Q2 2022 Moelis & Co Earnings Call

seven million of cash and liquid investments in no debt. I'll now turn the call over to Kat.

Thanks, Joe. Although transaction completion slowed in the quarter, our M&A platform continued to be the largest driver of activity.

Restructuring conversations have picked up from a dormant state earlier in the year and are primarily now focused on liability management advice.

However, the revenue contribution in the second quarter continued to be modest.

Our capital markets business continues to be active as plain found the nela financing has become more difficult complete

Issuers are forced to turn to more structured financings which play directly to our strength.

Turning to talent, we remain committed to attracting external talent that will excel on our platform. We're excited to welcome two new managing directors in New York, one to expand our coverage of the consumer and retail sector and the other to enhance our M&A capabilities.

Our hiring pipeline continues to be strong and we expect to make additional announcements in the future. As always, we continue to be focused on internal talent development.

The financial markets remain volatile. The Fed and the media have been beating the drum loudly, preparing the market for higher interest rates and the possibility of a coming recession. We believe this has caused sellers to more quickly adjust to lower valuations than they have in prior cycles.

Both strategic and financial buyers remain interested and engaged. However, the debt market is not fully operational due to significant transactional loans that are mispriced to the current market and need to move through the system.

As a result, the market conditions that existed in quarter two have continued into the beginning of quarter three.

However, we remain very optimistic about the advisory business and even more confident that our model of organic growth, maintenance of a pristine balance sheet, and total focus on unconflicted, collaborative expert advice is the best path to future success.

All the bad news that you can possibly think of is in the market. Balance sheets for banks remain fundamentally strong, and I believe the debt market problem will be resolved as debt is reprised.

We are well positioned to take advantage of the coming opportunities and we plan to be aggressive about future growth. And now that will work on our questions.

Operating on the address of questions. Operating on the address of questions. Operating on the address of questions.

If you would like to ask a question, please press star followed by one on your telephone keypad. If for any reason at all you would like to remove that question, please press star followed by two. Again, to ask a question, press star one. As a reminder, if you're using a speaker phone, please remember to pick up your hand set before asking your question. The appellate will pause here briefly as questions are registered. The appellate will pause here briefly as questions are registered.

The first question comes from Debbie Lyon with JMP. Your line is open.

Thanks so I get afternoon, Ken and Joe. I guess I want to start with maybe a bigger picture of questions just on financial sponsors and the outlook. And kind of where I'm starting here is the sponsors raised record funds, you know, record PE funds the last couple of years. They were deploying capital, kind of a record pace and it felt like, you know, they're trying to get onto that next kind of incremental record fund from there. But now where we sit here, you know, fundraising for that next fund, you know, probably 20.

absorb relative to just the, you call it equity prices and badass bread and in the markets coming back to more of a equilibrium. equilibrium.

So there's really two separate questions there. One, I do understand that LPs. One, I do understand that LPs.

have you know there was so much fundraising that they allocated a lot of money early they just uh... people you know their gp's contacted them very early uh... they made their big allocations

and possibly even you know some of them have a rule on how much of alternatives can be relative to the total portfolio so the denominator might have shrunk at the same time right to the that they there is a an allocation issue in the current year but by the way that doesn't mean they didn't allocate a significant amount of capital it's just that they did it early so that capital is in the market you're a think the idea

that if you're in the fundraising business the next six months are going to be difficult because people have allocated already that's not a bad thing that means the capital is already in play more aggressively than it even expected to be as ratio.

So that's number one.

Number two, the idea that sponsors are on the sidelines is just not, I don't believe that's right at all. The sponsors are very active.

It's an interesting market actually where the equity is probably the easiest part of the capitalization to get interested in transactions in sponsor world. The debt markets are just not functioning right now. I think that's a function of there's a bunch of loans that are being marked down. It's a little bit like the retailers are doing. I think the product that was put on the shelves three, four, five months ago isn't appropriate for the market today. It's going to be discounted.

to see you have hold the line on the Comparatio, you know, like the cover conditions in the second quarter. I'm not sure if you can give any guidance or thought around kind of the back half of the year. And if you can't just even help us with what scenarios would potentially drive kind of a change to the Comparatio in the back half we're also the first half.

Well, I know you addressed that to Joe, but I hold the line too on the Compratio. Look, it's the best estimate that we have. It's the best estimate that we have.

And we think that's a good ratio given everything we know. And again, I anticipate the back half of the year, at least the third quarter, I'm not gonna even predict the fourth quarter at this point. We don't expect a massive chance. I said we're four weeks into the third, and it feels a lot like the second in terms of the world. So I think we're going into that ratio with a knowledge of where we are and where we think the third will be.

and we're not, you know, and the fourth will be determined. We'll see.

Yep, got it. Okay. Terrific. I'll leave it there, but thanks for taking the questions.

Thank you.

Our next question comes from Ken Worthington with JP Morgan. Please proceed. Hi, good afternoon. Thanks for taking the question. So clearly M&A has slowed. As you look at your business, what part of advisory has been the most resilient? And I guess do you expect that resiliency to continue? And if you take the other side of it, what part of advisory has slowed maybe the most?

and how quickly do you think that or those areas will bounce back and maybe what areas do you think really are going to be slow for the foreseeable future. Thank you. Thanks. So first, the slowest has been restructuring. I mean, the conversations are beginning and it's getting a lot more active. And it's getting a lot more active. And it's getting a lot more active. And it's getting a lot more active.

Can you please try to put that mute if you can't? Can you put your sound mute? I think you're the one.

Background noise. Thank you.

restructuring definitely had the, you know, the, as I called, called an almost dormant in the first half of the year. And, you know, conversations are beginning, but it hasn't.

Distress has not permeated the market now. We're just in conversations very early with people trying to get ahead of problems that could occur. We're pretty active in that, but we're at the point where people are trying to get ahead of their problems. We're trying to get ahead of their problems.

I believe that the longest term, look, I think there's a misunderstanding of the sponsor business. It is very early into the cycle and it clears early. What I mean by that is I think we were early post-COVID in saying we saw M&A green shoots.

And it's just sponsored transactions from the time they're entered into the time they close are usually 30 to 45 days. There's not a lot of, you know, there's no shareholder vote, there's no proxy, there's often a lot less regulatory.

And it also causes at the end of a cycle, at the beginning of a down cycle, they clear out faster because they don't have long tails.

Strategic transactions could take three months to, anywhere up to highly regulated deals, 18 months to close. So those transactions often take a lot longer and stay in the pipeline longer.

I, I, right now, that's why I think M&A, I think the sponsor activity will be the first.

to reappear in the closable transactions. They will move quickly.

and they will close quickly. And that's why, I believe the business has a different cycle than I've been reading from a lot of......

I'm not picking on you, Ken. I'm talking about the research in general.

What.

Understood. Thank you very much.

Thank you.

The next question comes from Brennan Hawking with UVS.

Your line is open.

Thanks for taking my questions. Ken, I'd like to explore what I think I thought I heard you say about the financing market that you thought it was just a matter of clearing some of the the deals out that were mispriced or priced for the prior market and then the financing would get going again. Was that your conclusion or did I not read that correctly?

Yes, I think this is not an 809. The 809 you had fundamentally damaged financial company balance sheets.

And they had to rebuild equity and tier one equity and

and they were forced out of the, they were really out of the market for a while. This is, the banks are strong.

The non-bank market is strong, but right now the non-bank market is focused on transactional loans that the banks have and they're being offered at the clearance aisle. You know, 10%, 20% off.

And I just think that's just a natural, yeah, I think that those are going to get cleared out. Because they're one time.

And then we will reset and the banks will be in business. By the way, they'll be in it. You know, the new federal funds rate, I get it. They'll be higher interest rates. They'll be higher interest rates.

There might be lower leverage.

But they'll be back in business right now. There's a fundamental almost, you know, not working transactional market as the clearance deal.

It's clearer now. you

Sure, but I mean isn't the reason for the clearance sale that those loans were underwritten with meaningfully different terms than what the market is requiring now. And what the market is requiring now is far more onerous because you have such a significant amount of uncertainty out there. And therefore, you know, it's not like once you clear these existing, this clearance rack, you know, so to speak, then everything's all good. You've still got these kind of onerous.

financing terms, new kind of requirements that lenders are going to need regardless of whether the balance sheet of the bank or whatnot. You've just got such a significant economic and macro uncertainty. So I just to me, I guess I don't quite follow the confidence that financing is just going to come rearing back and more importantly, I think from the perspective of Moas, like how

How reliant is the activity in which you all advise for the financing market? Is that key or if the financing markets don't come back, are you guys going to continue to be a remain active or should we be just assuming the kind of lower run rate of activity?

Well, first of all, I disagree. The markets will find a clearing price, and there will be two things that help clear it. I think one of them is already helped clear it, and that is multiples and the price. And that is multiples and the price.

that assets sell for so just to pick a number for instance if if multiples go down by three turns or four turns

You know, you've already, like you said, that's already in the bank has to... The whole capitalization has...

Three or four turns, less of need. So already you're down.

And then the banks will step in and they might turn, they might do a turn less of leverage. Sure, they might do that. I'm not saying that. But all you need is functioning markets. I don't know what your owner is. This is the NIAI, the balder. It's again, as of today, what's sulfur, whatever. You've had funds rates in the low tunes, you add three points. Now you can finance deals on that. It's just a matter of the price and the leverage ratio. And everybody moves forward in the market.

You know we didn't always run a business on zero percent interest

It will find a level, pricing will reflect it, and people will transact assets. And banks are in the business of making loans. They have strong balance sheets. They need to put money to work. There's an enormous amount of money going into the alternative asset managers to make transaction loans. The knives are attached to one another toeline the competitive groove. Some people claim it's a very steep world. It's ha Excellence-oriented,AI. A trading environment in the most

Right now, I don't blame them. They're looking at buying things at 80 to 90 cents. So they're distracted on one time opportunities.

So I think that's what they're doing, I don't blame them.

But when we come back to the market, there'll be instead of five turns of leverage. Maybe it'll be four turns of leverage

The whole transaction will be three turns less and everybody will move on and do their IRRs off of that. But the world will go back into the mode that it's in because everybody's strong enough that they will return to business. They're not going to shut down. So I disagree with you. I don't see that. And our capital market activity is undergoing the same thing right now.

You're competing again with the clearance aisle. Very difficult. Hard to sell when the outlet down the street has the same goods on the shelf that the primary retailer has. But that will clear out and then everybody will be back in business. So we're having the same sort of moment in capital markets, but it's strong. And we think that our structured capital markets is exactly where the solutions lie as things remain volatile.

Okay, appreciate the disagreement and you know that's what makes a market. So plenty of respect for your view there. The, when we think about the current environment and you think about what parts of the business are active, you said capital markets has been slow, you said restructuring the outlook is improving, right? But it's still on the come. So, please.

I think I said capital mark. I didn't think I said capital mark is a slow. It's actually done pretty well. It's actually, you know, capital mark has been fine. I don't think I said it was slow.

Oh, it may be interpreted.

Yeah, okay. So, then let's clarify that. Capital markets has been good. Has it been running, you know, above the normal proportion of revenue for you all that we've seen historically? Has it been more active?

It's been about flat from last year I believe for the first six months so it's over 10%. Yeah so I think you know as the top line decreased it as a percentage has gone up but it's running about flat. I didn't mean to say that it's you know it just hasn't slowed it's done very well.

Yeah, and last year was tough, they were active for you all in cap and markets as I recall, right? Yeah. So when we think about the outlook from here, restructuring is still expected to be much more of a 2023 story, and then how should we be thinking about the composition of the business? Do you think it would be very similar to what we've seen here to date? And then it's not going to be until 23 when the restructuring picks up.

When we're trying to think about refining the model and coming up with a forecast, how should we think about the different pieces and the outlook from here?

It's going to feel similar to where it is. It's going to lead the way.

Capital markets, I think we'll continue to do what I've said. I think they'll stay.

you know

It's very hard to get a plain vanilla financing done in the market and people do need to finance. So you turn to us to do structured finance and I think we are going to be a beneficiary of that. I think we've been a beneficiary and we will continue to be.

And M&A will continue, I think M&A will continue as is for a while. I think the sponsor community will turn quicker than most, and especially if you count it until closings because of the speed with which it enters the market and closes.

And you know, restructuring will start to creep up and start taking in monthly retainers.

I would guess you're right, it's a 2023, success based fees will be put off to 2023. Knitting on D- borne

Okay, thanks for that color, appreciate it.

Thank you.

Thank you.

Our next question comes from Richard Graham and with Goldman Sachs. The line is open.

Hi Ken, so maybe I can just start off with a bigger picture question, which is obviously as you talked about this, just a lot of uncertainty about the macro environment and how things are going to unfold. Has it in any way got you to rethink or reprioritize the investments that you want to make in the business, either in absolute terms or in terms of prioritization, i.e. from a product or geographic standpoint?

Yes, I would like to be as aggressive as I could be.

I do not see any fundamental weaknesses in corporations. I see the financial sponsor community has raised a lot of capital. In fact, I think it was Devin's first question.

too much capital if they were too successful it took all the money out of the system

They are in the business of transacting, so they will transact.

And look, this is just my feeling, so take it for what it's worth. I'm not a global macro economist. I'm not a global macro economist.

I think that you have corporations and financial institutions in excellent shape.

And you have financial sponsors with a lot of capacity and everybody has a desire to grow. Every, you know, a bit, if you go on all their earnings calls, none of them think they're gonna be smaller in three years.

And the person that's going to get, as I said, if there's a hurricane coming, I think the corporate community heard it loud and clear. The Fed couldn't have been louder, and the market couldn't have reacted more aggressively to marking down values to anybody who thinks, has the Fed raised rates? Well, they raised the cost of equity capital by about 1000 basis points in the markets by the discounting of valuations. And now, you know, the debt markets have…

have thought about it and have reacted in advance. And between the Fed and the media, I think you've pre-pressaged a pretty bad recession. So people kind of, as I said, if it's a hurricane, they board it up, they put the plywood up and they've gotten ready for the hurricane. OK, now, the part of the economy that...

probably isn't as ready and because there's no way to avoid it is the consumer and I think you're seeing that the consumer has no way to really get out of the way of increased high gas prices and food inflation and things that nature so you know there will be parts of the economy that I do think have a very difficult time but

The part of the world that is thinking five to 10 years out on their business model and how to allocate capital to effectively deliver returns to their shareholders or their LPs, I think they're gonna be very aggressive. Not today, maybe not tomorrow, but sooner than you think.

does very clear. The second question I had is, can you spend a couple of minutes talking about the difference between a restructuring mandate and a liability management mandate when it comes from a fee perspective? Is there a significant difference? And should we think about liability management mandates as effectively becoming restructuring mandates over time or should we think about them separately?

Well, one of the things we pitch Richard very and we were proud of is we think if you hire us on my ability man

One of the things we pitched, Richard, and we're proud of, is we think if you hire us on liability mandates in advance,

Bill Darrow, our head of RE and then saying have some stats on this but we're very effective.

of keeping people out. It's one of the things that we actually pitch very hard. We're very different than a lot of what I would call the bankruptcy firms. We think of ourselves as a.

bankruptcy avoidance firm. So I would say that we don't go into liability management.

So I would say that we don't go into liability management.

We're very proud of the fact that like 75% of those don't end up in bankruptcy.

And that's a success for us. Now some of them do.

I would say to you that the fees involved in a full-on bankruptcy are more. They're more certain to. You know, you go into court and I always say you get paid a success fee at the end. Not really that big a success. You just go through the process and you come out of bankruptcy.

And liability management does take more activity and more thinking, and it's often just not as large a transaction. But you usually have a good client for life if you succeed in that, and that's what we try to do. So it's not as profitable.

But it's...

Probably more, probably better client.

opportunity then bankruptcy.

Okay, that's very helpful. Thanks for your time.

Thank you. The next question comes from Manon Gossler with Morgan Stanley . Please proceed.

Hi, good afternoon. I just wanted to dig in a little bit more on the rate of change through the quarter and into July . It sounds like last quarter, seller valuations were the issue. Debt markets were also an issue but not as much. It feels like today's seller valuation is reset, maybe not fully, but there is some progress there. And debt markets are the bigger issue. So would you say that net things are a little bit better or would you just say that there's...

not enough visibility right now to say that.

So you're right, you know, what happened with cell evaluations and this is the fastest I've ever seen it go in a cycle. And again, I attribute it to, have you ever really, I've been around a long time, I've never seen the Fed in the media in unison call for such disastrous future economic results and loudly make it known what the Fed was gonna do and et cetera, et cetera. So what happened very quickly is,

You know February , March, April , maybe May, you had sellers looking back.

to hope for a while, hoping what happened to that value.

And I think by July , maybe late June , you would have sellers of assets thinking,

You know, I think it might get worse. So tell me what the market is Let's see what the market is and let's move and that was that's a pretty quick cycle I mean, I think you three three months cycle to reset pricing then what happened is the credit markets Disappeared there, you know for less than investment grade credit. It's very very difficult And that is what happened. I just think that

That market of resetting the bank market is a function of clearance.

It's it'll happen. Banks have to get this stuff off their balance sheet.

And they don't have all day to do it.

And so it's going to happen and I feel like then now then we have an equilibrium in BISEL. And I think we'll have a functioning debt market at a different, as I think Brennan said, at a different terms. But people can transact if they know the terms. But people can transact if they know the terms.

So I guess that's the biggest catalyst we should be looking for is the dead markets at this stage.

Yes, I believe that is the primary.

You know, I think that's the primary.

as of right now.

If that cleared up, and especially if markets, you know, that felt pretty good, you know, you can say that a lot of good assets people might hold them for a while.

You know, I'll put...

There's a cycle to these situations. Strategics need to sell certain assets to accomplish goals that they want for their own.

needs, whether it's simplicity or whatever needs somebody wants to sell a strategic asset and also financials have a cycle. So I think things come back.

things come back if the bank market and the financing markets come back online.

Got it. And then just as a follow-up, are there any differences that you're seeing between markets? It would seem like public market valuations, particularly in some sectors, have come down pretty significantly. Are you seeing more dialogue maybe on the public side versus the private side or on the tech side or maybe from cash-rich corporates or the strategic side? Where would you say the incremental dialogues are coming from? The wisdom agent or maybe people who have taken over our Socialism campaign, or the companies are really like in the same way or in any Ill- Abdeloudic relation. Some can consume the loudest noise on their- Precord, hey, deported, so you will spend life just entering similar markets, and spending more time on those collective campaignsDuring theBA versus clear. Another case is almost a CLIP of the

I do think the public markets because they're liquid, react faster and often much more volumly. And, and.

And I do think that if there was a function in debt market, you could have some cash buyers try to take advantage of dislocations in the public market. But right now, the math of available debt and to undertake those transactions just makes it. And to undertake those transactions just makes it.

difficult and so you know they're not they're not starting yet but I do think that could happen I think the public markets were quicker to to react I mean they you look at you look at them

Violent reaction of the public markets in some sectors and yes, they reacted much quicker.

God, thanks so much.

Thank you. The next question comes from Steven Chubak with Wolf Research. Your line is open.

Thank you, afternoon.

Maybe to start off with a question on capital management. Your cash position is quite strong. It's currently around the level where you've historically paid a special, but we also have to recognize there are some greater risks to the outlook. You also talked, Ken, about the more attractive market for talent. Just want to get a sense as to how you're thinking about the balance between maintaining the flex to invest and potentially more challenging backdrop with returning some of that capital for shareholders.

Again, we're committed to returning all our cash. And we were for the first time in, I think, a very long time. We were very active.

repurchasing shares. I think 3 million shares for us in a six-month period is by far the most we've done. We've said when we felt the stock was in a position that it wasn't in our minds.

wasn't a close call on valuation. Look, just buying back our stock when we were doing it in the last month or two was almost a 6% cost of capital not to do it on our dividend alone. So we have decided we're not gonna pay as special because we have been, I'm not saying what we'll do in the next few months, but we've been very active in the market buying back our stock. And.

That's the way we've decided to for the near term.

allocate our capital to return is to stock buybacks. Again, I'm not saying anything from here on forward, but that's what we have been doing.

Understood. And maybe just a two-parter just so we capture both the comp and non-comp side with regards to the outlook. Similar question to what Devin had asked earlier, maybe just taking it with a slightly different take. As we think about the more challenging revenue backdrop potentially for the back half, I know that there have been some sponsors on the record saying that if they expect deal volume and activity to be lighter in the back half.

It sounds like you have a dissenting view from that can. But just if the revenue backdrop is more challenging, I was hoping you could help us frame what's the minimum level of revenues or baseline revenues that would be required to hold the line at that 59% Compratio. And then, similar to giving the uptake that we saw actually in non-comps, what's the right non-comp run rate we should be thinking about in the back half?

Well, again, I'm not projecting that the year, you know, I've said the third quarter has started the same as the second and I said, you know, I'm not sure.

envisioning an immediate return, by the way. I'm sort of...

saying that it will happen and then it'll take time for deals to close by the way. So, you know, we have our pipeline as of today is almost exactly, by the way, I looked at it's almost like to the penny where it was exactly one year ago.

So it's not for lack of opportunities and pipe, which it's elongation, it's an ability to complete them. It's all the things we're talking about with the debt markets where it is. And I don't know what exact moment that will fall. And I don't know what exact moment that will fall.

So I don't want to leave you with a projection on the year end. I'm just saying that there this thing you know I believe there will be a turn.

on the Comprisio as of right now.

That's our best guess. There are a thousand things that will go into any change in that. I don't foresee it, but again, things happen in life. But right now, that's our best guess. We have a tremendous... We have a tremendous...

Organic growth model. And I do think that having so many of our manager directors come up through the system gives us a little, I think, good control over our comprehensive ratio and an ability to...

to maintain the split that we think is fair. But again, I don't want to, I don't know exactly. If we were to change it, it would be because of a thousand different inputs. If competitors come after us and wanna break their comp ratios to some extent, we're not gonna sit still, but for right now, this is an estimate that we think is optimal.

Okay, in terms of the non-comp-jumping off point, just given it was a little bit higher in the corridor, some of that certainly T and E related, but how we should be thinking about that for the back half.

Yeah, I think there's also included in that non-compressed period where some transaction-related costs, probably a couple million. So the best guess I have is probably 39 area for the third quarter, absent any transaction-related costs, which are hard to...

project.

Very helpful. Thanks so much for taking my questions.

Thank you. The next question comes from Michael Brown with KVW. Please proceed.

Thank you all.

All my comfort should

I guess if I maybe build on that Tom question somewhat.

During periods of market dislocation, and the past for you, it's been a good opportunity to get active on the recruiting side. You've added two MDs.

Can you just update us how is that talent pipeline now? What's your outlook here as you think about the back half here?

You know, the pipeline is strong.

My gut feel is...

that post-labor day I've worked at large banks.

The word goes out right around Labor Day.

Don't look at your head count. In a bad year.

It's just the way the cycle works. People don't, you know, people are away. They focus on the bonus pool somewhere in September .

And my gut feel is that we could get much more active in that time period as we see

Look, I think some of these organizations, especially to one, I'll get...

We'll, from the top down, just allocate human capital decisions and the organizations will respond. And I'm kind of hopeful of that. And we would be aggressive and intend to be aggressive. And our pipeline is pretty good right now. So we're continuing to move, but I think you could see, you know, you could, I hope you'll see us be more aggressive sometime.

from September through the next nine months. Okay, they're interesting. Maybe there's one more for me. If I heard you correctly, just now you said your pipeline is your journal pipeline of what the activity is relatively that changed.

Can you just clarify, was that relative to the prior year or the prior quarter? And just remind us how you define that. Obviously we look at public data, which doesn't necessarily line up with that commentary. And I know we've in the past had discussions about the differences between what's out there publicly and what you guys see internally. But if you could just remind us how you define that pipeline.

Well, the number I was looking at was a year ago like today It's what my earnings call, you know. It's what my earnings call, you know.

year ago. And by the way, it was like, it was scared. It was when I say it was the same, it was the same. I think they're, you know, down to the pennies. But the deal, as we look toward how we see it roll in, it has elongated I would want to make that clear, we we we don't think the pipeline will. So again, how do we define pipeline, you don't see it because most of it is confidential. These are things we're working on. They're mandates. They're mandates, not announced deals. They're things we're working on trying to

go to market advising behind the scenes. I mean, I would say, you know, I'm just making up the number, but 80 or 90% of what we think is a pipeline, probably 90% is the things we're working on that are not announced yet, but they're an engagement letter. But they're an engagement letter. And again, I want to be clear, you know, it's kind of interesting. It's to the dollar the same as a year ago, but when we look at it and try to picture the timeframe to completion, it's definitely longer.

And probably riskier, but definitely, you know, by the way, anytime you elongate a deal, it becomes riskier. A deal does not get less risky as it goes on. So, it is longer to completion, which makes them riskier by definition.

Okay, yeah, that's really helpful. I guess, yeah.

When you look back historically during this period of market dislocation, how has that pipeline worked towards completion? Is it clearly there's more risk to the deal that you just mentioned? So when you look back, is it...

in the periods of market dislocation, how has that pipeline worked towards completion? Is it clearly there's more risk to the deal that you just mentioned? So when you look back, is that... So when you look back, is that...

Kind of a 20% hits it to your pipeline over time. How does that typically work in terms of deal that actually moved to completion?

You know, I don't have an easy answer to that. If I had that, you know, really we ask ourselves the same question.

And we try, but I can't give a public answer to that because there's no scientific answer. There's no scientific answer.

Okay, understood. Thanks, Ken. Thanks, Joe.

Thank you.

There are no further questions waiting in the queue. So I'll now pass it to the gov to the management team for any closing remarks.

Well, thank you for the call. If there's any, we do to follow up afterwards, give Joe a Matthew call and we appreciate it. Thank you.

This concludes the MOLS & Company Q2 2022 Earnings Conference call. Thank you for your participation. You may now disconnect your line.