Q2 2019 Earnings Call
I would now like to turn the conference call over to your host Evercores head of Investor Relations.
Jamie Easton. Please go ahead ma'am.
Good morning, and thank you for joining us today for Evercores second quarter, and first half 2019 financial results Conference call I am Jamie Easton Evercores head of Investor Relations.
Joining me on the call today are Ralph Schlosstein, our President and Chief Executive Officer, John Weinberg, Our executive Chairman and Bob Walsh, our CFO . After our prepared remarks, we will open the call for questions.
Earlier today, we issued a press release announcing Evercores second quarter and first half 2019 financial results. The Companys discussion of our results today is complementary to that press release, which is available on our website at Evercore Dot Com. This conference call is being webcast live on the for investors section of the website and an archive of it will be available for 30 days beginning approximately one hour after the conclusion of this call.
I want to point out that during the course of this conference call. We may make a number of forward looking statements. 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.
These factors include but are not limited to those discussed in Evercores filings with the Securities and Exchange Commission, including our annual report on Form 10-K quarterly reports on Form 10-Q , and current reports on form 8-K, I want to remind you that the company assumes no duty to update any forward looking statements.
In our presentation today, unless otherwise indicated we will be discussing adjusted financial measures, which are non-GAAP measures that we believe are meaningful when evaluating the company's performance for detailed disclosures on these measures and the GAAP reconciliation you should refer to the financial data contained within our press release, which as previously mentioned is posted on our web site.
We continue to believe that it is important to evaluate evercores performance on an annual basis. As we noted previously our results for any particular quarter are influenced by the timing of transaction closing I'll now turn the call over to Ralph Thank you, Jamie and good morning, everyone.
We are pleased with our results for the second quarter and the first half of 2019.
As advisory revenues continue to drive our growth.
In fact, our second quarter and first half advisory revenues reflect the second best results for any quarterly or half year period in our history.
We anticipate that these results will drive further market share gains in advisory revenues, among all publicly traded firms.
Our market position in advisory has never been stronger.
Among independent firms in the first half of 2019, we finished number one in the dollar volume of announced M&A transactions, both globally and in the U.S.
In fact globally the volume of our announced M&A transactions was more than the next five independent firms combined and in the U.S. It was larger than the next eight firms combined.
Among all firms we were in the top five globally and rank higher in the U.S., depending upon which data source you use as John will discuss we also were involved in many of the largest transactions announced year to date.
Strong revenue enabled us to deliver Sop solid operating margins for the periods, while simultaneously investing in the future growth of our business.
Seven new advisory senior managing directors have committed to joining our advisory business.
Three have already started with the remaining four expected to join in the third and fourth quarters, we expect to announce the remaining four bankers when they have completed their garden leave and are permitted to join us.
We still have several active discussions underway. So we could end the year with a record number of new SMB hires and advisory.
Overall, we ended the quarter with 107 active or announced advisory senior managing directors.
We have also added five senior research analyst strengthening our coverage and consumer retail healthcare and technology as well as enhancing our coverage of us public policy research.
Our strong results supported significant capital returns to our investors consistent with our long term capital return objectives.
Through the first half of 2019, we returned $271.3 million to our shareholders.
Through dividends and share repurchases and our share repurchase activity.
Represented two and a half million shares at an average price of $85.23.
Let me now turn briefly to the quarterly and first half financial results.
The second quarter 2019, net revenues were $535.8 million up 18% versus the year ago period.
And a record for our second quarters in investment banking advisory fees were $443.8 million in the quarter up 22% versus the year ago period underwriting fees were $16.9 million down 20% versus the year ago period.
Commissions and related fees were $48.3 million down also 5% versus a year ago.
In investment management asset management, and administration fees were $14.7 million up 3% versus the year ago period.
Net income was $101 million for the quarter up 21% versus the year ago period and earnings per share was $2.07 up 25% versus the year ago period.
Indicative of our size shrinking.
Shareholder base.
The operating margin for the quarter was 25.8% versus 25.5% a year ago.
Our compensation ratio was 58% for the quarter.
Non compensation costs for the quarter were 86.7 million up 14% versus the year ago period.
This increase reflects both the growth in personnel at the firm as well investments being made to sustained growth over the longer term, particularly in additional space and technology.
Bob will comment on this further in his remarks.
Turning to the first half results net revenues were $955.6 million up 4% from last year.
Operating income was $234.2 million down 2.6% from last year caused by the higher compensation and non compensation expenses.
Net income was 182.7 million and EPS was $3.73 down, 7% and 4%, respectively, reflecting a higher tax rate as well as higher compensation and non compensation expenses.
Our operating margins for the first half were 24.5%.
Let me now turn the call over to John to discuss the current market environment and comment further on our investment banking business.
Thank you Ralph the elements that drive healthy M&A market are still in place and supportive of strategic M&A and capital raising transactions the economic environment remains accommodative.
Particularly in the United States.
Board and CEO confidence generally remain high further capital is available and the potential for increased activity from both activists and sponsors remains high.
Technology media, and telecommunications and industrials and energy have being the most active sectors based on announced volumes are levels of engagement and activity continue at a strong level and most sector activity focusing on both M&A and strategic and capital advisory assignments.
We are pleased to have completed the first half of the year ranked fifth globally number one among independents in the league tables for announced transactions significantly we had the privilege of advising clients on four of the five largest transactions announced.
Equity capital markets activity has been mixed given equity market volatility the second quarter saw a large saw a number of large ipos come to market, particularly in technology and our dialogue with issuers remains active in equities, we continue to see clients reduce the volume of research they receive and refine how they pay for research and the level of payment.
Quality continues to be an important differentiator as we continue to show assure that we are compensated appropriately for the value we deliver.
Let me now briefly comment on our investment banking results.
As Ralph mentioned, our advisory revenues are strong a testament to our success in serving our clients with excellence and distinction.
In the past in the path for in the first half we advised on some of the largest and most complex assignments globally, including four of the five largest transactions announced year to date and 10 of the top 25. Several of these transactions leveraged and showcased multiple capabilities, including debt and hedging advisory tax advisory strategic shareholder advisory and our equities platform. Our broad range of capabilities allows us to more deeply serve our clients and contribute meaningfully to our growth.
Advisory revenues for the quarter remain diverse and reflected contributions from multiple sectors and capabilities, including financials energy technology and media and telecommunications.
Health care.
Consumer retail and industrials.
In the second quarter, we had 225.
Fee paying clients up from 216 in the same period last year, we earned 81 fees greater than $1 million in the quarter in comparison with 85 in the period a year ago.
Underwriting fees for the quarter were $16.9 million as several large deals were postponed to the third quarter. During the second quarter. We participated in 16 transaction 10, which we held the role of Bookrunner.
While we are still most active in health care, we are increasing participation and technology and real estate, we plan to broaden out our sector reach overtime.
Our debt advisory and restructuring teams remain very productive as they continue to focus on refinancings liability management and debt capital Advisory globally, and we also continued to expand the breadth of capabilities, we offer to the financial sponsor community.
As Ralph mentioned, our recruiting efforts have been very successful to date and our high level and careful investment and talent rim remain a strategic imperative.
The announced and committed Smbs will not only strengthen our M&A bench and deep sector expertise, but will also broaden our geographic presence in Europe and the middle East.
We remain active in discussions with additional candidates and it is possible that 2019 will be the strongest recruiting year in our history.
Let me now turn the call to Bob to discuss our GAAP results and other financial matters.
Good morning.
Beginning with our GAAP results net revenue that is.
There is a third 1 million 1.7 billion.
Dollarseighty eight respectively.
A record for a second quarter.
They were a record.
Phases that revenues.
Were 946.4 million.
4%.
Net income.
Fair.
$149 million.
Consistent with prior periods, our adjusted results for the quarter excludes certain items that principally related to our acquisitions and dispositions will also share count associated with those acquisitions.
Specifically, we adjusted for costs associated with the best in class.
Units rented.
For the quarter, we expense $3.7 million related.
Our adjusted results for the quarter.
Hello.
Okay.
Turning to other.
<unk> revenues are up significantly.
Peter.
This increase primarily reflects eight.
Hey, great good use.
Yes, it's about.
Looking at non compensation.
Yes.
Okay, 5% from the prior quarter.
On a year over year.
Yes.
The growth investments.
Marketing partner.
Yes.
800 employees.
9%.
Just to note again in the fourth quarter 28.
We revised our adjusted presentation will eliminate the netting of revenue.
Expenses related to.
Related to client expenses.
Expenses associated with revenue sharing engagements with third parties and provisions for uncollected receivables. This adjustment brought our results more in line with our US GAAP presentation and the presentation of our peers and had no impact on operating income net income or earnings per share.
Turning to taxes, our GAAP tax rate for the quarter was 24.8% as compared to 23.8% in the same period last year, our share count for the second quarter for adjusted earnings per share was 48.7 million shares lower in comparison with the prior quarter, driven principally by share repurchases and on a GAAP basis. The share count was 43.4 million shares.
Finally, looking at our financial position, we hold $591.4 million of cash and marketable securities at June Thirtyth 2019, with current assets exceeding current liabilities by 651.6 million. We continue to carefully evaluate the composition of our liquid assets in light of both investments to support growth in our deferred cash compensation program commitments.
As a reminder, we adopted the new accounting guidance on leases.
During the first quarter, which replaced which plate replaced existing lease guidance.
This resulted in the recognition of $217.9 million of lease liabilities on the balance sheet as of June Thirtyth 2019, along with associated right of use assets.
There was no meaningful impact to our income statement as a result of this adoption.
I will now open the line for questions.
Thank you Sir we will now begin the question and answer session. As a reminder, if you have a question. Please press the star followed by the one can your Touchtone phone I would now like to withdraw your if you would like to withdraw your question. Please press the pound key.
If you are using speaker equipment, you may need to lift the handset before making your selection. Our first question is from the line of Devin Ryan with Jim JMP Securities.
Hey, great good morning, everyone.
Morning, David.
So first question is.
I look at the senior managing director footprint today relative to where I was heading into 2018.
It's up over 20% and based on your comments on the market backdrop for advisory remains favorable yet when I look at forward expectations, there's virtually no revenue growth implied, particularly this year and it seems that after a great 2018 people may be having a hard time seeing that repeated even though they are significantly more producers in the system. So I just wanted to get some reactions to this perception that seems implied an expectation to the evercores growth is going to lag maybe even some of your peers, even though you've grown your producer headcount by more than most.
Well.
First of all you know we never make any forward looking statements. So your question is one that we normally don't answer, but let me try to be responsive.
Last year, obviously, we had a terrific year, our advisory revenues were up.
32.
Percent.
They were up by more than anyone else.
In the industry and I might.
We have everybody remember that at the beginning of 2018.
The hypothesis about evercore versus the other independent firms that what was that we would grow more slowly because we were quite a bit larger.
And certainly in 2018.
That was disapproved.
Not by a little bit by a lot.
Our backlogs, which we do comment on.
Our strong.
They remain strong.
You know I.
In anecdotal discussions with.
Law firms with whom we work and some of our friendly competitors.
It seems that some of them have similar backlogs to us and some of them.
Our saying that things are a little bit weaker so the honest answer is I couldn't tell you.
Whether what we are experiencing.
In the first half of the year.
Until everyone as reported.
Our market share gains.
For evercore versus all firms or market share gains for the independent firms.
Versus.
The larger firms.
But it's pretty clear to me that in the first half of the year.
We are experiencing further market share gains.
I'd like to.
Two.
Follow on that comment from Ralph and say that one of the things that we are very focused on is the fact that when we add senior talent. It takes time for that talent to ramp up.
Our goal is really not to drive.
Growth in a particular next quarter or the next two quarters or three quarters, but our goal is.
Long term sustainable growth and we really see the potential for that and therefore, when we see top talent, we add the top talent because we have a a genuine belief that there is real opportunity for us if we grow the it with the right people in the right spaces and really Thats, what weve done. So as we add you will not see a mathematical equation between when we add and actually where those people start to kick in at full strength. In fact, it takes time for people to ramp up so.
The comment I'd make is that our our our goal is to add top talent and could and to continue sustained growth and it may not show itself in the next quarter or two quarters and just to add to put a number on that Devin.
Of the 107.
Smbs.
That were referred to.
27 of them are at some point in their first two years either after joining the firm or after promotion.
And we do find that there is a.
A couple of year period of time before they get to full productivity.
So.
When we're adding people today. So for example, the seven people that we have committed to us this year.
We would expect the revenues to show somewhat next year.
More fully the year after.
Or 2021, and then very fully in 2022, so there is a lag.
Yes.
Thank you for all that perspective, and so my follow up is a little more of Evercore versus the big banks. Because you are now in the top five advisory firms today with.
Some some large full service balance sheet banks ahead of you and actually a number of them behind you as well.
Yes. So I guess the question is is there a ceiling, but just given the capability set I mean, it seems there's always been a perception of that given kind of lack of balance sheet and the importance of that certain other big bank capabilities.
Or there are actually some advantages that allow you to do more in terms of sort of circumstances are giving you. Some competitive advantages just trying to think about whether that historical fact is flawed, especially as your overtaking some of these big balance sheet banks in terms of market share.
Well.
Two things I would say.
First of all if you'd asked me this question three or four or five years ago.
I would have significantly underestimated what I would have thought would be the ceiling.
You may recall, five or six or seven years ago. I got asked that question and I said, well I know Lazard did a 1 billion for at their peak. So I know that can be done and we did obviously 1 billion 740.
Last year in advisory revenues.
I think our.
Business model has some real advantages versus the large firms.
Complete lack of conflicts with our clients financial or otherwise.
Complete confidentiality.
And senior people doing the work so we're actually winning share I think partly because of our business model in the pure M&A business, which is what your question refers to.
I would also add that over the last few years, we have added.
Very materially to our capabilities.
We have the very best.
Among all firms activist defense practice, we have a strong.
Debt and equity capital markets Advisory business, we also advise our clients on hedging.
We had.
We have we are the only independent firm with an equity underwriting.
Business, we have real tax expertise, we are adding expertise in corporate restructuring as opposed to financial.
Restructuring.
So when John and I sit down with.
Potential recruits from the large firms.
The one thing that we assert which we get absolutely no pushback on is that.
You will do more revenue.
With your client base at Evercore, then you can add any other independent firm and Thats because of the broad range of capabilities.
That we have here.
So.
I think and I think we believe there is still a fair amount of room to run not only in our market share in the M&A advisory business, but also in the growth of these other more corporate finance advisory activities.
My perspective on this is very similar to Ralph and what I would say is that.
As you know this is really a talent business.
And it's a business, where if you have highest quality people.
And you are setting them up to be successful on calling on clients that you will get you will be able to win advisory assignments because at the end of the day, it's about experience.
Expertise and trust and if we sustain our calling efforts with high talented people who have very good values. We think we can be involved in more and more situation as we look at the at at the environment as we look at the.
Opportunity set we think theres a lot of white space for Theres, a lot of places, where we can actually be effective at calling on more clients and providing more services to those clients. So from our perspective.
We don't.
Whereas we don't have a balance sheet, we certainly have a lot to offer and.
It seems like and it feels like that clients are more and more willing and demanding of actually having our involvement so.
We're seeing a real we were seeing a real opportunity.
Set in front of us and so we don't feel limited at all.
Yes, I would just conclude by saying that in any given year and this.
Applies to the first question as well.
Whether our revenues go up or down as a function of two things the environment and our market share.
And I would say there is a very high degree of confidence here that our market share will continue to grow.
We are not particularly.
Expert at predicting what the overall pie will be in any given year.
Thank you for all the detail I appreciate it.
Thank you. Our next question is from the line of Jim Mitchell with Buckingham Research.
Hey, good morning.
Maybe Bob just a quick accounting question was was there any pull forward.
This quarter you are you guys did close quite a bit in the first couple of days of July I, just want to make sure. We're look we can understand what we're looking at.
We recognized about $81 million of revenue related to transactions that.
Ultimately closed legally.
In the third quarter.
There was a sort of I understand there was sort of a particularly large amount of clients, who simply chose for cut off reasons.
To close in early July as you noted.
Okay. So that was in the second quarter.
Okay, when we think about.
Buybacks you guys are pretty active this quarter looks like over over $100 million put to work can you just remind me what the authorization.
Remaining is and sort of how to think about.
Using that up over the next 12 months or not.
Jim I I don't have the numbers in front of me, but we have substantial runway in terms of what the board has authorized.
How do you feel about.
I mean, you bought a lot it.
In the mid Eighty's stock still there its still kind of feel good about buying at these levels.
And timing constraints.
Yeah, Ralph and I have always talked about how we think about buybacks, but our objective is to offset the dilution.
From our bonus equity grants as well as new hires and.
We accomplished much of that.
Year to date.
Okay, great. Thanks.
Thank you. Our next question is from the line of Brennan Hawken with EUV, yes.
Good morning, guys. Thanks for taking the question Im just Bob sorry to clarify there you had said that you guys have achieved a good deal of.
To to the primary goals is that mean, we should think that probably if anything all else being equal buybacks will slow.
At the pace from here.
I think what you should think is that.
We have a bunch of uses of cash.
We're making a fair amount of investments.
For the longer term growth of the business.
In some of which are.
Long term oriented like space.
And technology.
We also as.
We've reported.
In the first half of the year purchased.
The.
A and interest.
And in our wealth management business, 17% in total up to.
75%, we purchased the remainder of our.
Private capital Advisory business.
So we have uses of cash.
That.
Add to the earnings of the business beyond just dividends.
Share repurchases.
And so we weigh those as well and.
As you have seen there.
Many years.
That in the past when our share repurchases have significantly exceeded.
The minimum that we promise our shareholders, which is the amount.
That we need to offset.
Any dilution that requires that occurs as a result of Rs use issued or as a result of shares issued.
Two new.
Hires.
But the amount by which we do that obviously depends one on.
The opportunity to to buy stock attractively and too.
As we get larger we have more uses of cash.
To build our business.
Terrific Ralph Thanks for that.
Detailed walk through since you touched on some of the investments you're making I figure why not transition to non comp Bob I think you referenced that it was up per employee about 5% quarter over quarter.
And it sounds like the drivers of that are sustainable, especially Ralph.
Given some of your comments there.
So is that.
A fair level as far as non comp per employee that we should be thinking about from here will there be a little bit of upward pressure as you continue to invest Ralph as you highlighted.
At least.
We should think about it that way until some of these recruiting efforts that you guys have highlighted start to.
Turn into Ssds and others that you could actually add to your to your head count is that is that fair.
No Brandon as you know that number.
<unk> has been very stable.
For several years now at about 47000 on average.
Per employee.
As I said in the last call it is elevated because.
Some of these costs related to facilities and technology.
Yes, Bye bye bye design and necessity are out ahead of the number of people we have today.
I think that that's a reasonable number.
As we move forward.
And obviously, we're going to work very hard.
To have that come down as a function of leveraging that cost over more employees, but it will take some time before we add that meaningful number of employees.
That's fair thanks for taking my questions.
Thank you.
Thank you. Our next question is from the line of Steven Chubak of.
With Wolfe research.
Thanks, very much good morning.
So I think on that wanted to start off with a question on election risks. There are a lot of investors are starting to work through election game theory trying to anticipate different outcomes and how that could impact deal activity I'm. Just wondering what you guys have heard from corporates in terms of how the election and political uncertainty is impacting deal appetite if at all particularly in some areas of strength that you've had historically such as healthcare and TMT.
I'll start with that given that this is not an easy answer.
I'm sure I'll, Ralph will have something to say on this also we've we obviously are talking to our clients all the time and when we talk to our clients. There are always things that we're talking about with respect to the the outside environment and the impact of that on how.
Both shareholders and other stakeholders will react to deals.
To date.
We've not seen any overhang with respect to the election with risk with with the deal discussions that we're having.
Having said that there are obviously is is it continues to be sensitivity about the economic environment about trade about other factors that people are looking at and putting into their calculations. So my my short answer to your question is we're not seeing any election concern in those conversations as we see them.
But clearly as we get closer I'm sure that it will enter into some of the narrative and discussion.
But right now we don't see it acting as a damper it all on activity.
I agree with that the only other thing I would add would be off the record so I'm not going at it.
[laughter].
All right fair enough, while this sticking to the economic backdrop.
John you one of the things that we've been hearing.
From a lot of folks as just general concern that if the fed starts cutting more aggressively how that's going to impact corporate confidence and.
On the increase.
Expectations for a more meaningful economic slowdown I was hoping you could also just give some perspective since you touched on it how the election could potentially inform people's views talk about the rate backdrop since that's changed pretty dramatically since your last public remarks, how that informs the outlook for corporates and their appetite to do deals.
It's pretty clear there is a global.
Effort on the part of central banks.
And the.
International.
Monetary institutions.
That are multi lateral.
To sustain.
The recovery that we have underway right now.
And I think you you can look literally across the board whether it's the CB the bank of Japan, Australia Us.
Anticipating at 25 basis point cut next week.
There is a.
General.
Policy toward.
Sustaining recovery and I would add.
In this country, we have a reasonably accommodative monetary policy about to become a little bit more accommodative.
And we certainly have.
A.
Stimulative fiscal policy, considering where we are in the economic cycle.
And the number of years into the recovery.
We are the budget agreement that was reached.
This week added a little bit more stimulus for next fiscal year.
The compromises always seem to be more for defense and more for domestic.
Without any revenue.
Support.
So.
I think.
If you had Ed Hyman on the phone.
With us.
He would tell you that they don't see.
No signs of recession.
Yet.
And.
And they don't see them for next year either.
And.
That that's about as far as they can.
Can see so and I would say that view is pretty.
Widely held by our client base.
As well.
Hi, Thanks for taking my questions.
Thank you. Our next question is from the line of Michael Brown with KBW.
Hi, good morning.
Good morning, So just I just wanted to ask one quick one on that comp ratio. So I mean this quarter.
And that 58% that was in line with last quarter, obviously, a much stronger revenue result.
So as we sit here about halfway through the year I guess, how are you thinking about kind of the full year comp ratio compared to last year.
Michael its a little early to get into the comparison of year end last year as we always do we look at it carefully every every quarter.
Both in light of.
Reported revenue and where we think the year was going as well as.
Our comp costs, which were particularly impacted by.
Recruiting a new hires so as both John and.
Ralph have mentioned the.
The backlogs are strong.
For both revenues.
Andrew recruits were going to carefully look at the numbers again in the third quarter and of course at year end, but too soon to gauge what the outcome will be.
Okay.
And then just.
When we're looking at the industry trends for announcements I mean, clearly what we're seeing as Europe and.
Cross border activity continue to remain really weak year over year.
Are you seeing any early indications of that kind of bottoming out from here or just kind of given the uncertainty and.
Both those types of transactions is it.
Thats kind of remain remain weak just interested to get any color from what you're seeing in your.
Discussions.
I think generally the cut.
The discussions that we're having with clients have been quite robust.
We certainly see and feel what you see and feel with respect to.
Europe and other areas in terms of the weakness.
Our general view is that we are at a place where we're going to continue to.
To generate activity and I think whereas we would not predict tremendous tremendous strengthening.
We see sustained levels and may be some strengthening over time, but.
But I don't think we can make any broad statement that we have bottomed out or that we are seeing a strong recovery.
But we generally feel good about the dialogues that we're having so.
On an anecdotal basis I can say to you that we really like the activity levels that we're seeing but but it's very hard to make some prediction about exactly where it's going to go from here.
But we but we feel we feel generally optimistic about our business at least.
Europe has been negatively affected obviously by slower growth there and by the uncertainty associated with Brexit, which not only affects the UK, but.
Continental Europe in terms of its interaction with.
The UK so.
I think resolution of that.
We'll.
Huckabee helpful certainly in removing uncertainty.
Okay, Great I appreciate you guys, taking my questions. Thanks.
Thank you. Our next question is from the line of Mike Needham.
With bank of America.
Hey, good morning, everyone.
So first question I have is just on another follow up on Europe .
In market share potential can you help us understand where you are with your Europe business relative to kind of your aspirations.
You know sort of what inning, you're in particularly as it pertains to continental Europe . It does seem like the environment full tough.
But if you're thinking if your plan as long term.
Maybe you can pick up some really strong people.
I think if you look at.
Evercores business versus the two.
Large global independent investment banking advisory competitors.
Lazard and Rothschild both of them were born in Europe .
And their businesses there are considerably larger than ours, not Abbas report geographic revenues so.
I don't know whether that's there.
One and a half two X two and a half exar three ex us.
But theyre definitely quite a bit larger.
In Europe and.
Going back to a question that was asked earlier that is certainly one of the areas.
Where we have.
Real growth.
Opportunity.
Having said that our.
Addition of talent.
As always.
In response to the availability of a plus.
And a talent.
So.
For I think since I joined the firm over 10 years ago.
Consumer and retail was a high priority for us.
As was general industrials and it was in 2017.
As opposed to a start date of 20 not 2009.
That we added our first senior.
Bankers in industrials and it was last year that we added our first senior bankers.
In consumer and retail so.
Even though.
We do believe there is a growth opportunity there and there's an obvious gap between us and our two large competitors.
It's a question of availability of talent as to when that gets filled yes, and just to respond.
We are very much watching that environment, we are in dialogue with people.
All the time, especially people, who we think are highly talented and could actually fit our needs and in Europe . We're looking opportunistically. So we will do exactly as Ralph said, which is to the extent, we find people, who we think fit us culturally and our outstanding in terms of how they are commercially.
We will act and were and we and because there is weakness in that environment. There may be some very good people out there and we're going to we're going to try and be very opportunistic about that.
Okay. Thank you.
As a follow up.
On doing more for financial sponsors I think you mentioned in the prepared remarks.
What do you mean by that is it is it kind of more financial sponsor coverage.
Bankers transit transactions that financing.
Thanks.
I think if you look at our.
Business with.
Financial sponsors.
It's I think the largest among all of the independent firms.
But we've done that predominantly.
On an industry banker by industry banker basis interacting with their counterparts at the private equity firms.
And so what John was referring to was.
Okay, a multiyear effort because once again, it's dependent upon finding the right talent.
Lifting up our.
In a broader relationship management and coverage of these.
Very important sources of business for our.
Industry.
And I think that's.
It's not something that's going to have a.
An immediate impact, but my guess is three four or five years from now.
We'll be talking about a a.
Considerably more intense coverage effort that isn't simply dependent upon.
The individual industry bankers here following.
The assets that are relevant to them at the private equity firms, but also has us.
Identifying those that might.
Have fallen through the cracks either because.
Our bankers in that particular industry aren't necessarily as focused on private equity firms or alternatively.
They are assets that don't fit perfectly into one of our industry groups.
Said differently.
We think there is real active there is real opportunity because we have some really outstanding people in our industry sectors and as Ralph said, we're not we don't think we're connecting in every point, we could with those sponsors.
Who have hot big businesses in each of those industry groups and our our goal is to bring more of evercore to more of those financial sponsors and to really make sure that places, where we have expertise, where we have opportunities to discuss with them, where we have capabilities that we can provide to them that we try and keep that we try and connect in in those places so that where we have something to offer and where they have a demand we can actually connect those and thats about staffing ourselves appropriately organizing ourselves so that we can actually call on those.
Those accounts.
Effectively and to make sure that we're really investing in those relationships, which we think is a real opportunity for us. We think we can do more in that space.
Great. Thank you.
Thank you.
There appear to be no questions. At this time I would now like to turn the floor to Ralph Schlosstein for any closing comments.
Thank you very much for your time and attention and we look forward to talking to you in roughly three months.
Thanks, Thank you.
Thank you. This concludes todays Evercore second quarter 2019 financial results Conference call you may now disconnect.