Scott Bok: Sure. I think clearly, we’re still in a market where strategics are the more active group. Obviously, a lot of them are investment grade. A lot of them have strong balance sheets, a lot of them have a fair amount of cash resources. So they’re able to act. And frankly, right now, they’re probably seeing less competition from the financial sponsor role than they might ordinarily. So we’re more optimistic near-term about that. I’d say medium-term, though we remain very, very focused on growing our financial sponsor business for the simple reason that they — that group still has an extraordinary amount of dry powder. They haven’t put a lot of it to work just recently. They would like to see credit markets get a bit better before they really amp up that spending.
And when that happens, I’m sure they will amp up that spending. But right now, we’re a little more optimistic on the strategic side. And frankly, that’s obviously near-term a positive for us because we have historically been a firm that skews more to that client base than to the sponsor base, even though one of our objectives is to start to balance those 2 out a little bit more.
James Yaro: Okay. That makes sense. Maybe if you could just contextualize the strength of your restructuring business in the past quarter and what you see ahead? And then perhaps within the restructuring business, what parts are you seeing strength in? Is it debtor side, creditor side, traditional structuring or liability management?
Scott Bok: Okay. Good. Those are good questions, actually because last year was an unusually quiet year for us in restructuring. Obviously, it was a difficult financing environment. But yes, for most of the year, credit markets were really quite good. And there were a very low default rate. I’m sure you’ve seen statistics on that. And so there was just frankly very little activity, not that we didn’t do any, but it was not a really exciting part of our business last year. I would say, toward the end of the year, we started seeing a significant pickup in opportunities. I would say that most of the activity is in what I would call like classic restructuring like companies that are in some degree of distress, not necessarily Chapter 11 style but some degree of distress.
And by sector, I think it’s pretty eclectic. We’re still in an economy where I think corporate profits are quite good in most places. But there are pockets of companies out there that are exposed to higher commodity prices or higher interest rates or foreign currency movements. And so it’s kind of an eclectic mix of opportunities. I would say there’s not a lot of household names that are out there doing restructuring right now, but there’s a big world of mid-cap opportunities, and we’re seeing more of those come our way.
James Yaro: Okay. That’s clear. Just a follow-up there. You talked a little bit about the credit markets being open at the beginning of last year and that slowing or keeping the lid on restructuring opportunities. Obviously, we’ve seen those markets open up a little bit through the beginning of this year. So is that a potential headwind to the restructuring business? And I recognize your M&A business is far larger than restructuring, so that’s probably a positive. But just how do we think about the impact on the restructuring business if financing markets continue to improve?
