Joe Simon: There’s confidentiality related to that.
Ken Moelis: As Jon said, as they – we’ll actually call them out when they happen — so you’ll see them on a real-time basis.
Joe Simon: But there is confidentiality.
Connell Schmitz: That relates to my follow-up question as well, I guess, on the non-comp. So when they come through. So we have non-comp over $43 million this quarter. That’s an all-time high. Is that the new run rate we should expect? And can you follow out any puts and takes that will affect that number from here?
Joe Simon: So yes, in my opening remarks, I indicated that $43 million included $2 million of transaction-related expenses, which I can’t predict — so I look at the underlying run rate of $41 million this quarter as persisting 41% to 42% is the underlying run rate absent those transaction-related costs.
Connell Schmitz: Okay. That’s helpful. That’s it. Thanks.
Operator: Your next question comes from the line of Devin Ryan with JMP Securities.
Devin Ryan: Hi, Ken. Hi, Joe. How are you?
Ken Moelis: Hi.
Devin Ryan: Good. So looking at Slide 17 in your presentation, and I like kind of the framing here. So you have all the fee pools and kind of your market share. And obviously, technology is by far the largest fee pool and by far the smallest market share for Moelis. Historically, but Ken, as you mentioned, you roughly doubled your client-facing managing directors, you have 15 MDs in that group. So trying to think about what that business — that sector could look like in a recovery scenario. And really just is 1 plus 1 more than 2 here because oftentimes you plug into your sponsor network or vice versa, there’s maybe more revenues than each unit and you’re kind of bringing in a group that’s as large as or even larger than what you previously had. So I’d love to maybe just think that through — I know it’s not precise, but any framing around that would be helpful.
Ken Moelis: Yes, a couple of things. First of all, it was — I talked about it as double because I kind of rounded it, but it’s actually 2.5x. I think we had 10 managing directors, and now we have 25. And yes, it was very hard, actually building up a tech effort one person at a time, and it goes to your 1 plus 1, does it equal more — if you don’t have enough expertise to kind of make yourself important, especially the group that we hired was much more sponsor driven. In fact, they were almost 100% sponsor-driven. Our group prior to that was almost 100% strategic driven. You can imagine, first of all, the cross flow of information between those 2 is very helpful to drive new business. And that’s just within the tech group. Then as I think I’ve said many times, my goal in this is to be as important to what I think are our largest growing fee pools in M&A on the planet, the very large sponsor groups that I think will continue to grow and be very significant is I do think there’s a benefit to being an important supplier to them of quality, idea flow throughout the organization.
And they are all tracking it. They’ve all become extremely sophisticated. They know how many calls you’ve made, how many ideas you’ve shown them, how many people have been in their hallway. And I do think that they’re looking for important suppliers. And look, there’s always a decision to be made on the allocation of some transaction. And it could be a transaction in – I’ll just pick in homebuilding. And your tech team might have shown them 10 good ideas, none of them executed upon. But you’ll get leaned in on some other part of your organization because as a firm, as a whole, you are important and a very significant supplier of idea flow. And yes, so the answer to that is, yes, I do think that one plus one should equal more than two in that event, especially with sponsors, who are literally one large corporation who just transacts in multiple different spaces that I think has become very sophisticated in keeping track of how you’re calling on them.
