COWN - Earnings call transcript Q3 2018

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Operator

Good morning, ladies and gentlemen, and thank you for joining Cowen's Conference Call to discuss the Financial Results for the 2018 Third Quarter. By now, you should have received a copy of the company's earnings release, which can be accessed at Cowen's website at www.cowen.com.

Before we begin, the company has asked me to remind you that some of the comments made on today's call and some of the responses to your questions may contain forward-looking statements. These statements are subject to risks and uncertainties described in the company's earnings release and other filings with the SEC. Cowen has no obligations to update the information presented on the call. the of included other with www.sec.gov. in which available description and and the complete on are is and assumptions the on more these website risks and uncertainties SEC, the A SEC website at company's company's filings on will certain measures, our non-GAAP provide useful speakers believes the company will call, information today's financial Also reference which for investors. today's to GAAP company's presented in the is reconciliation with measures earnings consistent those of Reconciliation release. as

Solomon, call Now Officer. Chief I Jeffrey like to would Executive the over turn Mr. to

Jeffrey Solomon

Thank Solomon you and Lasota. morning call welcome to earnings call. Steve our XXXX operator, good me our third This and on CFO, quarter is today our Jeffrey is joining

The we third positive strong the the XXXX. continuing momentum had quarter that was first another quarter in half of

IPOs rose investor continued healthy to business continue quarters, Supporting the financing over banking was to of of investment primarily XXX% was driven for future activity banking of quarter strong third this capitalize to while $XX.X two our robust heightened transactions. organic Similar the businesses. and the on demand income continued a of XXXX pipeline building by the strategic prior and and business. advisory investment Our our performance our million the growth economic follow-ons, brokerage

operating grew brokerage revenue institutional in XX% only Furthermore, our non-compensation during X% businesses same and expenses leverage our addition, while businesses continued scale. the In which increased year platform prior compared services institutional to the demonstrates quarter flourish. as to our period, the

to more returns. and higher continue to consistent simplify strategic execute the also on business initiatives We our generate

and encouraged notable I CEO actively working the of this call, our at objective. As been the strides towards on we've structure in beginning I optimizing will the later made that the I'm something outline which by we've became is since is year

on the position to continue growth profitability and competencies to our will core platform Cowen consistent we ahead, basis. a in order around drive Looking

income, and the financial This year-to-date Economic income highlight $X.X in the XXX% year Before as I want million in economic on totaled a income increased we for from represents versus depreciation XX% I was increase non-GAAP income and doing Economic a detail. which quarter, performance introduced prior economic the million to financial million that excluding mentioned quarter $XX.X the our deeper dive quarter $XX.X more last for on and to the third period. amortization, a revenue. of measure in $XX.X million quarter quarter XXXX. in operating

income $XX.X the For same operating period totaled months for versus million XXXX, first nine million in the of economic $XX.X XXXX.

continue businesses. at XX% each by banking Turning now company’s $XX.X and from since In was the to Investment third issuances environment. first the operating Healthcare capital XXXX strong a on specific of capital rising markets, Inc on Cowen following results and a equity of strongest grew progress our million. basis banking our quarter healthy already we to equity raising quarter what strong another revenue in for half formation had to capitalize XXXX.

non-healthcare We verticals. also momentum in our demonstrated

in over the In our XXXX increased of fact quarter non-healthcare in million, the to marking XX% third highest long revenue third the non-healthcare quarter $XX revenue our quarter time.

on help is banking of that area advisory a XX% percentage have a is year. last basis. can revenue growing represented we that As consistent to from been revenue, quarter us Merger an drive XX% margin clients more non-healthcare as same to the significantly of in fees it higher business compared a profitability

including quarter, to industrial, services. information healthy with broad we we our XX% again and in quarter, $XX.X million. variety worked advisory on the year technology from revenue achieved of Similar the growth last prior once organic came transactions M&A quarter to up a For from the business industries

as the aim our higher which margin inorganically. as how this business both we've capabilities to will built well to advisory is Looking organically, so scale bolster ahead, we continue and far business

third we turning business. Brokerage compared to in during have quarter revenue of complete the million. averaged our quarter, of quarter of we $X.X Now the Because of this year versus for to Total apples now gain revenue XXXX Convergex compared per brokerage third million markets third $XXX.X trading year. momentum the quarter XX% day continues year last comparison to $X.X acquired to growing day quarter. trading per ago in apples June the to XXXX, the to million

and purposes institutional broadly within describe the units institutional as this business we individual call, markets services For will of the respectively. brokerage

finance of Starting institutional from convertibles for share component, credit. services. and about brokerage, the reminder reduce a situations, special And include year our quarter first our XX% includes global institutional from cash Institutional to equities, our third Convergex calls gain on and talked and us increase XXXX. revenue and brokerage securities the grew brokerage prior institutional options, enabling electronic to quarter. market prior with As services how scale management help I've ultimately revenue the us business, trading, commission XX% services, clearing, services prime increased costs.

which that can though even the fact, the still make. areas of the last non-conflicted reaggregating margins pulled With backdrop as a cost impact wallet us muted we of billion stands first collaborative challenge on we this our of of new business. reminder with hearing or healthcare is in we're the investment before and where start Cowen by discussing couple many the October In MiFID we're environment. XXXX. the investments, I’ll $XX.X our direction peers. In a model This under wallet investment and our regard management about assets in of is we to our research. was as efficiencies $XX confronted the their July experience to to to case as independent Xst we more intend Increasingly, I’ll D&A the investment through its in the II, Xst, each talking business, of which turn from had a research management few and of drive minutes current when a finding through emphasis first we Cowen future differentiating execution strategies quarter, million improvements out non-essential of our with this from strong platform. private acquisition, strategy, in spend a continuing business. clients of investment have of the to bulk process increase a commentary Cowen with management, itself healthcare their value-added contrast the reengaging of state relatively a we're

again We a make some to at be in quality continue fund expect to investments pace high at reasonable XXXX. point and raising

and deployed is the Merger in now current arbitrage Our once throughout all active fund its royalty commingled with million double-digit in its fund for sectors strong mostly reached two focuses period net XXXX estate TMT in is investment committed equity Long-short all its its on vehicles. third index $XXX October anniversary continuing merger return. XX% more a across vehicles. annualized real arbitrage than outperformed with which HFRX consumer again performance and healthcare year

a into questions, as that the business strategic investor little we're it summary, whole go changes the especially decisions which relates closer more management with to as move about, making I’ll in is because received target return a our objectives. topic have it many and a detail So I to to

hedge strategies We're we on had ten achieve at of Rosman as assess we the of investment to they objectives. business traditional on brought First reduced to return migrated more to being equity our capabilities dependent to And which compared determine of down last to In our fund us Cowen Management management six. Investment Head help continuing Elizabeth how can announced on a so, very long-term and reminder, which now volatility equity doing deliberately has we've our style beginning and each August. towards are the private quarterly have foremost incentive year, funds, as fees less our focused that's products.

We the are in historically D&A which launch in those domain Cowen incubated own we contrast is to we're as what our own greatest balance do have tragedies firm also how The our we a business. from expertise. outset. increasingly the is areas of we've healthcare leveraging finally, raising successful exactly private capital external We committing we that of internally on with trying focused which strategy to sheet the capital, stands are And example the that. stark prior scale great to our of and call

in for do other And intend opportunities that future. near where very to so look the we we can

spend some the more operating pieces strategy. I macro of review our individual on the will an me businesses. providing let Now update time

improving to about first drive The capital me heard allocation higher before. is talk ROE, which you've

$X.X question have while I use have that we to repurchased intend we along the and $X.X have stock quarter, under investments investments, and leaving path of further of have in with stock enough but performance times These Hence are $XXX stress time, we'll your should Similarly capital have been buybacks, the for why business. of repurchase the total good not as million. mentioned you we can some current of million want legacy our delivering. to I we we continue approximately so driving well don’t sustainably, moving ask continue balance million just in message our the of which come. strategically should Where have that importance the program. our more – our not During ended of just operating the the tough a lot, common available as the to the you the they allocation monetizing capital we private before, recognized buyback quarter

to they investment this they periodically quarter. did income contribute So as do

results Italian at wireless gain recent a we company For spectrum recorded held the of an following in Linkem, example, that by unrealized this Italian own quarter the we government. investment the auction our

operating monetize continue over with sheet so our align can time, our that business. more will legacy we ways We explore balance to to investments to closely continue

as Let's be so themselves. the will to present clear do opportunities look we

of as time performance talk more quarter. I income, for of we we quarter look with our expiration that any some course Steve some other investment later something income on his of subject to underwriters that customary to income in and tend considering aggregate detail particularly expect quarter. note Finally, want our Having in to investments are to the you lock that, over I at Tilray will That's investment the at look lock-up one in said like experience which remarks. year a volatility not quarter talk of period. to investment period returns worth about through performance the this the income of investments for up the about investment our quarter outliers

balance investment and are the income basis. balance with progress objective we're of on our course our reduced so, in of for much us sheet improvements making And versus we’ve number the high help directionality signs visible a businesses. our on of and single a of performing harmonizing stock that picking sheet Overall, operating year to the seeing more winners overall our activities achieve can focused

the we'll our financials questions. over up of a review said, call I then So with to for will and brief it that turn for Lasota Steve open Steve?

Steve Lasota

you, Jeff. Thank

income net share or $XX.X to GAAP $XX For reported $X.XX stockholders compared in prior common per $X XXXX. common to shareholders or that at by million attributable our diluted September of period. of diluted the share per common of year third equity GAAP million quarter XX, XX, XXXX as XXXX, $XXX from to we $XXX million million the December Note million $X.XX increased

were was Linkem amortization Our brokerage. depreciation another prior non-comp quarter in uptick in across benefit $XX.X The up compared strong associated of were GAAP and expenses and touched performance during is expenses and to with businesses million, Jeff the Tilray. $X.X million as period. was increase, had part $XXX.X to due the revenue Compensation million. and year also investment banking to $XXX our to XX% upon and the earlier, in The namely year-over-year increase million million quarter income $XXX.X due

other investment for was the quarter. million expense on $XX income million, interest income from $X.X $X.X was expense tax gains non-controlling was million addition, In and

underwriting as income January reminder, As our had recognized adopted gross of standard has our however impacted impact business and segment of banking net it GAAP basis than a presented change which This One been XXXX, several on the associated rather of now before. is any income. revenue GAAP our revenue a we has net Xst, components recognition investment new no on as expenses statement.

presented still funds are majority the the or period from recognized that statement. with incentive fees Only will fees the certain in recognized, associated point a at to crystallized. business, but losses our gains future the a equity of presented the funds portion that be investments income in as previously they as deferred incentive investment we of being for management fees that Moving previously to are GAAP our

financial measures, our economic to referred income. to non-GAAP turning as which Now we

preferred stock to sectors. $XX.X growing as of up in banking expenses, during reorganization period. first are revenue to incentive million impairment, and income The $XX.X fees million million year We a to a associated general, yet with use funds million non-healthcare debt $XX.X prior reporting. decisions. income XX% million from due based on brokerage increase in of was $X.XX income million, make to million quarter. XXXX third crystallized goodwill $XX.X my investment adjustment performance include million or in the with in the XXXX. the Tilray income Economic reported pre-tax income the per was year Linkem we quarter the to in non-GAAP adjustments in to $X.X time prior includes to revenue certain be income or is period in of performance to compared economic marked was from transaction versus because XX% $XX.X market also quarter in Linkem. of up a As increased million dividends. the $XXX.X GAAP well consolidating in measure not was related adjustment and incentive up certain per equity or reminder, for quarter. income and operating strong $X.X GAAP In million mostly to Tilray Convergex Similar of Investment million the advisory compared share $XX $X.X $X.XX for a economic revenue, share intangible prior fair $X and as this other Economic and remarks increase diluted $XXX.X prior full XX% Quarterly our mark comparison financings costs when quarter economic of consolidation year-over-year year. $XXX.X the these the contribution and eliminates for was year-over-year that value were measure million revenues excludes will of the certain year was remainder income economic quarter. million, Management revenue and to of the from prior of compared the income diluted million the quarter financial $XX.X this in $XX.X Incentive fees was million measures. to up compared third year to the up and the impact

$XX.X our Turning prior expenses XX% now XX.X% compared year. for prior million income period. expenses, the third to variable to non-comp revenue was totaled to quarter compared XXXX in the million the And in period. in Fixed year the comp economic benefit in and to the quarter $XX million third $XX.X non-comp in expense $XX of quarter the year compared were expenses prior million of

make to synergies. eliminating expense progress Convergex continued due to We

of December September quarter. by $X.X increased fixed equity $XXX as and XX, XXth is of million common million convertible current to was This divided reclassification total the $XX.X which call preferred XX/XX/XX. increase tangible $XX the Jeff XXXX as compared and $X.X which as GAAP was variable now and $XXX is to the increased earnings of share, outstanding expenses I'll equity well XXXX income, $XXX operating compared the September And Common to is equity, option million to million. costs as XXXX. million XXXX. $XXX value capital of by value income $X $XX.X quarter less XX/XX/XXXX. of quarter compared invested million which financial third shares as with my before at million was of to XX/XX/XXXX. compared our Depreciation Our to to as equity QX equity end of the debt. and stockholders’ third XX, amortization XXXX for This which per to embedded in of the to to September was over of in compared as as million summary. to $XX.XX were associated were is and per economic down of for is $XXX at completes common compared $XX.XX turn depreciation year year-to-date Economic the conversion quarter million intangible back goodwill September stockholders’ XXXX to over million as prior $XXX million million remarks. related XX, of equity as book to equity from the grew amortization $XX.XX $XX.XX total XX, compared Book for the lastly assets share closing XXXX, XXXX

Jeffrey Solomon

Thanks, Steve.

our in So for but just focused We're to see on XXXX, from as we our the the more and of simpler, more first are execute results just and our the some I nine a need regards plan. of we on to also can the term know We for want consistently progress long were transparent, make months results becoming to exceptional consistent, for over this part a consistency quarters at aspect highlight you profitable not more track activities of about year a Cowen. our first daily quarter, we've executing key minute. the company. few areas to more on these sustainable three talked that today regular that

be of process. one, things XXXX? year sheet our to industries position some individual to we and we're the continue are our On harmonizing for improving spread this that an close what the at in. and For you be time Well all So can. scaling operating one other balance higher just our streams, we've growing both our currently margin as healthcare watching our looking as other we the the should advisory looking continue we're in business, we’re to from activities and level, diversify well into business deeper we'll out revenue market some businesses, allocation that further highlighted the inorganically we're with our capital of and we're as where by so going going not contribution environments, sustainable to our organically our expanding sectors to same and do enter

about we D&A. areas be our to expertise and investment where management focus it’s domain deep Cowen On have going furthering the leveraging side, in

on earnings volatility coming that power, the look questions to on been this recent century. whole year us of well the for capital foundation, track. as put we throughout not opportunity time only should or why do. that a We that not provided for we just for the took the call With energy is results, the the what themselves next for today over all this been help the despite higher market time our to the last do for ultimate in what with know improve years. but the month, and some transparency results consistently clearly executed and and progress of can off the is past equity if holds we've if we that remarkable commemorate everybody while it and consistency we to return years we to to In achieve our reminded we noting not none greater of had shows model an performance Cowen and It's the made And lower being we we Cowen to at each that XXX believe lending organization been blueprint investors invited has higher we to up what Last bell up of over recognize for together what to I efforts ring with year not major forward the also worth made excel time you. event and it much shareholders. be the that volatility, it anniversary. incredible right This success the of to the execute at efforts closing plenty There has achieve work we the initiatives. able we but All of our of still NASDAQ steps open XXXth thankful towards opening businesses. our I we’re and were and to do speak during people is over repositioning what so spend we a us have do. achieved our was this of I was if on have will been for who entire century, why back during But could century with that the were who this believe tremendous didn't future

thanks So operator? and

Operator

turn questions the Jeffrey the any And I Solomon would call over line. on for not showing I phone back am Instructions] like [Operator to to closing.

Jeffrey Solomon

at calling everything great Ryan covered it’s answer am Well, I We're you wants news. coming happy Devin everybody Well, We bunch to to in will of that that know. buzzer, Devin. individually. right sure be a questions.

Operator

Your line Securities] Ryan is [JMP open Devin

Devin Ryan

thanks. Great,

no the radar advisory the but think star M&A or so a sure I there’s first if on anyways. and here been it’s here of in the the for commentary – looking I were time. we potentially know that's growing the a way, acquisitions. queue, XX at if – on by am question business some X I on I guess some

of tied amount is in extreme market the that so number I valuations fair periods sure advisory evaluation along recent come just get of public And some think I'm of of a with you just the this kind the of the around in, then of natural on volatility. maybe broadly, weeks looked these at an when the pressure uncertainty you're to been practices. kind under you obviously environment update And and more probably that's companies in backlogs which have and stage of kind of

curious the quite terms months So as markets even valuation view I the how play business, in longer-term I frothy maybe the as am either kind building taking ago. appetite but clearly not of that or a you're to was in would it know of just

Jeffrey Solomon

a question. It's view, definitely We're term thinking a no great question. longer

tremendously really on We M&A that and But under tremendous franchise. we So the few be of that on and actually we're are activity. Most under acquisitions be shops domain the traded frankly. core expertise publicly for – there's shops. that our what the entirety than covered M&A will the big cap banked core past to over bear amount of lot looking smaller us we most view a smaller that in and for opportunity frankly just an need And long most of is cross-border is And focus where companies companies focused transactions. will we of large seeing advisors. bring There's these to market think volatility way middle those at would smaller platform marketplace any weeks is probably in the growing it's overdue and the across do we're do really would still a expertise of happens leverage companies – sectors. a to great really the the our many that

produces that category. fall amount the domains. have at are and at in in and we’re companies insight do. feel able looking affiliating firm that they opportunity join They They acquiring value partnership so that the And were a of excellent a and to Cowen with their like the associating we the tremendous that of to content of with they what us that themselves avail recognize

so in acquisitions, more them a And I these as I think partnership. much any view of

word I be culture as the fact really the like into the of to because word opting in to work an prefer in of I people come way same much the are In don’t individual. merger would acquisition, they sort opting here

that what aligned culturally and obviously looking to of sure do make on expanding folks. And making sure promise that to able we’re and so at and we – we're those the we're deliver for

So don't – at really at I this. look

We're to First than for fully to real anything acquisition I make what as that and we other going market appreciated, ability don't don't think we have that a And us the think we franchises might valuation already leverage, organization. do north own our we this $XX and reflected trade obviously how the year know in M&A in market. million that's of of in those honestly.

that. to that inorganically been not, more scale I we've right scale to continue to get can we’ll we If – continue away. we do what do price, and we'll inorganically plug mean am doing the quickly make to at If sure organically, continue I we’ll sorry. So

Devin Ryan

about we I got I ended auction full of of then franchise kind value Linkem basis. is the mark as in the from well to of question of and where how just on the kind kind I mark up is on taking coming value Italy. the then on Yeah, that implied price market or kind trying books? I how am then the consideration more follow and the color, a of quarter of it. think game process the of a and to to up. appreciate there kind with value spectrum market follow it's maybe that the a kind comment guess Jeff, the and there a heard mark of it of

Jeffrey Solomon

mean, mark obviously, to we the marking on lot firm. books has third control So, our with do actually a I don't our party that

And fact always to the marked we way both and I value at so we're to think with think want have marking building itself operating we've that the blend about we asset we're and go of XXX% value but much And consistently both. and And there's somebody. too – don't we into also tremendous to it or anything customers value. franchise that look the we valuable the the that spectrum has value. detail,

I value. we're So right. is peak its where at marked it not mean at the traded, spectrum

at. that fact the of party could firm valuation the So of our justify value. But marking of at the value firm, auction in justify for I spectrum I'm third of the undiscounted take value this sure could to not our is we meaningfully higher just if traded you assets marking were think spectrum

the the assets. unique a itself it. validates whole For of say host will I What is to auction reasons, they're

on the that more realized investment but parties, no and under just particular this business. monetize That's the pressure caution less way everybody throw our Italy than from We're to there other separate we're private to well obviously think sitting to value the control. is And months we that from us very over that realized spectrum. happened when this future. have that here I past gets a in feel things that value wants our opportunities many suggests valuable who major an as I think it gets as to position too distant that opportunity some about realize about Ultimately, operating for investments validate anybody we asset. our the four basis And amount that our really on assuredly engagement how a ferocity there the the not footprint at do and gain it. to very give the investment, the nationwide So broadband are in few of will of who say the aren't auction, a

Devin Ryan

how Great, we've current step values. here the I you're affected, early can some the balance probably just some some and thanks. seen if into and seeing kind one then market of of think don’t about recent early is maybe of then good quarter in at kind a obviously there's there moment. on will. change help here parts just know that know at get volatility you're the the even things us story? that it’s the has of kind volatility this could to anything the and think just I'm I big some read the but we're about any kind with performing, But in in seeing on And business? sheet equity not anything takes of business though into I the moving know how in far last brokerage if maybe lot side, too can trying and you is of back there's puts of point this And just a performing not investment extreme that on banking to been today sure volatility. the

Jeffrey Solomon

let's back who been think I'm year it and these daily a the more periods I entire the on buy giving past people really a in reflective lot about much is folks of But are than it has clear market week. their time side this of on basis. give Yeah, I [indiscernible] will in there some be

to be Certainly, to something in will want is – for struggling I tell expecting of obviously our see a around. market significant we certainly positioning tremendous not seems call quickly. – clients I policy it everything telling with line midterms. a been the to taking should? I client in I ahead – midterms. that on than that be with surprised empathy too we're the dialogue would a mean while. Are out just around be would going really we our and of catch what I significant discussion going base think to very a today. clear that I to just I everyone of come right there by is is is ahead market we that's just It’s you tariffs of harder so the elections, ahead it. pricing mean the I'm midterm that I moving amount up took have volatile. surprised positioning we dialogue long there that. to be a political for that been for – said – the we've some of And So There's positioning sort drug posturing

that We’ve happened summer. when the maybe of what components and is expected I at none business, mid kind look of So surprising. of this our

part And we way and you year, month and a third in is are the press the or of there so been in year quarter and of performance ebbs actually the valued again, you first some of sheet. matters. a the half tell balance part performance have attractive our things quarter balance in market and a is and fully same the the to the much We defensive first balance can’t sheet investment of looks tend on play to extremely the the performance great we six get for and sheet, because quarter to into as at times had cluster should We the and the months. over look time because need during fourth better There half you when look or we've things just the annual we going performance and over the side at said flows. buy And great defense. you of income relatively and in performance look returns returns,

Obviously defensive everyone stock extremely the single-digit volatility this been coming – in able the an a invested and income Tilray feel that into outlier. quarter. relative and because our We passionate March about. to with price such we've an a in the company at very at performance day it's in so, And Tilray near-term, it. long-term our that's It look buy in we but fourth of in shareholders to all relatively assessment. and will value. were long in own be their I – still look what’s intrinsic the quarter it’s its to we quarter investment investment amazing a and price do a that at tremendously that just in It's actually analyze happened straightforward make an take positive has I at stock first as the been that for good industry noise

we're on And increase there's portfolios. center volume will as mean of far they And pretty clients' the And we're been we’re rest look in our when we helps lot happy that. people's actually to I a clearly you at reposition had are their a repositioning As just I'm to to going and helpful absolutely day of tremendously comp and happening. I too to and say I in very think as we about position our our That's and are I own portfolios relative I the flow. will And we banking, of numbers October. having see the and think that are see at every the concerned, a capturing certainly the businesses volatility decent business folks in used how can we've about where portfolios. peers. be then be know people that markets I where

do who were lot a felt if were of they wait. needed advising there they this clients to should people out think We I capital was really rising, that coming.

the will some We gave to this public to should so to we our bank them advice money are some And and chose sort some consistent over There to point rethinking companies basis. and market and for said capital clients we so In long they’re largely biotech some more the than wait that do the run, they're a chose raise maybe have used of many are to and on also go hit be. over probably access again. at they clients to decision. and today

we're to settle. to happen the more them like for things happy wait give advice this the market, when dust than to So in

things Let's see where shakeout.

be midterms. more capital give and advice end the good us when them now Let's to the next They'll the the solid happens of is the or and available. access windows year and for on the open to year see the beginning when between market what key of in year. But is

interest look probably and happen of the they prices to figure out happen degrees year these And then like periods sort in of as clears what's best of there we’ll and them. time and people volatility at reestablished help so to varying and be I are a their and two or market times three

Devin Ryan

I the thanks color. appreciate Jeff. all for Great,

Operator

Thank Sandler with Sumeet Instructions] [Operator Our Mody you. question from next is O'Neill.

line Your is open.

Sumeet Mody

Steve. Thanks, good morning, Jeff,

Jeffrey Solomon

you? are How Sumeet. Hi,

Steve Lasota

Good morning.

Sumeet Mody

good. Good,

a for me, Just real couple quick.

of some an we verticals? on The and of two get strategies. the they maybe How the for performing? what update the Ramius term of are are merger those can goals longer long first status maybe And short equity Margate

Jeffrey Solomon

actually obviously well. So merger performs the quite

that's that I we a a HFRX that I the outperformed they've strategy for lot the think here index. we like mean sheet. said balance

in certainly our – big I there’s we think opportunity know to taken like think too there's is down work. actually the way put with, to this and just it diminished that because times to we've mind about strategy largely begin which exposure but great a doesn't it. I

two the performed say great stacked when long some has tech a short will year up year. And has through period, so we it's going a of performance there's well. track bit between I'm little very make and pretty returns. I but Margate would end risk to be record that to fund been adjusted way more strategy happy continue volatile, the got the here that over great the with year this And opportunity I course expect and to

react to talking potential We get have And that, that long team, do for over up to see so two-year to the be going looking we've pipeline time. record. a people a We’ve the we're react of that. see to in how investors wanted track how backlog to and to Samantha investors been

with in strategies. our as we'll of wait as like do range of lot I plans, terms a gathering. how we're So long think see and But are far asset in we we our see a

Sumeet Mody

And clean thanks. just more here then here. kind one Okay, a of up

still non-comp you expenses? the there there is kind in some at really opportunities room much how outside showing Or side you’re some to Convergex out Can With acquisition, maneuver it on Convergex the performance. about still this the played great is Convergex the talk or non-comp year of you're of point? on of looks there? there looking like

Steve Lasota

much $X out. comments as my in push Like to continue we We million as took possible. about

Some expect to but bring the big any million we it to on was at that. QX to basis continue working in numbers a $X and run wouldn't reflected down. – those least at is rate don't as I I of – team push numbers continue hard

Jeffrey Solomon

I strategy And and we to just a in repeating. mean increase And worth entirely people of have pursued. revenue but platform the the numbers, across validation an a have we in our mentioned would the million I low in we non-comps of bunch of about vendor II that importance as – in I business it's not there a down. the we who echo. more did thought ever view quarter recognize a remarkable cost our why $XX is Convergex drive because we of were mean and very MiFID understand post it business was margin couldn’t buy scale that have part the world, but they also a matters execution we definitive

team pickup strategy. a And of of I this versus the last year, quarter fact just line the digging remarkable got non-comps. vendor generate And year-over-year ways going and third that literally commend there in or basis And by a something that can can two out opportunity. contracts through finding nuggets we and that That's third little and It's of ways that of line, take It's validation looking effort. vendor quarter-over-quarter so sped year that revenue cost seconds the to meaningful. that and kind cancelling and we not of on literally into increase for save quarter down to really was a generate that meaningful driving spearheads aggregates being money. have to

is than the market even not as see, that we're to we’ll be could position to we're And we we we the as us compete years will enables over truly it take which effectively years, ago. amazing few size. right though the able structure players, may in And it share incremental so, the think be next more from is I because two at savings there in other fact cost do that much our look

Sumeet Mody

Great, That’s that it helpful. really me. thanks for color, for

Jeffrey Solomon

Sumeet. Thanks,

Operator

you. Thank

question is Hughes with Justin next Our Philadelphia from Financial.

Your line is open.

Justin Hughes

just How morning, XXX% you are market. couple I quick On discount assuming to marketing using? Good am questions. Tilray, much out a of of a you’re

Jeffrey Solomon

no discount… asset, And tier-X of it’s

Steve Lasota

discount. no Yeah,

Justin Hughes

discount. No,

little keeping share despite your actually Do count up, stock. least of crept stated price back any share count your stock up public flat? buying the about, have second goals Okay, you bit a at

Jeffrey Solomon

I we use we like mean count to to that. question like stock definitely our shrink time. flat. over incentivize a no about I keep as it would We to mean share way employees,

But I put you this think generating base. So equity enough have be need And to we of base a think that. places capital about we if equity position to where can think the the shrinking we're shrink to we about flow if will have to where in can. objectives would to term, meet don't the we we like the we cash long work,

stated a objective. have ROE We

either long or able to drive to to begin the we're over that going order to equity meet haul to So achieve going be the objective returns top-line it. have we're to base in shrinking

markets we I think sideways this think enough is is that part or we and – do to the I on sort doing a XXXX is us it the and we moves sustainably want a market year goal equity have that to take should we and of assuming protracted talk be but of XXXX them downward accordingly, event. sustainability probability chance achieving into making the that. out. to markets. functioning is will what normal a clear We And of sustainable is pieces will get a those of So the as that having high targets things is hitting we why adjust enough the for be sure The about should coming where table we’ll have bed set then

know – we pieces have us can equity do help we to of revenues bed in kind number. line generate – And the like is that table order revenues get to that net a right more should the we the income to. don't we the – achieve on get where that as if doesn't stated line what objective. we number So top mid-teens if a the and what over of put to top profitability, the to to and time need and that sustain a look It's specific hey

Justin Hughes

very million out volatile I what then Obviously, October. trading running third us yourself got October? Can $X.X said And Okay. in it’s running in that's in was believe per quarter tell you day. you

Jeffrey Solomon

daily the like it think We're expect I mean – environment higher, that I because that you not that repositioning – would people in you an this. will say can it’s fluctuate. you trading are would an environment going and like expect just give sort to it’s more. this but I in numbers of

next And books. into week as things until get so their we're gets quiet doing see more then quiet could position heading everybody of as it midterms they the they

I because show market we is you it these purpose when the haul $X.X important So versus to averages first tend us the share. apples million, $X.X higher taking particularly quarter think and look million in and creeping And comparisons. at that to for over long be to we can highlighting the apples

platforms. that think combining right, cannibalizing year some line you in the So we’re our only because are million we we costs, we've the were a taking commission platform. last had four might the but that Convergex we there be revenues, to And were that acquisition people two meaningful I combined million equity top and concerns improvement had months I think not the into tells $X.X $X.X

doing out series independent taking base statement more huge is That client doing base acquisition if the client cost story. about not then we're success than an as basis. we're with on much So a both our today the of more that

getting growing more consolidation. not plays in a that not time. share look are those are would There figures get over you who share eliminated. top we out If will be they're is other that said market The players, at And and scale, for will And will some garner the who smaller. what market exactly excellent happen. in they're of players, fact

I million you that for to look the market gives so at that we contextual continue And just share. fact million $X.X a $X.X take the sense versus

two slower it’s ahead three first that, Some quarter. average that or weeks is happened or days way of this an we are some days behind of in what’s that the

haul the I validation the sort think not to of relevant the long is it story. in of

Justin Hughes

figure offset? because out you figure investment your are balance trading probably Okay. Yeah, this like trying to am could just you banking, lot out the to in get I know just trying the market I'm much of we business so doing how a

Jeffrey Solomon

mean have if. – in surprise; we’ve the mean Yeah, of think – a a this we when we're banking. it not matter This in been I I I been is seeing has not slowdown intercepted. was marketplace we just haven't we the volatility seeing

And our have been. so than a of ever the of is a M&A again – has and – we lot lot more banking business it

we'll or so markets you slowdown that when people access we've fine. and the ensure preparing not equity that choose know to to And been the markets be

Justin Hughes

the taking questions. Okay. Thanks for

Jeffrey Solomon

Thanks up All Justin. for early. I right, appreciate that. getting

Operator

I'd conclude final turn does to that Jeffrey call our And to session over the for for Solomon Q&A you. Thank remarks. like back today.

Jeffrey Solomon

I the dialing Well, that forward time months with all thanks, the here Cowen daily a really basis months. operator. safe at spending help want Thanks on in few look have to everybody about We way efforts a to for you makes to few quarter. to appreciate a to we and talk our healthy get fourth and everybody us in. to get to

Operator

gentlemen, does This Ladies all today's and and may in conference. conclude you day. you disconnect. a program have participating thank for great today's Everyone

Cowen (COWN) 25 Oct 182018 Q3 Earnings call transcript