There’s just a whole series of flows that need to happen. So we think it will happen. We believe that we will get off to a decent start on strategics. We think that there will be satisfactory activity to really keep us busy and productive. I think though, the sponsor side is going to be important for the overall market. As you may know, or I’m sure you do, 30% and 45% of our revenues come from sponsor-related activities. That is private capital advisory type activities as well as the M&A side. So it clearly is important to us as I think it is to many firms.
Operator: Our next question will come from Mike Brown with KBW.
Michael Brown: Hi, good morning. Thanks for taking my question. On restructuring, you had mentioned that you feel good about the restructuring and the liability management activity. If we take a step back, what do you think this cycle will look like, I think, over a multiyear horizon? And with central banks looking like they’re going to shift to easing. It looks like the opportunity set is maybe a little softer than we thought three months ago or six months ago. So it would be just great to get some more color on how you think this activity could progress over the coming years and how you think the revenue potential could compare to 2023? Thank you.
John Weinberg: As we’ve looked at how we’re looking at the year ahead, we actually think that it’s going to be quite a strong year in restructuring. Granted, if rates come down, there will be less distress in the system. Having said that, rates are still pretty high. The maturity walls are out there in 2024 and 2025. And we see a lot of activity, not necessarily in bankruptcies, although there will be bankruptcies, and there will be some larger bankruptcies, but in the activity of liability management and helping companies to structure themselves to grow. And increasingly, we are getting involved in the general course of helping people think through their balance sheet and their liabilities. And so, as we look at what we’re expecting for our restructuring business, it’s actually going to be quite a healthy year.
And we think that, that will extend itself in the future also. We really feel quite positive about how the market is being defined by our group and really their impact.
Tim LaLonde: Right. The only thing I would add to that is if you put this in historical context, years ago, it used to be that the restructuring M&A cycle was kind of feast for one famine for the other. It feels like in more recent years, what we’ve really seen is that restructuring has an opportunity to perform reasonably strongly throughout the cycle. And I think the points John raised about higher rates, we’re still in the higher rate environment. So a lot of companies put on a lot of debt at very low interest rates that were variable and are now experiencing higher rates or alternatively having to refinance at higher rates and so even in an economic environment, which is reasonable in a capital raising and deal environment, which is reasonable, we could still have a very solid restructuring environment for some period of time.
Operator: Our next question will come from James Yaro with Goldman Sachs.
James Yaro: Thanks a lot for taking my follow-up. So I think it’s very constructive that 40% of your MDs are promoted internally. And I also thought it was true that you gave the 1.5 to two years ramp for MDs hired externally. Maybe you could just talk about the differences in the ramp between those that are promoted internally versus hired externally.
John Weinberg: Well, I think that the ones who are promoted internally take a little bit longer to really get to the high productivity level because quite frankly and obviously, they’re growing and they’re learning. A lot of times, with what we’re looking for in the lateral sense and people coming in laterally, they’re already really at the height of their powers. They come in with a fully developed client base. And in many cases, they have transactions, which they’ve been talking about and dreaming about and really pushing for quite some time. And so it takes longer and I think hard to really put a number as to how much longer, but I think it’s safe to say that the 1.5 to two years is really a, maybe, conservative for the people coming laterally and probably about right for the people who are ramping — who have been promoted from within.
Tim LaLonde: Right. And in addition to that I think if we were to open our books to the public, what you would see is a very healthy proportion of our highest producing partners are actually people who have been promoted internally. And I think that speaks a little bit to two things. One is the strengthening of our franchise, so they’ve got a better calling card than they might have had five or 10 years ago. And the second is, I think an improved ability over time to develop our people into productive partners.
John Weinberg: One of the most important parts of really growing the firm is to create a culture of aspiration and to really allow people to think that they have real opportunity to grow. And so hiring from within, promoting from within, growing our people is really a critical part of what the culture of Evercore is and should be. In addition, creating an environment where people who do come in laterally have a great opportunity to grow and really find their way and fulfill themselves is also a very important part. So it all ties in culturally.
Operator: Alright and we do have another question from Steven Chubak with Wolfe Research.
