PJT Partners (PJT) 26 Oct 222022 Q3 Earnings call transcript

Company Profile

Participants

Sharon Pearson	Head, Investor Relations
Paul Taubman	Chairman and Chief Executive Officer
Helen Meates	Chief Financial Officer
Devin Ryan	JMP Securities
Richard Ramsden	Goldman Sachs
Steven Chubak	Wolfe Research
Jim Mitchell	Seaport Global
Mike Brown	KBW

Call transcript

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Operator

Good day and welcome to the PJT Partners Third Quarter 2022 Earnings Call. Today’s conference is being recorded. At this time, I would like to turn the conference over to Sharon Pearson, Head of Investor Relations. Please go ahead, ma’am.

Sharon Pearson

Thank you very much. to Partners welcome earnings quarter and call. conference morning the third PJT XXXX Good Pearson, Investor Head Partners. Sharon am I of Relations PJT at And Meates, Paul Executive is joining Chairman me Chief and Taubman, Officer; Chief our our Helen Financial Officer. and today

there to I assumes meaningful number call to out the the These the subject statements make forward-looking want of these this The update forward-looking non-GAAP turn of want we call, to during I and are over statements. I to Paul, various uncertainties Before may any course morning, today conference the point also that that make and you risks which GAAP contained And factors release over this no are in issued a disclosures measures, and financial cause to to these we the materially pjtpartners.com. that We presentation are could important Partners’ from XX-K, the is reconciliations, we those Factors believe factors turn XXXX company differ are within statements outcomes remind believe contains evaluating on the Paul. to PJT website the detailed our which we performance. duty at company’s Risk available that actual data these I’ll contained the indicated statements. to refer described on in Form metrics section with our in in that available website. financial on call should press you their that, and forward-looking non-GAAP

Paul Taubman

of and EPS you share. of million, morning, reported per revenues we Sharon million $XXX and This adjusted thank income pre-tax third Thank for all $X.XX us. joining you, of adjusted quarter $XX

of $XXX adjusted record had adjusted $XXX million, the pre-tax EPS income share. period, million of For per of X-month revenues and $X.XX we

few we on broader review the environment. comments a wanted more make our I Before operating detail, to in results

We previously spoken environment. an macro challenging about have increasingly

has the the increased inflationary of next takes energy instability to rate progressed, will and the around Fed perform war to with have greater further in than tide. and X- has and both stem need significant X-month the are by year our political you push our the hopes of contraction as year higher successive same periods results, will rates to probability business At Clearly, revenues disruptions prices have go continues the This a in hikes rising in financial detail. time, Helen Helen? businesses ago. caused headwinds, further compared in less in failed Ukraine, increasingly landing higher an turn likely and Europe the outlook economic previously to and thought. markets and year. Notwithstanding the soft a As I of economies review pressuring After globe. our elsewhere each these through well performance grown

Helen Meates

revenues revenue million $XXX revenues, both slight and Strategic for Beginning and a in income Hill total Paul. up other in Interest meaningful year-over-year, quarter. PJT Thank by driven with million, Advisory third increase third restructuring Park and revenues. morning. were decreased quarter you, XX% Good the the growth $X.X in revenues

were revenues revenue Advisory Interest $XXX up period. the to compared in significant Hill in revenues increases modest Restructuring X revenue million, year. in a ended and total Strategic Park X-month $X.X in months year-over-year, the and XX, income increase prior XX% the other million For September with PJT decreased

were up other, XX% and year-over-year. for income the interest total Excluding revenues months X

non-GAAP we are with X-K. to our the These presented prior in certain fully adjustments. more expenses quarters, with Turning Consistent expenses. adjustments described

First, expense. adjusted compensation

resulting XX% the operating of XX% the year We from to Our the due compensation compensation months first current accrual environment. was X year-to-date increased to revenues. uncertainty ratio from of for XX% a increased

up quarter first at the at resulting to X-month in year, comp is was the XX%, compensation had XX% third ratio which we current through XX.X% year. best months estimate the accrued for bring the accrued X the Given of our our to

adjusted total million million year-over-year third up non-compensation the the for and $X expense, $XXX million up quarter, Turning was non-compensation X $XX expense year-over-year. months, adjusted $XX to million for

of quarter and percentage months. of XX.X% and non-comp represents this the first revenues, million X first for increase X due the for third in expense. increased was to XX.X% $XX year-over-year $XX approximately expense the a Of As year, the in months the travel million related

continue of principally related year, travel the to office the as non-comp we For expect expense, excluding driven client and high internal senior single-digit adviser events, and space. well grow a modest increases by our full expansion in expense, increased to in percentages, as

$XX We reported pre-tax adjusted million $XXX X of first the the Turning third adjusted income for months. pre-tax income. million to for quarter and

a Our adjusted converted to shares, the corporate first and the for X XX.X% had we as third for have pre-tax our the for units results margin with provision The prior taxed rate. X all as been was at quarter and presented our months. tax years, partnership income was of taxes, XX.X% that

months the expect our X and XXXX rate of full tax be rate effective first we year. tax XX.X%, to the Our for for this effective was

share quarter were first adjusted and Our per share third months. earnings per for X $X.XX the the $X.XX if-converted for

count the share our quarter, share weighted for count average shares. million the was On XX.X

market partnership million repurchased the in of the the to During months cash. shares, X for quarter, approximately units X XXX,XXX including repurchases, exchange approximately equivalent shares, bringing third our we primarily of first open the through repurchases

in ended and the balance capital, and no equivalents the have investments debt quarter funded million outstanding. $XXX we we short-term with sheet, $XXX million in net cash working and On cash,

record And back it the of Class shareholders share. per on that, Finally, December with to turn paid has will of XXXX, dividend common X. to $X.XX I dividend a XX, of be Paul. will Board The as approved A December

Paul Taubman

leading the indicators Advisory, operating environment, despite Thank remain the we In you, of many volatile Helen. Strategic track positive.

matters grow addressable our coverage remain mandate strategic to record is continues Our importance, and expands. on our near at our of count levels as highly market as engaged footprint clients

high, Many In ago industry-wide converting approach the of number deals. our This an on capabilities industry-wide clients’ remains announcements a greater be increasingly collaborative and as this of clients degree engagement ones. become strengths. to better and relationships transactions to in recognize fallen to year clients. On culture COVID bankers new holistic globally, have continue cultivate our Amidst basis announced we levels. fundamentally the with difficult. integrated, engage positions It advice. basis, Following sequestration, U.S. perform globe sharply to our the while an as well dialogues back and plays from crisscrossing announcement to strengthening traveling, are in-person to relative us M&A into differentiated as increasing willingness are mandates strategic increasingly has with showcases volumes well taking close longer existing terminated to our turbulence,

revenues exceed record the pushed period, last no for longer record Although revenues levels. full Advisory Strategic given to we deals delivered we withdrawn, Strategic year our deals X-month out Advisory year’s and expect

stepped Our invest has opportune Strategic have in particularly count and recruiting a a one from our Advisory efforts XX% year grown end partner as as result. to environment senior We XXXX. this up see

Turning to Restructuring. and their markets Rising supply interest access sheets accommodating pressuring pressures trends, to balance rates, company’s and chain less are funding. inflationary capital

uptick As the year increasingly year levels. become has mandates an progressed, our ago Restructuring in business active to compared has with

X-month both revenues ago. up Restructuring for a to year Our the periods X-month and relative are

advisory our of restructuring distress. has we about us first leadership firm present liability and enabled close partnership companies to integrated strategic surprisingly, signs at to bankers and maintained management in differentiated management. capabilities and the bankers has roster spoken of Not have our As the increasingly between restructuring our liability its expanding our previously, position

and hot the in IPOs, For recent capital announced U.S. the in conditions environment have first most of has in to the restructurings softened Park rankings, With of in pace half have of dividend XXXX, portfolios. first the return fundraising considerably. published which of LP the we red XXXX, PJT Hill, investment across investors and as asset sting And declines second a allocators number their for period monetizations, ranked after slowed we recapitalizations price M&A fewer market feel globally.

are LPs revenues for deliver PJT both a year ways remains record track in their on and X-month full create alternative As to result, liquidity this backdrop, results. portfolios. looking record Hill delivered GPs Against to Park and

different of environment our ahead, businesses impacting in look we operating the As current each ways. is

businesses. In market primary with unsettled conditions while businesses they our been integrated businesses have more of as negatively clearly have been these these, more such Strategic through. our model effects our differentiated diverse an positive Park environments on us the restructuring Advisory markets our difficult shines secondary dampening business benefiting business, well mix nuanced our that PJT positions both In We relative our While remain basis. and have confident business. for impacted Hill, absolute

not and the take will the capabilities, with right culture but to your weather environment, the right stronger on people, to this right now Session that, we emerge And other challenging only side. Question-and-Answer the questions. have We

Operator

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

Devin Ryan

everyone. Good Thanks. morning,

Paul Taubman

morning, Good Devin.

Devin Ryan

hit of financing you quarter markets commentary. a are outlook higher guess maybe markets bit third want I interplay the details. broadly patch in to as Advisory in and seeing Funds and mentioned. still more are rates I and Strategic Obviously, what the expected with just Fed for Thanks the start the of on a all you to financing little just move some rough

talk the cost So, higher borrowing Can how both your and outlook you and friction the market higher. that’s costs little are a both activity for Strategic borrowing of in the sponsors impacting and Advisory bit corporates? about

Paul Taubman

Sure.

pressure. think pretty have a got a [Technical clear micro it’s you on macro the Difficulty] side, and I

most of assets there debt available is the cost and debt think gone of quantum for from I a has on up. a perspective level, that financing micro less

financing lower that leverage that valuations, and which a of So vast when you time. of a there a in the of out worth spot is they has those is when sponsors headwind. adjusts And or same is than rates are creates by probably the agreed more transactions. current fully short because awful the clearly expensive second the majority think financial there structure clearly, market, put relatively an that getting market you of and you reset the Then have I leverage been and to effect until issue, are in those investments is is on pencil return, lot less has a valuations, period to which capital an part of the out less

there potentially think which as is there I or to leg is going markets going another at second and whether clarity push until there there out. put are order, where is capital settle be not to down, is aggressive So is to less to greater probably a a out

being sponsors less in the see near-term. active we So

in And phenomenon, downside, overly to financing cost see in up. But presents which think also you and they the of data, you to a banks some And have But if clear it’s of until to bit. were phenomenon. a is to anecdotally. a seeing with think number also to that But way significant that all time, as financings. some start you’ll we significant I a that terms works the and as we not the all that capital new activity I you’re of of for have through pick get clogged another get activity. I normal, deceleration in that’s then and inventories sponsors holding committed, market over syndicated equilibrium the are transitory its prices, there’ll that’s its And equal, but else sort but still commitments extent XXXX, while I works of correcting system. pressures sheets permanent phenomenon, think be not way this the and transactions. larger-sized itself Probably in that probably inevitably, active balance very of think through, the

Devin Ryan

Yes.

X% I headcount. the Okay. there. on detail Thanks of just second the It want third in follow-up employee in quarter strong from the end for quarter. the to the up growth was all

much seems well. as you it still talked you’re accelerating kind leaning like So banker senior And growth. in of on recruiting very about

assuming in just down It then to I’m and isn’t the starting dynamic to ahead just was curious, timing the of this battening some feels And be the and direction. that like firm? hatches about is step-up kind people existing guys getting are just up together, this letting are Or support senior opposite going obviously, doing? I’m taken big people little you’re to bit so going go. talk this recruiting you catching of And a the of all a

So little big the bit process that thought to dig in a on and then maybe more just want on step-up.

Paul Taubman

Yes.

the need campus you the the associates from think I of up. be and third that careful second quarter get all all the when quarter, analysts to show go recruiting you to you and

up year need at junior quarter-to-quarter, a look in disproportionate you the you that shows amount to arrive it the because if full all year-over-year when of head look count in over So really they and because that’s our third quarter. the recruiting at

of So that’s year not representative full growth.

see when was for One lockdown are are you’ll we that’s It’s repeatedly take difficult we levels. that to candidates for what into just we was the XXXX. place to But recruiting were transaction that very can’t I spoken year. probably said most that we XXXX. how a at velocity annualize You not faced environment, a smidge, that’s they overall candidates attractive smidge, you’re people in relative less activity the bit, the to understand on office, our focused think we slowed incremental smidge. remotely if and count and about we hiring as to What and PJT But and financial last technical in this to head going literally a this And whammy have and senior it. that. a in slowed support to double special a in working needed on continue we is. be most is have previously us. I really And the little environment headcount it’s term, vet feel move

client returned has how As pace not so has to share, as a There velocity those meaningfully very senior you’re of is and also lower in, cost of hire having making recruiting also we the the friction mandates everyone to compounded. with normalcy, I’ve is take-up, and friction in picked and greater because transaction because comfort breakneck senior our is environment, sense busy, at to recruit less. the when of but conversations. we’re hard we’re difficult the their more a greater there XXXX, it’s leaving mind lurch get more as spoken up. their in it’s move And a leaving clients a transaction in were is is surprisingly, in all world about behind activity,

about XXXX. of now have dissipated talked those had got we tailwinds some that of Most and in all So the headwinds blowing. we we’ve

of us major less level infrastructure effects So that. on to where to so the would in and at the QX. the capitalize campus terms that But you’re will the I be expect focus on support senior in focused

Devin Ryan

Yes.

color. got queue. Okay, the it. all in Thanks the hop back I for

Paul Taubman

thanks, Okay, Devin. to Good speak.

Operator

And Ramsden question Richard from the comes next Sachs. Goldman of

Richard Ramsden

everyone. morning, good Hi,

just partly does operating the you said the one environment, are can in sounds like through investments, comp-to-revenue on this It too. Paul, you in ratio? hand, because think help also but So accelerating of you the us uncertainty the sound increase like, is it

for? long on to is it So investment do you would next be two. the year this impact you just Or And Is if that could side, think think think helpful going really do year? well? would you then unpack this the how persist it just into this something you could continue as

Paul Taubman

of first put at Yes. in full quarter. perspective. the first kind of the which made the for end Well, We was our of best estimate let’s accrual this comp our year, year the

looking We’re later. months now at world the X

some perspective. you give to Just

months. by activity If about you X in two transaction X year second this down XX% break roughly up the X-month into periods, first and months down in was the XX%

light of in light the strengthen comp-to-revenue points. the of pressure as our judgment is we to on That’s commitment flow, think of a step it. transactions appropriate point. clearly, to through ratio business, in sitting light So the some is, we’re full of that that, here at all significant about moved and the basis of But XXX today, flow needs it year has dislocations, all invest and our all on all announced how What and news capitalize of in down. the saying of

catch-up to I precision the we’re which you’re in smart really what for is one-fourth points QX. why seeing it’s more the never the basis second of in XXX know quarter third the and is with quarter, than that enough So first in appropriate But while the given recruiting by full accrual what a is slowdown thing year XXX do the points. the the transaction to bump ratio robust, is. way just year, right remains to think basis activity, And through the

Richard Ramsden

debt early as got into financial need significant from is a you opportunity mean, refinancing to heading we and are refinancing pickup the restructuring about a there of then we into the actually spur do secondly, too and that debt but about I got should could outlook obligations And debt think fact that a there that Okay, as a you head is significant perspective predominantly to it. so if it’s ‘XX, think or companies lot have probably ‘XX, deteriorated have in talked about dysfunctional Look, obviously, markets markets as ‘XX? M&A anything. think

Paul Taubman

could you both think have I next year.

now that equilibrium, to rate in into financing uncertainty build is it’s base equity this prices, less XXXX close of a massive Strategic very year where may conditions of the year. with more we be dealing level there have to starting that’s right. I transpired has phase you If do absolute to I It’s in imagine up. Advisory is think that to lot here all not everything that that going me, back I reasons reasons. lead clear going a any Strategic with also is change. not the think greatest motion running signs set that you that said the what just when a we’re think the we’re be to will weak kind to that clarity? couple that the that that, It’s to trend on been where to and And to a year. has have see it’s the less track and of this it momentum next the when rates, hard And books and it’s for year, restructuring on I you the not continue of and move therefore, Advisory, be with that up activity change. new levels well more is pressures to in though, all next of a me, stronger. vector and activity get going will don’t a And to One clear

our which not the step-up a don’t of but a back, was consensus have out think I know don’t if beginning we And kind saw at ever to catalyst way of But much that ruling think quantified do down. couldn’t just view, the of I’m step as that. if we I XXXX. at not market we in being M&A of publicly it. need I ready prognosticate for the was all out year, So I activity in I’m that you’ll XXXX, But to

no could second in rates with XX%. about war thinking very the XX%. be but of think to a X And current and of the in as soon time, doubt but I of minds, of to where the we and for it behind. temporary second it’s Ukraine the consequences said the and moving, a activity that to spiral, is all as that normal. may or and third X level were was to may our activity as happen bit before, normal, the we’re that there first prices continues months don’t of need XX% political new keep a And XX% in that of down chain it the dislocations, order year, year see pocket down the equilibrium. think I don’t is persisting, energy of running normal. months but I kind new we appreciably. new And uncertainty it’s market an of It air inflation has little I slowed the not representative in and get But supply

Richard Ramsden

Okay, you. alright. very Thank That’s helpful.

Operator

Research. Chubak next And Wolfe from Steven question comes of our

Steven Chubak

morning. good Hi,

Paul Taubman

morning. Good

Steven Chubak

ratio. press here, So going I’m sorry a on the Paul, comp horse you but dead a bit little to to more beat

Paul Taubman

it. for Go Okay.

Steven Chubak

you year, much just sounds what mandates will quarter the sounds those – given this out like or or backlog, gave guidance. of fees into it ‘XX, given when And conservative a to strong ultimately revenue you’re will those to So with hit. Advisory be a timing pretty contributor likely restructuring subdued in fees next from are coming higher fees success it Rx and like, looking

to With path with Do year? the the next the likely some revenue about credible a does growing very we suggest it as comp closings. a you And to strong better with enter well delayed assuming mandates, strong accrual, revenues backdrop? a think you’re that should how XXXX see backlog of

Paul Taubman

risk actually and a little of year. bit. what beginning in full fourth me the pushed is when Yes. X.X dusted. and the other and baseline pumping gets each next the of we much to sort year next we – at hard than as XXXX kind kind all months. into knowing forgive of mandates talking actually of by is the pace of I’m Well, happy What’s sort done for knowing perspective of about without without It’s a and more give again, I hits is is the confusing do of of quarter XXXX what year the – what to you because too announcements think backlog for next run year,

I that restructuring that’s am speed. to train said though, bearish going would today, me, I think that the how everything we tracks clearly based you on bullish the see meter, visual, down heading businesses? about to the on If in locomotive only pick is I thinking the use likelihood, to up say following: all

see tailwind an that as incremental I in So XXXX.

I have year. Hill its think going and Park next takes is to puts

the fundraising monetizations for less oversized clearly, more and have is is challenging. these They commitments. LPs. I liquidity think There environment

I discriminating. are be to they going think more

think is more going be I difficult. fundraising to

But if activity liquidity prior you’re their to from harder in looking the think LPs of as we’ve time, their same stakes amongst I liquidity not you’re create companies, more in full it fundraise. going in commentaries, by to getting the see underlying selling and harder are at to finding foreshadowed fewer reach assets, sort GPs.

GP GPs to going solutions the do to capabilities. trying more You’re monetizations through see

we’ve exhaustion that’s to because to some is challenging. to hard suspect if one don’t year. we see next the XX% outrun market idiosyncratic. being on talked gains. is of that, in I market going get point, in that. very the and I nets XX% be At ourselves is think So And next extremis, always rates. But will share that year we is market to that a just point to down believe pushes more as if that It’s I and There through Strategic no we’re fundraising all where the pulls, Advisory, just about where doubt going is be about will then out environment headed

the private We greater forward having strategic we point to return there return That’s banks will roll and bit time, ‘XX. where little market. commitments, get sort think is. it’s where clarity leaning-lending of it get to have just all both to next we there gut there less is a some I will I think is where on little a my is equity of I Restructuring hard put And clarity But Restructuring. some of that for the where considerable up clarity Strategic in significant period prospect of until all moving out where – paused to year. will is think a more as done ambitions go strategic on amounts and more do a put seen capital dusted we’re hold volatility and But as of will most and long their reasonable of forward the in Advisory,

Steven Chubak

for helpful, question. clarifying really a follow-up, my Paul. And just That’s

the pressures those some what’s you broadly? group in quarter, should strong a expect can you but more that year versus do any driving for Admittedly, very guidance. what’s better simply revenue fall indication terms that imply advisory function certainly it? the of going to the deals of down driving outcome to like rather or implies ‘XX any year challenging understand to typically what’s your – for not delays, fourth of out which a full Want quarter. seasonally just for that’s like full the and ‘XX, of perspective and would you, be on Just – Is it give a

Paul Taubman

lot Yes. And in there you again, where firm-wide seasonal with a our your in – that, numbers. with is annual advisory with mixed

seasonally fourth seasonally think strong. have me let be fourth So, The and unpack quarter anything that traditionally don’t that won’t said the I little try I is a strong. quarter bit.

close, So, there let’s comments we public that take take I a that because i.e., all XXXX. tied the think record, into of ahead. that withdrawn, go that have of one one I second factors, announced that part probably move number And there the that’s I then see announced side. fall – of record to another Then is, may my businesses. have those deals said we And have and ourselves business, and it are longer deals we one, other in which three no in to just to seen think setting and longer the is which

Steven Chubak

You versus did sorry, advisory will be down ‘XX. – but full ‘XX that revenues did you indicate year

Paul Taubman

Strategic our Hill. talking three did clear this talking year. why – advisory, only it’s businesses. year, did advisory, said Park restructuring, that’s That’s about not strategic that That’s I I the about a I to that’s not about businesses, talk fact of three yes. one talking would have want about the Park am okay. and record just I not of I up. the fact Hill way be that be talk would And about restructuring –

short So, very the specific one of up, businesses three two because our be will and smidge or more factors. the third will fall, of a

Steven Chubak

this questions environment. my much for Paul. Thanks for good a taking outcome so Certainly

Paul Taubman

you. Thank Absolutely.

Operator

is of Mitchell And question our Jim Global. next Seaport from

Jim Mitchell

morning. Good Hey.

Paul Taubman

morning. Good

Jim Mitchell

talk little deals could Paul, being withdrawn. maybe we just a about the bit

been that’s think type months few more I a of phenomenon. last

that do And withdrawals? or to few think more get us that how just of driving on price it – for based sort is give months? sponsors just What’s trying or of we what’s How strategic? is you a the can the financial So, do – next financing? sense us you see about playing of, out

Paul Taubman

and Look, a When taking transactions like to close, have periods while. we long of seen you else. phenomenon that anything time have it’s for

but has was has pitched sellers’ the regulatory And buyer between different buyer is no a seller dislocated that deal that era, a and in binding remorse likelihood, or longer longer and perfectly struck remorse, When buyers’ markets perfectly all and of Some are seller. is commitment. a time was is in pitched that seller, either completely reviews. between buyer the there

some long no you not some many, longer to just, instances, and has in motivated condition if some have instances, but there an enough, go transaction. is met opportunity not sides but Now, because all, in in two not even things been a

you So, know make or one market to satisfied. in period and this. time me, what, sense conditions of and of it’s it doesn’t in deal this approvals really it’s signing made all all between environment, that side saying, maybe the receipt interplay sense being of both And extended

but the one it these than be up, makes it’s tends extending is it tends been walk it’s saying, be because away. markets, who be no dislocated transaction up of it’s equity it, if we are It’s that some of gee, are to if pivot termination agreement. mutual side mutual And by rather meaningful longer of to are just some to the And a period seen it the themselves. a if spike may down, not asset sense. has consent just you In values down. reasons assume automatically it’s to they some asking dramatic, and sometimes time get it just after when tends there others, for a or sellers. in period And that buyers, And

and above culprit up or the that’s that’s in final a one bit about not, turbulence toll higher – may kind until compelling. as little markets, So, when it’s like and it, everyone. you – be different get There affects that you that of to in kind and time, of this is it. have again, down And thing. the cruising to very a up And It’s why can I altitude to of but think the different. of time, of kind meaningful in fullness struck were but pay this a all you get no is a revaluation it’s deals dislocation is

I forward-looking suspect issue. would really almost all going that that’s backward-looking that. to a think of more I That’s through issue. a not be we And are

Jim Mitchell

completion. management Great. would a how you terms in has turnaround within has shorter I then or say just become? imagine of time And that Okay. on restructuring, that business big liability that time maybe would And

those correct? statements us think management. Any of could help So, through way liability the are impact of both you

Paul Taubman

who a my Absolutely. have out like you I lot mean Yes. Look, be and clearly, of sitting saying, there years. companies, point are okay, may X choke

executives, financial debt position And So, a of who a – fully of there advantage responsibility to There how Gee, prices, this take is give have keeping is tender that with is what is today there focused can really has dislocated a my room an an exchange, debt senior I significantly at of myself can the trading or tender, funded. do I there is all more dialogue. significant their companies it, amendment. myself. at can I

revolvers test, as can always look maturities, and make that the the a you test. is sure and bank and need access you this clearly As pass at to like, at stress you stress to you look walls

meaningful need that situation. end of are the they court processes but has through you going over-leverage uptick been to to line So, a with the finding to the go are deal have their companies where in to that activity, gotten also

tend where now, going So, seeing a you lot in it’s liability And strategic be real force, those dialogues on out, an point, that’s management. as are trusted activity restructuring with both. coverage to – relationships. advisers fueling right increased and having where at some But because some that of be build that’s we a And of the success. it’s that’s to having benefit it’s advisory presence ever-growing and those our

Jim Mitchell

Thanks. Great.

Paul Taubman

Absolutely.

Operator

of And our Mike from next question comes KBW. Brown

Mike Brown

Great. morning. Hi, good

Paul Taubman

Good morning Mike.

Mike Brown

for hoping commentary fourth your about to here just questions some getting of maybe clarify just still as am some was to year, comment the so it quarter. full the pretends your I And

on advisory can the pieces I of still comments all elongations But the all that third your together quarter the in expect and of do challenges of the withdrawals the higher fee terms be to year and for if Again, business. the that sequentially want times, commentary the So, I quarter? strategic – make fourth that lot full of sure placement is I and closing understand advisory of on correctly. it deals a versus restructuring take line to just in fair the I the appreciate color in there,

Paul Taubman

I away, the it’s really you think we report, have business I advisory go how and and distinction talked about revenues and the core we that because advisory mean wish Hill you how could restructuring make about not wand placement I manage revenues, we in business. some advisory have we a you magic that strategic revenues. as wave Park Yes. And have have

everything. a So, of little bit it’s

two for which in not that fourth are up that year we we not giving are most three have included I But one end our that advisory guidance. which nine Let differently, of made me months, this is come quarter businesses at commentary. that up. is have is and not other our strategic the the businesses will likely little a one business, comment, simply

I think have I been and their about So clear pretty prospects.

Mike Brown

Sure.

little just and right about understand that restructuring when do terms sector are XXXX, throughout I hear start are to in the see Okay. the those Thank fair the a by that more And year, to Restructuring now? really of a and play what I be was of you. the seeing And of type in hoping transaction. you there second as it contribution what’s to driving it look that’s type more increase themes then depends consistent the complexion for is could bit on And it mandates a the you on region. in at side, quite or there you year? of by success half of and of out some if more fees, lag the is the But

Paul Taubman

see assignments, we take and things – it steady builds, to on started right, look, get think these are you then because retainers I inflection more where as an you as point. more

think I late more would to my year be last constructive right. sense, on we get started restructuring

late started see ‘XX, inflection. of Sort to just we that

So, as those mandates, themselves. some get to take up in resolve orders you to tick start some

starting of it to to clearly, takes and early for some as through work their while momentum like But retainers. you So, build. those anything, a that have start wins to see more you way

of probably time into about be better year, direction else probably would continue portion results for on. this the gets equal, how feed think a as is not will that year and line, restructuring it’s rest better And a more straight a our just I next time, quarter-to-quarter. So, into all results. equally It probably general march to

in of a is lot industries, I catalysts. think situations we different broad and seeing array of are there of sorts a all

when of the I and and COVID. by have it up I of were policy you damage of covered would And some and was some the punch – lasting this monetary you as that treat normal. it extraordinarily damaged think near to is companies that in accommodative all back by – that to ball [indiscernible] have zero had rates. away, fiscal some take you spoken interest And repeatedly, severely about fine behaviors existed that

sudden, companies to enable sheet the them have of to find lot those All of businesses. balance don’t they a a operate that their

who have you a that’s rates all lot Then And a the of sudden, theme. So, debt. rate move another a of have floating up. of theme companies,

You with in wild And you have relatively others, dislocations companies, who in are chain idiosyncratic have dealing out are now can’t management who in end where to or thin get but created And worked you you dealing there you are stress swings the a margins. on is that the currency and issues, delays Then currencies create can’t just of there. supply and a overhang dealing mismatch with litigation have operating are get the in have all product you or expenses. companies situations user decisions then got like. in various that that got not you revenues booked, well those

then has where that of just out activity continued starting So, see that part I And come gone it to this that it’s activity more tend Europe as to capitalize to and we should more little and the bit everywhere. we And ticked in about able opportunity more coverage surprise would are also just now Asian the in of that Europe, all on has into credit given up, get we we more our to say that. levels of a world. on lag. no as cycle, build have in are footprint as

starting change one to a future. So, it’s really almost the expect not little I just thing. everything in don’t that to bit. foreseeable And turn It’s

kind this the next think is in. I we are wave that of

capital, Now, etcetera, the you is will working proactive we hence, we more that real more we restructuring, But But more challenges help around will industries ourselves for can, were risk the in record focus are far present just other there are be it’s of prices, rates I of be the structural a normal, benign there beyond unnaturally and abnormal I we some equity that’s through will to going companies normal. suspect function that companies of and be and And management. lots lots a situations zero think liability that. to and just from argue as on near and globe, we can markets where more as processes of before, that on plentiful appropriate. try

Mike Brown

Very interesting. Paul. Thank you my for taking questions

Paul Taubman

Absolutely.

Operator

final That question. was our

End We will Paul turn to Taubman Q&A it closing now his of for back remarks.

Paul Taubman

with you you. XXXX. early for our everyone’s we much your you year Well, time Thank in this morning, we forward speaking again you we Thank again, Thank Wonderful. when and company. interest report for look appreciate questions. results in very your full to

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