PJT Partners Inc. (NYSE:PJT) Q3 2024 Earnings Call Transcript

PJT Partners Inc. (NYSE:PJT) Q3 2024 Earnings Call Transcript October 29, 2024

PJT Partners Inc. beats earnings expectations. Reported EPS is $0.93, expectations were $0.74.

Operator: Good day, and welcome to the PJT Partners Third Quarter 2024 Earnings Call. Today’s conference is being recorded. At this time, I would like to turn the conference over to Sharon Pearson, Head of Investor Relations. Please go ahead ma’am.

Sharon Pearson: Good morning. Thanks very much, Leo. And welcome to the PJT Partners third quarter 2024 earnings conference call. Joining me today is Paul Taubman, our Chairman and Chief Executive Officer; and Helen Meates, our Chief Financial Officer. Before, I turn the call over to Paul, I want to point out that during the course of this conference call we may make a number of forward-looking statements. These forward-looking statements are subject to various risks and uncertainties and are important factors that could cause actual outcomes to differ materially from those indicated in these statements. We believe that these factors are described in the Risk Factors section contained in PJT Partners’ 2023 Form 10-K, which is available on our website at pjtpartners.com.

I want to remind you that the company assumes no duty to update any forward-looking statements and that the presentation we make today contains non-GAAP financial measures, which we believe are meaningful in evaluating the company’s performance. For detailed disclosures on these non-GAAP metrics and their GAAP reconciliations, you should refer to the financial data contained within the press release we issued this morning, also available on our website. And with that, I’ll turn the call over to Paul.

Paul Taubman: Thank you Sharon. Good morning everyone. Thank you all for joining today’s earnings call. We reported strong results with record third quarter revenues of $326 million, up 17% year-on-year, adjusted pretax income up 16% and adjusted EPS up 19% from year ago levels. Our nine month revenues were also a record at $1.016 billion, up 23% year-on-year, reflecting increased contributions from all of our businesses. Our nine month adjusted pretax income was up 32% while our nine month adjusted EPS increased 35% from year ago levels. The benefits of our sustained investment in the business are beginning to shine through in our financial results. We remain committed to continued investment as we seek to enhance our capabilities, deepen our industry expertise, and broaden our geographic footprint.

Consistent with this commitment to invest, we closed our deNovo Partners acquisition on the 1st of October. While our firm’s growth has largely been driven by organic investment, we have been acquisitive when we see unique opportunities to strengthen our firm. That was why we acquired CamberView Partners and that is why we acquired deNovo Partners. Our firms were culturally aligned with a similar focus on collaboration and teamwork and a shared set of values. We had the benefit of working alongside deNovo’s founder for many years, as well as insights gained from our strategic alliance with deNovo, which dated back to 2020. This highly successful partnership gave us the confidence that for all our successes together, we could be even more powerful, combining deNovo’s presence in the Gulf with PJT’s broad advisory capabilities, extensive global network and strong sector expertise.

After Helen takes you through our results, I will review our business performance and outlook in greater detail. Helen?

Helen Meates: Thank you, Paul. Good morning. Beginning with revenues Total revenues for the third quarter were $326 million, up 17% year-over-year. PJT Park Hill revenues were significantly higher than year ago levels, while strategic advisory revenues increased slightly and restructuring revenues decreased slightly. For the nine months ended September 30, total revenues were $1.16 billion [ph] an increase of 23% year-over-year and a record first nine months. Each of our businesses produced record revenues for the first nine months of the year. Turning to expenses consistent with prior quarters, we’ve presented the expenses with certain non-GAAP adjustments which are more fully described in our 8-K. First compensation expense, we have continued to accrue a compensation expense at 69.5% of revenues for the first nine months of the year.

This ratio represents our current expectation for the full year 2024. Turning to adjusted non compensation expense, total adjusted non-compensation expense was $49 million for the third quarter, up 19% year-over-year and $138 million for the first nine months, up 14% year-over-year. As a percentage of revenues, 15% for the third quarter and 13.6% for the first nine months. For the third quarter, the main drivers of the year-over-year increase for higher occupancy costs, travel and related and our other expenses line. In the third quarter, we recognized some non-recurring expenses, including expenses related to the acquisition of deNovo Partners. We expect that our full year 2024 non-comp expense growth rate will be in line with our nine month rate of 14%, which is slightly higher than our previous guidance.

Turning to adjusted pretax income, we reported adjusted pretax income of $51 million for the third quarter and $172 million for the first nine months. The provision for taxes as with prior quarters, we have presented our results as if all partnership units had been converted to shares and that all of our income was taxed at a corporate tax rate. Our effective tax rate for the first nine months of 2024 was 21%. This rate is slightly below our previous full year 2024 estimate of 22%, primarily due to the tax benefit from the delivery of vested performance units. As a result, the effective tax rate for the third quarter was 18.6%. The 21% rate represents our current expectation for the full year. Earnings per share, our adjusted of converted earnings were $0.93 for the third quarter and $3.10 per share for the first nine months.

On the share count for the third quarter, our weighted average share count was 44.5 million shares, up from 43 million in the second quarter of 2024. Given we used the treasury stock method to calculate our share count, the increase in the third quarter was principally due to the impact of a higher share price. In addition, some of the share count increase was a result of achieving further price hurdles on the performance units. By the end of the third quarter, virtually all of the prior sales from these performance units had been achieved. As we look to share count growth in the fourth quarter, ignoring any price movement in our stock or any additional share buybacks, we expect the fourth quarter weighted average share count to increase by approximately 400,000 shares, primarily reflecting the remaining weighting of the performance awards.

We continue to be mindful of offsetting this dilution over time and for the nine month period, our repurchases total approximately 2.6 million shares, up from 2 million for the same period last year with record open market repurchases of 1.9 million shares in the year to date period. And finally, we plan to exchange 125,000 partnership units for cash on November 5, 2024. On the balance sheet, we ended the quarter with a record $477 million in cash, cash equivalents in short term investments and $491 million in net working capital and we have no funded debt outstanding. The Board has approved a dividend of $0.25 per share. The dividend will be paid on December 18th to Class A common shareholders of record as of December 4th, 2024. And finally, as Paul mentioned, we closed the acquisition of deNovo Partners on October 1st.

Back to Paul.

Paul Taubman: Thank you, Helen. Beginning with PJT Park Hill. PJT Park Hill’s revenues have rebounded faster than our most optimistic predictions, fueled by significant growth in both our primary and secondary businesses. PJT Park Hill’s 2024 results will be up significantly relative to 2023 and in line with 2022’s record performance. Even though LPs continue to be highly selective in their allocations to alternatives, our differentiated approach to origination and distribution has enabled us to significantly outperform the broader primary fundraising marketplace. Our year-to-date fundraising volumes are more than double a year ago levels while industry wide fundraising volumes are down year-to-date. The macroeconomic headwinds which continue to dampen the primary fundraising marketplace have been a boon to our private capital solutions business.

New fundraises continue to be constrained by limited fund distributions which have helped create over allocations to the alternative space. While these dynamics have challenged the primary market, they have also fueled secondary activity as GPs pursue alternative liquidity options for LP capital return. With secondary industry volumes now at record levels, our private capital solutions business and its best-in-class capabilities have capitalized on this increased demand driving strong year-to-date revenue growth. Turning to restructuring, our leading restructuring business continues to benefit from a multiyear cycle of elevated restructuring levels and liability management activity. Our team has maintained its global leadership rankings in both announced and completed restructuring transactions and remains extremely active in providing proactive liability management advice to clients.

For the nine months, our restructuring revenues are at record levels and 2024 is shaping up to be another record year. Even with the expectation of additional rate cuts beyond the 50 basis point move by the Fed and rate cuts from other central banks, we have high conviction that this restructuring cycle will continue for some time to come. Corporates and sponsors continue to work their way through high interest rates, challenged business models, technological disruption, and changing consumer preferences. Turning to strategic advisory, while year-to-date Global M&A volumes are up for the first time since 2021, they’re only up 8% relative to last year. We have always expected 2024 to be a transitional year sandwiched between two successive down years for Global M&A activity and what should be a far more constructive 2025 market environment.

Against this backdrop, our nine month revenues for strategic advisory were up solidly year-on-year while third quarter strategic advisory revenues were up slightly. The M&A market is slowly recovering with many elements now in place for a more active M&A environment in 2025. Central banks are cutting rates. Capital markets are more open and receptive than at any point in the past three years. The velocity of both private equity monetizations and dry powder deployment has begun to increase. We will soon turn the page on a year of consequential elections around the world. And all the while company’s strategic appetite for M&A continues to grow. Today we are better positioned to capitalize on an active M&A marketplace than we were in 2021. We have 35% more strategic advisory partners who have been with the firm for more than two years than we did in 2021.

We’re seeing the benefits of this more built out platform translate into greater traction with clients, higher win rates and a growing backlog of announced transactions. We are quite constructive on our strategic advisory prospects given this building announced pending closed backlog, a near record mandate count and an increasingly favorable M&A backdrop. In closing, 2024 is proving to be an important milestone in the firm’s evolution. We continue to attract a significant number of highly talented professionals to our platform. We continue to expand our global reach, most recently with our deNovo Partners acquisition. We continue to see the network benefits of our collaborative business model as we increasingly deliver the full capabilities of our integrated advisory and capital raising businesses to clients around the world.

And as we showcase our unique capabilities and value proposition, our brand, both in terms of recognition and reputation, continues to grow. 2024 will undoubtedly be another year of differentiated performance for our firm. And as before, we remain confident in our near intermediate and long-term growth prospects. And with that, we will now take your questions.

Q&A Session

Operator: [Operator Instructions] We’ll take our first question from Devin Ryan of Citizens JMP Securities.

Devin Ryan: Hey, good morning Paul and Helen. How are you?

Paul Taubman: We’re well. Good morning Devin.

Devin Ryan: Great. First question in the M&A advisory practice. In strategic advisory, obviously Paul, you highlighted the material level of headcount growth there and you’re seeing significant seasoning of bankers on the platform. And so given the level of change we’ve seen in your business specifically over the past handful of years, I think people are having a hard time just trying to understand the capacity of the strategic advisory business today and kind of how that’s evolved relative to maybe the prior up cycle that you referenced. So just love to just get a sense of whether there’s any type of range of productivity expectations that you guys expect when you hire a partner or any other frameworks you would suggest to think about that from the outside, just given that degree of change in the business over the past few years. Thanks.

Paul Taubman: Look, we don’t manage to a metric because it’s very hard to say a partner should deliver X in revenue because it’s a function of what’s your time horizon, number one? Number two, what’s the macroeconomic backdrop, Number three, what else is built or unbuilt around that banker? And number four, what is the strength of the franchise and how much what I like to call walk up business or walk in business does one benefit from. But the firm that we are building is designed to be best-in-class on all dimensions and ultimately that reflects itself in very high revenue per partner for that moment in time relative to any other firm. As I’ve talked about repeatedly, we started this firm nine years ago with virtually everything unbuilt.

The progress that we have made in nine years is extraordinary. We have far better built out industry groups, geographic areas where far better understood and sought after firm and all of that plays to our long term advantages. In the last cycle in 2021, we did not have nearly the market presence that we have for 2025 and beyond. And therefore I certainly see the direction of travel to be meaningfully more productive going forward. And I think the first time you’ll see that will be in 2025.

Devin Ryan: Got it. Thanks Paul. And then just to follow up here on the restructuring commentary and the contribution that you’re seeing there. Good to hear the outlook. Just to go layer deeper, it be great to just get a sense of kind of the pace of new restructuring mandates coming in because I know you’re executing on a lot of deals that were announced last year and early this year, but just how that pace of mandate has evolved just over the past couple of quarters and whether you’re seeing a stronger effort to maybe kick the can as rates are coming down and capital markets reopen, or just any other nuance within the business that you’re seeing. Thanks.

Paul Taubman: Yes, look, I mean there’s so many different dynamics there. What I have said repeatedly, and I think I might have been a minority of one, was that this was a long tailed restructuring cycle that this restructuring cycle bears no resemblance to what we saw 2020 to 2021. I think when I said that I was out by myself. I think now that’s become much more conventional wisdom. We stand by that. This is a multiyear cycle. And even though central banks have moved the short term, if you look at what’s happened in the long-term, rates have been stubbornly high and the long end of the curve has moved higher. The refinancing walls in the very near term have been addressed. But if you look out 2 years, 3 years, 4 years, there’s yet another wall of maturities that will need to be addressed.

You have a world that speeds up more technological innovation, more disruption, more creation. But when you have more creation somewhere in the world, you have more destruction. And that’s how you end up with more companies needing to rethink the balance sheet that they have. Because oftentimes the balance sheet that they have was not designed for the competitive environment that they are in. We don’t see an answer to your specific question. We don’t see any material change in the onboarding of new clients. And we’ve been quite pleased that as the year has gone on, we’ve been more constructive about 2024, and we are constructive on 2025 and beyond as well.

Devin Ryan: Okay, that’s great. Thanks so much, Paul. Appreciate it.

Paul Taubman: Thank you, Dev.

Operator: We’ll take our next question from James Yaro of Goldman Sachs.

James Yaro: Good morning and thanks for taking my questions. Paul, maybe just on strategic advisory, I do appreciate your comments on why 2025 looks so much stronger, but maybe you could just comment on what exactly gives you that confidence. Is it that we’re past the U.S. Election, economic factors, geopolitical, or something else?

Paul Taubman: Well, there’s a micro in the macro. Let’s talk about the macro first. At the beginning of the year, I said that notwithstanding all of the hype about runaway M&A activity, 2024 was going to be a relatively sober year. And I think I was out there, maybe not a minority of one, but there were relatively few who had that sober perspective. I think as the year has played out, that’s pretty much what we’ve seen. And we’re sitting here today, 10 months into the year with an annualized run rate of volume up all of 8% from year ago. And I’ve repeatedly talked about us needing to start to see rate cuts and not just one, but when we start to see the direction of travel as we continue, I think that that will ignite more sponsor activity.

I also believe that we need to get past the elections and I also believe that there is a building demand on the part of corporates to transform their businesses and their desire to use M&A as a tool has never abated. And I suspect that once we get past the election, regardless of where it ends up in both the U.S. Congress and in the White House, that the approach to regulation, to antitrust and the like will be more constructive than it has been. It may manifest itself in different ways and to different degrees, but I believe that either, either direction will result in somewhat freeing up of strategic transactions. And when you take that plus continued easing of monetary policy, I suspect you’re going to start to see the private equity imbalance which has occurred become more imbalanced as capital markets continue to open up and there’s more opportunities to tap the equity markets.

As you start to see dividend recapitalization transactions like as you get the ecosystem into a better balance, you will see a more active environment. It’s just that it’s a slow rebuild and you see some of it in 2024. I’m reasonably confident you’re going to see more of it in 2025. Now as to what makes us confident beyond the macro environment about our firm, as I said at the beginning of the year we started with a record or near record number of mandates. We had an enormous pre announcement pipeline, but the covered was bare by historic standards in terms of announced pending closed transactions. If you look at what has transpired over the 10 months our mandate count continues to grow, it stands at or near record levels. Our announced pending close backlog has improved dramatically which sets us up very well for 2025.

We have more completed networks whether it’s by industry group or by geography. We have more maturation of the bankers on the platform. We have the benefit of some significant increase in understanding of our firm. We have far more companies who appreciate what we do and how differentiated we are. And all of that both from a micro and macro perspective sets us up very well for 2025 relative to either 2024 or relative to the last time we saw an active M&A market which would be 2021.

James Yaro: Excellent. That’s extremely helpful. Just one follow up here on sponsors which have comprised nearly 40% of the M&A market in 2021 and 2022, but less than 30% in 2023 and this year so far. So I guess the question is, is it conceivable that sponsors could return to comprising this much of the M&A market or is that more of a function of the near 0% interest rate backdrop?

Paul Taubman: I’ve always believed it was more the latter, which is that things have a way of returning to balance. And I think it’s dangerous when you have historic norms that are punctured and all of a sudden you’re dealing with aberrational weightings to just conclude that that’s the way the world is going to be going forward. And I think with each passing day it becomes clear that the quantum of capital that was raised in the alternative space, the quantum of capital that was deployed, the near zero interest rate cost, the fact that as assets melted up, having all of that low cost money created very attractive returns, that is not sustainable for the long-term. And that’s as we’ve now returned to a more normal direction of travel for interest rates that has put a lot of pressure in into the system.

And it takes a while to get back to a new equilibrium. So I suspect it’s going to be meaningfully better than it has been. But our view of the world is not predicated on it going back to what we saw coming out of COVID.

James Yaro: Excellent. Thank you.

Paul Taubman: Thank you, James.

Operator: We’ll take our next question from Jim Mitchell of Seaport Global Securities.

James Mitchell: Hey, good morning. Hey, Paul. Paul, maybe you can talk, since you were talking about sponsors there, can you talk about how you’re sort of leveraging Park Hill’s touchpoints with sponsors to kind of improve the win rate in sponsor M&A, where you are in that sort of evolution?

Paul Taubman: Yes, well, we can talk about it across the board. So we’ve always maintained that if you’re going to have, a best-in-class sponsored practice, the best way to do it is to have a best-in-class strategic practice. Because if you have a best-in-class strategic practice and you have all of that corporate access and you have an increasingly important number of sell side mandates and what you can talk to your sponsors about is highly relevant to what they do, which is to buy and sell businesses, then over time you build a world class sponsored practice. So it’s very hard to just start and say we’re going to cover sponsors. We don’t have the corporate side figured out. You need to get the corporate side figured out and then you need to translate it to sponsors.

So that’s the first point. And with every passing day, that mission is further advanced. The second thing is if you think about sponsors, they typically buy companies with relatively high degrees of leverage. Most of those investments work out, not all of them do. So not surprisingly, they become a disproportionately important part of the liability management or restructuring ecosystem as far as important clients. And if you look at some of the success that we’ve had in our liability management and restructuring endeavors, it has been to continue to expand the number of sponsors that we represent. And one of the wonderful things about sponsors is they’re highly sophisticated and they understand who’s best-in-class. And when you have a best-in-class franchise, that franchise is increasingly in demand as you continue to expand the footprint.

Then you get to the next place, which is Park Hill. And when you look at what’s going on with the deployment of fund continuation vehicles and the like, that increasingly is the domain of the largest GPs who don’t necessarily look for outside help in terms of fundraising because they’ve taken a lot of their fundraising capabilities and brought them in house. But as you have an ever growing demand on the part of large GPs for fund continuation services, being able to leverage our best-in-class capabilities with our sponsor relationships has helped to spark growth in that business. And then when you get to the next level, having mid-market sponsors who are quite desirous to work with Park Hill. Being able to now pair that relationship with deep domain expertise and knowledge of many of the assets in the portfolio, which might not have been the case five years ago or seven years ago, or even three years ago, increasingly creates lots of opportunities for us to present holistic relationship, holistic coverage, and a holistic approach to serving clients and being rewarded in terms of business.

So it all kind of is progressing apace and it’s all highly interrelated.

James Mitchell: Makes sense. A great color. Maybe just a follow up on just sort of the comp leverage. I think you’ve talked said today that every business line has had record revenues year-to-date, including M&A. I know that’s been the fulcrum of getting comp ratio improvements as we look to next year. The pipeline is good. M&A does seem likely to be improving prematurely. So is that sort of the key to getting the comp leverage out of the franchise? And any thoughts on it would be helpful.

Paul Taubman: I’ll give you the one word answer first. Yes. Now, to give it a little bit of context, we have said repeatedly that comp leverage for us, because we’re making such heavy investments in strategic advisory, is when strategic advisory revenues increase at a rate faster than headcount growth. That’s typically when you see comp leverage. Almost every year, in the early years, we were growing the revenues faster than the headcount. You saw comp leverage. You saw it in 2020. You saw it in 2021. Not surprisingly, when we continue to add heads in 2022 and 2023 and the market retreated and our advisory revenues retreated, even though they retreated less than virtually anyone else’s, you had that mismatch and that’s why you saw negative comp leverage in 2022 and 2023.

In 2024, I suspect you’re going to see headcount growth and growth in strategic advisory revenues reasonably matched. So it’s not getting worse, it’s not getting better. Having said that, when you turn the page to 2025, I am highly confident that our strategic advisory revenues will grow meaningfully in excess of our headcount. And that’s when you’ll begin to see meaningful comp leverage in the system.

James Mitchell: Okay, thank you.

Operator: We’ll take our next question from Brennan Hawken of UBS.

Brennan Hawken: Morning. Thanks for taking my question. So, Paul, I’d love to start on that last point. So it looks like Partner headcount year-over-year is up about 4%. If we look at total headcount, it’s up a little more 10. But your total revenue is up nearly 21%. So can you maybe help us understand what’s missing with the lack of comp leverage coming through this year? Because it looks like at this point you’re basically saying 69.5 is right, which would mean 30 basis points of comp leverage versus what was reported in 2023. So is, is there some movement going on under the surface? What’s causing the comp leverage to not show up this year? And why would that be different next year?

Paul Taubman: Well, I think, as I said, you’ve got to look at the headcount growth and strategic advisory. And you have to look at the revenue growth and strategic advisory. And what I’m telling you is if you look at those two this year, they’re going to be roughly in line with one another other. And we’ve made all of this investment in headcount for a number of years and we had two years of revenue contraction, albeit much less than anyone else. We now have an inflection point. The revenue has grown this year, but it’s not grown at a rate that’s in excess or meaningfully in excess of what our strategic advisory headcount growth. And when you look at headcount growth, you need to look at total headcount growth in strategic advisory.

Partners are an important part of that. Managing directors, the full stack up and down when we get to next year, if you just look at our announced pending close backlog and the like. As I said, I’m highly confident that those two will diverge to the positive, meaning meaningfully higher strategic advisory growth than headcount. And that’s when you’ll see it. And investment is a multiyear process. You need to think about it over multi years. It doesn’t just move quarter-to-quarter or even year-to-year, it develops over time. And we’ve been very clear on how our investors should think about the cadence of that. And we’ve been quite consistent that they should look to that green light, which I’ve been pretty clear is positioned for 2025 to start to see the benefits of what we’ve been building.

And we’ve had a couple of years of higher comp than we would like. But that’s in the short term. We have no doubt that if you just take the lens and make it a little broader that the return on that investment is going to be quite significant.

Brennan Hawken: Okay, great. We’ll be looking forward to that, to that meaningful leverage then next year. You also had some interesting comments on Park Hill. It sounds like things are really picking up nicely in that business. When we think about market currently and as I’m trying to think about what should happen in that market, it feels like we’re going to have probably a handoff from the continuation funds, a lot of secondary activity, into more of a regular way fundraising market. As things pick back up here in the beginning of next year, do you think that that’s a fair expectation? And then can you talk about that handoff and what that would mean for like economics and the revenue in the business and how it should translate into effectively growth for Park Hill?

Paul Taubman: Yes, I’m not sure that I would agree with that. I think the fund. I’m not sure that the fund. To me, the fund continuation concept is here to stay. The biggest issue has been a mismatch between desire on the part of GPs to avail themselves of these opportunities and the dedicated capital that is available to invest in these situations. And if you just pick up the papers, you’ll see an ever increasing stream of funds that are gearing up to put billions of dollars against this opportunity. And as you get a build out in dedicated capital for this asset class and the ability to underwrite larger transactions, more transactions, I think this business grows meaningfully from where it is today. And as far as the macro fundraising environment, I think we’re increasingly getting to a bifurcated market where not everyone can go out and raise their next fund.

And you’re starting to see a tiering where the successful funds can accumulate larger and larger dollars. And those that don’t have the performance and the scale are increasingly finding it more difficult. And in that environment, which is challenging, our Park Hill business has had differentiated performance because we have a differentiated approach to distribution and to origination. And in a more difficult environment, there is a flight to quality and that benefits our team.

Brennan Hawken: Got it. Okay. Thanks for the color.

Paul Taubman: Absolutely. Thank you.

Operator: We’ll take our next question from Brendan O’Brien of Wolf Research.

Brendan O’Brien: Good morning and thanks for taking my questions. I just wanted to follow up on the comp ratio commentary and specifically a few of your peers have cited that comp ratios are going to be structurally higher going forward, given the level of inflation seen specifically at the junior level. Could you speak to your confidence in your ability to get back to that 64% comp ratio that you were running to previously and whether you’re seeing any of the similar dynamics playing out within your own business?

Paul Taubman: I don’t see any reason sitting here today that we can’t do that.

Brendan O’Brien: Great. And I guess for my follow up, I want to touch on capital allocation and specifically whether you’re more inclined to do an acquisition today versus returning capital to shareholders. I know you recently did the deal for deNovo Partners, but given where you and your peers are trained today, it feels like there could be a lot of interesting opportunities out there to leverage your multiple and do an accretive acquisition. So it would be great to get a sense as to how your thinking has evolved here, if at all.

Paul Taubman: Look, we’re building a best-in-class firm. I don’t think you build the best-in-class firm by leveraging your multiple. So it’s not like we have a currency that we don’t believe in that we want to go use someplace. If anything, we still think it’s an incredibly undervalued currency. We want to continue to buy it back and we’ll use it if there is a highly, highly attractive combination. But as I said repeatedly, those are few and far between. And that’s why in our nine year history, we’ve done it twice and they’ve been a reasonably modest scale. They’ve been of a scale that’s big enough to move the needle, but not so big as to overwhelm the firm. And it all starts with is there a compelling opportunity? And the reality is investment banking, mergers, if you look at the history of them, they haven’t gone particularly well.

And I think we have the benefit. If you look at what we did with Blackstone, if you look at what we did with camera view, if you look at what we were able to do with our strategic alliance, we’re quite confident that if we do it, we can execute on it. But that doesn’t mean there are that many things out there that we have the confidence that we can execute on.

Brendan O’Brien: Great. Well, thank you for taking my questions.

Paul Taubman: Of course. Thank you very much.

Operator: We’ll go next to Aidan Hall of KBW.

Aidan Hall: Great. Thanks for taking my question. Most have been asked, but maybe just one on deNovo, obviously relatively small, few partners, but strategically sounds like it made a lot of sense to extend beyond the initial partnership. So wondering if you just expand on where you see the immediate impact. Is it really in making introductions on the strategic advisory side, maybe some benefit within Park Hill with primary fundraising and then over a longer term period, call it three plus years, like, what are your aspirations and what would success really look like for PJT in the Middle East?

Helen Meates: Helen here, maybe I’ll answer just more in the short term. As Paul mentioned, we have had a historical relationship. We’ve had a JV for four years. deNovo brings two Partners, two managing directors and some senior advisors, as well as licenses to operate in the region. So we’re very committed to the region and where it will have immediate impact. I think it’s across the board. It’s all the businesses where we operate. Advisory, restructuring, Park Hill. And so that’s where we focus. We’ve already had a lot of people flying down to the region to continue to meet with clients in that area and that will be our focus. Three years down the track, I presume that we will be well ingrained and have a lot of success.

Aidan Hall: I will leave it there. Thanks for taking my question.

Operator: Thank you. That concludes our question-and-answer period. I would now like to turn the call back over to Mr. Taubman for closing remarks.

Paul Taubman: Well, again, I want to extend our appreciation for everyone’s interest in our company. We look forward to speaking with you when we report full year 2024 results in early 2025. And until then, we wish you all well. Thank you.