Steven Chubak: Hi, thanks so much for taking the follow-up. First, just on ECM. The performance, as you noted, was a bit challenged this year. I was hoping you could just speak to your outlook, whether you envisage a meaningful ramp in 2024 as the range of revenue outcomes just over the past few years has been incredibly wide. And any specific sectors that you anticipate will be more or less active?
John Weinberg: We agree Steven that 2023 was disappointing. We actually see 2024 off to a reasonable start. We actually have a good book of business that’s building. We’ve been in a few deals starting off the new year and we see it building. And so it’s hard to really predict exactly where it’s going to come out, but we think there’s a real strengthening and we are quite optimistic that this will actually continue.
Operator: Thank you. We do have a follow-up from Jim Mitchell with Seaport Global.
Jim Mitchell: Hey, good morning, thanks for the follow-up. Maybe just, Tim, any thoughts on the non-comp outlook for growth this year given the puts and takes of trying to be efficient versus the headcount growth?
Tim LaLonde: Yeah, sure. And so I guess the way I think about it is — and by the way, just for full clarity on the call, our non-comps increased from $365 million last year to $407 million this year, which is about 11%. As you heard in my comments, really due to two things, which were the reversal at last year’s non-comp expense of about $12 million and the increase in normalization of travel and the two of those combined would have taken — if you remove them, would have taken that 11-plus percent increase down to the 4% area. Where do I think we are for the outlook this year? I think there’s a few things. One is we will probably see some continued normalization of travel. And so I would expect to see some additional increase there.
We also are living in an environment where we’ve got a very data driven world. And of course, the data providers are able to have some influence on pricing power. And so there could be some modest increase there, some modest increase with respect to headcount as non-comps are highly correlated with headcount and a little bit of increase within relation to lease expense as we continue to grow the firm. What I would note, though, is if you look at our non-comps on a per head basis, what you would see is that they are up a little bit over last year, probably about 4%, but still below pre-COVID levels. And so I feel like on a per head basis, we’ve done a pretty good job of controlling those over these last four or five years.
Operator: Next, we have Devin Ryan with JMP Securities.
Devin Ryan: Hey, thanks for the follow-up. Just wanted to ask about the deal time lines and I heard the prepared remarks that they’re still on the more elongated side. And so I just wanted to hear if that’s been improving at all just with some of the improvements in tone and activity. So really, is that just kind of the typical dynamic here that as recovery occurs, the time lines are elongated, but inevitably will shrink? Or is there something else going on with this recovery or just in the broader kind of macro or M&A market that may continue to keep deals moving slower than they otherwise would in prior recoveries? Thanks.
John Weinberg: I think that the time lines will continue to be elongated for the foreseeable future. Financing is something that is taking more time to really get that sorted out as companies go forward. There’s always a concern at this point regarding the regulatory side and antitrust. And people are taking longer to really do that analysis. I think that honestly, the strategics are feeling tremendous urgency to run to the finish. So I think it’s going to take some time. I think the elongated process will continue. I don’t see it really accelerating into a deal frenzy for quite some time. And I think what we ought to — we all ought to actually expect is that it will continue to be in a slightly elongated way for the foreseeable future.
Tim LaLonde: Right. One aspect, though, that it is at least modestly favorable is that one of the elements of the elongated closing time in 2022 and 2023, was a very challenged capital raising environment. And we do see some improvement there and would hope that, that might be helpful as we move forward.
Operator: Our next question will come from Ryan Kenny with Morgan Stanley.
Ryan Kenny: Thanks for taking the follow-up. So one of the big macro changes that’s happened since last quarter’s call is the amount of rate cuts expected this year. Can you help us understand how CEOs and Boards are thinking through potential rate cuts? Are companies waiting at all to get more clarity on the size and pace of rate cuts to put transactions through? Or is there more momentum to get things through the finish line now that the forward curve has come down?
