Scott Beiser: I think, consistent with our comments, it just isn’t the crisis mode, it’s just a probably a little bit of plain catch-up, as well as just a higher interest rate world. I think you’re going to see more of a steady flow of business. And some companies more proactively early on. We’ll try to do things before they hit that maturity walls, some take a little longer. I think the major difference today versus what we’ve seen over the last couple of years, there is an ability to do refinancings that maybe didn’t even exist six or nine or 12 months ago, but refinancings are at a higher interest rate. So it doesn’t necessarily solve their problem. And I think we continue to chat with companies that we know maybe have some struggles in their business plan and their financial results and a balance sheet, in which — in today’s world and today’s interest rate, causes them to need to come to some solution.
And this is the reason I think — in the industry, will just have some elevated results and restructuring for the next couple of years.
Alex Jenkins: Sure. That makes sense. Thanks for that color. I guess as a follow-up, just on the expenses, you guys have been able to hold the line on expense ratios, particularly relative to your non-middle market peers. If the M&A market doesn’t recover, do you see a scenario where you might have to take that comp ratio structurally higher? Or is this just an example of the difference of your business models? Thanks for the time.
Lindsey Alley: I think it’s probably the latter. I mean, we do have some structural differences that allow us some flexibility in how we run the compensation ratio. And in market conditions like the one we’re in, we’re clearly confident enough to suggest on the earnings call that we have no plans to change that. Are there market conditions that might impact our compensation ratio? Of course, there is. Are we in one now? No. And so I think we are still comfortable suggesting that we won’t change our target, and we’ve been pretty consistent over the last — certainly the last several years at maintaining this tighter range.
Scott Beiser: And I would add, the firm’s been in business for 50 years. We’ve gone through some very bullish cycles and some very bearish cycles. And we have just always — partly to the way we think about our business, the way we manage our business, the diversity of our business, the amount of deferrals we have, whether there’s stock cash, et cetera. All of that adds to reasons why we’ve always had, I think, a relatively tight range of what our compensation payout ratio is. And we’ve — for the last really several quarters have been in a very consistent ratio. Expect that’s what we’ll do for the foreseeable future. But as Lindsey mentioned, there’s always things I guess we could never predict that could get us to change our point of view to properly run the business. But right now, we’re happy with how we’re running it. And think that the compensation payout ratio that we’ve been at for quite a few quarters feels like the right range that we should be in.
Alex Jenkins: Great. Thank you. We appreciate it.
Operator: Thank you. Next question comes from the line of Ken Worthington with JPMorgan. Please go ahead.
Ken Worthington: Hi, good afternoon and thanks for taking the question. I wanted to follow-up on the impact of higher long-term rates on middle market M&A. So, maybe first, as we think about middle market M&A, what portion of these deals are financed by debt and loans versus equities, equity? And how does that compare maybe to large-scale M&A? So, are the smaller middle market deals financed differently? And I guess you mentioned in the prepared remarks that the availability of financing or debt financing is improving. But given that the financial costs are a good bit higher than they were, five, six months ago and a year ago. Are you seeing evidence that this higher cost of financing is having — or possibly will have a more lasting sort of negative impact on deal activity, as we look out again maybe over the next six to 12 months. So I think there’s a bunch there, but curious to hear your thoughts.
