Tim LaLonde: Right. And so – look, we of course, as a matter of practice don’t provide guidance, and so I want to be very careful about what I say, but there’s mathematics behind all of this. And the mathematics are that the prior year amortization awards hit you in a larger than normal way on a percentage basis, when you’re in a market where revenues are declining, and when you’re in a market where revenues are improving, sometimes that can provide some tailwind. In addition, as you pointed out, it’s too soon to know what the ramp rate will be for the new hires. All we know is, we’re really glad they’ve joined us and we’re really positive about their prospects, but too soon to really say more than that.
Brennan Hawken: Okay, thanks for taking my questions.
Operator: Thank you. Our next question will come from James Yaro with Goldman Sachs. Your line is open.
James Yaro: Good morning and thank you for taking my question. So it does feel like the M&A recovery continues to be pushed out. Obviously you’ve had some success in the past few months and that’s been positive, but overall the industry continues to recover quite slowly and this doesn’t appear to be the 2020 to 2021 recovery. So, I guess what is your view of the likelihood that this M&A recovery ends up taking a number of years to build back to a more robust level like we saw post 2008?
John Weinberg: Thanks, James. It’s really hard to call the pace of a recovery. I would just say that if you look at really some of the firm indicators internally our backlogs are building, our other internal indicators seem to be strengthening. And I would just say anecdotally inside the firm, the activity level and the client dialogues are very robust. But as you said, it does take time. And the fact that activity takes time to lead to announcements, which then take time to lead to closings, that is absolutely true. And there’s no question that there’s an elongation with respect to deals. Right now we feel optimistic about the activity level we have right now. I think it’s probably safe to say that there is going to be a ramp in 2024. We just don’t know exactly what the pace will be. It’s very hard to call, but I think that if our indicators say that we have a very healthy amount of activity inside and we’ll just see how that translates.
James Yaro: That’s very helpful. Thanks John.
Operator: Thank you. Our next question will come from Steven Chubak with Wolfe Research. Your line is open.
Steven Chubak: Hi, good morning. Yes, I was hoping to unpack some of the commentary you made on 2024. Really trying to distinguish between strategic and sponsor activity. We’ve seen a number of large strategic transactions announced most recently in the energy space. At the same time, sponsor activity has remained fairly muted and the commentary from the public alt suggests that it’s likely to remain subdued, at least in the call it the near to intermediate term. I was hoping you could speak to the dialogue you’re having with sponsors and strategics and any differentiation would be really helpful.
John Weinberg: Sure, Steve. And by the way, I don’t want to frustrate you, but it’s very hard to call what’s going to happen with sponsors. The interest rates are higher, which does really impact kind of the economics of sponsor deals. But sponsors really want to get going. They’ve got a lot of dry powder, they’ve got real need to actually monetize and return capital. And so there’s pressures at the sponsor level to really get going. And I think that on the other hand, they don’t want to capitulate and take lower prices on their assets. But sponsors are in business to do transactions that they can monetize and then bring back to their investors. And so there’s a real pressure going on there. And I think that what you’ll really see is you’ll see deals start to happen, but we don’t think that there will be a massive rash of deals immediately coming from sponsors.
Having said that, if you look at some of the other activities and sponsors that we engage with, which is continuation funds and fundraising, we see the fundraising environment feeling a little bit better. We see the continuation fund activity building. And I’d say that the way that we’re seeing sponsors on that side of the business seems to be building. And so in general, we think sponsors have, on the one hand, some concern with respect to going that it hasn’t gone faster. On the other hand, we do see what we think is a strengthening and we do think that there will be activity that builds. On the strategic side as you’ve seen, there has been quite a bit more activity publicly. You’ve seen some deals which have come out that are somewhat larger relatively recently.
It’s hard to say whether that will continue and build at this point, but I think it’s safe to say that activity levels, dialogue levels, are at quite a high pace as I said earlier in the call. If you look at us anecdotally, we think that there’s a lot of dialogue inside that’s, not just in terms of number, but also quality. So I’d say that the strategic side is starting to begin to build some momentum. It will take time. As I said, it’s hard to call the timing and I do think sponsors will start to move forward, but it may take a little bit longer, at least what I think.
Steven Chubak: Very helpful. Thanks for taking my question.
Operator: Thank you. [Operator Instructions] And our next question comes from Ryan Kenny with Morgan Stanley. Your line is open.
Ryan Kenny: Hey, good morning. Thanks for taking my question. So you’ve talked about encouragement from Leading indicators and just when we think about the last few weeks specifically, where we’ve seen ten year yields briefly spike above 5%, is that recent volatility enough to have any significant impact on moving deals forward? And does that push things out a quarter or is the impact more limited?
John Weinberg: I think that interest rates certainly impact the way people think about financings for deals. It has a bigger impact, I think, on sponsors. Will it push it out? It could. I do think though, that the deal activity will move forward if, for example, there tends to be a stabilizing of what I think are the risk conditions existing in the market. I think one of the things that is holding back some of the deal environment is that we have real uncertainties, both geopolitically and economically. And I think people are watching that really carefully. So I think rates will impact to a degree, but I think the bigger impact is people watching what’s happening in the environment and really how the equity market is going to look at deals generally.
So I think that’s the case I mean from our standpoint, we think that the dialogues that have been high quality are continuing to move forward. So I don’t necessarily think that the interest rates are going to materially impact exactly the fact that things that get done, but I do think it’ll moderate to a degree and I think people are watching it carefully.
Ryan Kenny: Thank you.
Operator: Thank you. Our next question comes from Jim Mitchell with Seaport Global. Your line is open.
Jim Mitchell: Hey, good morning. Maybe we talk a little bit about restructuring. It seems like it’s been pretty active, increasingly so I think a lot of out of court restructurings. Can you just sort of discuss the impact in the quarter and how you’re looking at activity and your thoughts going forward? That’d be great.
