COWN,CWGRP,COWNZ,COWNL - Earnings call transcript Q2 2021

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Operator

Good morning. Thank you for joining us to discuss Cowen's Results for the Second Quarter of 2021. By now you should have received a copy of the earnings release, which can be accessed at investor.cowen.com. After the speakers’ presentation, there will be a question-and-answer session.

As a reminder today's call is being recorded. to call like to now would hand over the Mr. I Relations. Cowen's Head Farley, of JT Investor

JT Farley

Thank operator. you,

Before I call on and earnings today's has we on presented Also consistent of Cowen as contain the for in reconciliation the SEC. obligation the today's certain those we risks referencing is that the to believe the to of the to other forward-looking measures comments you information which we presented begin, information responses call, described today's are non-GAAP no made filings would update statements. like and useful investors. measures, These with earnings on be subject questions Reconciliation uncertainties release company's today's with GAAP your and statements will call. financial provide of release. remind some may to to some our in

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

Joining and Jeffrey Chief Lasota. us Financial Chief Executive Cowen's Mr. Officer, Chair are and our Mr. Solomon; Officer, today's call on Stephen

I Now to call the to like turn Jeff. over would

Jeffrey Solomon

answer the earnings JT. After to performance Cowen's thank us and Thank second questions. then quarter. be morning Steve I'm your quarter to share this financial Today you joining of quarter that the for Good you details results everyone, on strong XXXX call. happy on our review happy will we'll

third-best and of for earnings slowdown the We the funds, and which of banking some our both of changes across income. second quarter and despite The standout terms our negative was XXXX breadth the the markets incentive impacted issuances clear and impact in and overall investment markets capital It performance Cowen's revenues quarter in of delivered mark-to-market profitability. our depth ever in this of quarter best the was fourth and platform. power of a the growing demonstration core capabilities

past investments through the the results we upon and over years team. capabilities This earnings power our quarter established record year. have strategic consistent demonstrates in It several builds over our our also past the

four past and in the per generated operating generated $X.X billion Over nearly share we in over income. revenues quarters, economic $XX have

is we the financial that best in our the team Cowen's valuation believe to are a performers stock across additional our firm, to and priority. and compelling, we safety coming continue year, is of so and opportunity Mindful this the is in do office greater as sector remains the always in among still will returning months. While upside. the that numbers Operationally, for health there

at team to where clients are continues a of located. deliver our results Our operate to we level very regardless high for

proud knew see are of future At of benefits work workplace with and Cowen, clearly colleagues of will to future look we clients, the in will can in what a position filled gather be our in we where we address needs the communities. the office, our flexibility. order again to While beginning more we rethink be to like the

banking advisory, comprised the It on XX%. second revenues the of the advisory In slowdown revenues our the of were revenues. quarter Banking quarter was nearly markets health capital SPAC IPOs. for which was year-over-year, quarter capital was with in banking, in ever M&A at and it also impressive operating some are strongest Here an it and first the from M&A quarter. XX% care which majority even record activity and total the markets highlights up investment revenues combines

outside sector XX% care demonstration of diversification. This and of our generated with strong health Sectors from quarter of also consumer on revenues was services. progress banking a contributions clear technology-enabled

the $XX level from our and health med with areas IT. were health M&A diversified, revenues a tools care increasingly ago. nearly also as tech And of businesses triple care year and revenues care health such of on coming Our XX% diagnostics, million,

underwriting, While revenue merger SPAC-related total compared was year. revenues, activity just looking XX% out of to sharply including and fees. first SPAC of Demand quarter banking remainder to the second total and markets remains strong PIPEs the the IPO quarter, capital advisory issuance fell for

is at Our a quarter is pipeline the current a It up new worth that ended record the backlog. level XX% over one-third up of mandates make our noting deal and SPAC ago. year over versus level just

retail of X% who number months In markets, choice to We all in at accelerate emerged want and team their XX% with recent revenues, our an recent quarter months XXX% have for in part was added over well banking hires are of in of up base. the as Cowen our Highlights who professionals and both XX% levels trading execution has driven to income strong investors, a to second revenues careers. client by non-US a of increase decline employer year, result and we quarter services trading situations outperforming XX% included It up year-over-year how up million US had cash given another both finance was also $X.XX versus a compared with groups a is exceptional much XX%. last a was not special activity rebounded trading equity revenues. XXXX. quarter volumes. in in prime strongly increase That's for daily Securities average in an the

prime early such and gained brokerage. promising We as international business share in ADR have clearly trading in and are seeing growth opportunities our newer markets

announced We income which team, also trading event-driven following We're our assets our fixed on introduction in initiative desk new talent, in digital building a bolstering and trading to outsourced leading making million May. in progress $XX expertise offering, Europe. on are the capital adding PolySign, out we attracting our investment

emerging is for done of of range developing are work there a meet we be client still digital trading to capabilities demand While assets. custody to and lot of a

compared second although current average the daily good quarter, $X.X in at a Looking start off volumes excess are to million. we have in revenues July modestly equity quarter, slowed to the of with

repeat are me We both lows – higher in lower that. seeing highs business sorry, and markets let our

the has In research, our analysts higher highs bring our to back believe our added and higher year. in both never seeing competitive and stronger. lows half business already with formidable markets are of to plans this been in on we bench strength We position additional that

senior During the food and and onboarded quarter, diagnostics; healthy and facilities; analysts second managed in tools living. life we care and science and new

We sector. also coverage cybersecurity launched in the

energy also ESG, focus flourish. continues sustainability to Our transition and on

mark-to-market We a to Curve the have and and new coverage Clients of a the the one largest our differentiated footprints quarter We street reports the areas. research. our Ahead economic of incentive our on the nearly And XX in library. first Investment meaningful in incentive quarter, team from saw fees thoughtful launched published thematic XXXX continue value In from our these of while during Healthcare folds clients. in a $XX flagship $XX positions Series the still million Management, so half strategy, totaling were brokerage fees in are gain institutional up negative million. year the all for we economic almost Cowen we in had charge investment

over largely that perspective $XX.X Total XX% of and incentive for fee XX% income up higher to the Economic year is year-over-year. number fees entire were Just is sustainability XX% year-over-year economic up the was billion AUM for and XXXX. strategies. AUM which due total management of activist

five investment Looking at strategies. our

investment just quarter in end. Proterra's the Our over at ArcLight $X.X follow-on strategy AUM in a merger of completed The sustainability completion saw billion SPAC. with the ecoATM had and also strategy

in several performance the beating ended healthcare quarter Royalty we the an positions so. the and Merger financings on of remains public AUM, are in noting for Our means new investment total quarter million performance stake financially the The Arb provide quarter Long-term $X.X during strategy declines The despite more one positive quarter and with assets strategy and HealthCare year-over-year. we Cowen the quarter AUM. end. the which $XXX strong for value Index. investment completed Royalty and initial billion two second Healthcare and public The million in economically HFRX what had second under $XXX up million positive strategy had filed is Worth offering able with merger to do at in has to $X.X activist for our ownership it intend to quarter. assets details when strategy strategy The management and performance in arbitrage the billion. $XXX grew had follow-on ended

to wireless higher brief of And quarter exchange value adjustment was improved asset Eclipse $X.X in XXXX. Co, Steve? a our than company review was million investments includes of and our to the intend investments Steve as the The our interest, gain quarter. value for results of we non-core of in a I to financial over now, Asset rose The Internet million. second FormationX which monetize. Year-over-year and investment $X.X favorable LP a million, Linkem turn due $XX.X call net metrics. Italian business to million Lasota the the Turning reminder to that in for foreign will $X.X

Stephen Lasota

expense prior and Income the year-over-year was diluted diluted follows. was amortization share million common $XX.X share of in million. cash million. prior million XXXX. quarter. million expenses available from all the of operating prior $XX.X the depreciation from Expenses for quarter were tax attributable per second $X.X the $XX.X $XXX.X $XXX.X from of for and results expense excluding million year period. income $XXX.X net second GAAP compensation in million D&A million quarter. or XX% taxpayer down Please XXXX Revenue stockholders $XXX.X benefit -- as was Jeff. we a or net last Compensation $XX.X to down million have since a the period. Net income to during compared utilized were were been year and per period. million decrease per that $X.XX year we losses Therefore, share was $X.XX Thanks, $XXX.X note

income to as our which Economic million of Co we non-GAAP uses explanation and income the economic pre-tax was the Please $XX.X and million. quarter. as was economic economic useful. them how well an and $XXX.X how our Now as income terms economic income, income about proceeds investors economic total income operating income. filings these non-GAAP $XX.X for measures, of financial was pre-tax million. had company find earnings turning a economic operating Co $XX.X to definition the release consult Op Op these second million quarterly in refer measures and

Economic an economic million XXXX. of Asset tax overall of to from during federal Co net second quarter prior On and $XX period million is economic for from as income taxes. operating $XXX.X unrealized second $X.X income The we economic well prior quarter XXXX, XXXX the $XXX company available in associated pre-tax Nikola. has down the of income presented million subject reported of $XX.X year the was for million gain dividends The basis, included down all income of $XX.X expense income pre-tax year the million. income Economic Economic not of income proceeds in income losses million an an loss limitation was utilized period. and loss operating of year $X.X economic had period. million. $XXX,XXX, prior as economic in

proceeds economic declined million. Second quarter year-over-year economic million $XXX.X compared operating to income was the $XXX.X XX% million Total to year $XX.X prior in period.

For was XX% for Economic XXXX. the Most to brokerage quarter proceeds quarter, $XXX.X million. $XXX.X in very were of million of health economic income the on up in strategy. the of management were banking adjustments of strong the year-over-year negative Economic the year-over-year positions due $XX.X were versus fees proceeds care up up XX% million X% year-over-year a to million. investment $XX.X quarter in to mark-to-market million. incentive Economic also income loss were public second our second $XX.X quarter losses to

in million position. the second As almost unrealized And million held reminder was prior XXXX from fluctuate the period. in income Nikola the may the million strategies. $X.X income income included $XXX.X in Economic quarter quarter-to-quarter on results investment our investment gain $XXX of value a from various of the on based year investment positions incentive versus

to period now year prior and quarter for benefit $XXX.X due to compared $XXX.X expense our for was million Compensation decreased Turning to the revenues. the expenses. million,

of ratio from XX.X% proceeds to year-over-year increased Our proceeds. to economic XX.X% comp income

million and an vary and from For quarter, quarter the ratio may office we entertainment increase the due due $XX.X first non-comp increased prior up year $XX.X trade are between the quarter-to-quarter. it to in million business year Fixed as XXXX full activity brokerage execution were to well development new totaled million XXXX, expenses $XX.X is as The to was hires in versus travel, from XX%, The from second XX% $XX return higher period. expenses although targeting the increase in year-over-year. annual costs million non-comp initiatives. of Variable expenses. and and technology volumes compensation higher

scheduled. modestly to For levels the from development XXXX, business we remainder T&E expect are current and meetings in-person more rise of expenses as would

XXXX. to to Second we taxes at sources We $X.X rate of income. were tax of million In the XX% share, and our the operating million geographic of XX.X%. XX% rate range income or effective compared of effective $X.XX future the second on $X.X to quarter our depending an be per nature which of quarters, in depreciation expect and economic expenses common includes $XX.X million quarter amortization in generated impact of the

At the at Op million Co had of company Turning balance In quarter June, totaling million, from in we million XXXX. down end up capital $XXX.X million Co, the $XXX end totaling sheet. of had to the end, invested Asset $XXX.X invested the end capital of at $XXX.X XXXX. the modestly from at

Turning above less XX.X% return the to well $XX.XX XXXX. consistent equity $XXX.X target equity, share $XX.XX at at preferred mid-teens December compared book to basis. end compared shares was common billion value XXXX, total of is was end on our on Common up divided our of common Common equity for from XX, as Return was to XX, stockholders' of June the equity XXXX. book which is share, Tangible on XXXX. as equity of rose generating outstanding per quarter of per million end, as equity. $XX.XX XXXX, value equity which of $XX.XX the of quarter $X by common a to

a target calculated As now reminder basis. this on an ROCE after-tax is

this our share. common per of Directors we of quarterly cash morning, dividend As maintained $X.XX Board our announced

quarter, stock, second XXbX-X record the to according million shares purchases including we of a X.XXX $XX.X total executed million existing During repurchased our in plans. a

as convertible June, shares. Our of of of was over timing late of an average more vesting first program fully million and well in increase weighted as in XX.X was increase weighted conversion shares the average. to units shares, the count restricted quarter incentive the stock long-term quarter's XXX,XXX This diluted due previous than share the of Cowen's a notes the

the we our income. XXX% of nearly quarter, shares During purchased to equivalent economic operating

turn XX% XX%. be operating income, in we opportunistic above our when first able conditions to call market monetize to shares half and may we're of the cash to For prioritize to such on With of I'll additional the depending we'll We purchased returns XXXX, XX% as back a at Linkem. over just buybacks target assets available economic flow range and capital equivalent our value that more Jeffrey. of

Jeffrey Solomon

was indeed markets quarter, generated the giving remain or generated capital extraordinary face we power. environment back accounts, income tougher $XX of By of impressive consistent after of earnings million in result this tailwinds consistency basis and taxes. our the That Without beat mark-to-market after-tax in Steve. a we economic for $XX is year. all incentive over clear in going the operating factoring the any Thanks, on strong We negative of achieve demonstration well-positioned mid-teens a targeted even million tremendous the our in after some and income and forward. common to earlier a in return equity on healthcare,

on And which doing Cowen the the made well do we as work. us the Even on enables to across working focused that means platform, good. live we are more and we've progress are this mindful in communities to building broader benefit we

and we about simple a we're in progress help with open Cowen a area, heightened acknowledging quarter, workplace the second national the And an effort workers to the Operator? responsibility. and work inclusive a of needs tackle proud study, America. the matter, to but committed will not about problems. of We've be is During the I the report create it up done This important inclusion a is working progress this this across that corporate of to made and awareness for firm. but believe, more This among diverse found to be issues questions. and equity was in there across more that, is racial majority discrimination workplace report the pledge those to willingness sponsors to and

Operator

question of Wolfe with from Research. comes [Operator Chubak Steven the Instructions] first line Your

Brendan O'Brien

Good morning, guys.

Jeffrey Solomon

Hey, Steven.

Brendan O'Brien

for actually O'Brien, Brendan filling in This Steven. is

Jeffrey Solomon

Hi, Brendan.

Brendan O'Brien

expecting, that Well, a quarter-on-quarter. the line. off negative took ratio expense non-comp on up step non-comp out, obviously some we mark bit that the and higher to likely was were than the though part first incentive significant of was ratio even adjusting But in income the a through coming

scale over sense maybe year? market a driving you're ratios margins a thinking about wanted increase? normalized of environment last Just that gains earnings the significant get in given and non-comp what generated to share and was the how And

Stephen Lasota

So, to have the new a activity some hires do that of technology QX I expect we Brendan fixed number because to for with But, continue. expect a return and that that that the some non-comps, bit has initiatives we office high, QX to maybe would driving for up number that were bit. are in also that

QX floor is a variable on this dependent I said well revenue of will which the do but a bit and But trade But again, pick to execution, brokerage quarter up much QX. On T&E but and -- depends and T&E picking lot also, is we it up, on entertainment obviously will side will we side, depends high, markets were in on variable execution bit depend expect that in so do into we that and the and quarter. how as any non-comps particular client the a continue the the fixed be quarter on how business. and do probably trade

Brendan O'Brien

Great. And lines. there's and more bit tone sounded return guess time a like as a little monetization of count, depending on bit bit if on of bit the driving a more the a share capital a shift opportunistic in it being terms I

how that last addition from here. to of to XX should the be willingness growing understanding potentially inorganically? the is continue to deploy firm my accretion about to get we Thanks capital capital what appetite share at wanted months, your significant questions. taking the share current repurchase And the an price, given thinking Just shares the for in to and count over

Jeffrey Solomon

Sure.

the shares. range But of back XX% be economic all our So, that income I to that withstands. to the think change no after-tax first our XX% in operating there's on the would of gave we we buying guidance commitment of in tone

the mentioned is is the have which call, we back we period in to shortened first the as on So, a quarter buy which last period, stock.

for we now we're we and guidance. that changing the made that end stand quarter of not target our at second So, the high well and up in range certainly excess of in

on we to shrink at we No continue expect We'll as kind profitability continue look and continue that. change to expect, an at buy share So in count. the stock to to opportunities. of you generate the back inorganic can all basis after-tax us

things we to to assets just institutional do it. bar that. in game. It's is seeing the our good digital to crypto will to in tremendous think done platform think offering in institutional investment a opportunities for trade feel the We be clients for haven't us be able of our or we'll where or to see there pent-up play we haven't high, a from longer-term to yet, we're is like enables a but a begun going in got do longer-term made that out here grow to world-class amount retail a product them. that I largely really clients mean them. think I case are institutions And the near-term even we roll the us PolySign, we've we that that's as participate. do We're demand, our point

there drive top investment, it's $XX think because going we a the to took line. made So, longer-term and capital of million we

changes intellectual there's has where when where have we've to always we provider course it's in do occurring. continue are numbers we activity, rapid certainly can of M&A people. or things be to should with undergoing advisory. we like opportunistically We again And places like meaningful like in raising knowledge a that, they're which expect areas that to where transactional transformation continue hire where standpoint, identified, play we'll things industry also And of both those people you see are a places do but to profitability you understanding to this capital, from And identifying growth. capital is easier hire do

So again, we'll continue to do those things.

benefits lot the in flow. the some see frankly can investments made, we've cash we had a of You when less

that proud that continue super so we'll And of down path. and

Brendan O'Brien

questions. my taking for Thanks Okay.

Jeffrey Solomon

Thanks, Brendan. Great.

Stephen Lasota

you. Thank

Operator

of Piper with question Mody comes the from line Sumeet next Sandler. Your

Sumeet Mody

of an total pipeline And in Thanks. more Good one-third in of health to the you of little you achieve growth non-SPAC-related and being next the Maybe expecting I idea set to around into today. banking up the environment talent sort give deals? that. us How of have pipeline similarly the drill on? talk to you heard of areas Or the what SPAC and care think the nonhealth bit the guess for set I up for wanted over morning on care guys. business. SPAC commentary in versus scale couple maybe you're infrastructure does I Do the the a years of related. you're terms expectation about kind total your focused growth banking? can

Jeffrey Solomon

address So let SPAC. me

think was I the and I issuance put seeing market record there looking expected knew we still therefore and of de-SPAC SPAC pricey So, that certainly meaningful second the all SPAC SPAC IPOs. for they're -- and no little Obviously, sustainable chill in it's market was remainder IPOs, quarter SPAC more the in slowdown on first on and transactions XXXX. IPOs. SPAC bit it of at thought that We're SEC the for deals the in quarter get exits put closely one a a terms but the for done, be a would the

we've expect see them In those actually closing. to July, terms in and transactions, de-SPAC we to had a continue closed number of of

I and said ask deals able more we de-SPAC in of terms not that's close. call, matter for to the being transactions, was there last expecting more we're of timing It disclosure the detail changes for but on as think anything accounting to some of as simply requirements a began happening. So, and that these change to the be SEC the

There's too quality where being of There's we able and fair I chop continuing and is as And are and well we've SPAC next so continue very we're we'll ton of up think position SPAC so, do well. we're really excited to them Currently, in that ones that choose going capitalize our transactions. have on backlog, and at Obviously, when with being many to industries on operate. of through we share. line us the de-SPAC we'll capabilities indication, if to the in a to over certainly going still activity, to staffed years be activity our highest able we get certainly focus said lean it. forward. to are going And we're pick any we about to July look on the the in we the think for that we're which luxurious the few

concerned, As health is think has the our and biopharma been as far bread historically, care I space. butter, in

don't to those money around for the Discovering lot biotech amounts drugs primary they of space, drug activity the companies understand the have raised build is economic nuances has have of engine. of So discovery that right? which money really to obviously infrastructure. been fairly the downstream, significant engine primary and actually spend A actually that is to these

innovation. So continue which infrastructure and technology sciences diagnostics nexus in And drug those companies to you're to are the tools discovery, necessary have life of are and seeing and sit been developed. diagnostics, innovation at have tools really the

map a different companies been those for that months valuation And different sets, growth. of the a industry it's very different different it's makeup know, example, for genomic discovery. amount and actually the less over XX in mapping is last fact, in technology Those science than two proteomic terms and in to an of the our as coronavirus ability that function tremendous and of industry So, has a skill have of metrics. diseases weeks very of economics than different area drug there's -- the dynamics, are huge

sort growth our and activity the And as come health has from made and so, areas IPO those some in has that biopharma of diagnostics, care. technology sector follow-on that is really we're also broaden of the care in and of and tools to abated, a investments we've health at information good even the bunch growth other areas activity

will Cowen of for biotech pipeline, to been capital As which here over and lot a sector be of us. which when financing over. think to so we've or the difficult most do I time, -- we are nonbiotech say tough difficult in May, period are March, because happen M&A sort the last not of difficult could probably our and the of tape look economic discovery. six diversification is and over you And things a been of months. people It's four nonbiotech we what to very Cowen a in our see that I Certainly, the that markets look really But of last -- XXXX. over it's and XXXX continue the space into in time diversification banking June quarter most so in beginning end got I probably forward, And run really a the other advisory, the rolls drug again think at since that months April, if this think positive time business, see activity of sector there's going. can really even that when activity will most proof And all difficult well, of slowdown helpful said or well the we've diversification many of July. a

than even is of the activity confident. I ever with makeup And has feel and I It's at pipeline so, as it diverse forward, been. the more highest very been look going our it all it's that

So you you to lot Sumeet. maybe hope gives hope a color of some that I that's -- but helpful I

Sumeet Mody

No Yes. sure. Appreciate for that.

Second of morning increasing on home hire employees highlighting that economy. you but on it's on the but gain that or one, effect have seen from I I peers little touch that you for base a side, kind article this it bit. or junior Wondering months we're wanted hiring to in your the across about competition that recent impact of talk in Or like you remotely? talent can the its sector, on been due any the more employee play tech dynamic, seems have kind a saw maybe ability seeing that the to to front? of it Maybe retention in on journal bit. a work the

Jeffrey Solomon

we've got think gainer front. a I on that So net

course had return like of long that think remote been office together to they've we've to of time excitement during and onboarded bunch many seem -- I or and being been good at of for colleagues our the them we've been together of events people around back palpable and time. the again when here this we're met encouraged of work too. of a through to really period And bunch over period again back certainly work. bringing I've onboarding a back a time I'm office, were month of who past by the during a

that So whatever culture. a there's really holds think, to the be for And well our of desire future on I real part together. team our the us strong speaks of

has in in Cowen very different gainer few up were recruiting a that desirous pandemic was past exhibiting of talent. the where been Certainly kind we lot always years already were even a a terms better we decade ago had story. But capability leading been we a position net the the it of think of. over than I to we're

during that still that's so and to organization demonstrate the able anything if our so, And environment accelerated kind we people can is been pandemic in that have the remote a engagements so are bring have empathetic common foundational. of on and in we've same them

for that And best super granted whatever people as that we're pretty place to from that I to I an working that as come work, core flexibly ability of think or and I strengths our about have is is connectivity all. that to Feel a we're together our Cowen it. benefiting well. or the I is. that new think special the remotely like looks extend want one at we fact organization whether way So it feel certainly good never The take where people

Sumeet Mody

if All sneak Steve. I right. Great. And more could in then one for

million a normal what of other if the was a kind run quarter? higher bit missed than driver the of rate in this there. Sorry line I just the $X.X It's little but revenue

Stephen Lasota

our that overseas. and insurance It's in from Yes. things mostly operations like

Sumeet Mody

you. Okay. Thank

Operator

with line Instructions] the from next of question [Operator Your comes Devin Securities. Ryan JPM

Devin Ryan

It's become? the least could not for question on guess and any extending productive? brokerage. growth appreciate about it's the And international we start JMP or any maybe that momentum should some the as just those then Securities. kind there's how expect kind well. sure around other I just areas digital revenue assets size ADRs business first way to think I'm also of in color would into here at could And there. frameworks about you incremental been you've brokerage these of talking of whether when or the they Jeff we're business that prime that continued or give initiatives in of here. initiative of kind some to days early that producing become big I you're with But how if

Jeffrey Solomon

say, been but brokerage of have mean peers definitely business. have the more talent in we bunch selective, just than any I I we're we our I'll acquisitive folks. on think being of a So

US and business and you've a you're It the great come it's in Europe If to plugging tremendous mean increasingly this you're is got and got work. equities and is. forward a playing. momentum franchise place because in I really

end And the invest great Europe I think so on in And event are forward around it's in where know are, to the bolts this impact just in this our And team, business ability European that to top XX to event of of opportunities -- that of best platform. on to These the us list work. make momentum. of the that at which I an you if we team we look already for We're you you're as you if we talent. this go Europe the when towards places want list that because started think hire to a honestly I mentioned able think it's you your to XXXX. were you attract team we short business in growing make

a how and at the -- investments A achieved. folks doing Cowen it's And business. made which gains, a the so other business Goldman XX is it's businesses? And played larger it's really we've see an struggle who mean market seen for we're market versus sometimes making with we except equities think industry to really platform you I lot kind competency think the of impact? look the ever we've at they I the much best really And share the think anyone core thing. share that certainly in if space a in of us what's maybe I markets can commitment the highest Sachs. top what are out. I firms the big work you

do That's assets. I expect continue to the share near-term, And in there that when I And that do our game lot regulatory way, because things of And so, jurisdictions frankly, a advantage we've is you is of generator a make trade grabbing. bunch to in approval press sure want we'll hone swaps that come that be want your to seeing Digital shares in continue a demand address prime to needs we a product Cowen got approval to we that you seeing of there. some I it the balances longer-term, increase, think of into of different you're revenue our to where some get our on done counterparties, which to what we've while prime you're is the out fits because work the swap to dovetails, business. clients, what's those grow interesting. which offering. regulatory more And in challenging, think And of us take But don't business. in. and know

in-depth institutional so So our like how what custody in our out -- hard just the because conversations, in-depth or that's it's it's we're And many challenges. conversations to for much clients exposure. we're in figure they conversations with solving. get of having to so part And them, would

an sales, of When client base. cores, wallet was a some which thing from in more think the around you brokerage, a businesses to about those and where find those ago. the you options build equities at equities when of out take Cowen So from of research was cash existing traditional outward sit greater really that can to you the you from -- all and that trading, the good is growth to event, decade growth Cowen share just prime that algorithmic to cash

to it we Street. is going the continue And them relative that's to so for every to how And for will strategy their And seems working. strategy. relative on the And the out, this And to about as us, continue other continue figuring to it's be firm provider. just us, to been help us. certainly already have. identifying like, core mean, with a And we're I the we clients to excel. market wallets consolidate volumes

Devin Ryan

banking believe, a strong zeroing advisory backlog Thanks, you but a of large Clearly, investment business. on momentum and follow-up on, Okay. there. transactions quarter lot in outlook, just Terrific. in Jeff. backlog have second the Maybe M&A there the the results, I very but some here

like you that are revenues give $XXX also can next any historical -- maybe So, how for revenue guys you or a of had some advisory seems million upstream where moving be, it's just target more want larger sizing fees. we've you business of And frameworks. million size in it if you And fees little other to recently it market? of Cowen are the of deals, more terms flavor the $XXX whether guys for the than are

a of maybe momentum? target how aspects guys little just you advisory Jeff the next give the of are some of can if So around, about you color the and revenues for more of thinking other kind M&A

Jeffrey Solomon

pretty everything, Yeah. markets M&A much I we complexion equity markets want think pretty I to at capital our of advisory. again, and terms in significantly that, backlog is mean, weighted underwritings. capital guidance think, advisory look is but to I the reiterate of M&A we I And as gave and backlog. And the that

in we about think the the and markets with economics amount gave when of M&A anytime So very we associated looks significant that the similar. a advisory call, metrics have you earlier those, capital

M&A to and transactions markets space. deal are financing backend we're and And us ways seeing looks they metrics markets win both we're the large many Certainly that target in like SPACs transactions. or helped when average of it. significantly. So some size we're SPAC, certainly capital activities transaction. debt in or representing de-SPAC in a either capital And talks the at transaction raised Those so our economically the we've has blocks the just to restructuring anything there's on that what oftentimes terms an close, we're in or good adviser or for us like

be took in do So, up. aftermarket, and basis. been M&A And and between Street you, logical difficult to best necessarily a we've financing. continue not integrated if choice, to company, be capital for setup we're provide market is longtime. certainly to is firm support Cowen sponsor That's you, integrated you're advice something for we firms that an are M&A a many Wall looking just want you, not SPACs the size our have because I do. and to setup set on instances private not raise and you winning and to the to can of advice that and for And financing actually we access advise up advice on like, we But thing. obviously set in Street public. of the you to and because is we're how a And a how a you're say

them it we're at And other opportunity And -- as continue sets. and we those that we take to M&A see so expand, looking how you parlay prints happening. into can

more how increased middle As been -- active. picked you at has market, of you middle market and of can that see the some a when the just function we're in we're the And numbers activity fact our they've that's up dramatically. look

advice the people plug that's into out places at for is And able less used intensive. firms other as critical market mandates ticket We for the traditional nature. size advisory translates function have SPAC into us laid in reaching fact especially Oftentimes more that some that that in work to the being a sheet us financing ask are to component. acquisitions we that to we've strategy And we've of are prints. average we We're middle middle seen that has sponsors of doing the Many And the those more that sponsors. that, M&A out of or on balance with to increased focus getting market advice. significantly. made financing are a that

prowess hand-in-hand bank combination you're then would in our good call game. argue client that advice those cap to standpoint, or lending you're activity financing discuss a sponsor ability goes And compete firms we seeing increasingly can win selling we're of lack is -- what financing -- oftentimes And basically our and us only single have bigger do hiring the things as size to a that's mature thing. to stuck single that a talking when get And middle we market, And private a big the companies to that feel our think what or this firms They much this on great if I than offer again, which to from with seeing. product. robust we're against providing who the in is market suite the competitors are with you that our refi. exits important the cash one can't is capability product. out we it platform I us. And things very the and many in our is financing services So selling are through just get full to bit comfortable synthetic as companies is access market direct would competitive -- is enables I of have great than as is every the more private

to M&A. see expect And so growth to in I continue

very, than meaningfully. Our M&A banking investment grow dynamics very continue And really we're didn't growing going the business us businesses to Cowen's the see of continue is drivers we space business. and those sponsor have out to space I traditionally for footprint I what in people where that a as have well. in different associated some much think

resilient be. money traditional have we're of the may about Like ways and in of could portfolio think Devin, XXXX when diversification a and I of products backlog even very And than it's not. at and we not I of the I might that's we that into back of only firm they different a It great industries lot they me backlog. position head if used a not look banking. to the And the size look or the of I the ebb much confidence it but made gives into like as at very, the so some we more businesses year of right? I strength in feel And half think our or

Devin Ryan

one last One terrific. can here in. I squeeze if Okay,

Obviously, the IPO over capital HealthCare around vehicle we've permanent potential some create management higher. will fees questions and Royalty that investor on time just that impact. Just received and move

I crystallization. implications around on anything or share Cowen? some potential there's incentive that income think process there Is can also guys you

Jeffrey Solomon

that the details give in registration. appreciate details any now I give can't I question any I because though can't So, company now and is

anywhere that is Devin, just and to tell going will we're think got in Royalty more talked sheet. the I've a economic when say though and lot we've fees I to on -- you information or you extent giving the management What about this not ownership our So, incentive and you Partners HealthCare we can. any balance past of I there to the the be

about we investor So, investors be it looking get to were when more goes, and as be if we and information it. we at talk you I'd And can how in We more for to question an I detail that so we will a back people that It's what for just us say can't a in economically. they're can -- registration. means it great sense get better right it though. now because

Devin Ryan

Understood. Yes.

it Okay, leave terrific. Well, I'll thank there. you.

Jeffrey Solomon

Great. Thanks Devin.

Operator

Your next question of comes from line Brown Michael with KBW.

Michael Brown

comments follow-up comprehensive. M&A we Great. It's Thanks there. taking just you maybe my on the made questions. that Jeff very advisory could for

investing kind in financial area industry. of been your what's grow doing of activity talked color bit you segment have Can little outlook more the provide of coverage is for near-term? then do of there? you sponsors? to you just of address top And robust focus the what for as out kind leader there M&A an that to there? has You need have real the been What's activity sponsors us you needed? a been kind that specifically? about What And kind really What your for

Jeffrey Solomon

Yes.

because practice I dynamics corporations the on XXXXs understand I and which as made less Cowen a question time. busy did appreciate better, we the had honestly, that coverage competitors historically industry we company to think doing in the there's footprint. divisions didn't way at Cowen coverage obvious. to business Cowen great that a it M&A, proper to corporate-to-corporate basically business. extent corporations terms lot it say to this me this Cowen great And so have. that but really to great And it's of a M&A other the limited a because sponsor a early and -- much trying have a in industry did you're sponsor and M&A of A was would So, sponsor in I public of was our not a I Mike things that have get of goes knowledge, the construct right? lot a bankers had sell We just who have too shift to didn't was want

a of sponsor to starts for we the coverage lend hey firms big often I with you. time lot think

comes And as nor you of sponsors repeat there's business consistent so the when rents they're to look where if firms in a been a your as a for a sponsor don't you're And heartbeat, sheet you're models to we're lend. get as lender, for and game certainly they going That's not cap to game balance are We got the up rotation. sheet have that at That's fee. to big a coverage a lenders going lot sponsors name long that sponsor have expect long never the big a as in. in. we get that you've lend balance the to we're

you lot into able you've So, we because been dominance less transactions opportunities to have the to uncover have are done obvious. compete on for intellectual a capital. just that And all means or the going you've consolidation markets in where space that

order sales that you don't We to to acquisition. was we get when space, in back. you needed a of sponsors sides with sell articulated enough platform I if as enough not call in connectivity is, to don't sponsors. works acquired as and into side And first acquisition. a sell should have it have more retrospect, Quarton way amount you foray a And platform it sponsors have have great the have meaningful our because exclusive engagement So, then those

trying it a tried it's and you're for question to do do chicken of number to egg organically, a we if So which years.

expanded So gave footprint capability. the corporate this us that Quarton acquisition our on

companies and cascade takeout big of corporate the in industries in we to terms really are to corporate either building markets big think house at there's we're of we have if in consolidating which transactions So which public corporations themselves big a ultimately down about up to what's themselves or you cover relationships. takeouts, that smaller good the have at – into the happening a the cascade of the in the top and which

building when organically what or a who be either we could require see a the back, we're us exhibit of of high-quality We're that we that pipeline, – XX% something of in seller tickets, transaction kind a And say that that platform segments – middle one as also if or the which bring raises in the to activity focus characteristics to capital. have of – probably there. of middle instances why number on it's think has significant we is the same multiple of that's equity fairly That our businesses a is takeout. with activity. acquisitions Industry can we times – sponsor business on will to This the there's But exhibit that pandemic, you and is those we well because that in then a as happened deep, another, Again, to interruption actually so going capital got year-over-year, be market ultimately over with know even advising about up financing lot way that So gets bolted – is were we industries wasn't this model. out cross-selling our years with for a I'd to sponsor acquisition. It's is that we're disruption inorganically, which innings is another capabilities. undergoing stronger in doing. paid. on Cowen this and the corporate, talk MHT is consolidates this growth characteristics massive debt it the corporate that about getting a from And some bankers result and that debt straightforward group about. come a means really it's actually we bigger

industries capital. those both to And anything spend right? capital time We change. just meet lot them, don't that to don't of don't a so need spend don't are and great have industries but to And a that of of sheet then time time offer great we or either. – that spend we we maybe conversely, industries balance don't raise There may are there those, capital anything on in If is undergoing in dynamics, lot a say on right? that

that fact look and what that in up want So the what market, those they And got individuals success middle that seeing domain and transacting it's with a that where they of the overlap. they those for exhibit we great what characteristics married connectivity the in to sponsors, two we're to businesses have need. function we've is expertise, now of are spaces which

have in very base. I'll and country thought a it's got I I but moat intellectual than the and so of around it. right? team probably case transactions. last argue the get got point And space. in consolidation transactions year other player bank, doing a any it capital people our we things but we've then industrials to complex It's that Those And that's confidence, this we dominant that's And lot hope more was defense. the why significant about business think mean about that business that difficult more and every transaction fact around that We're just to way acquisition – great isn't great It the HVAC I really that's knowledge you. historical middle in saw it that as in the integration that that. a HVAC undergoing the off a acquisitions would build and in We've market, much done I of in see into – when a to the access function give strong of meaningful have suit helpful certainly Cowen’s our that the through of season a I integration just aerospace on starting the are of industrial, I at also these industrial those we to platform. that's that Quarton and backlog. flourish look as a we're

Michael Brown

was all that color great. there, Yes, appreciate I Jeff. the

a the on of you of on just ways there. lot is Your business model working that clearly touched kind

to advantage of peers a though maybe and their You their Cowen. and than different in some mention sheets larger land sync balance their have did with your way an ability that hooks

one any something stake, hear kind Cowen your your of of be that an eventually that a elements alliance want and strategic that's the the be to I'd that of strategic structure similar something with of see oversimplify a But Japanese the point with you value at a One alliance some would peers that? to on like announcing transaction. ownership merits love in if announced to don't bank interested if thoughts may I there. the

Jeffrey Solomon

had we different And very lot and relationship so partnership Well, a the they've do. admire. are. what I always I admire firm They're a mean, on that admire I to lending like and of side I than years. say, honestly active they I for

a if that I we're know deeper into have to going yeah, to look make at it, were So ever think there. about But we that I better. we think it's I And for of region, about any them. lot I have a think that's an particularly they way I'm that I insight big transaction big – them, be to are. I a observer makes want don't how sense that, region and say, of partner. if monetize important move think a as making same that you may they a the to

we – the the think I we for what domains we partnership a we lot looks think that firm value over at we in good and add of we're a we bring because have. we're all think do place,

also that recognize can't people. to means, things We by that definition we be all all

you so we meaningful partnership. multiple would were dynamic of I'm other If to very, to to it but as about seeking the were terms the businesses to an very we're in would involve that. here. if that do And examples geographies in I changing firm, can how investment that partnership of be have we expand we open give other expand, think we always out And how into or

us that's And synthetic answer big control. – to a to your And create there drive an by benefits not I is fees question to partner and But might relationships business and we order that something relationships. lending to do decisions. from don't do hard more active specifically. and having in I to for partnering need necessarily very to that like with balancing would think And something under those no, – synthetic credit try for from economics. not I and do a call to the has our good for us that for synthetic don't times lender that. the our have think think that, honestly continue to unless tried it's what and got to few think an dialogues. I we opportunity a there I difficult I somebody, in do currently constructed don't we're now I everybody when we us we yeah, having what if you're be we're because lending meaningful But So recognize way opportunity think lending partnership by would grow we an it's there think right value same do good investment bank was at

opportunity, not we're do yet, it that to there with an it open yet. I'm of about and folks Maybe hearing. aware I'd talk suggestions, I'm in just not so to in And want to anything but is us, if area looking interested be

Michael Brown

bit. balance Jeff, I meet for necessarily sheet an agree just overview. was that mind to And a that implying Thanks that, partner Great. I'm of lending not kind thinking about little got a that it's interesting my all thought Yeah.

for taking So I the thoughts questions. there. my appreciate Thanks

Jeffrey Solomon

a Yeah. appreciate All question. right. that, It's I Mike. good

So no further questions. if there's

Operator

now Mr. the I no Jeffrey like Solomon. questions. further to turn are There call would to over

Jeffrey Solomon

operator. thanks thanks Cowen. express like to to heartfelt at the Okay. my Well, I'd team

to You our commitment values. have all your core demonstrated

with this that am how people. I because privilege sustainability position. more do couldn't to that CEO And and work company the with other do amazing in be well and say amazing realized lucky, I people proud that that, them of tenacious the filled of humility, Chair I be be all me here things for empathy, I And know It's vision to you You a real for teamwork. day. every

basis. that day call on you face out acknowledging and a And all work day so and I all challenges without the we just hard didn't want this to deliver end do the everything in overcome to that to

thank earnings on our So October. forward stay at all do thank in to to all you really look you then joining We next and And And to until safe of our us. you call stay Cowen. for colleagues healthy. speaking of

Operator

for Thank call. conference you participating. today's concludes This

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Cowen (COWN) 28 Jul 212021 Q2 Earnings call transcript