COWN - Earnings call transcript Q2 2019

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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 second quarter 2019. By now, you should've received a copy of the company's earnings release, which can be accessed at Cowen's Web site 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 the risks and uncertainties described in the company's earnings release, and other filings with the SEC. Cowen has no obligation to update the information presented on the call. the of included other with site in which available description and and the at complete and are is site assumptions the on www.sec.gov. more these SEC risks and uncertainties SEC, on A the Web Web company's company's filings

in which for is Also today's presented investors. reconciliation those to GAAP measures, Reconciliation with speakers believes the will as certain non-GAAP will of earnings on company reference provide consistent company's our financial call, release. the today's useful information measures

I would turn to like Mr. Jeffrey the to Now, call M. over

Solomon, Chairman and Chief Executive Officer.

Jeffrey Solomon

morning Thank is you, call joining Operator. second welcome Good Solomon. today This me and our call. CFO, XXXX is And Jeff quarter earnings Steve the Cowen's Lasota. on to

Investor you our site. release. As a reminder, review we to made quarterly with section the We Web Relations our encourage financial in in it conjunction supplement earnings of available

provides quarter, Company the to represents two with into business profitability in which our the value our and greater and of core on provide This of non-core the change Operating balance OpCo, supplement legacy segment format the business reporting insight aims our AssetCo. or This investments our our sheet. details segments, investors on our Company or Asset

sustainable business, way way reflects a our are Presenting this financials highlights we and manage the towards our basis. the average long-term on mid-teens ROCE our achieving also making we progress objective of

on common this provide ROCE notice, operating will segment a or our higher company equity will shortly. you return the generates change As on segment. assets segment than details more Steve company much

our revenues and quarter quarter ever both consecutive with overall. quarter and consistent results, on a on quarter investment of Cowen highest marked GAAP It best Inc. sixth of income the It of was since banking our XXXX formation second economic strong to now revenues also revenues. basis. best the the Turning record profitability market second for overall our was of

and of quarter crucial expenses it talent, top increasing a identifying our record not towards to promoting in diversity make investments investments enhancing growth. continue and capabilities. quarter by are future was on impact as a profitability These was record new as they steps the our it additional businesses, line, near-term we While revenue the attracting our

at XXXX look second SEC record, Issuance up banking markets, businesses investment and performance operating new revenue year-over-year. the during in early second a of quarter. a part the of the was quarter Taking quarter of our demand in the wake the in the banking strong in the of set XX% shutdown capital first

as revenues, sector, XX% markets strongest June on XX and quarter, is healthcare equity as in did XXXX. alone. capital up a which markets transactions in second of book our the month a continues from served we the banking to XX our equity As transactions We be result, the XX% of Healthcare during XX of comprised booked capital them. runner quarter we of

from diversification our total were in XX% the on We of banking XX% investment second outside However, of sectors and XX% represented investment revenues non-healthcare continues. of more quarter, that the industry in than of XXXX. revenue transactions banking healthcare, quarter lead up left

our We build banking out capacity. continue to

a hired we as new bankers. software quarter, of TMT the other three During Banking senior as well co-head

our practice. expand directors cannabis We in also our consumer managing to hired group two further

the XX% building down of While M&A back-half a the revenues year. were year-over-year, is sold pipeline for there

during revenues integration up were pipeline The as quarter. been Quarton has and the grew sequentially of the progressing well,

year. down hires. market ahead acquisition team increase We and off investments higher advisory margins and the for organic potential we as of And opportunities in the road. bolt-on the to and reminder, revenues the we which opportunistically talent multiple will on will improve calendar look the team specializes, evaluate to heavily a these transactions, middle continue bring believe tend towards as weighted to As additional be we pay additional back-half this advisory the

our best on revenues division, with was turning the across Markets includes our Highlights up number quarter the market quarter soft board strength contrast in strong dollar, XXXX. Cross-Asset to and trading significant business the we and quarter special the our were other financing, second equity who of Revenue situations, a institutional increases year-over-year XX% X% services, record. revenue and had in decline recapture reported from the of clearing. XXXX the alone in outpacing includes brokerage, up second Markets competitors in United Brokerage quarter revenues X% which securities, in quarter prime strong X% part second in derivative. during wide and to revenue of Now declines revenue which to global in States include trading for trading, clearing, commission increased services volumes. volumes

continue are launch we outperforming the the we the including And to We gain our others global expansion is competition. electronic Markets share capabilities, trading as additional prime and a in believe of of securities progress well trading, to platform, our trading capability. even In outsource sum, division finance operations positioned make stumble. swap

Our momentum. research has also effort continued

number in which we recognizes for their analysts three research StarMine number provider returns and the their earnings estimates. second three the -- in recommendations of Awards were ranked the the accuracy their During quarter, and the U.S.

expertise simpler, we style concentrate our or reminder at our equity management, to investments philosophy. of as investment of firm are in important Moving a is fewer, call an core on deeper areas offerings DNA. we part investment what the targeting private to Cowen and continuing This

had royalties second commercial the make strategy or Partners second for two-thirds HCR existing fund active strategies, available quarter, And the HFRX healthcare III. committed half additional the in in arbitrage the index in year strong is and over and benchmark of $XXX approximately second outperforming committed currently fund Merger capital portfolio was XX the Healthcare Looking near companies. we at first in million quarter. a our the HealthCare is assets. in first raise is the of billion HCR half XX% in has now over expect Royalty and to positive debt-like slightly commercial investments to purchase merger for our the stage half and investment positive Cowen of year. capital that

we have to transparency been segment ensuring will process not our providing new be non-core our is advance our increased balance we seen Turning by about how designed and this that we reporting to heard, talking and into sheet, help asset.

As share able investments additional capital intend business we are to as of investments, our combination well these to the accretive redeploy core we monetize a as in repurchases. in

return we XXX,XXX second $X.X shares waiting total the a to some to million. capital stock we our the shareholders. on of repurchased are quarter, for However, of In not monetization of

cash continue flow. buy We stock back to out will opportunistically of

$XX.X million. Our remaining is repurchase authorization

pursuing talent allocation the by Cowen capital DNA investments approach shares growth generating back capital investing strategies. while in incoming we that’s reminder, securities business future or still maintaining are a our buying bringing a such the as more new or of balanced whether funding in As to support financing

questions, to a would financials. call over the Lasota Before I review we turn brief our of answer Steve your for Steve?

Steve Lasota

Thanks, Jeff.

solid of As Jeff noted, quarter business. and significant achieved a incentive record the our with profitability and demonstrates income our decrease in we core investment revenues in even the strength operating This second income.

period. an common net XXXX, we $XXXX quarter the shareholders second prior-year of $X.X attributable to income increase GAAP of the of million, from reported For

quarter $XXX revenue quarter $XXX.X was the year the the comp is Non-comp of In $XXX.XX million second XXXX up prior D&A to million period. million million. expenses in second expenses XXXX, and GAAP and $XXX.X for million. $X XX% were were of from year-over-year benefit

We of also million $X.X second XXXX units. related of recognized segments the in of to restructuring a goodwill and quarter the in impairment reporting change our

$X.X expense was on Our million, income gains million. was $X.X was expense tax $X.X investments million, income non-controlling interest from and

would monitor and the a As segment. I have continually that noted to authoritative review any accordance we have period, reportable structure changes our in in determine occurred reporting segment prior reporting whether guidance impact with

of Chief aligned businesses end change differentiated insight content the of or the the Jeff, the Operating of the Cowen refocus expertise XXXX, domain maker, experiences a the to a products in which are on company's of and our D&A. strategic decision to within Because company shift at set

company effective of business result a has the this this quarter following the segments. now As shift,

Markets four Company Company Operating OpCo estate certain multi-strategy our funds. and real of segment private The legacy Management, investments, of private AssetCo Asset other or The or Research. of Investment business consists divisions, consists Investment Banking, Cowen segment and

level not reportable While for the AssetCo a provide segment AssetCo. information segment, segment will we is

as make certain expenses to consolidated Now non-GAAP and which refer with income as pre-tax certain income, In for is we economic other and use to reorganization associated a measure decisions. related goodwill the measures that certain of we reminder, economic performance funds transaction and economic turning costs a financial impact to operating intangible or our adjustments our measure impairment, general, debt. to and consolidation eliminates excludes income

with the during incentive GAAP also the banking be after income preferred the fees would retainer period dividends. not Please as yet otherwise are collectibles GAAP crystallized economic incentive during note as that include well now that when reporting. fees period income investment Economic income reporting revenues deferred for is

of based The be my the remainder to million year prior period. income remarks second financial XXXX non-GAAP reported quarter million the measures. We on of $XX for of in economic $XX.X will compared these

operating expenses $XX quarter was compared XXXX. which before amortization Second to $XX.X of quarter income and second economic income economic is million million depreciation the in

a to increased million. record X% revenue income Economic $XXX.X year-over-year

was revenue Investment $XX For the quarter XXXX. second XX% million million in quarter, up the $XXX.X to Banking from of

Incentive million first for up QX income year million in was from from $X.X quarter down activist from performances million revenue the were XXXX brokerage fees in $XX.X quarter the million. Management to year-over-year prior the $XXX.X reduced to $XX.X QX to period. in million X% was compared part the fund. due $X.X

from million strategies prior related And the prior across for down our revenue year was $XX.X million the million other income is business. reinsurance to in the compared in the $X.X quarter quarter of from in investment returns million $X.X to Investment the the board. period. period increase year loss to a first due was This finally lower $XX

comp $XXX.X to revenue to comp year for prior in $XXX.X our to million now the expense benefit decreased quarter year-over-year period, XX.X% XX% revenue. compared of from our was Turning expenses, ratio to the income million economic and

from second in prior depreciation in million year compared million to the the non-comp XXXX. non-comp second quarter and $XX.X expenses amortization and the $XX.X second XXXX the quarter of quarter XXXX the of second million million expenses $X Fixed $XX.X period. Variable totaled were were compared $XX.X million in of quarter $X million to up in expenses in

start increased of of closed well reminder, year the which As XXXX expenses this as reflect the higher our as revenues. acquisition impact our tied variable at a to Quarton the XQ expenses

capabilities meet our addition objectives. noted in are we Jeff investments diversification and In to as making growth our

of invested June June, second as $XXX.X $XX.X million of totaling had of revenues OpCo the $XXX quarter. in of million OpCo the total -- income company had and As economic XX, OpCo XXXX, in million. capital

in XXXX million. company XX, $XXX totaling June of as AssetCo, the AssetCo invested had capital

of revenues second the income million and total quarter. in economic had million AssetCo $X.X $X.X of

equity XX, preferred to XX. carbon on XXXX. million equity $XX.XX decreased an capital as of less Turning equity, of $XXX to equity common XXst, of quarter as March for the which XX.X% shares million June divided equity $XX.XX December $XXX.X to as million March our per XXth, Return million of Book in XX, as compared XXXX, second common to equity as of compared share second compared from XX.X% June of was quarter value by shareholders to outstanding XXXX. is of $XXX.X was annualized $XXX.X was down is which Invested slightly total 'XX.

in just to of In the we Asset this in X.X%. had Co Co quarter achieving of quarter's Operating second way return ROCE. our mid-teens demonstrates we breakout has ROCE Op segment also a XX.X%; consistent on for XXXX. equity are This contrast on financial Company of segment common a ROCE of our supplement provide

turn I'll that, the With Jeff. over to call back

Jeffrey Solomon

Thanks, Steve.

breadth and another made momentum the and help strong yet we was capital our make businesses strong the to platform, it for future. to business we with progress, So an management about and for XX we investment sum as built the continue over milestone quarter here capabilities, market investments We months. depth promote our top-tier lot strength our scaling operating even with growth. up, and growth execution Cowen We've diversity franchise our revenues prospects at to that leverages the our us I'm a excited which of past revenue research second future boost expertise, and clients We're a idea domain all of as from can outperform. of the

that, open questions. And Operator? with for it I will up

Operator

the of Devin question first from JMP Our of Instructions] Securities. line [Operator Ryan comes

Your line is open. now

Devin Ryan

Great. Good guys. morning,

Jeffrey Solomon

Devin. Hi,

Steve Lasota

Hey, Dev.

Devin Ryan

start on you guys another where to brokerage want result I business had So, obviously great the there.

little it's bit to the just a that want brokerage, But but in you I dig some think banking less perception growth investment clearing, there's talk business hearing to for just of kind growth. newer securities than Jeff, I there. and about steadier the capabilities, finance, there's prime all opportunity

electronic that expanding share and [ph] some market been definitionally your been the in these small but So, has of of it's newer cash some areas. in, you've areas and obviously in

just possible the these evolved. ability for newer growth overall how you then you some of quantify overall today, kind of the drive potential if how So would for that's think just the initiatives market to about see to for the and And where platform? addressable brokerage

Jeffrey Solomon

idea we all. financing, sales, we core recognized talk the me so I that we behind and think recognize cross particular and -- and for all it's markets second in asset, let that, and The because competency we business, it that is but not equity institutional have So, isn't do aggregate in simply we at just growing this brokerage research do but anymore, do services. conceptually around a the we marketplace

for at it's market that falling and it it's So is of And addressable been brokerage decline. relatively the down, on when cliff. at equities all, maybe misperception but total commissions there's off slightly isn't actually a secular I equity think business steady growing big you not this a look to sort

is their expense commission their flat, clients our -- the being deliberate expenses. how and how they're their reality would spending say are it's people managing more dollars, just and with they're they're own And I much spending dollars because been

be can turns do you we is that what with job possible which services service, walls to amount terms that product, the just excellent you in clients have have. we the of cash to as best-in-breed to people maximize then them fact the in business we or our is provide our that So been can business. as it core things what And out identity and will equities able many is away of And you're of breed. the simply pick growth seeing of to from best we've built the the

competitors nontraditional our clients really equity when nontraditional our do look penetration in significant options with businesses market us this don’t other are share like you have who do. a we when at as at what business do share And trading the that in business algorithmic gainer, we things in So look a can you it from from is have capability, particularly net as post-MiFID you made world. in we to take we ability see well II our we business, --

clients spend players frankly that out their And and decisions excellent advantage a number product they're the of to We are make of and how of are fact precious taking position. the about are going larger they're dollars, our capabilities. to beginning to on going really focus only

ourselves, the gains and So that's position -- share see where that's why the gains made. we you we've

Devin Ryan

call price Got the where just business. it. the And or out is the majority if some possible, had freeing stock would the, the new disclosures, capital. the of go go? And it investments can repurchases maybe where that capital asset that biggest that of activities it hypothetical, we And would the appreciate thought about where operating on where breaking a asset how Jeff. are progress Thanks, a in think go? If capital from at are, it, the towards any you revisit that up process the maybe would just then you would returned Is today all level segment.

Jeffrey Solomon

to the want are like Obviously we to there's look as asset beginning what this. Steve So well. the do core to that's operating an primary are assents opportunity from say why And our these reason we is we're think mean here separate themselves do I mentioned, I business assets. the legacy doing business. think at

way. manage the also this We business

management -- you if the but process including asset it's to have fully a doing assets make are on business. managing progress continuing look we geared okay. We're And separate the at business, it. investment And company. towards themselves operating integrated, really So our the

mentioned, as years there terms to the so value gives As And opportunity the another the we've the for at that to just it gone do of us validation, for continued a have year, our think well licensure extended We've a lot of XX in asset end of that better. the actually there's comfort. last of company year. relates auction I Linkem, the things in auction

of country capability. a a our puts to We the position about wireless so interesting lot our really players have half in really bandwidth to want and where market Italy, that in that access have us in and of fixed to

And what so that's unique. makes it

we be we've attractive think would also monetize asset we in said for again that that later, I than assuming rather position a that it. get prices to sooner can

And to our team have see continues And enhance so we value. things can to a quarter. management in the the markup this you do

to partner if We can ability paths. the whether for time not the at we the make to think our larger disposition, also decisions have company ultimately and the on And that. that year pull or trigger our on said the to that time position. are it's assess of we we us we At pursue and decide that a to we'll there that see with continues next in liquidity how of appropriate an control the own beginning and have that we do year not when

short, well. in the that's we as really continues the for And we're going we're the to our looking to that's assets. It IRR there. do investors, largest doing liquidity what to and for maximize So, opportunities create be of

not to how we that. would into really going redeploy go And I'm

we we think -- capital on are said into call I earlier the the that optimization. in call

have buybacks of there's a so had more this for the position we offence. be and aggressive from can to a where readjust, liquidity in play part be us to simply want we and assets. if time be going is know markets liquidity we And these can play to know the where at we in that stock And offense, we moment we

sure we company company. thinly forced recognize to we back harms buy to by a biggest that the in our the we'll positions, and liquidity. impediment the about these seller be put in making that capitalized be don’t to don’t that fact want But is assets so we probably way generate careful have becoming to stock And a liquid continuing we ever

think And a as in think which if want that, but we're position ourselves particularly you goes so capitalized softness, position. would to I it -- managing and thinly of cautious not haven’t a anticipating, we're of put the be around have we're couple quarters just be we a to we sideways where market in we

know. thinking you of helpful So terms but it, I hope that's in about

Devin Ryan

is, is It be process, we're make the the committing to the capital the at tough, something equity, return business so from -- might hypotheticals to and but sure is the understand on to the guys various outside, about or can that current is mid-teens I those just or or are it some or is you the or generate we it incremental to can or the clear of it? difficult how and redeploying what just at return bar that looking think what is on operating thought capital equity or return higher, be that's thresholds options

Jeffrey Solomon

we we So, denominator the that will and be just not it's both think or we just way the adequate engineering, for generate goal. can target recognize to things that mid-teens our the investments return. on we is and there's put we that potential same do great the us can that line denominator want and then we achieve we that recognize at available acquisitions because ROC manage to mid-teens the doing in or things with the bide achieve if too numerator a doing the us prices I not to don’t top for adequate to why that don’t time to time -- the us other but drive be out think become shrink We If an of financial because or reason can return there's equation.

that have the at to token, engine margin we By you towards add back creation the culturally of content almost multiples attractive if we higher obviously transaction, take look more who where trading at have. for businesses the of us just our off that. they're tilted get some opportunities work. this we the it could and fits that same all we do And we much a that know can advisory There competitors all to are did do in we if to have opportunity and other like prices, Quarton

that to a being able I think going a just of make rate we mid-teens we have as that sure to selective pursue those probability be than we're return. high achieve highly and greater

really I is that think bar high. the

Devin Ryan

helpful. very it, Got

the for Just I'll hop last one in queue. back me,

you up Just the so underwriting but the pipeline about it's on market the little equity any moving clearly size opportunity, market if more depth, you've so around just you given into been a well are so guys doing, could table, the the back-half and today taking that. if you not talk just business, of context in can, year bit just and share league and heading how

just is want parts in there's we healthcare maybe any there or would people as thoughts that so the to to then before rhetoric in that just any And -- the given potentially moving move around picking here? happens, election closer concern there is healthcare specifically, space specifically just up, do something

Jeffrey Solomon

So your question, manage tables. don’t the to obviously first league we -- answer

what Our Street clear, want are on questionable view, just things really The of of in an look make lot done. the And way to league an because to are score that I and are you tables to just do that think we've firms the tables be doing but tables. to a outcome league a I distinction league share product, standpoint and that view from output only is gain economic transactions. a that's high-quality And is just deliver really consistently scoreboard, our if high-quality at great

good particular, I seeing a this quarter quarter had we so in think in healthcare. And you're what in

the deals revenues our take we is the that's XX% And have the able yet about of recognition frankly, of terms revenues and in Again, were function to that healthcare But year-over-year had we did and is that skill actually absolutely do where banking been book-run parlay set because higher, do almost the seeing XX%. of expertise not -- six our significantly publicly, healthcare there's of particularly -- transcendent down surprising outside year. year that ability we're actually and healthcare some the of has healthcare been, are months, is raises that down exceptions companies, a here too deals work. for for exceptional our equity to fact that last a both that to we've privately

doesn’t backlog, and -- we election we as at and I've backlog backlog. healthcare the Whitehouse I this, at I'll it's with our at I've into into think we said the on and there head those for some the sitting almost in And as And whether take I think just offerings will gets calls, outside M&A particularly of to again, sit numbers, fact think it But goes I grow. numbers and to around rarely think seem a rhetoric going or could months. be continue So XX changing here easily particularly I who this that's we around all. that now follow-on And ECM, always like be the in around, is actually, look ECM that the close market in previous particularly look healthcare breather.

that look and to And continues have own it so shadow at, our be we strong. we

that see of it's ECM. numbers, we not so quarter-over-quarter backlog it reason business even that And be quickly, raise because backlog money make backlog our outside at they so think inclusive top healthcare and get line will I'm the when pleased in grows, so. companies then of usually to look quickly do I those really follow-on really they really the healthcare, what execute decision, we a usually to always when is and But doesn’t

Devin Ryan

Great. Thanks Jeff. much, very

Jeffrey Solomon

Okay.

Operator

the Our comes of next line Sumeet question Mody with O'Neill. Sandler from

now is open. line Your

Sumeet Mody

Hey, good guys. morning,

talk and updates a Just monetization follow-ups with quick couple efforts, at to you X all? there Formation question, of any can Devin's about starting

Jeffrey Solomon

to have biggest investment I calls only the don't don't continued capital to company you they're they read; no previous what I have to in I know insight view. do know, any things I Hi, take Sumeet. valuations. the have to do. going at is I that. and any on continues well on decide I do I mentioned on whatever -- company the mean there, when we've higher think updates Wish.com,

Sumeet Mody

I federal the then non-healthcare a to just get material more get couple the a seeing of as the and are wanted most And that those in legalization momentum or are cannabis you the mix color just around I bit on potential mentioned remarks. your you're in quarter of thoughts in over the on banking, beliefs to Okay. years, secondly wanted contribution revenue just banking your hires on anticipation of where your hires forward? your little there thoughts revenues for sector of to next what kind the kind of going not

Jeffrey Solomon

federal thank the one everybody you because growing that the don't definitely of had healthcare I call, that of law. sector is the chunk outside would say cannabis, up we've the a fastest that of and are for pick cannabis we slack U.S. consumer contravention would on just companies that be in

States on our touch are people don't majority So of is revenues United that the focused the outside the plant. vast

to research best companies the to from state done the then many identify that a started there's be the think a process are we our so those And years and to having And theme ago, standpoint best, there. it started dominant lot going companies. us be around we pursuing who in this enabled

here still trying the I see so, And of certainly early think to in our we're a number competitors play up. innings catch

think I raising because open people generally that's money. the I and capital good access. capital it market up will see for

they're putting and raising of larger allocating are in portfolios. money, pockets Our their money clients capital

it's much the more that mainstream deals people's only investors that that me And recognize. from investment long in becoming would of this portfolios. significant to we've quarter you suggests of Some some terms are done

to much of top that's we're opportunities, of executing our it’s talk we've of game. want So been part the had to all, reason we inflow, so why more hired inflow hard Frankly, sure people. the that we've to at make

this individuals So towards expenses an and of some pie of result that headhunting space. the have a some were that clear this for of line fees quarter we the of are making seen revenue you've investors sight increased direct increased in

Sumeet Mody

you Okay largely are of a your a an or sheet about on into update short wanted have, to for equity the the Starboard any what kind you're of it's anything long simplification after comfortable strategies, changes you maybe potential strengths with Thanks. balance matter just I then regarding thinking growth are or great. leaning still And getting get remaining with else? there

Jeffrey Solomon

We’re again, it's good business AUM this growth AUM year of time been and for years we in that intimated, a which I growth was see to you clear. number with and the what the potential long it's if it's a get really coming think been have,

on strategies strategies for So the of have. in doing we're we the we best that number and the we're focused fact skidding down what do

very lot comforting and of trap we'd we getting did that of the just and XX spent we time didn't management rid time we scale. on focus months and costs think, things and think over to get I things is a exiting last

I to continues The for HealthCare long And a to business there's that some in chug of and partners our at closings likely fund product growth, our so AUM look for the investor, suggests and a which market time. And from appreciation that the is that is fact now the to go Starboard forward have momentum honestly Royalty few that another investment is increased two-thirds some our fact inflows. in that of of opportunity today those; gives and us that. that time healthcare we're raise all thankful more that we're on along in first one

Sumeet Mody

that one on color the the think little Great, for but just you million just Steve, about that how that that's revenues could going kind forward? question reinsurance $X.X And give the driver was that line model maybe up clean for helpful, around we there business. number, the thanks. then was should a And of

Steve Lasota

the business, it well majority is insurance performed QX it. in Primarily that of

Sumeet Mody

All it okay. right, Got that's from me. Thanks. it,

Operator

comes Research. question of line next Chris Buckingham with the Walsh Our from

open. now Your line is

Chris Walsh

Hey, Jeff. Steve. Hey,

Steve Lasota

Hey Chris, you? how are

Chris Walsh

Doing lot in brokerage things on market share had of couple well, already been of years were quarter; I has but a asked, questions. solid just A pretty recent Cowen taker. clear

so, could any And you services? equity, across gains or both sense trading U.S. do Bank just wondering its of and sales whether accelerate brokerage, share institutional exiting your institutional have Deutsche businesses

Jeffrey Solomon

leaving. say it isn’t leave would anytime somebody a for else win everybody I business, who to net Well, decides a that size becomes

XX top Deutsche provider So certainly specific a Bank more of U.S. I that, decision. was execution years. I think Equity can’t be for lot a a big than And that’s but

few slipped. think it I last the in quarters

be question that so, doing there the the elsewhere. Bank is clients of did to in question short specific lot business who are a but business your more are again I And is than doing yes. that, answer Deutsche no can’t

Chris Walsh

just taking take for that on me, and I it. Sumeet’s think Formation about monetization, Devin back -- intermediate potential wanted then to the excuse be could capital, term and and opportunities a question of kind set backing longer both monetization term piggy more on Got And has. although just Cowen Linkem X

am that’s roughly $XXX according up new time, over the where and multi-cap around that breakout, monetized So, be stake is of strategic capital have Starboard million, it to about in non-core also of and million your arguably that’s but you thinking both around tied I your AssetCo in could your half $XXX -- correctly? investments

Jeffrey Solomon

continues we It’s to amazing am and balance sheet on AssetCo. investment going that’s anywhere, might about recognized to is that Starboard well there. we OppCo, not I just not Well, for I might not that. how inside performance to say obviously not an us with speak strategic inside but do value our but not Starboard I speak position, it value Starboard's and does. to be. been going what the would know the am of Starboard And is or not

Chris Walsh

Yes, yes.

Steve Lasota

sense how to is performance for their targeted So I to it, ability we our give think to our just as certainly rates of achieve returns sure. -- about to you integral a

Chris Walsh

thanks comments. Okay, the for

Jeffrey Solomon

AssetCo of the timeframe. but In in term longer the there, - term wide term that’s a the terms are longer open longer medium in the then term terms for and could it in

to These I is what appreciation that. am a of have think Formation businesses over be these It’s or with particular you not These the in not sure capital to new troubled other like that the fully by to really value that X appreciated investments shareholders Linkem for in investing to those trapped story. or years. to would are for But like appreciate assets. we time. assets new the drive these said assets things harvest investment we that it and be that to I think the are position investments, the both because if are are number business. we over operating a this new They I who are we where I clear is our do in people help these really story know assets. there in want relatively are Chris great where of that to us story. we performers been to great have -- And investments. look the of returning smaller are have at much either

separate XX% And can you they definition, they to understand any people by around the that quarters we value any two our on drives in important ROCE still much that the we what of opportunity the be where plus do to That’s we may see strip the or to of so do have going the be have that operating company. because terms you drag them, on much doing made on revenue operating And of it’s result, are in it that’s drive we how operating people a don’t the that almost want quarter-over-quarter. when work quarter step we how And one assets. attached able associated focus company. And the time, quarter value we non-core And as how it highlight And business. quarter. which in time. to our I all actually that is with with over in of progress then stand you the for more everyday us, can these are that an their and year assets of can won’t the things -- or that see think driving from change decisions -- can people function it’s we almost value terms be to the that really out to that are they focus in these making we gets just volatile gives

Chris Walsh

story, and direction and sixth right Cowen the is the quarter consecutive of consecutive Definitely. like -- moving becoming definitely there. profitability I like given think an more and It seems earning more of keep seems strong results in quarter, this

Jeffrey Solomon

Thanks, Right. Chris.

Chris Walsh

guys. Thanks,

Operator

Mr. no like to turn further am would I I call the in And questions at back time. queue this to showing

closing for remarks. Solomon

Jeffrey Solomon

Thank you, Operator.

really that of stay in do repeating. with values in We we and come to this progress empathy, result teamwork. idea just off, sign how team of is is our our everyday every quarter, we And and the merits we vision outperform. say our Before And sustainability it of direct remind tenacious the hard true our I one mind help that investors I but how our work want clients here. core

And do enables little ability our questions for those central empathy central teammates, about our And to term here I dedicated of cornerstone it’s doing that focus empathy ability get promoting the good. culture on our clients, our internally. to for success have something sometimes a that to a our we actually a for a more for world and in idea of the make our is we for families, our what as it us believe is it’s feels success long lot we drive at over of time. are Cowen been contributions to our empathy, like the really of to our communities. short it shared that because And long is kinds to

more to what thank better of a So good ones I do. specially our without because to we long-term you, our do. get new And being we do, shareholders, want we the success continued part our shareholders the for we do won’t

our for on nice our make sure day. speaking with us. Have Thank next a we And that express I And want just gratitude. joining forward to call. you so look you all to we

Operator

Everyone, Ladies great thank you today’s day. participating you program a for gentlemen, and the and your conference. concludes in may now disconnect. have This

Cowen (COWN) 26 Jul 192019 Q2 Earnings call transcript