in realized U.S. of in quarter number on among our the Alexion, in the the XXXX M&A close largest records

with to announced franchise out-of-court working in on diversified We well restructuring as number team is debtor for Our two that league creditor and indicates as base stronger in the due number business U.S. transactions of even than both of restructurings. the clients, ranked league restructuring our in-court working and both tables our XXXX. believe table

business and companies believe restructuring the and and in from for traditional service continue pandemic deliver levels XX induced certain downturn. remain can our activity as financing and far companies beyond XXXX on elevated and the called slow advice the recovery advice taxing bankruptcy us Our capabilities. We sectors liability Chapter management many

XXXX markets continue strong and from performed equity market equity Our benefit in capital issuance. business expect sustained well exceptionally a we for to to

transactions strong has nearly equity in this see and that fee-paying to we continue results proceeds. capabilities XXX billion investment and transactions. ongoing We larger in raised our has to total participated diversified both equity-linked in business, than our $XX XXXX, from events In more which led and

and looked Additionally have in both their Evercore assignments in XXXX in to assignments bookrun to sponsor growth bookrun increased significant role raising. We our corporate clients play the both assignments. increasingly and of outpacing in our a with active capital bookrun number growth bookrun active

navigate positioned active have new capabilities well market. SPAC this in serve investments they to clients many Our us as

first early also convertible place sales and are trading, We transaction week. bookrun by our encouraged underwriting our and took investment in that including last from results convertible debt sole ever just

had Advisory group Capital Our a year. phenomenal

than billion And of in clients. raise on to successfully these $XX GP of the primary Our increased team more the transactions, capital half in year. LP-led deals we advised significantly for continue second and

track In record fact, funds industry. the team an has the than fundraising more impressive closing in else virtual anyone virtually

continues down shareholder on to market-leading broad where the in the We strong see defense successfully this activity In practice. advisory in defense analysts demand institutional volatile of valuable continue to fights. very team our and the to advisory top campaigns we of of advised on two opportunities macroeconomics activists the growth XXXX, defense and our our activist largest these areas. proxy increase insights hospital build provided as advised largest of continued were takeover in experience year. Equities, investor-ranked We to positions fundamental for US their attempt In Activist throughout clients and companies.

significant level support We our enables platform also on a to roles. high in at a very with increasingly make important continued our ECM execute of number to us which to investments franchise, transactions

the billion in advice XXXX, first in environment. for Management mark investment important a to and provide grew time Finally, past clients the challenging our Wealth AUM, $XX business

continuing yet pleased focused are in remain and with momentum we We these this accomplishments beyond. many XXXX on

me turn for future discuss to Let opportunities now our growth.

our remains. expanded future and and grow two underwriting main second, broadening future our advisory foundation growth and further elements expanding plenty to provide model; to and there First, Our opportunity our that of believe coverage are capabilities capabilities. the our in We for deepening the growth:

of facilitate investing XXX, talent, model. sector with TMT, our white with service many dedicated financial coverage multinationals, continued seeking areas geographic in There our cap sponsors areas targeted potential, can we deepen untapped those financial the large pharma, of nationals in add to and talent consumer, and Europe. multinationals our to grow Our our talent program to efforts the of will expand addition space including in actively A+ we expanded believe areas are we are and of large-cap all fintech, sponsors, coverage, or to Evercore and where coverage

conversations areas of these have professionals talented continue many to to strengthen with important We coverage.

as tech mentoring we and individuals business. talented our These a recruiting were externally our our our individuals announcements within. two additions to self-sustaining capabilities be on forward XXXX These resume advisory a normalized focus Equally We from firm. four back and during talent in commitment pandemic, ability look from in promoting process. historical to to and recruiting we XXXX Evercore the welcomed recruiting corporate recruiting long-term advisory to to we to realignments large-cap average enhance attracting eight we additional more complex is recruits annually to our as our contribute markets junior important SMDs on to pulled While below due capital year. the process usual of

firm pleased are and element Directors and to the advisor of was financial advisory Jazz second announced to others An $X.X to our of transaction. a lead in bought our needs equities to three technology. and Senior restructuring where our this as Pharma of meet merger and this debt to to advisor collaborate a our services we capital across example financial announce January strategic clients. coverage healthcare growth We GW Deepening the promoted of at Managing Pharma capabilities with and and billion enables plan, our deal strengthening further Director acted sole that Evercore bankers healthcare deal. Managing coverage broadening our this morning the the excellent a

Markets as people Advisory addition, as to and Equity all In hedging advice. and the Capital contributed well from M&A

broader fees and client diversifying greater to that pay relationships our deepen their on capabilities, of We in a continue we participate so transaction. adviser share to any a clients activities range and that earn focus on can broadening given of

Equity and to us Kristy hire to underwriting are We've stage SMD growth. world-class of built XXXX, ECM excited have truly advisory Markets, advisory to join business business we We welcome next lead Head first our this of Grippi. through its a and of are Kristy pleased Capital our new

relationships Our XXXX with diversity helps building demonstrate client relationships. our the with and clients that new of drives deeper and results breadth capabilities

Our opportunities investments advise remain to in two clients. are to new recent We examples have significant new client provide both the believe just base clients. to to the SPAC investments of and attract enabled additional current and convertible opportunities that markets services our that

productivity. industry-leading enhanced. more that or our capabilities be increases, even have by as will utilized capabilities our and clients productivity broadly our We fee share market-leading SMD broader Advisory become these our supported Our sustained anticipate

Bob sheet, to Before I Ralph to throughout team and ever Corporate achievements our and could the want and Wealth our have I to and I experienced. commitment over Management teamwork, people dedication, balance Advisory acknowledge summarized the of not us exceptional demonstrated that GAAP call across one most discuss over and financials turn uniquely the our results go group. Board; have that The without that collaboration, of the have many years happened challenging the our Equities

are We effort. their for deeply grateful extraordinary

me call let Now, Bob. over pass the to

Bob Walsh

all. to morning good and John you, Thank

with kick Let's results. our off GAAP

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

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

$XX which and incurred million. historically, reflect has related which our transition we prior a total, quarter separation results case of estimate and In costs quarter the of the $XX in fourth As adjusted XXXX. in benefits our in that the from the fourth related realignment was of been the exclude completed began strategy certain million, items of to XXXX modest increase costs and approximately

a business. founded other in in of to newly loss Mexico for Advisory alliance the million strategic that million related fourth leaders year transition business approximately we approximately which we management strategic recorded transition there XXXX, formed During charges sale and completed former Mexico the of of in broker/dealer firm quarter our results. by completed Advisory of our are team business In There, the $XX advisory a we the in our TACTIV, is of adjusted its special is the a to from the with revenue to fourth our quarter, our excluded Mexico. $X of included

to year accelerated resulting and of Our million, $X.X full charges also special related impairment respectively from fourth down of and the million to depreciation $X.X wind quarter the adjusted results expense $X.X for our assets of business. and the XXXX related Mexico million exclude

taxes, XX.X% period. to was quarter the Turning compared our the to tax year in GAAP XX.X% fourth prior rate for

million prior GAAP the Our XX.X% And quarter was period. for and the the year tax fourth in was for million full the basis, on to XX.X% year. the compared XX.X share rate GAAP a for full count XX.X

full were Our a per related employee lower was the costs basis XX.X share non-compensation and costs year full share the $XX,XXX year. quarter the count respectively. The per earnings and adjusted expenses. for XX.X fourth non-compensation for travel year, for down $XXX,XXX reflects the and million million quarter XX% X% fourth approximately Firm-wide for each versus year-over-year decrease last on and in for primarily employee per

more to continue recruiting, will normal expenses and increase. towards operations, evolve costs As begin to associated travel, other we with

focusing on sheet. our balance Finally,

Our of strong the recovery strong momentum part and balance our balance strength of sheet year-end -- the reflects year. the the latter in

of held in $XXX approximately and in As billion investment cash securities. XXst, and cash million we December $X.X equivalents

that time of the relating quarter. the our of vest investment liquidity cash are that holding will to to first of obligations restricted to units liquidity currently, in awards awards term, portion future vest payments meet payment capital year fund is in to relating deferred this awards relating that be upcoming payments, securities at bonus we related compensation As vesting compensation tax deferred and prior to net compensation are Longer stock case the year, regulatory obligations a and to including used always meaningful the settlement fund requirements. will to

XXXX. in payments XXst, relating December with established prior earnings the operator. put to obligations free number of XXXX, position subject investors These satisfaction to to Ralph, generated change have will of $XXX for requirements. and vesting first pay to paid quarter cash our awards than from awards operations course cash under strengthen dates us and I deferred the exist million are The significantly, in compensation at in and This new programs obligations to as compensation to long-term consistent actions various to noted, as these a our line of As sheet out return future commitments past payment will now related and be made payment through we will John practice. like open vest would XXXX more taken and be balance granted. questions have

Operator

Thank you, sir.

first We line Manan comes with begin question-and-answer session. the will from now of question Stanley. Gosalia Our Instructions] Morgan the [Operator

Your line is now open.

Manan Gosalia

good can very all us deals completed quarter this what maybe put M&A morning. can hold complete? an quarter? Hi, quarters the Clearly, And color a have in you strong I deals but the through fashion a were quarter three taken Were environment bit. into appreciate those pre-COVID? went dig give near-term to here. little accelerated I that strength, this the of If would on percentage on to percentage what that two of

John Weinberg

Sure.

a me We really -- But saw the things we that, would think many. environment say in and it's positive significant and quarter, how and as in important portion studied you activity fourth began. we Let But exactly and warm significant a continued percolate think continue what that, quarter. haven't with to I the this started to felt start. up, a third portion level is very I things is the

our improvement have from is the on now, the activity We quite found that fourth quarter. continuing level reflecting strong

strategically. types interest that sense, I and you we're started having our quite say But percentage in clients of what activity give a level is a we the right about thinking significant early now about of very feel And strong. dialogues is, would the the the there's really we feel good so And year. that to

Manan Gosalia

on Got pretax margin the it. front. Maybe

get necessarily not higher back current that than or in the is that quarter a are saw reason the go above environment. was and here, should might start back up to pretax we year, you This the pretax a cycle, if any in considering? environment margin and Are that new the showed you're looking well holds this headwinds you are I revenue there XX% we make at any wondering, that run be to strong that any of margins it you can M&A rate why there XX%-plus investments XXXX? the

Ralph Schlosstein

we year above in that we travel comments. and that in make there's Well, we in and in value course a XX% because to to look, can significant from we've comp And I in and that. entertainment benefited variables run we business my able compensation travel don't ever the obviously to of we high And articulated -- said I lower little little -- the be XX%; long-term travel the like expect opportunity if the the I run good entertainment range. because a I environments. our XX% we of or We normal year. creation feel XX%, target could think, XXs always was And lack But margins set investments given and that, it's our in ratio always the year genuinely it's activity. somewhat abnormal. at will think, to so people, any course, the earlier get in do This to XX%-plus lower question a expense. a entertainment non-comp ratios that, cause said, temporary specific with and bump ratio of many lower business your as for one blip target of reserve the right this in because our

Manan Gosalia

you. Thank Great.

Operator

you. Thank

Devin comes Securities. next Our question from JMP Ryan with

open. Your is line now

Devin Ryan

everyone. morning Good Great.

Ralph Schlosstein

Good Devin. morning,

Devin Ryan

in Maybe just there, heard a frame up backlog I to the talk are question first strong guys on little you the I follow so which of front very you about comments, very how bit the outlook, about know things. word the and in bit thoughtful a more

advisory fantastic bit a like and reaccelerating. some is ancillary just the businesses advisory a as year restructuring other then M&A handoff the more And accelerating for businesses. other little and some between talk so, just M&A want the of I about And seemed really of kind to of after what

seems to and there. productivity. together of what of also, have some puts you and Because implies that's like just think other trying all trying piece still takes historically biggest piece most, but think to in the that individual the and Just you M&A like about the is kind these feel improving that putting the for about areas, of momentum some

John Weinberg

Sure.

seen the business. we've constant the XXXX, what is me saying pickup latter pickup a and Let a that, in just in there's that, been merger start half of by

And we're level and talk have a a good that that place we situations. about good so really seeing fact feel out activity as wanting we and reaching clients lot is articulated, actually a about of to strategic -- lot in the of

saw that fourth or capital it's or strong many levels actually all and of it's private markets quarter. whether we've our seen the equity have articulated whether that's activity been advisory also into capital advisory businesses debt You whether

project business. I trying really we play? And does And or we clearly so that which good forward level. a And your to to believe momentum just we're about up. around, going you think to But where get any that would feel how give going result, that is is about we've say we're as that that got to really what activity end our some I you're comments hands not

to equal One would talked the we difficult and credit -- this last say business where right market. would very, said engines their in comments very We is our activity were year given at versus our of in Having of be is we its the very about restructuring there's fund lots this available looking now that, we're cash for our level that very, year. that very that this of And it business. environment strong year. proud performance

pursuing comments our breadth that provide in capabilities have But clients. So hope we to business. able of really And there I and applicability keep we is allow will and also forward. will services into be that together clients hopefully trade-offs think to to then really diversify that add objectives issues clients' to and And our Ralph said that that's really in the us our will and our we're more And for we us which articulated right continuing the been concept more moving people. future. we it is offerings the continue now, to capabilities, those have well what grow

Ralph Schlosstein

turned we the three Yeah. underwriting it months to said and our in is first Devin. we in said versus of and opening pause checks restructuring. of year pause which as I they nine business, I that in one, we offset the the in out the calls, XXXX, add M&A, I commissions exactly with and that sufficient my XXXX. would were would three But expected flat the that add the just first just for in strength sure we largest revenues And remarks, weren't M&A. calls earnings in were first

that completion activities announced the other the quarter, other strong. allowed M&A to transactions before were and those some to started In So businesses us remain had of pick up the pandemic flat. been still plus the fourth had

XXXX. our would of for in putting had But our the would we is in extremely to models our positive all the business. storm having continuing fourth largest momentum the to quite performed fourth I John in say certainly that perfect not where quarter revenue as well. indicated So you your momentum together business of urge our annualize quarter advisory helpful revenues businesses positive I

Devin Ryan

XXXX. takes as expenses a middle invest will But to into of and over were And think non-compensation the travel, maybe this you. Okay, the then, have good trajectory to in some puts here the terrific. kind but of of for and Do seems acceleration? I'm to benefits guys follow-up obviously, up of the remain year well. that Thank just quarter this further trying then first of a year maybe on course obviously, continuing that to model step It around some tailwinds had and get the costs, sense like think to may as about platform you the trying we maybe that could as work the the materially. just return reverse you about light. unusual just

So any would help appreciated. be there just

Ralph Schlosstein

with Why John something. don't we let I then will add and or that Bob start

Bob Walsh

and us be said with be do pickup It back back of the in that, And won't anticipate the we a to on levels. think our office. remarks, travel. get anxious lights to year our I we're everybody all It will to in XXXX measured -- a course concurrent in view. the I As during of

and So bringing to important together. us in office, we'll Getting for people back the see. getting terms our culture to is back important the -- of Devin

cost a some pressure driver, which upward did way. we up per head, which net-net is a anticipate more the is for positive, go key to which perhaps recruiting, So statistic on back-to-normal professional will anticipate in And pick the one you it is which have we will fees. measured us, cost

Ralph Schlosstein

I would add just to that…

Devin Ryan

Okay.

Ralph Schlosstein

based think were Because, things was. done certain over feel normalized will is quite it what I own what to have of cetera, know again. us that that we it's travel learned transactions people My et to not be any we've done when view with …none safe vaccinated, call. certainty, be all negotiation and video go of -- including cetera, post-pandemic going et can everybody back effectively

person. Whether fairly again, on will I making more a the is to is it and don't a turns really types firm XX% with Wall definitely that bankers of than to But XX% in Street hand, resume in order. or other business to developing once client it travel the call, -- every those pre-COVID the new think the numbers that a relationship or bank other I will And and do electronically, less. our safe XX% XX% of short suspect, or is it challenging our out knows. be anybody On activities,

Devin Ryan

be appreciate time I congrats there. I year. Terrific, and on would But, Okay. great a I the guys,

Ralph Schlosstein

you. Thank

John Weinberg

Thank you.

Operator

you. Thank

question next Brown from with KBW. Our Michael comes

Your line is open. now

Michael Brown

Great. Good morning. Hi.

Ralph Schlosstein

Good morning.

Michael Brown

in really on that this that that just about Is I and any -- thoughts be year the XXXX? COVID-related So, of complete and or a provide revenue possible kind point? left so of piece the in from restructuring. pie, think how pipeline, then, just to can full lot you contribution as the how that start the maybe trend fourth we is mostly it restructuring-related to, at there of of the the into with out Even kind estimate could an kind and about we for quarter activities Would XXXX? think wanted approximate

Ralph Schlosstein

label it's don't versus it's never easy activities. really by our because break advisory categorize to we because restructuring know, want not way, It's out you the we balance As versus not the advisory individual be debt repair. sheet -- of And to it's transparent.

not accurate this high it area is in by for would a right that are it won't not break Advisory say know down, question, don't and how be will now, our said if be, partners good. as And the our John in we markets we which largest from strong as because very we're XXXX, that, would all comes because M&A or said year just largest answer expect really to our reporting. it than so, business as we now. that strategic think the, are difficult, right far, business long will touched strong higher as truculent still this that amount And as advice stronger they What and that expect I from we be was way as would historical is surprised, be XXXX. revenues our public And that earlier, would the levels. that as of But than in very was in has revenue that we be that XXXX momentum was of in XXXX. we'd Having would restructuring it

John Weinbergs

add firm and we always you culturally. truly give that parts outstanding has to like will serving businesses just of -- not financiers is is but that sense answer think add will I'd our can of in. what when this your some restructuring value objectives, to do is bit a And clients, we bring And acting maybe for, it a on thing directly which how and we're one advice our their the question, that business we give about little it. in

involved we Whether business level dependent of that se, their a per really to but balance they amount to general they And there's some sheets, or in thinking about bankruptcies to of so, advice. very terms whether that it's our clients our mergers restructuring us. of advice finance business with get respect do thinking on activity about just and bring is it's value-add with giving the not tremendous how

flex gang-tackle of together professionals have our And work our is the partner one so, of hard and really to really we problems the because to clients. real things that,

so firm in what partnership this over And will real leverage to is, allowing you see get us system. time the hopefully at our

Michael Brown

Equities helpful been it Okay. just business hear some to you of news Wanted ask years kind color. is franchise you the about given kind franchise? do or of as worst of you the in change volatility is stocks think across At this your issuance some continue one usual? impact past volatility could these which a to be speak some or would to puts do the behind Can the of ECM you Great. and will. over or of meme of X.X that about equities But and to if that will of the takes of point volumes, that's interesting the Reddit market-related I the seems be topic it and That's gears impact your as so do that thing all us. delevering these the like guess appears you volatility think

Ralph Schlosstein

driven and connectivity any of first exclusively if exclusively all we're all not not is really this think, Well touched because meaningful investors I clients. way in business' volatility by it's by institutional our almost Equity individual with

they're trading in the think a seen consequentially are we've stock So kinds I stocks, fairly that think moves in of general and fundamental are general in our prospects recent inconsequential. indicative in effect they had of terms its matter because of not revenues certain do of allowing depart in some the really stock. that -- that earnings And value the days to we've the the markets of demand individual the of from thing as on a for weeks. I the of and handful stock supply last power best

I they that market those sorts really badly large in of stock of the withstand good never think kind badly individual think things to see investors I volatility. for often are a institutions and end not very who have generally to the wherewithal because

don't it, but happy see I have addressing not an easy it. I'm to for prescription So

Michael Brown

on commentary Thanks. the appreciate the topic. Thanks, great. Okay,

Operator

Ramsden Richard Goldman comes next Our from question Sachs. with

open. Your line is

Richard Ramsden

guys. morning good Hey

as the think year the a those a realistic you business, you So again about a maybe could little on think could get realistic is what of you you. longer advisory you bit in you share talk over a also for think debt X significant maybe underwriting a talk well market the a is And bit revenue pool to do talk businesses? global business that for X obviously the period about Could of we When business? couple questions ECM? mean what little I share me. about become term market a that's within and

Ralph Schlosstein

Okay.

that look Let what the by I would at Underwriting of or I business ahead pretty of And -- our in I beginning that of us. think first. our Advisory share have way -- about in at XXXX. consequential me we underwriting have gains looked mean talk business I same in the sort business at is, XXXX the And XXXX market

will fee those to thirdly, participated gain both much broader We clients last broader collectively was of of industries capability addition three that things. fact involved SPAC IPOs think any We the cause the I we of much adding and benefited continue of benefited were were to And the from will year I breakout highly to involved. expanded and with CAP we to group follow-ons. that. entrepreneurial with we things the in a from benefit our we bankers -- and fact And benefited which do convertible think year we that the went where up. share as a the from clearly in and number types from capability capability our in market transactions -- us matter, a average general And they that share. continue

activity in the or advisory level any XXXX, equities XXXX, of or XXXX forward in whether underwriting it -- revenues are a share. and going our things: XXXX, aggregate two function was equity Now market business of the

of think will will what we're not the eighth the would aggregate the it's know how And share and are the at even confident we With no activity, inning because with or will continue out beginning to wouldn't know interface the only firms. seventh, on I although, very market ninth that say, publicly whom the basically think the but independent question, year larger it's in and market strongly. helping advisory, I don't that. that share. firms started in, is know of that I of independent business. that of firms clients be because a capital all business in, many business there's very of providers that grow respect John on level data no debt I certainly feel that we our our data I that to answer in What be success can a there's say to all that they're available you're

even couldn't So, I that answer begin question. really to

Richard Ramsden

-- And go Okay. then yes, ahead.

John Weinberg

going was that our type respect is we want help that, finding Richard we are can and through something have to things. financing to that think just what to them is as add with add how talent, clients A+ continued the and services judgments, I increasingly we

very and have of quality up the high the that up larger which in fees. side, to able respected those -- translating debt group financings, adding it helping ends obviously, terms value-added are strategic a On them give higher we side, of that equity people the this we're it's we really into advice, think as because real to where financings. ends positions And thing, into that we is are but take said we about on Ralph and about roles also larger doing in think to and how strategically increasingly advice same able get

a giving of think we a companies lot lot we've don't of white high-quality associated of front terms because And opportunities we the in and there's an with. device to so end see the in in transactions of that a lot space to of really us, been the

Richard Ramsden

helpful. Okay. That's

reform a XXXX, the in obviously some or of think So Advisory be the sort the it a tax guess, this I in post wanted on later material business negatively? that have possibility for either like to the either is second impact particular. get year tax positively I do would thing, or you business again. maybe ask could If election corporate reform about looks corporate we do

Ralph Schlosstein

XX% in of did that every rate, XX% tax achieve I skeptical XX%. we or that In Not split -- plans make XX% tax the I'm corporate have his dollar But he return his then congress Biden at candidate a about At by -- shareholders. way, had an tax plan of the -- goes about to tax it's to rate think rate, it a earnings It's as President of part with way any campaign, Biden his increase will through. of a all that, from if really. is the quite XX%. which clear of even not in as a argued XX% that

So less which at than decline personally in we decline get goes it XX%. in I it's of that's if a earnings increase of be a XX%, to -- If earnings percentage a likely all, any would it's five points. more think

nothing, So my that's not it's a in -- that not big it's but deal either view.

Richard Ramsden

recruiting great characterize is that How And then strong environment And about environment are for environment peers great. the last of a terms -- in advisors. well. to environment obviously, for today? a say question it's Would That's is, what is rational you a as would this willing people great pipeline for talent? my talked recruiting Okay. for the you pay recruiting your you, today it's obviously you

John Weinberg

who to talent. our drawn continue willing are talent. that I feel think, there judgment is opportunity opportunity has culture. we've you, can't can what like and judgment want our the negotiations real pay afforded But our I like to -- how for really talent us really more what make to we are a found going. give on really people a and think people that A+ And like in And model success discussions real to and our said is we I on as join. that who to to are pick we've firm to and finding some up to general, And in talk

is don't I bounds we have of of that in it, the we've think the terms what past. it rational In seen cost of out found of

to the happens look the a and really over being think our as in looking they are that, the that whether be part terms. of lot a experience people they of problem of a with want reasonable a at being then people is fact, to is come firm their -- is transaction momentum goals the getting continues by quite firm firm, they And realize making this quite the and also and really attractive. whether and can that situations momentum are they at to they an people organization And and that they whether there. that and has I like have with, join in they because the do to our I platform But judgment to are make think can judgment access we've to a at to opportunity no has well platform fact, client realize have what momentum. the they had love want team in financial

Ralph Schlosstein

to in the capability. the leading add any splits, that industry. can they're thing of corporate discussions, and firm, reinforced And can independent year. they expert has firm this performance a the who firm than that Evercore any and sit come Yeah. independent having business Richard, has Morris consistently whether inarguably full-service to independent more in strong can firm that firm everything coming only Trust with in recruiting, that just at we're their equity our firm people we're by I they we independent We're our clients an else we're and the other independent them would in or et do whom we're it only independent from Trust world-class find at another independent would an is spins, only Morris structure, We're can the practice. one defense is cetera. from firm front -- John has say engagement underwriting they with shareholder that a activist you large We're firm. I in reverse a without only anyone And firm. the if that from pushback

an is debt example debt, in for be of as would the -- anything the that like do a but in firm underwriting equity big certainly that draws they reality true that's done have And can been and So advisory involved old bankers advisor they of an of firm is at is cases have exactly of as extender business. their in firm. the would large one at involved our many sometimes

Richard Ramsden

Okay. Thank you very much. helpful. very That's

Operator

you. Thank

Hawken next from with UBS. question Our Brennan comes

Your line open. is now

Brennan Hawken

on decision to question the by Actually sorry of year the leverage or a of should Do more to going -- any shareholders, you comp a Thanks that you in bit lot on made in We for I just actually some yet, or that on maintain revenues any front competitors bullish? do XXXX, last of traditional it relationship have opportunity -- recruiting. And expectation? bracket set saw not show first bulge for line or between a you on kind benefit has questions. say comp. the into Good this the year? morning. you impact the -- follow-up XXXX discussions taking translated be and that to that is little this have the in of you seen question the be recruiting my expect for Has would

Ralph Schlosstein

happened Yeah. think in Brennan, is the you what I what's exactly just firms outlined. large -- that not the

I is large my the seen think -- that firms effect return on or on really extraordinary that them revenue their gotten disciplined. bankers we what to ratios their any return have compensation therefore, view and people are appearance last almost those And maybe extraordinary the capital firms. of from and results well XXX% has with a happened been the result well XXX% compensation individual they capital of That in the their of exception deployed. and And not shareholders pay or two of one in the more they've the the to have that that have year. allowed the pay

characterize compensated been as most high-ROE bankers we revenue who on last Those as the part, generate that sheet. the balance well necessarily being dependent the often have without I who can were year For people historically. they bankers, pursue, those the

Brennan Hawken

And that. is momentum impressive. for really Thanks then Okay. the in ISI

search you Evercore. in here pet project I'm of new with guys at So a

And fund single-digit guys you the percentage Why strategic more in of type all. sort small. though and at capital It via hiring? low alternatives thought you to wealth strategic shareholders have and business? seems just So the for as income operating point, the M&A like popularity alternatives return this of not either that buybacks for asset space of that's about management consider given use or it's to

Ralph Schlosstein

one Yes. I in Brennan, Wealth asset businesses them That's really in pet own taking think or -- on all that point, our the new this Look, wealth management. of we -- you Management business. appreciate first I project. we a At consolidated. Well, of of manage is

between to and business, and I I sell clients. people we into -- we're comes those a people hate synergy when Management wealth some we Wealth sometimes turn able think do this -- see in word,

us? opportunities else they accounted as to well. the this are at valuable And we that businesses look advisory equity at clients of, those view deconsolidated And essentially investments are always more sometimes for than are Wealth the are someone to they method in Management point have of The point. from

John Weinberg

the is remain their clients very really we're what with ahead feel to that and very like their only add Wealth Evercore serving well committed and opportunities their I'd The -- performing how Management they're performance, and good is very, group extremely to about business pleased them. their and executing

Brennan Hawken

color. the for Thanks Okay.

Operator

Thank you.

with Our Harte comes Sandler. from next question Piper Jeff

Your line is open. now

Jeff Harte

Good morning, guys.

Ralph Schlosstein

morning. Good

Jeff Harte

A you questions. SMD give employee us and the Can guess cleanup counts at couple of of year-end? I kind

Bob Walsh

changes Jeff, that we've the Senior Managing Directors of disclosed. reflecting a bunch

really is to [ph]. as of And today, XXX. headcount for So as total as opposed of year-end the the is X,XXX firm about

Jeff Harte

that back into pull-forward any XQ? XQ pull-forward closed deals revenues, there a in from were of revenues And of meaningful Okay.

Bob Walsh

$XX than a more last was XQ than a year on with let bit decide million. of meaningful. I'll million. XQ this more you year $XX compares bit That of

Jeff Harte

in thinking SMD an Okay. admittedly of, productivity, per a parse the XXXX something XXXX. a a Is you kind million, close assignment some per base some unusual in $XX out getting levels, was Thanks. M&A thinking the the like going of about that can And were what or revenue to fund case placement. restructuring -- I'm I'm stronger reasonable And of forward? like across that at different versus of areas all productivity types?

Ralph Schlosstein

slightly productivity a count full in that first Yes. different are only We it we measuring in way would sense that the have we -- is, the SMDs year. their of

firms. to than higher theirs productivity industry-leading be compared probably and close little independent would measure bit some we already it's -- a I to have closer in theirs. twice times And our cases the So yours. We're other to think three

wouldn't So good good. be can what right to it I by I our I a think, the it now. Directors broader where go. fact predict Managing It's our for can aided, think, already higher do And is deploy. productivity we have is to array than really of quite capabilities markets, it want In Senior that

I might we think that to [ph] be. it out at the wound than have lower predicted beginning would up have turned it

we of and we people And so, broadest of array capabilities have terrific the firm. think I have any independent

and between our competitors us our So gap productivity, widen. even maintained be the perhaps and should

Jeff Harte

I businesses mean, being kind out in we different end? kind And all across of than would others, of businesses, should of think – productive different more or net it does the

Ralph Schlosstein

gave think that clients. included or do XXX hard people, who just capabilities that, that for Bob covering aren't because are awful product people necessarily I it's who are to you responsible

asking So really isn't that about. to have that the categorization you're the mix of – we kind doesn't amenable

Jeff Harte

pipeline stepped I'm the that finally, up? relative talent of we to the margins driver of as kind additions that enter the and and comp had senior last a How referenced being back thinking rate? years as you ratio up you Okay. kind guys ramps up where And of hires about of couple leverage XXXX. specifically And stepped of kind of senior think should operating mentioned kind strong of as recruitment we

Ralph Schlosstein

at I not think this that clear. it's point

think what a way. opportunity it. comp of with of those share would lot dialogues new is on right a And that surely we're But into you that take ratio. If there little all very advantage said we'll transparent hires, the get have now. its so always of a bit pressure of be – we'll We we possible if turned we've in underway I

from this discussion having I point. away that at ways a of a think we're kind

John Weinberg

important just And get as state out. our obvious. clearly, ratio comp revenues plays to the We a really of is leverage part grow. how the That

can that ratio that it what address our that lot we're what market the well capabilities, we who in market. clients believe – share as comp an to how people the gives the a apply. think so as you our important told to in And But more we're our is really going themselves of plays. uplift clearly by part expanding we on a very and depends to of of both We've able us

Jeff Harte

you. Thank Okay.

Operator

Thank you.

with Mitchell Seaport Our comes Jim next question from Securities. Global

Your line is now open.

Jim Mitchell

We great. an clarity Good Okay, just XX Brexit. Europe. underperformer It's years. have Maybe been on little on question morning. finally might for a a

an area geographic highlighted as You expansion. of it

this you seeing there? see you seems about improvement potential we're point? So the feeling to sustained like are want your hear forward. at just I over a going how Do for thoughts green It shoots. Europe some

Ralph Schlosstein

Okay.

in do in that pickup I role as anticipate is we I indicated some some aggregate to honestly. But M&A think activity well its pickup. think, we that getting crisis below question your in in still pre-financial quite should Europe. you be back don't think there there activity. is Europe

firms the largest that Europe the -- firms in born the in We have States, among independent were those sorry. far United of there franchise by born

more would Lazard as we the And benefit I to we pick-up Rothschild any we other from Europe. think we're But Europe if does would as big from So more independent disproportionately that than and expect than in would. that them benefit not firms. of

John Weinberg

what is offer us. for that I And at we would Europe as opportunity look an clearly Yes. do

that have We and found playing our brand bankers there. are our well

and And team are believe opportunity talent quite our there's so for really that looking want intensively join we who us. real for we to

And focusing we in will especially, we finding that be the will looking be expect talent. real some growth Europe, as can for you So and mining improves. on market

Jim Mitchell

boutique about Okay. your That's bulge it a to long-term, really you about a bracket conversation. of follow-up that or how sheet getting sort keep balance have think share the you really, kind is is I helpful. but do would independent long-term doesn't there this of getting know an maybe levels, something being long-term? that on just ECM to market that Is from target? And

Ralph Schlosstein

part Well, underwriting of it's not first equity bracket overall a which the are and something activity, that block all, of We're firms there's bulge not going. do trades. small

we're which an the actually zero. credit we I is that are get the certain table going to going extend credit league only credit be uniformly share firms think just get get, we when a market our market large get as never There's they when the to of league table part that they So advisor.

bulge get we'll definition by So brackets. never to the

can with this agrees I On of involve in and massive. John don't we I competitive know parts underwriting -- think very the the hand, the business other that be

John Weinberg

seeing active opportunities built. and opportunities continued those I a Without lead, that, left. get prediction say we're move lead, to is increasingly getting the they've to making lead one would We've thing we that to are

think looking share us there real in a it's we really get now to to us. us or And that to front think, be we're doing and we're All now. for that space their what for front there's moving. so really assume -- To significant that's their and take I we is going of at to think of in think right profitability that growth we is level, keep market may leap certainly

prospect. to I good But you're feel suggesting think the We'll seen. we getting So I the about see. be level think remains that that to

Jim Mitchell

thoughts. the Appreciate Okay.

Operator

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

John Weinberg

for Thank you time really today. appreciate it. We your all

Operator

Evercore This year conference XXXX concludes and full today's results fourth quarter financial call.

disconnect. now may You

Ralph Schlosstein

Great. Thank you.

Evercore (EVR) 3 Feb 212020 Q4 Earnings call transcript