Perella Weinberg Partners(PWP)2024-02-09 02:55Financial Data and Key Metrics - Full year 2023 revenues were 213 million, up 16% YoY [15] - Adjusted compensation expense represented 70% of revenues in 2023, up 3% from 2022 [50] - Adjusted non-compensation expense was 338 million in cash and short-term investments and no debt [52] Business Line Performance - The M&A business saw growth driven by large deals with higher fees, despite a 30% decline in global M&A market closings [16][7] - The financing and capital solutions business, including restructuring, made significant progress in 2023, with elevated client activity levels [43] - The backlog of announced and impending transactions reached a record high, driven by an increase in M&A activity [56] Market Performance - European business showed increased engagements and overall dialogue, with activity consistent with peer group reports [12][57] - The US and Europe both showed strong activity, with a lag in revenue recognition from larger transactions in Europe [57] Strategic Direction and Industry Competition - The company's integrated and collaborative model has proven valuable, particularly in restructuring mandates and future M&A activity [1] - The firm is focused on adding senior bankers in strategically attractive segments while maintaining disciplined admissions criteria [46] - The company aims to achieve 1 billion in revenue, with a stronger and more diversified team than a year ago [47] Management Commentary on Operating Environment and Outlook - Management highlighted the resilience of the business model, outperforming the broader market due to scale, corporate client focus, and diversified service offerings [16][17] - The company expects a resumption of growth in traditional M&A markets, with a tailwind for the business in 2024 [48] - Management emphasized prudent investments in talent and capabilities to prepare for market rebounds [33] Other Important Information - The company returned 65 million to investors in 2023 through repurchases, dividends, and distributions [53] - A quarterly dividend of 0.07 per share was declared [53] Q&A Session Summary Question: How does the company plan to grow faster than the broader M&A market? - The company is less tethered to the overall M&A market due to its scale, corporate client focus, and diversified service offerings. It seeks non-linear growth by hiring partners who enhance the firm's capabilities beyond their individual contributions [20][21] Question: What is the composition of the backlog, and how has it evolved? - The backlog is largely driven by an increase in M&A activity, with both restructuring and M&A pipelines up from the previous quarter and year [56] Question: How does the company view productivity per partner? - The company aims to increase productivity per partner to 15 million, up from $10 million in 2023, with investments in new talent requiring time to ramp up [60] Question: What are the hiring expectations for 2024? - The company plans to remain active in recruiting senior bankers while maintaining strict criteria for growth and seeking non-linear growth opportunities [39][46]