Chad Abraham: Yeah, thank you. And we agree. I mean, lots of people have been doing quite a bit of hiring this year. We’ve actually been going quite a bit slower this year, but some of that’s just been — we’ve been on a pretty steady pace for five years. And if you just look back a few years ago, we had 130 MDs and now we’re closer to 170 MDs. So yeah, we absolutely feel like as the M&A market, even if it slowly returns here in ’24, that we’ve got the capacity to do quite a bit more pretty much on every industry team because we’ve added white space. When I think about big, big opportunities still for us, we still think about tech and software in that relative to our market-leading franchises in financials and healthcare. That business can be as big.
We’ve added a lot of MDs. We have the sectors that DBO brought us into, and it maybe has been the most challenged of the markets in M&A. So, I think there’s still a lot of upside there and there’s a lot of room for us to add many more MDs in the tech world as well.
Devin Ryan: Okay. Terrific. Maybe I’ll just squeeze one more in here on expenses. So, comp ratio is running a little bit higher this year, but much more contained than we’re seeing in some others in the industry, and I think that speaks to kind of the diversification of the business. And just overall, as you kind of look out, thinking about some of the puts and takes on expenses, we’re kind of in this inflationary environment, you guys have navigated that well. At the same time, you’ll see, hopefully, business-related expenses come back in when investment banking picks back up. So just want to think about kind of how much expense inflation in your mind is kind of sticky? And if there’s any view of impact on kind of normalized margins when we get back to maybe a market that’s a little bit more conducive than we’ve been in like new margins revert back to where they were pre — the last couple of years?
Or how are you guys thinking about kind of normalized margins, just given the puts and takes and some of the inflation that we’re all dealing with?
Tim Carter: Yeah. Devin, maybe I’ll take that. I mean I think we’ve talked about the different components in the past in terms of the comp rate to start with. And certainly, as we get back to more normalized levels, from a top line perspective, we should have the ability to lever down the comp rate by a couple of points. I think we’ve also talked, look, longer term, we see comp rates somewhere between 60 and 65, right? Revenues are depressed. We’re closer up to that 64, 65 when revenues are at more normalized levels or even a little bit better or closer to 60. So, I think there’s certainly a couple of points in the comp rate, that is as we get more normalized, we would get that back from a margin perspective. And then there’s some level of leverage that we are going to get on non-comps, and yeah, you might see the absolute level rise with increased business activity, but we’re still going to get some leverage there.
So yeah, I guess we get back to — all the way back to the Sandler deal and we said, look, with that and sort of that scale, we should be in the high teens. I think now as we continue to grow and scale the business back to that 20% margin, maybe low 20s is really more of the focus in the area that we think the margin should run.
Devin Ryan: Okay. Very clear. Thanks very much. I’ll leave it there.
Deb Schoneman: Thanks, Devin.
Operator: Thank you. And next, we’ll go to James Yaro with Goldman Sachs. Please go ahead.
