Q4 2024 PJT Partners Inc Earnings Call
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Speaker Change: Good day, and welcome to the PJT Partners Fourth Quarter 2024 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.
Speaker Change: Thank you very much and good morning and welcome to the PGAT Partners full year and fourth quarter 2024 Earnings Conference Call.
Speaker Change: I'm Sharon Pearson, Head of Investor Relations at PJT Partners, and joining me today is Paul Taubman, our Chairman and Chief Executive Officer.
Speaker Change: our Chief Financial Officer. Before I turn the call over to Paul, I want to point out that during the course of this conference call, we may make a number of forward-looking statements.
Speaker Change: These forward-looking statements are subject to various risks and uncertainties, and there are important factors that could cause actual outcomes to differ materially from those indicated in these statements.
Speaker Change: I want to remind you that the company assumes no duty to update any forward-looking statements and that the presentation we make today contains non-GAAP financial measures which we believe are meaningful in evaluating the company's performance.
Speaker Change: For detailed disclosures on these non-GAAP metrics and their GAAP reconciliations, you should refer to the financial data contained within the press release we issued this morning, also available on our website. And with that, I'll turn the call over to Paul. Thank you, Sharon. Thank you all for joining us today.
Earlier this morning, we reported record-setting full-year 2024 results.
Paul Taubman: Highlights include Record Revenues, Record Adjusted Pre-tax Income, and Record Adjusted EPS.
Paul Taubman: For the full year 2024, revenues were $1.49 billion, up 29% year-on-year.
Adjusted pre-tax income was $278 million, up 52% year-on-year.
And adjusted EPS was $5.02 per share, up 54% year-on-year.
Paul Taubman: This strong performance was broad-based as PJT Park Hill, restructuring, and strategic advisory all delivered record performance.
Paul Taubman: Our substantial pre-cash flow generation enabled us to direct a record $333 million to share repurchases.
Paul Taubman: while still ending the year with a record cash balance of $547 million.
Paul Taubman: Our 2024 performance reflects continued progress in building the best advisory-focused investment bank through sustained, disciplined investment.
and a competitively advantaged culture.
Paul Taubman: We remain committed to building upon this strong momentum through further investment.
Paul Taubman: After Helen takes you through our financial results, I will review our business performance, recruiting initiatives, and outlook in greater detail. Helen? Thank you, Paul. Good morning. Beginning with revenues.
Helen: For the full year 2024, total revenues were $1,493,000 up 29% year-over-year, and as Paul mentioned, we had record revenues in all of our businesses.
Helen: For the fourth quarter, total revenues were $477 million, up 45% year-over-year, also reflecting year-over-year growth across all of the businesses.
Helen: Turning to expenses, consistent with prior quarters, we've presented the expenses with certain non-GAAP adjustments, which are more fully described in our 8K.
Helen: First Adjusted Compensation Expense. Fully Adjusted Compensation Expense was $1,030,000,000 representing a compensation ratio of 69%, which compares to 69.8% for the full year 2023.
Helen: We expect our full year compensation ratio will decline in 2025 and we will provide more specific guidance when we report our first quarter results.
Helen: Turning to adjusted non-compensation expense, total adjusted non-compensation expense was $185 million for the full year 2024, up 12% year-over-year.
Helen: The largest driver of the year-over-year increase was higher occupancy costs.
Helen: The increase also reflects higher travel and related expense and continued investment in communications and information services.
Helen: In the fourth quarter, total adjusted non-compensation expense was $47 million, up 8% year-over-year. And as a percentage of revenues, our adjusted non-compensation expense was 12.4% for the full year and 9.8% for the fourth quarter.
Helen: Overall, we expect our total non-compensation expense in 2025 to grow at a similar rate to 2024, with the highest contribution to growth coming from travel expense driven by increased business-related activity, as well as continued investment in our technology and data infrastructure.
Helen: Turning to adjusted pre-tax income, we reported adjusted pre-tax income of $278 million for the full year 2024 and $107 million for the fourth quarter. Our adjusted pre-tax margin was 18.6% for the full year and 22.4% for the fourth quarter.
Helen: The provision for taxes, as with prior quarters, we've presented our results as if all partnership units had been converted to shares and that all of our income was taxed at a corporate tax rate.
Helen: Our effective tax rate for full year was 20.6% as we realized a significant tax benefit from the delivery of vested shares. The 20.6% rate was slightly below our previous estimate of 21%.
Helen: We expect our 2025 effective tax rate to be at or below 2024 level given the continuing tax benefit from the delivery of vested shares and we will provide a refined view at the end of the first quarter.
Helen: Earnings per share are adjusted if converted earnings were $5.02 per share for the full year compared with $3.27 in 2023 and $1.90 for the fourth quarter compared with $0.96 for the fourth quarter of 2023.
Helen: On the share count for the year ended 2024, our weighted average share count was 44.1 million shares, which grew by about 2.3 million shares, or 6% year over year.
Helen: The increase in the share count was due to both the share price increase and the achievement of price hurdles for performance awards.
Paul Taubman: During the year, as Paul mentioned, we repurchased 3.1 million share-in-share equivalents, including the repurchase of 489,000 share-in-share equivalents in the fourth quarter.
Paul Taubman: In terms of our fully diluted share count, we ended 2024 with 46.7 million shares, up just over 1% year over year.
Paul Taubman: Consistent with our capital priorities, we will continue to invest in the franchise while using excess cash to, over time, reduce our share count.
Paul Taubman: On the balance sheet we ended with a record $547 million in cash, cash equivalents and short term investments and $490 million in networking capital and we continue to have no funded debt outstanding.
Paul Taubman: Finally, the board has approved the dividend of $0.25 per share. The dividend will be paid on March 19, 2025, to Class A common shareholders of record as of March 5, 2025. And with that, I'll turn it back to Paul. Thank you, Helen.
Speaker Change: Beginning with restructuring, liability management continues to be the principal driver of activity as corporates and sponsors confront elevated interest rates
challenged business models, technological disruption, and changing consumer preferences.
Speaker Change: Our global restructuring business again ranked number one in announced restructurings globally and in the U.S., and again delivered record results, surpassing 2023's prior record performance.
Turning to PJT Park Hill.
Speaker Change: while global primary fundraising volumes declined for the third straight year.
Speaker Change: Our performance ran counter to this trend with meaningful increases in capital raised and revenues realized.
Speaker Change: In private capital solutions, our business benefited from both a strong macro environment as well as market share gains.
Speaker Change: Differentiated performance in both primary fundraising and private capital solutions enabled PJT Park Hill to deliver record revenues in 2024
besting our previous record results achieved in 2022.
Turning to strategic advisory.
Speaker Change: Our strategic advisory business also delivered record results in 2024, surpassing our previous high-water mark set in 2021.
Speaker Change: Even with 2024 worldwide completed volumes, down nearly 50% from 2021 levels,
Speaker Change: We achieved this record performance through significant market share gains, as we benefited from an expanded industry and geographic footprint, enhanced capabilities,
and Greater Brand Recognition.
on the talent front.
Speaker Change: We had another strong recruiting year in 2024, expanding our industry and geographic coverage, as well as enhancing our overall advisory capabilities through a sustained influx of senior hires.
Speaker Change: We intend to remain forward-leaning in our recruiting efforts as we continue to build out our strategic advisory franchise.
Speaker Change: Over the past five years, our steadfast efforts to attract best-in-class talent have resulted in a 50% increase in partner count.
Speaker Change: furthering our coverage footprint and contributing to the substantial growth in firm-wide revenues.
As we look ahead,
Speaker Change: We expect the macro backdrop for primary fundraising to remain challenging in 2025, while the private capital solutions business should continue to experience secular growth.
Speaker Change: In restructuring, we continue to believe we are in a multi-year cycle of elevated activity in liability management.
Speaker Change: and we expect 2025 to be another active year for our liability management team.
Speaker Change: In strategic advisory, we expect to see higher levels of global M&A activity in 2025 as activity levels continue to normalize.
Speaker Change: We remain focused on further expanding our firm-wide capabilities by broadening our industry and geographic reach. We continue to focus on providing clients with differentiated advice and differentiated outcomes.
Speaker Change: And as before, we remain confident in our near, intermediate, and long-term growth prospects.
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Speaker Change: Ladies and gentlemen, at this time, the floor is open for your questions.
Speaker Change: To ask a question, please press star 1 of your telephone keypad. To get out of the queue, please press star 2. And we will take our first question from Devin Ryan with Citizens J&P Securities. Please go ahead.
Devin Ryan: Good morning, Paul. Good morning, Helen. How are you? Good morning. Very well. Good morning, Devin.
Devin Ryan: Great. I want to start with a question that touches on both the environment and productivity. And I appreciate that partner productivity
Devin Ryan: It's just an output, but $13 million per year in banking partner in 2024 is a new record, just above 2020.
We're structuring bankers, roughly 15% of the partners.
Devin Ryan: were obviously well above average, maybe pushing two times the productivity is kind of our estimate. So maybe a little bit of upside there, but they're doing great and pulling the average up. And then Strategic Advisory had a record year, as you mentioned, but seemingly still has a lot of upside, you know, as productivity and the environment improves. And so
Devin Ryan: Just thinking about the broader backdrop for productivity, you know, how would you frame where each business
Devin Ryan: is today relative to its potential, just given that you have brought in so many bankers and then you have the environment, particularly in areas like M&A and for Park Hill, recovering from tough levels.
Devin Ryan: Well, you asked a question where I can give you some general guardrails, but it's hard to be overly prescriptive because a lot of this is a function of the operating environment.
that is presented to you.
Devin Ryan: And clearly, as the environment becomes more active, all else equal, you're going to see an increase in productivity. So what we focus in on is...
for a Constant Macro Environment.
Do we see productivity upside?
and the answer to that is an unequivocal yes.
Devin Ryan: So, if we were to go back and rerun 2024 today,
Networks are now built.
We have greater footprint. We have more continuity.
We have greater brand recognition.
Devin Ryan: We have a lot of attributes today that we didn't have 12 months ago, and I expect 12 months from now we'll have more of those attributes. So I never like to talk about...
Devin Ryan: A dollar number for a couple of reasons. Our bankers aren't producing widgets, they're giving best-in-class advice.
Devin Ryan: And sometimes you can make progress, but there's no crystallizing event, not because there's an issue with the platform, but because it's not the right time either for your clients.
Devin Ryan: or it's not the right macro environment. But if you said to me, what's the direction of travel? It's up and to the right. Now, if you then said, where do you expect the greatest upside to be, not surprisingly, it's in the least mature of our businesses, which would be strategic advisory.
Thank you.
Devin Ryan: Well, I think I've said, I think I look back just in preparation and I look back on
Devin Ryan: What we said after the second quarter, what we said after the third quarter, I think we've been remarkably consistent that we're set up very well to deliver comp leverage beginning in 2025.
I think we delivered, if you will, a little early.
Devin Ryan: trying to manage this business on a quarter-to-quarter basis, what I've suggested from the very beginning is if you go back and you need to look at your comp expense,
over a multi-year period.
Devin Ryan: because when there are, you know, on-boarding costs through buyouts and the like.
Devin Ryan: Those get amortized over a period of time. You then have bankers who are on the platform who are just ramping up. There's a mismatch, and it doesn't go away.
Devin Ryan: You know that the moment of the quarter or even the year after they're on boarded and you need to look at the totality of The investment and you need to look at where the revenue recognition is and you need to take a multi
Devin Ryan: multi-year lens to all of that. And what I've said consistently is, if you go back to 2021,
The good news is we have
surpassed our 2021 Strategic Advisory Revitas in 2024.
Devin Ryan: But, the reality is we have a lot more individuals on the platform today, and whatever revenue growth you've observed over three years, you know, pales in comparison to the growth in headcount over those three years.
Devin Ryan: I think when we move forward and we don't look at a 21-24
Devin Ryan: we look at a 21 to 25, that starts to change meaningfully and that's why we said you should expect to see
Meaningful Comp Leverage beginning in 2025.
Devin Ryan: But it's just too early to determine exactly how much. But we've been on a journey. We said when we hit 69.8 that we thought that was as high as it would go, that we had swam as far offshore.
Devin Ryan: and it wouldn't necessarily get better, but it certainly wouldn't gap out further from there. I think we held to that.
Devin Ryan: Then we got into this year, we said, we think we're starting to swim.
Devin Ryan: slightly closer to shore, and we had an accrual that was just a bit better. I think we finished the year a little bit better. But as you look at the arc of all of this,
Devin Ryan: It's going to be twenty-five and beyond where you'll start to see us return to more quote-unquote normalized levels.
Devin Ryan: And then Devon, you'd ask about deferrals. The deferral rates vary year to year.
Devin Ryan: But if you look over the last few years and you look at the average, in 2024 we would say the deferrals were below average, in 2023 they were probably above average, so we definitely had a lower deferral rate in 2024, but nothing significant in terms of changing the philosophy or the structure.
Speaker Change: Yeah, yeah, I appreciate that. Okay, well, thanks so much and yeah, congrats on a record year. Great year. Thank you.
Thank you.
Speaker Change: Thank you. And we will take our next question from James Yarrow with Goldman Sachs. Please go ahead.
James Yarrow: Good morning and thanks for taking my questions. Paul, I'd just like to touch on the economic growth dichotomy between the U.S. and Europe and the ramifications of that for M&A. So GDP seems to be falling slightly in Europe versus growing fairly well in the U.S. and rates are falling as a result faster in Europe but less so in the U.S. Weighing up these impacts, maybe you could just compare and contrast the health of the M&A backdrop and outlook for each jurisdiction.
James Yarrow: Well, you know, I think clearly the U.S. economy is the envy of the world, and it's a remarkable growth engine, and certainly when you compare it to two other countries, that continues to be the case.
James Yarrow: So when you ask, though, about M&A activity, presumably it's from where we are today.
James Yarrow: and what do the vectors, where are they pointing? And if you said to me from where they are today, I actually think a case could be made.
James Yarrow: At some point, you have to ask yourself whether that valuation disconnect, you know, over penalizes European companies. And just to be a bit contrarian...
James Yarrow: I am of the view that that probably starts to narrow, maybe not instantaneously, but I think there's a perception that there's greater value to be had in Europe, so I think that potentially creates a little bit of a catalyst to activity in Europe.
James Yarrow: I also think that European governments are keenly aware that they need to stand up stronger European champions.
James Yarrow: And I wonder whether or not we're going to see a more constructive view on consolidation.
and mergers within Europe.
James Yarrow: from European company combining with other European companies to better compete on the global stage.
and I think that that's a positive.
James Yarrow: And then the reality is there are a lot of European companies that want to increase their exposure and access to the U.S. market. So all of those things...
James Yarrow: I think suggest that all is not lost in Europe and that that's one of the reasons why we've made a concerted, continued effort to build out our franchise in Europe.
We've had great success.
James Yarrow: and as you have more and more multinational companies who are in each other's market, you cannot have a leading practice without having a leading European franchise. And with every passing day, we are further along in that journey and we are quite proud of what we've built in Europe.
Speaker Change: Thanks so much, Paul. Maybe just one more on advisory here. You know, obviously very strong results in the quarter. You talked about stronger strategic advisory being the driver there. But any additional color you could just give on the drivers of the strength. I am estimating the highest multiplier on deal logic revenues this quarter since 2019.
Speaker Change: And then separately, on secondaries, I think I've seen some industry estimates that secondary volumes up.
for today.
I think this quarter, the standout for this quarter
Speaker Change: was strategic advisory, no matter how you look at it. If you look at it sequentially or you look at it year on year, it was strategic advisory.
Speaker Change: If you look at it over the entire year, all of the businesses were standout performers.
Speaker Change: I think on a percentage increase. Clearly the Park Hill business was up the most on a percentage increase, but not necessarily on a dollar increase. But we benefited from strength across all of our businesses.
Speaker Change: and you start to see a bit of the power of the franchise, but we're not really operating in anywhere near ideal strategic advisory conditions.
Speaker Change: We're still looking at M&A activity levels that are far down from peak levels, far down based on traditional metrics of activity, the GDP.
Speaker Change: to global market capitalization. As I mentioned before, the primary fundraising business continues to be quite challenged. There's no doubt that secondaries is a great spot. It's a very important part of our business.
Speaker Change: and we are a leader in that business and I expect that to continue. I don't spend a lot of time focusing on
Speaker Change: what some reports suggest is going to be up and whether or not, because...
Speaker Change: The reality is no one knows for sure, but as I look out further, I get greater clarity. So I could look out three years, five years, and I think there's...
Speaker Change: many compelling reasons as to why our private capital solutions business should benefit from both, you know, long-term secular trends
as
Speaker Change: Owners of assets in the private market want to add other liquidity alternatives to portfolios. I continue to think that IPOs.
Speaker Change: for many of these companies become less attractive options than this.
Speaker Change: presents another quite attractive option that is ever more interesting to the owners of these assets. I think the issue has been that the amount of capital that's dedicated to this asset class pales in comparison to the ultimate...
Speaker Change: The ultimate demand and as you marry that capability with our best-in-class fundraising distribution efforts through the PJT Park Hill business We have unique abilities to attract more capital to the class and to have a superior
Speaker Change: track record in terms of being able to execute on these transactions. So it's kind of all of the above.
That's very clear. Thanks so much. Thank you, James.
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Speaker Change: Thank you. And we will take our next question from Brennan Hawkin with UBS. Please go ahead.
Speaker Change: Good morning, this is Marc Pelluccion for Brennan Hawkin. Thanks for taking my questions. You had a record year in restructuring and I was hoping you can help us understand how much that was up versus 2023 and do you still believe revenue growth in 2025 and restructuring is feasible?
Speaker Change: It's absolutely feasible. I'm not prepared to guarantee it, but it's certainly feasible. I mean, we're in a multi-year wave of extended activity and liability management. If you look at 2019 to 2024,
Speaker Change: One thing that may surprise you is default rates are pretty much on top of one another. What's changed is the quantum of debt outstanding. So if you take a similar percentage and apply it to a much larger debt stack, guess what? You have a lot more activity.
Speaker Change: It doesn't look as if rates are coming down nearly as fast as others, including myself, had thought. It's a bit stubborn on the long end.
Speaker Change: You have all this economic uncertainty, tariffs and the like. I imagine that the amount of pain or, you know, number of companies who find themselves wrong-footed either to a different, you know, trade and tariff
Speaker Change: Framework or technological change or consumer preference changes or the like, they're not going away.
Speaker Change: And I think it's a very important part of our business, and I expect it to be a very important part of our business going forward. And we knew going into the year it would be active, but it could have been down a bit and still been highly active.
Speaker Change: and near record. It turned out it was yet another record. I think it was comfortably another record, but probably the growth rate in that business was slower up than our other two businesses this year, but that's just a reflection.
Speaker Change: of the other businesses having a different mix of opportunities in front of them.
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Speaker Change: And what do you expect to be the implications if sponsors don't have that option for monetization? Thank you. Well, I appreciate the question, and I think it goes back to what I said a few moments ago on the last question. I think it probably feeds into, you know, greater interest.
Speaker Change: and Deployment of Fund Continuation Vehicles and the like to create liquidity for assets. And probably, at some point,
Speaker Change: It creates more impetus for there to be outright sales of companies rather than taking them public. And one of the challenges is...
Thank you.
Speaker Change: There are so many assets that are owned by sponsors that are very large.
Speaker Change: and that still have large amounts of leverage. And as a result, it means that a lot of the primary capital where you'd IPO it is likely to go for debt reduction rather than...
Speaker Change: monetization of the GP ownership and then it means given the size of the business
Speaker Change: the long period of time it might take to go public, I mean to be fully out of the business just as you have future sell-downs, and then when you think about the number of companies that are all competing to be taken public
and with a somewhat...
Thank you very much. Bye-bye.
Speaker Change: mixed record of IPOs, I just think it makes that option
Speaker Change: less attractive, and it means more M&A of portfolio companies if possible, and to the extent you have companies that are perhaps too large for other sponsors to acquire, I think that fits very, very nicely into the narrative of greater fund continuation activity.
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Great. Thanks for taking my questions. Absolutely. Thank you, Mark.
Speaker Change: And while you're certainly correct on 24, you know, quarter to date announced M&A volumes are tracking down about 10% year on year.
Speaker Change: from you as well as many of your peers and the trends that we're actually seeing in announcements according to date.
Speaker Change: and when we could actually begin to see activity for the broader industry begin to accelerate more meaningfully.
Speaker Change: Well, first of all, I'm optimistic about our business, and I've always said we're a micro story more than we are a macro story. And I think we have tremendous white space in front of us and opportunity to...
Speaker Change: grow our coverage footprint and to interface with more clients and to serve more clients and even if Volumes are flat. I think our business can grow materially and can do so for an extended period of time but on the on the macro
I do believe that we are
Speaker Change: heading towards a normalization of M&A activity and if you go back
and look at where we've been.
Speaker Change: 21 was aberrational in terms of level of activity, and I don't suspect we're getting back anytime soon to 21.
but after two punishing years of 22 and 23.
Speaker Change: If you recall, we had the view that it would be a modest, slow recovery, and I believe the market ended up approximately 14% in 2024, but as I just said a few moments ago, on almost every metric,
It is well below historical norms.
Speaker Change: And we think that there are a lot of constructive conditions that suggest that we should get more of a normalization trade. And that's not just a 20... a 25... a 24... I'm sorry, a 25 phenomenon, but that's...
Speaker Change: Now, as far as the data, everybody has their own data sources. When I look at January, I'd make two observations. Number one is January is typically the month of January.
Speaker Change: a slow month for activity levels. And if you go back 10 years and you take January and you multiply it by 12, I think 7 out of 10 or 8 out of 10 times, you end up with an annualized level that's less than what the actual year is.
I do recognize, though,
Speaker Change: that the news flow that we're experiencing every day as it relates to terrorists and the like...
Speaker Change: It will take some time to clarify, and I do think that is having a short-term impact. My expectation is this is the storm before the calm.
Speaker Change: And I think that being the case, I would expect that as we get further into the year, you're likely to see an acceleration of activity. And I think a lot of the debates we're having...
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how restrictive
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Speaker Change: What I think almost everyone can agree on is, taken in its entirety, it's going to be more favorable than what we experienced in 2004. We can just debate the magnitude of it. So I continue to think we're in a multi-year normalization trade here because...
There are a whole host of companies who are...
Speaker Change: quite desirous to transform their businesses. They either need to be out of certain businesses where they no longer are scale players, or they need to double down.
Speaker Change: I think there's a more favorable environment in this administration than there was in the last administration.
Speaker Change: I think at some point it's less an issue about where rates are and more an appreciation that the rate environment is likely to stay.
Speaker Change: And when people talk about are rates too high or rates too low, I think what they miss is the most difficult time to do M&A is when rates are high and everyone thinks they're coming down.
because when everyone thinks they're coming down, sellers don't sell.
Speaker Change: 2025, but I still have every expectation it will be an up year and it'll be just another continuation of that normalization.
Devin Ryan: That's helpful. And for my follow-up, also, I guess, on the strategic advisory business, now, Paul, when you entered last year with what you, I believe, categorized as an abnormally depressed backlog, but yet you were able to deliver record results in strategic advisory, which would imply that you've seen a pretty significant improvement in the velocity or the turnover of that backlog.
Devin Ryan: So it would be great to get a sense as to where we are today in terms of time to close transactions relative to what you would categorize as more normal levels.
Devin Ryan: And given, you know, many of your peers have continued to cite this elongation of deal timelines, you know, why would you be seeing a more significant improvement here relative to your peers?
Devin Ryan: I mean I can't really comment on anyone other than ourselves. We came in the last year with a historically low level of announced pending close but I also said that we had a very robust
pre-announced pipeline.
Devin Ryan: And I think what ended up happening was we had a lot of transactions that had yet to be announced.
that were announced.
and we had a very broad base of assignments.
Devin Ryan: And there weren't that many very large deals that closed in the year for us. I think we have a much bigger backlog of large transactions.
that we expect to close in 25.
So that's kind of our
Devin Ryan: our story, and you are correct that as the year went on, we became more optimistic.
about 24.
We've always been optimistic about 25 and beyond.
Thank you. Bye.
Speaker Change: That's great, Collier. Thank you for taking my questions. Absolutely. Thank you.
Speaker Change: Thank you. And we will take our next question from Aiden Hull with KPW. Please go ahead.
Speaker Change: Great, good morning everyone. Thanks for taking my questions. Maybe just a follow up on Brendan's question, but more on the...
and a backlog of activity for restructuring. It sounds like...
Speaker Change: The pipeline for advisory is considerably higher. Park Hill and kind of both lines of business there continues to see strong momentum.
Speaker Change: Curious how you would characterize the restructuring backlog relative to maybe this time last year. So like flat or slightly lower. Anything to kind of help contextualize that would be appreciated.
Speaker Change: I'd just say broadly consistent. I mean, we were quite active last year. We're quite active now. We think we're in a multi-year period of extended activity.
Speaker Change: And if you go back, I think most of the investor concerns about that business for us was that it would somehow kind of, you know...
Speaker Change: come plummeting back to earth, and we've said consistently that's not the case. That continues not to be the case, but when year in and year out you're delivering a record result, it's very hard to calibrate. Is it going to be yet another record? It may well be.
Speaker Change: I'm not suggesting that it couldn't be. I'm just not prepared to tell you it will be. And what I am prepared to tell you is that it's very robust activity. We are a market leader. And as I look at the macro conditions out there, I don't see them...
becoming less hospitable to liability management.
Speaker Change: I appreciate that color. Maybe just as my follow-up on the talent and the outlook for 2025.
Speaker Change: I can appreciate you guys have a lot of white space and advisory, but any main areas of focus you're trying to really focus on right now, or teams that you think you're on the cusp of being at critical mass that you may need a couple more bankers in. And then just as a base case, any way to be thinking about hiring expectations in 2025?
Speaker Change: Look, on the hiring expectations, we've got the micro is helping us and the macro is hurting us. So the micro is, like, every day that goes by,
that we deliver success.
Speaker Change: and we deliver success for clients, and that we have more folks who come over from other platforms and see that this is a differentiated platform, it's a better place to work, and it's a better position to support their clients.
Speaker Change: It just makes our story easier. So every day that goes by, we have an easier story to communicate to potential hires.
I've also said, though, that when the world heats up,
Speaker Change: That makes it harder, from a macro perspective, for talent to leave their incumbent position, whether they're happy or not, just because when they're sitting atop a lot of activity, no one really enjoys.
Speaker Change: having to take their gardening leave and the like. So, I think we've got the micro tailwinds, we have the macro headwinds. That's one of the reasons why
We were so
Speaker Change: focused on continuing the recruiting and the depths of the M&A market in 22 and 23. We're going to continue to do it.
Speaker Change: We have a long pipeline of highly attractive candidates that we're in discussions with, and I expect to see meaningful conversions of those, but the timing and pacing of that is hard to know. And as far as where we have white space, me and my sort of...
Speaker Change: answer is pretty clear. It's almost everywhere. There's almost no place where we wouldn't benefit.
Speaker Change: Rule number one is make sure you have more intellectual capital and better intellectual capital than anyone else. That is our investment philosophy, and that is unchanging.
Speaker Change: We'll leave it there. Appreciate the call, Eric Paul. Thank you.
Speaker Change: Thank you. That concludes our question and answer period. I would now like to turn the call back over to Mr. Taubman for closing remarks.
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