Q3 2024 Moelis & Co Earnings Call
Good afternoon, and welcome to the Moelis and company earnings Conference call for the third quarter of 'twenty 'twenty four to begin I'll turn the call over to Mr. Matt to cross.
Speaker Change: Good afternoon, and thank you for joining us for Molson Company's third quarter 2024 financial results conference call on the phone today are Ken Moelis, Chairman and CEO and Joe Simon Chief Financial Officer before we begin I would like to note that the remarks made on this call may contain certain forward looking statements, which are subject to various risks and uncertainties, including those identified from time to time.
Speaker Change: And the risk factors section of Moelis <unk> company's filings with the SEC and actual results could differ materially from those currently anticipated the firm undertakes no obligation to update any forward looking statements. Our comments today include references to certain adjusted financial measures. We believe these measures when presented together with comparable GAAP measures are useful to investors to compare our results across several periods.
And to better understand our operating results. The reconciliation of these adjusted financial measures with the relevant GAAP financial information and other information required by Reg G is provided in the firm's earnings release, which can be found on our investor relations website at investors that malls Dot com I'll now turn the call over to Joe to discuss our results.
Joe Simon: Thanks, Matt and good afternoon, everyone on today's call I'll go through our financial results and then Ken will comment further on the business, we reported $281 million of adjusted revenues in the third quarter. Our adjusted revenues for the first nine months were $763 million up 18% from the prior year period, the year over year increase in revenue.
Joe Simon: For the first nine months of the year is driven by growth across all major product areas and our year to date revenue distribution remains approximately 60% M&A, 40% non M&A moving to expenses, our third quarter compensation expense was accrued at 75% consistent with the first two quarters, our non compensation expenses in the third quarter.
Joe Simon: Were $48 million and we expect a similar non comp expense result in quarter four.
Joe Simon: Moving to taxes, our underlying corporate tax rate was 34% consistent with the prior quarter regarding capital allocation. The board declared a regular quarterly dividend of <unk> 60 per share consistent with the prior period and lastly, we continue to maintain a strong balance sheet with $298 million of cash and no debt and I will now turn the call over to Ken.
Joe Simon: Yeah.
Ken Moelis: Thanks, Joe and good afternoon to everyone.
Ken Moelis: We see gradual improvement in the M&A market throughout the year equity market valuations are at or near all time highs.
Ken Moelis: This has changed course and appears to be committed to lower interest rates, although the pace might be up for debate.
Ken Moelis: At the time at the same time rapid innovation, driven by technology fuels and the need for M&A and these factors suggests we are getting closer to the next upcycle in M&A.
Ken Moelis: And our capital structure advisory business, we continue to experience elevated activity and engagement with clients, we anticipate a prolonged restructuring cycle centered around liability management exercises due to a large amount of non investment grade debt maturing in the next few years.
Ken Moelis: Turning to capital markets. The rise of private credits has allowed us to compete with the legacy banks on raising capital for our clients. This market actually appears to be larger and developing more rapidly than we had anticipated. We were early to identify and we have invested in this secular trend.
We continue to experience strong demand for structured capital solutions as issuers look to grow their businesses or to refinance upcoming maturities.
Ken Moelis: Turning to talent, we released recently vintage of biotech MD, who set to join the firm next months, our recruiting efforts remain active and we will continue to selectively add talent in areas of key strategic importance to the firm.
Ken Moelis: Our expertise across products sectors, and regions has deepened, allowing us to deliver even more impactful independent and conflict free advice.
Ken Moelis: We're well positioned to drive long term growth with that I'll open it up for questions.
Ken Moelis: Okay.
Speaker Change: At this time I would like to remind everyone in order to ask a question. Please press Star then the number one on your telephone keypad.
Your first question comes from the line of Devin Ryan with citizens JMP your.
Speaker Change: Your line is now open.
Devin Ryan: Hi, Thanks, Hi, Ken Hi, Joe.
First question just on comp ratio kind of near term and intermediate term.
Speaker Change: Our revenues up 18% year to date, I think comp expenses up about 7% so you're already seeing.
Devin Ryan: Some leverage there, but obviously backlogs appear to be building. So just love to get some sense around whether you feel like there might be some positive leverage in the fourth quarter off of the 75% level and then how we should think about that relationship.
Devin Ryan: Into 2025 should we still think about kind of that guide that you guys had been previously given every every I think $100 million or so is four to five points. Just how we should think about that that connection as we look into 2025 and beyond thanks.
Speaker Change: Hi, I'm going to ask Joe to reiterate because I think we think the model that we gave you that kind of algorithm works.
Speaker Change: And your question about the fourth quarter is.
Speaker Change: Yes depended on the fourth quarter revenue.
Speaker Change: This market continues to show signs of.
Having energy behind it and having a desire or again I've said this I think two or three calls now, but our pipelines continue to be at all time highs.
Speaker Change: Our announced transactions of all time highs.
Speaker Change: The amount of activity is very significant and yet the time to complete the transactions continues to be longer than you'd see on a full scale bull market.
Speaker Change: So I just don't think we've seen the increase in.
Speaker Change: And the speed to market that we might have thought we saw when the fed first started to move rates.
Speaker Change: So yes.
Speaker Change: Yes. The answer is there is leverage and I hope the fourth quarter continues on the pace of improvement that we've seen.
Speaker Change: And I think I'll turn it over to Joe for a second but I think the algorithm. We gave you on four to five points per 100 million is still holds true.
Joe Simon: Yes, I think thats right.
Joe Simon: It does barring any significant hiring phase, which we don't expect at this at this time, so I think that the algorithm.
Joe Simon: Is still relevant.
Joe Simon: Okay.
Joe Simon: Okay great.
Joe Simon: That's helpful and then.
Just a follow up Ken just on the inner play M&A with interest rates. So obviously, we've been talking about rates coming down with a catalyst, but we just had one move right and it was recent.
And we're still pretty far away from I think what many people consider a neutral rate so.
Joe Simon: In terms of sponsor Reengagement do you think we need to kind of.
Joe Simon: See where rates settle out to really see reacceleration or is this just the rates coming down people see the writing until they're starting to.
Joe Simon: You tried it to.
Joe Simon: <unk> things with the expectation that by the time, you're actually getting to closing a deal rates will maybe be closer to that neutral rate I'm. Just curious kind of how that interplay is working out based on the first move we think.
Speaker Change: Well a lot of that question, Devin anticipates that I know exactly what the.
Speaker Change: Neutral rate is of the fed does or anybody does interestingly.
Speaker Change: No. The 10 year, probably disagrees with you and has moved in the other direction, maybe that's causing some of the slowdown, but I think the whole system will move together.
Speaker Change: We find that the sponsors are engaged it's very different than it was I'd say 18 months ago.
Speaker Change: When the default was everybody knew you were going to do anything it was kind of like waiting for godot waiting for something to happen.
Speaker Change: We are in active conversations in and around Austin, all sorts of things liability management private credit placement M&A, there's a lot of things going on I still see one of the missing ingredient as we were talking about this year today is.
Speaker Change: There's a lot of.
Speaker Change: Partners sector partners in private equity and other sponsor placement sponsors like that that are out there on their front foot.
Speaker Change: Getting long ideas and maybe the transactions and then I think it gets back to the investment Committee and maybe it's the slowness of the replacement capital the replacement LP capital.
Speaker Change: And so the whole system Hasnt really started back up where everybody knows they can go back out and raise another fund.
Speaker Change: And I think somewhere between the.
Speaker Change: The partner on the transaction itself.
Speaker Change: The entity as a firm at investment Committee decides where they're going to allocate capital things just seem to slow down a little bit and.
Speaker Change: The exact opposite happens in a bull market.
Speaker Change: In 2021 things just accelerated right through to completion so.
Speaker Change: It can be maybe if interest rates if the fed continues to tick.
Speaker Change: Because that will restart the whole process, but it's kind of a hole.
Speaker Change: That will move together I think.
Speaker Change: Okay. That's great. Thanks, guys appreciate it.
Speaker Change: Your next question comes from the line of Ken Worthington with JP Morgan. Your line is now open hi, good afternoon. This.
Ken Worthington: This is sort of a pie in the sky question as well.
Ken Worthington: If you go back to the beginning of the year can you were optimistic about the outlook for M&A, you're still optimistic about the outlook for M&A.
Ken Worthington: At the beginning of the year you.
Speaker Change: And that most of the pipeline was at record levels were still at record levels. The S&P is you know sort of record highs.
Ken Worthington:
Ken Worthington: But M&A that the recovery has been fine so far you called the gradual.
Ken Worthington: If there are no surprises so nothing out of left field so to speak.
Ken Worthington: 2025, just be another kind of so so year, you know better than 'twenty, four, but maybe disappointing relative to high expectations and if we have our chat.
Ken Worthington: Year from now and activity was so so rather than great.
Speaker Change: What are the likely drivers of expectations that a reality that fall short of expectations next year is it just rates you mentioned that a lot of things are working together.
Speaker Change: It all sort of comes to mind on what could drive a mediocre rather than like a really healthy recovery in activity levels next year.
Speaker Change: Well again, a good question, so I won't repeat what I was trying to say maybe I got involved.
Speaker Change: Involved.
Speaker Change: I see everything about it barring an unseen.
Speaker Change: External event 25, as you said I think it'll be a good year it will be somewhere between good and very good.
Speaker Change: The activity levels are picking up.
Speaker Change: It is different than it was if you went back a year ago I don't think we were quite at the levels, we were at activity of optimism.
Speaker Change: People on their front foot.
Speaker Change: If I had to say one thing Dan I think the thing that's going to.
Speaker Change: And it might be a derivative of interest rates, but it's the ability to raise capital in the MLP market is there.
Speaker Change: Is there a fund.
Speaker Change: 10 behind fund nine that is available if you allocate capital in and use up your last 25% of capital.
Speaker Change: And.
Speaker Change: That that may not be.
Speaker Change: That may be related to interest rates.
Not discounting interest rates it may be related to a lot of things.
Speaker Change: Because I think the rise in interest rates definitely stop that allocation of capital going into at least private equity alternatives market.
Speaker Change: Capital is going into private credit alternatives.
But if I had to thermometer and you could tell me how that market loved how reallocation of capital into the private equity market looked.
Speaker Change: That might be a derivative asset of interest rates, but it would probably be the best indicator of whether we will have a mediocre recovery or a very good recovery.
Speaker Change: Okay, Okay, well, that's part of the Sky I appreciate your thoughts. Thanks. Thanks, so much.
Speaker Change: Thanks.
Speaker Change: Yes.
Speaker Change: The next question comes from the line of Brennan Hawken with UBS. Your line is now open.
Brennan Hawken: Good evening, Hey, doing Ken.
Speaker Change: Good.
Brennan Hawken: So it's a bit of an unusual environment for sure, but as we're thinking about.
Speaker Change: The coming quarter.
Brennan Hawken: Do you expect that we'll be seeing the typical seasonality and the strong a stronger fourth quarter than what we've been seeing here year to date is the seasonality you think still something we can count on.
Speaker Change: And again I don't want to guide but.
Brennan Hawken: <unk>.
Speaker Change: Yes, the business seems to feel and I'm not sure it's totally about the seasonality as much as yes, there'll be some deals that always tried to close in the fourth so thats a little.
Speaker Change: Little bit of seasonality as people rush to close at year end.
Speaker Change: The business also seems to be gradually getting better each quarter somewhere between a gradual or mediocre recovery every quarter.
Speaker Change: And that could change by the way, we're going to have an event here in a couple of weeks elections.
What Paul does after that Theres, a lot of things that could accelerate that so it feels like things are improving let's put it that way I'm not going to try to guide to a number.
Speaker Change: And then I think there are things that could accelerate that.
Speaker Change: Okay, Yeah, what what wasn't trying to fish for a number but thanks for that the high level commentary.
Speaker Change: So if we end up seeing some seasonality then.
Speaker Change: And the leverage as Joe just endorsed earlier on the call.
Speaker Change: And we have a decent fourth quarter here.
Speaker Change: No.
Speaker Change: It sounds as though youre, implying that the 75% comp ratio that we saw in the first nine months, that's not necessarily the way we are going to shake out for the year and we have to see how solid the fourthquarter can end up being before we can.
Make that call is that fair.
Speaker Change: Yes, yes.
Speaker Change: We look at is what does the run rate as of today based on this market.
Speaker Change: Indicate and I think that's the conservative way to think about it if the market gets better and the comp ratio will get better.
Speaker Change: Excellent thanks for taking my questions.
Speaker Change: Okay.
Speaker Change: Your next question comes from the line of Brendan O'brien with Wolfe Research. Your line is now open.
Brendan O'brien: Good evening and thanks for taking my questions I guess to start I just wanted to talk about head count.
While youre MD count is down slightly year on year. Your employee count is up nearly 20% with a fairly significant increase quarter on quarter.
<unk> I just wanted to get a sense as to what drove the big step up in head count is it simply because you need to fill out some of the teams after the significant recruiting John over the past few years or something else.
Speaker Change: It's a little bit of both I think we're a little we believe our ratio is a little overstaffed per M D, but I will say some of that is.
There are some sectors, where we are recruiting in senior talent, where we have <unk>.
Judy your talent that we liked as well and that might have that might distorted just a little bit that we kept some teams pending.
Speaker Change: I think we announced.
We just said we're going to hire senior biotech banker.
Speaker Change: Okay.
Speaker Change: Yes.
Speaker Change: Those types of ratios might end up as a result of having a team that we think is capable of calling on it but they're not <unk>, yet and we're going to bringing up the on top of that and some of it is just again part of the comp ratio and I think I've said this before is as deals take longer.
Speaker Change: And your backlog kind of stays there you don't have banned in your backlog you sort of have all of the deals that you thought you were going to do six months ago and you still have all the deals that you want to.
Execute on in the next six months and so I think some of this drawing out of the pipeline and backlog and even the length of time it gets to take deals done.
Speaker Change: And end up you end up with a larger head count just because you can't walk away from them you can't just leave them on the shelf, it's not a it's not a commodity you have to service the client.
Speaker Change: Whose transaction you took on 18 months ago, but has not completed.
<unk>.
Speaker Change: And Thats, what happens as the pipeline gets dragged out.
Yeah, and just one correction Brendan I'm not sure what figure Youre looking at a year to date I think.
Speaker Change: We're closer to 12% not 20.
Brendan O'brien: I was looking at a year on year Joe.
So I wasn't sure if there is some seasonality in terms of like summer hiring and the like but.
Ken: Yes, no that all makes sense Ken.
Speaker Change: I guess for my follow up I, just wanted to touch on capital allocation and specifically, whether you would consider doing an acquisition to accelerate growth I know, it's something that you've not been interested in previously.
Speaker Change: Given where you and your peers are trading today it feels like there could be some interesting opportunities out there to leverage our multiple to do some accretive acquisitions and accelerate growth.
Speaker Change: Just wanted to get a sense as to how Youre thinking has evolved here if at all.
Speaker Change: Okay.
Speaker Change: I am not.
Speaker Change: Ever been 100% against acquisitions I guess, there is never going to be I don't see a way that that a large.
M&A deal happens by the way again, you are a function of where you are growing up in the world that was a Doj when credit Suisse merged I don't think I can ever.
Speaker Change: Ever do a transaction of that magnitude.
Speaker Change: But what we did with SVP and.
Speaker Change: In my mind was as close to a an acquisition of <unk> to get to 50 bankers out.
Speaker Change: Without doing an acquisition. So I think there are is that type of a situation where you might have to accomplish it.
Speaker Change: Through as you said a purchase I'm not averse to that if it makes sense. If we're if it's the right price if it's the right culture.
Speaker Change: I think they are very difficult to do.
Speaker Change: I think the earn out method of buying those.
Speaker Change: It comes with risks they don't show up for five years, I know that to make our financials look good I think at the end of five years and when earn outs right now.
Speaker Change: Seen what can happen.
Speaker Change: So again I'm not averse.
Speaker Change: I'm, not saying I won't do it but it would be the look and feel much more like an SCB type of thing.
Speaker Change: Anything dramatic.
That's great color. Thank you guys for taking my questions.
Speaker Change: Your next question comes from the line of Mike Brown with Wells Fargo Securities. Your line is now open.
Mike Brown: Hi, good afternoon.
Mike Brown: Okay, just wanted to maybe follow up on the on the comp ratio discussion.
Mike Brown: How is the competitive landscape in terms of hiring are you finding that the fight for talent is getting tougher and resulting in a need to pay up and are you also find the correct.
Mike Brown: Ask you retain your talent and I guess I'm, just trying to figure out if there's potentially some more structural pressure on the comp costs as we start to think more about 2025 and of course I. Appreciate the comp ratio algorithm that you guys have laid out.
Mike Brown: Trying to think about that dynamic right now.
I'd say it feels fairly stable.
Mike Brown: Over the last.
Mike Brown: The only 18 months I think.
Speaker Change: There are people available.
Speaker Change: I think the market has quieted down a little but in general market. So there's always going to be 5% 10% of.
Speaker Change: People, who want to move for whatever reasons I think the large banks continue especially with this pressure.
Speaker Change: What I call as again, it's just really imagination of.
Speaker Change: Of lending from the back and go on a private credit.
Speaker Change: I think the regulators hubs.
Our.
Speaker Change: Our intent on pushing a risky credit off of the major banks balance sheet and into the private credit market I think thats whats driving that market.
Speaker Change: And as a result, I think bankers, who would tend to have gone to those banks in order to be able to provide.
Speaker Change: I call it off market credit or better credit are going to are going to become more and more available.
Speaker Change: But I think it's with stable I mean, it's hard to say overall, if you go for certain segments and there is a.
Speaker Change: A shortage in that segment.
Speaker Change: You can find some pressure.
Speaker Change: But I think talents available.
Speaker Change: And it stayed about look the market's been pretty flat I think that the.
Speaker Change: Cost of acquisition has been pretty flat for 18 months.
Speaker Change: Okay, great. Thanks for all that color.
Speaker Change: Just change gears and talk about restructuring.
Speaker Change: How is activity holding up there and when we think about the next 18 months, how do you expect restructuring activity to progress and what would be kind of the interplay between call it traditional restructuring and liability management.
Speaker Change: I think it will be more liability management and restructuring because the capital markets are open.
Speaker Change: Really the chapter 11 part of financial restructuring usually happens when.
Speaker Change: You get to a maturity and there is no. Other alternative chapter 11 is how is the last alternative that kind of a full scale restructuring.
Speaker Change: As Les last alternative and today there is aggressive money there's risk oriented money. There is a lot of capital that we will find a way to play in the capitalization and extend maturity. There's also again the liability management exercises. We do now are pretty sophisticated.
Speaker Change: The large institutions are willing to participate.
And do the analysis and if the company has a valid business usually provide runway so.
Speaker Change: That will be the dominant.
Speaker Change: The dominant part of what we call restructuring.
Speaker Change: And I think it's going to be gradual and continuous.
Speaker Change: Because of the size of the credit market just has gotten so much bigger over the last seven or eight years and it's you can almost do a regression and it's okay.
Speaker Change: Mount a restructuring liability management, you have is a direct correlate or event to how much issuance happen somewhere between two to four years.
Speaker Change: Before the event.
Just going to be a percentage of issues.
Speaker Change: And if the market's growing the liability management market will continue to grow.
Okay. Thanks, Tim I appreciate the color.
Your next question comes from the line of Aden Hall with K VW. Your line is now open.
Speaker Change: Great. Thanks for taking my questions.
Speaker Change: Maybe just a follow up on your <unk>.
Speaker Change: M&A comments or large team lift outs curious how you would characterize appetite for not just like traditional M&A bankers, but maybe some of the non M&A capabilities.
Speaker Change: Obviously private capital Advisory primary fund raising as well or.
Speaker Change: Areas that come to mind that some of your competitors have been a little more aggressive in kind of growing so any appetite there do you guys.
Have ambitions to grow in those.
Speaker Change: Verticals.
Speaker Change: Yes. The answer is yes, and yes, we are we have significant ambitions to be in there. We think it's an important part.
Speaker Change: One of the things we want to be is the most valuable and important provider of services to the private equity community and.
In alternatives private credit as well.
Speaker Change: So we're looking at that and yes, if that were.
That would be on the order something that I think would look and feel like almost an SCB when I use that it's just of the size.
Speaker Change: Yes.
Speaker Change: Oh, the size and shape that if it were something that made sense for us.
Speaker Change: Makes sense and the M&A.
Speaker Change: As well as hiring talent either way.
Speaker Change: Got it appreciate it appreciate the color there and maybe just a follow up on Brandon's question about kind of the head count more on a sequential basis it.
Speaker Change: The MD head count decreased by 5% quarter over quarter anything to call out there just seems pretty elevated but another can be some noise hearing clarifications. So I just want to clarify yes, I think what happens is.
Speaker Change: Yes.
Speaker Change: Those might have occurred.
Speaker Change: 456 months ago.
Speaker Change: Some that are voluntary or.
Speaker Change: We might give people time.
There is also a garden leave if somebody leaves.
I think those are a result of things that might have happened in and around bonus time or after right around that time, where.
Speaker Change: I'm not saying, they're all managed but we manage our head count some of them are.
Or not.
Speaker Change: On our <unk>.
Speaker Change: Things that we promote.
Speaker Change: But I do think Thats what happens it's it takes time, sometimes 456 months for an exit to show up in your head count.
Speaker Change: Got it appreciate it taking my questions.
Speaker Change: Yes.
Again, just as a reminder, if you would like to ask a question. Please press Star then the number one on your telephone keypad.
Speaker Change: Our next question comes from the line of Ryan Kidney Kenny with Morgan Stanley. Your line is now open.
Speaker Change: Hi, Thanks for taking my question.
Speaker Change: Just on the comments around longer lag to complete transactions can you just give us an update on what's still driving that is it regulatory driven is it just a longer vetting process and do you expect that lag to normalize as the cycle picks up and sponsors start coming back in force.
Speaker Change: It can be all of the above I think in the public markets.
Speaker Change: It can be some regulatory or a private markets, it's usually not regulatory.
Speaker Change: In private equity.
Speaker Change: But I do think again.
Speaker Change: These dynamics are kind of interesting you have these large organizations. It sector partners go out and we might have a product.
Speaker Change: That is attractive to them.
Yes.
Speaker Change: You might go through a long process of which.
Speaker Change: You're getting close to having a transaction.
Speaker Change: Well when it when it gets coordinated inside the larger entity.
Speaker Change: The investment committee of that entity.
Speaker Change: It might not be the right time to their capital for their fundraise needs for their exit needs.
Speaker Change: Think theres a lot of dynamics going on around positioning private equity.
Speaker Change: And in trying to figure out how much how much capital do we haven't found one when do we want to fund five whatever fund urine.
Speaker Change: When do we want to go to market I think in 2020 in 2021 again I use those markets because they were kind of.
The epitome of a bull market.
Speaker Change: The answer was we can complete that transaction and the sooner the better because if we want to go back to market and raise another fund everybody's waiting for it and we already have commitments and things will roll.
Speaker Change: The fundraising market has been very slow.
That's been if you think M&A has been painful I think the active fund raising in the private equity market was extremely slow in 'twenty three getting a little better in 'twenty four and people are hoping for a brighter 25.
Speaker Change: But I also think the.
Speaker Change: The inability to project that.
Speaker Change: Feel confident about that.
Speaker Change: I think slows everybody down in the process I think that's just one of those things that.
Speaker Change: Yes.
Speaker Change: Is lurking behind the scenes.
As part of the slowdown and so and by the way it's not always when you have a deal look through our bank office we've done.
Speaker Change: Been assigned the project.
Speaker Change: And done the diligence gotten to work on it and then it was put on hold for six months.
Speaker Change: That happens too so it's not all regulatory it's not all market, it's not all interest rates.
Speaker Change: It's a whole bunch of things that just come together.
Speaker Change: When markets are.
Speaker Change: Roger do not seem to be interest rates do not seem to be going.
Speaker Change: Rapidly in one direction and definitely the funding from private sources does not seem to be going directly in one situate one direction. So I think it's all of the above.
Speaker Change: Alright helpful. And then one technical question on the $7 million gain on Moelis, Australia shares was that a one off and any update on how Australia fits into your strategy from here.
Speaker Change: Australia has been.
Speaker Change: Well, we starting with Australia.
Speaker Change: It was purely advisory and we wanted to do advice will then they have been very entrepreneurial and we created a pretty significant public company down there.
Speaker Change: Financial now.
Speaker Change: That was a reverse inquiry they called US out they went public I think four years ago or something they called us up and.
Speaker Change: And said, we have a buyer for 5 million shares.
Speaker Change: And we just decided why not take the liquidity and and do it was helpful to them I think it is helpful to us.
We continue to do.
Speaker Change: Do things with them, we continue to use them in co advise on anything that happens in Australia <unk>.
Speaker Change: <unk> Alliance for Us and we have no plans on any of the other stocks that have happened to be reverse inquiries. So we executed.
Speaker Change: Thank you.
Speaker Change: The last question comes from the line of James <unk> with Goldman Sachs. Your line is now open.
Speaker Change: Good afternoon, I think we've seen a couple of recent successful sponsor ipos.
Starting to come up and your dialogues with private equity and do you think thats.
Speaker Change: So I mean that could lead to more activity either in ECM or M&A in that part of the market.
Speaker Change: Okay.
I think there'll be more sponsor IP or some of the transactions are large enough that finding and exit buyer.
Speaker Change: Is difficult.
Speaker Change: Very successful large buyouts, and but having even larger exits.
Speaker Change: The IPO market I think is an obvious place for them to go and look again with the.
Speaker Change: The stock market at all time highs in interest rates coming down you would expect to see an IPO market develop its actually kind of a strange nasdaq's at an all time high so it's kind of strange that there is no IPO market and I think.
Speaker Change: If people come to market with the right price with quality product that there will be an IPO market and people will take advantage of it.
Speaker Change: Okay. Thanks.
Speaker Change: Quick one here, maybe any way you could just size the percentage contribution to revenue this quarter from restructuring capital markets versus M&A.
Speaker Change: Yes, I think <unk>.
<unk> was about 60 and all the other was about 40.
Speaker Change: So that's been pretty consistent throughout the year.
Speaker Change: Okay. That's really helpful. Thanks, a lot.
Speaker Change: At this time there are no further questions and I would like to turn it back over to Mr. Ken Melissa. Please go ahead.
Ken Melissa: Thank you very much I appreciate it look forward to talking to you after the end of the year.
Speaker Change: This concludes today's conference call you may now disconnect.
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