Evercore Inc (EVR) 2009 Q1 法說會逐字稿

Good morning, ladies and gentlemen, thank you for standing by. Welcome to the Evercore Partners first-quarter 2009 financial results conference call.

During today's presentation, all participants will be in a listen-only mode. Following the presentation, the conference will be opened for questions. (Operator Instructions). This conference is being recorded today, April 30.

I would now like to turn the conference over to your host, Evercore Partners' Chief Financial Officer, Robert Walsh. Please go ahead, sir.

Thank you. Good morning and thank you for joining us today for Evercore's first-quarter 2009 financial results conference call. I am Bob Walsh, Evercore's Chief Financial Officer. Joining me on the call today is Roger Altman, Chairman and Chief Executive Officer. After our prepared remarks, we will open up the call for questions.

Earlier this morning, we issued a press release announcing Evercore's first-quarter 2009 financial results. I would also note that we issued a press release yesterday announcing the formation of Evercore Trust Company and the pending acquisition of the Special Fiduciary Services business from Bank of America. The Company's presentation today is complementary to those press releases, which are available on our Web site at www.Evercore.com.

This conference call is being webcast live on the Investor Relations section of the Evercore Web site, and an archive of it will be available beginning approximately one hour after the conclusion of this call for 30 days.

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 there are important factors that could cause actual outcomes to differ materially from those indicated in these statements. These factors include but are not limited to those discussed in Evercore's filings with the Securities and Exchange Commission, including our annual report on Form 10-K, quarterly reports on Form 10-Q, and current reports on Form 8-K. I want to remind you that the Company assumes no duty to update any forward-looking statements.

In our presentation today, unless otherwise indicated, we will be discussing adjusted pro forma or non-GAAP financial measures, which we believe are meaningful in evaluating the Company's performance. For detailed disclosures on these measures and their GAAP reconciliations, you should refer to the financial data contained within our press release, which as previously mentioned is posted on our Web site. We will refrain from repeating the information included in the press release and focus instead on the key opportunities, challenges, and changes in our business.

We continue to believe that it is important to evaluate Evercore's performance on an annual basis. As we've noted previously, our results for any particular quarter are influenced by the timing of transaction closings, both on the advisory and investment management sides of our business.

I will now turn the call over to Roger, who will review our first-quarter highlights and results.

Good morning, everybody.

Evercore had an extremely active first quarter of 2009. A whole series of strategic developments occurred. But let me just begin with our results, or at least a summary of our results.

Our revenues performed rather well. They exceeded both the first quarter of 2008, the quarter-over-quarter comparison, and the fourth quarter of 2008, in other words the sequential comparison. Revenues were up -- were $50.6 million for the quarter, up 19% quarter-over-quarter and 54% sequentially.

Earnings were down, earnings per share on an adjusted pro forma basis of $0.05 compared to $0.13 on a quarter-over-quarter basis. Earnings were up sequentially. We had a loss in the fourth quarter of 2008 and so, by swinging to a profit this quarter, we compare favorably on a net income basis sequentially.

Let me mention a series of the strategic developments that occurred and then I will come back to talk about our results. We announced yesterday that we were acquiring the Special Fiduciary Services business formerly of US Trust and acquiring it from Bank of America. That will close momentarily. This is an important, very important development for Evercore. It's a classically strategic development. This serves the strategic priorities I have regularly mentioned of expanding our investment-management platform, diversifying our revenue mix, and this acquisition directly does that. We are very pleased to finally have received approval from the office of the Controller of the Currency and be in a position to do this.

SFS is a very successful business. This will be immediately accretive to Evercore's earnings, and it is a business which manages assets on behalf of employee benefit plans. It is by far the leader in its business, advising approximately half of the corporations, I believe, in the S&P 500, and the dominant business in its field. It's got a history of consistent performance and consistent profitability. You can see, given on the one hand that Evercore as an advisory firm has a particular niche among large-cap multinationals and on the other hand that SFS particularly serves the same clientele from an employee benefit plan investment management point of view, why it is synergistic. Their clients -- Ford Motor Company, JCPenney, Boeing and so forth -- are exactly the key franchise that we have on the advisory side. So we are extremely pleased to have finally received approval on this and to be in a position to close it, which we expect to happen momentarily.

In addition, the Firm hired three additional senior management directors on the advisory side this quarter addressing sectors in two cases which we haven't previously had organized coverage for. One is transportation and infrastructure; one is oil and gas. The third, Advisory MB, is based in London. This brings the total number of advisory SMDs to 37, and the total number of partners in the Firm to 47. I might say the firmwide headcount at the moment of 355.

We also announced, as you know, our new venture with CITIC Securities for China global investment and M&A. Evercore has joined with CITIC and with a very talented management group to organize a new firm for advising parties investing in or doing transactions in China and China-based parties doing transactions on an outflow basis. We are quite excited about that; it matches up with our previous alliances with Mizuho for Japan and the G5 group for Brazil.

In addition, Evercore Wealth Management has gotten off to a very strong start, substantially ahead of plan, has $650 million of assets under management already. That's quite a bit further along than we thought they would be. I'm not making any final judgments about Evercore Wealth Management but we are quite excited about how well it is doing.

Now, I want to come back and say a few words about the quarter. The quarter was essentially a "Tale of Two Cities". We had a very healthy performance on the advisory side and a very transitional but not very good performance on the investment-management side.

On the advisory side, our revenues were $48.5 million in round numbers, compared to $41.2 million in the year-ago quarter. Our adjusted pro forma net income, on a pretax basis, on the advisory side was $12.1 million, up from $10.3 million in the year-ago quarter. So if you look at the advisory business and you juxtapose that against the continuing, very difficult financial market environment which we all face, it did really quite well.

I am not prejudging our year -- I will come back and make one or two comments about that -- but it did quite well. I'm sure you know the results of our closest competitors and their revenues did not perform the way ours did.

I might say that both sides of our advisory business -- restructuring advisory, which is doing extremely well, and M&A advisory -- compared rather favorably, given the market circumstances which we face.

I would also say that we had a substantially higher number of revenue-paying clients in the advisory business in the first quarter in 2009 than we did in 2008. So the revenue was more diversified. We also had 22% of that revenue coming from non-US sources.

Now, on the Investment Management side, it is transitional news and not so hot news. We had a loss of $9.9 million. I want to explain that.

We are in the midst of doing several things here. Our goal is that this business breakeven next year. I wouldn't cite that as a goal if I didn't think that was reasonably achievable. Parenthetically, if we achieve that, you can imagine what a swing that will be in terms of our performance. That would be a very big development from the point of view of Evercore's P&L. Now, and of course beyond 2010, we expect this business as a whole to be quite profitable.

Now, here's what we are doing. There are a series of nonrecurring costs here, or one-time costs. They relate, for example, to portfolio adjustments or markdowns at the level of Evercore Capital Partners and at the level of Evercore Asset Management. These aren't giant markdowns but we did have $1.5 million in that category.

We also decided, together with the other founding partners, not to proceed with fundraising for HighView. We and other partners are writing off our development costs, legal costs and so forth in connection with that. It happened to be about $1 million, a little less.

Then, we have substantial startup costs in connection with Evercore Wealth Management, which is growing like a weed but of course is in the startup phase. Whether those are legal costs or other costs, it's not going to be profitable until it hits, give or take $2.5 billion of assets under management, so that is in new business mode.

We mentioned Evercore Trust Company. We had a lot of costs associated with acquiring the business. Those costs fell quite heavily into this quarter. Now that we've acquired the business, as I said, it is immediately accretive but we did have costs -- legal, regulatory approval related and other costs associated with acquiring it. We had a very, very small loss in Pan-Asset Management, our UK asset management advisory firm. So we had $2.6 million of costs in relation to new businesses because those three are very new.

We are restructuring Evercore Capital Partners. We've made a decision not to proceed at the moment with fundraising for Evercore Capital Partners III. The market conditions are too difficult. We have not decided to shut Evercore Capital Partners, but we are not proceeding with fundraising at this time. So, we are downsizing it and restructuring it. There are a whole set of steps in connection with that, but ECP did lose $2.1 million in the quarter, and then we had corporate allocations and allocated interest, which came to a total of a $9.9 million loss.

So, the advisory business performed well, the investment-management business, at one level, is in transition between new businesses and restructuring or phasing out other businesses. As I said, our goal is that this breakeven for 2010 or in 2010 and begin to be substantially profitable in 2011. I would not mention those goals if I did not think they could be achieved. But the main business, advisory, did well. This business, which we expect to ultimately be quite important to our Evercore, is in transition.

As far as the outlook for the business is concerned, we did do a bit better this quarter than we had expected to do, relative to where we were a few months ago and our expectations. I would still be cautious on the year. The financial market environment has showed some signs of thaw and improvement, but it is still very difficult. That applies to the equity market conditions and obviously applies to credit market conditions.

Our backlog remains quite healthy, probably a bit less risky because the restructuring advisory percentage of it has grown. That business tends to be more predictable from a revenue point of view than whether you do or don't do a particular M&A deal. So the backlog is a bit more solid.

Finally, a word about our comp ratio -- this is in the press release, but it would have been 52% on the advisory side if you leave aside the stock-based comp for new partners. Obviously, on a firm wide basis, the comp ratio is too high. I assure you that we consider that to be way off and that our goal is to get it back to the levels that we enjoyed around the time we went public. That's a very top priority for Evercore. Exactly how long it takes us to get to that depends a bit on how fast we continue to hire. We are aggressively expanding the Firm, and that's the basic dynamic on hiring on the advisory partner level, if you have all of the costs in the first year and you get the benefits in the second, third and fourth year. So for the moment, we are continuing to hire steadily and believe that's the right strategy for the Firm.

So I think, on that note, I will stop and we will be happy to take any questions that anybody has.

Thank you, sir. We will now begin the question-and-answer session. (Operator Instructions). Devin Ryan, Sandler O'Neill.

Just a follow-up on the outlook comments -- are we at a point yet where this recent equity market rally has at least started to create some activity behind the scenes or potentially an increase in client conversations? If it has, what sectors are you beginning to see that activity start to pick up, at least behind the scenes?

I don't want to give anybody the impression that the fundamental turnaround has already happened, because it is not that type of thing. There's been some improvement, but I mean my basic message on this is that there has been some improvement in the tone but the conditions are still quite difficult.

For example, global M&A volume -- I believe I have this figured just from memory -- was 42% lower in the first quarter of '09 than it was in the first quarter of '08 -- 42% lower. That tells you a lot.

So, what counts is transactions which actually occur. Obviously, in the first quarter of '09, business was really tough from an industry point of view.

I would describe myself as cautious but hopeful that we might have a slightly better year than four months, five months, six months ago we would've thought. I want to strike a cautious note on that because business conditions remain volatile. Your guess is as good as mine as to whether or not equity markets, for example, have seen their lows or whether they haven't. I certainly wouldn't bet the farm one way or the other on that.

So, are we seeing a surge in business or a surge around the Street? The answer is no. Are we seeing a somewhat better tone? The answer is yes. I don't know how to put it any differently than that.

No, okay, no, that's helpful. On the expensive front, you guys made some additional progress this quarter, but items like professional fees and travel are more business related and those seem to improve. Should we expect that this level is, I guess the level this quarter is sustainable, or is it likely that it's just going to creep back up as activity levels rebound? Or how should we think about that?

Devin, I think you are right that, as business activity rebounds, that will cause somewhat of an upward movement. In addition, of course, the new businesses will create an increase in the expense lines, both the addition of the SFS team as well as beginning on April 1 we will be consolidating our Evercore Asset Management business. Historically, we picked that up on the equity method.

Okay. Then just on the acquisition announced last night, can you guys give any more details on the price or deal terms, or just how we should think about that? Was it a material event in terms of the deal value?

Well, we haven't closed the acquisition, so I am going to say simply the following. It will be important or material to Evercore's P&L. I am not going to make any forecasts; we don't do that. It wouldn't be appropriate to talk about any aspect of the acquisition until it's finished, which I do expect to be any minute, but it hasn't yet occurred. We wouldn't be announcing it if it wasn't a certainty that it would be finished, but it hasn't, as a technical matter, been closed.

I should say, though, that SFS, which is the business we are fortunate enough to be acquiring, has been the leader in its field for about 20 years.

I misspoke a little bit before, so I want to correct this. SFS has served employee benefits and sponsored by about half the companies in the Dow Jones industrial average and about 20% of the companies in the Fortune 500, as well as -- and this is really significant -- three quarters of the top 20 corporate plan sponsors in the United States. So it dominate its business. It's been very successful historically. Chuck Wirth, the CEO, is sitting here with me and we are very pleased to be partnering with him and his colleagues on this business. This is going to have an important impact on our P&L. I will just leave it at that.

Okay, great. Then just lastly, on the stock-based comp for senior-level hires, the kind of drag on the comp ratio here, what is the timeframe again on how that is expensed over how many years?

Generally, it is over four years.

Okay, great. Okay, thanks, guys.

Michael Hecht, JMP Securities.

Just a follow-up on the comments on your plans for hiring this year. We know you are at 37 SMDs, up 3 so for this year. Just you give us a sense of where that puts you in your hiring plans for the year and then maybe a few of the other industry groups or areas you are looking to hiring?

Well, just to put it in perspective, the beginning of '07, there were 33, I believe, partners in the firm. There are 47 now, SMDs. All of that growth has occurred on the advisory side. I don't know what the final number will be for 2009, but it will be larger than the number we have so far. It could be six or seven, or five, some number like that. If we ended up around six, I would be quite pleased.

We are continuing to fill in sectors, so we hired an SMD, George Ackert, who will be joining us shortly after his garden leave is completed, who will address transportation and infrastructure. We hired an SMD whom we haven't announced yet, who will address oil and gas for us, based in Houston. And we hired an additional and very senior SMD for London.

Other sectors we're looking at include natural resources, include forest, paper products and building materials, and others. There are a series of sectors which we would -- and I've talked about them from time to time -- which we would like to fill in. We would like to have a broader focus or a deeper team for example on healthcare, even though the team we have is extraordinary. We would like to have a broader platform on [FIG] even though that has been our biggest-single area for most of the last three years. Then there are a series of other issues, of other sectors that we would like to fill in and address, and I just mentioned two of them. So, I hope that is responsive.

Yes, that's very helpful. Thank you. Then just on that same -- and I'm sorry, I was focused on the M&A segment and I didn't mean to mistake the overall number of SMDs there.

It clearly must be a good environment to add talent versus some of the larger firms, but at the same time, it seems like there's a lot of small firms looking to continue to hire. Can you maybe just talk a little bit about the competition to add the really high-quality folks that you guys obviously and many of the other boutiques like to hire and kind of the value proposition of joining Evercore versus maybe some of these other firms?

I think there are two main points. One is that, as you just said, it's a very favorable moment for hiring as it relates to the obvious out-migration of talent from large firms. We all know why that's happening.

At the same time, there's always competition for the best people. The types of people we want to hire, that Evercore has always tried to hire, the very best and, frankly, paid accordingly, are always in demand. So, there is competition from places like Deutsche Bank, Credit Suisse and others who are not TARP recipients and so forth, and there is competition from other boutiques.

I've said many times that one reason we have a particular niche among large-cap multinationals is because our partners tend to be more senior and more experienced. But those are the types of individuals who are most sought after.

So it is not true that competition for people like that is way down. It's not what it was but it is still very, very strong. You do have to work at it every day.

I got you. Okay, that's helpful.

Then just in terms of your M&A advisory revenues, I mean obviously they were clearly a lot more resilient than I think many of us thought. Up 19% in this environment is pretty good year over year. It was pretty tough to track the public deals you guys were on this quarter, so can you give us a little more sense of whether your fees were more heavily skewed towards private but more traditional M&A deals, or was it really just kind of more heavily skewed towards the restructuring type assignments?

No, you know, it was reasonably balanced. I mean, we had some substantial deals this quarter. We advised on Pfizer-Wyeth even though the primary payment in regard to that, as usual, would be made at the time of the closing. We received some compensation in regard to that.

We advised Swiss Re on the Berkshire Hathaway deal, which was a substantial transaction. You can see, in our press release, there were a series of others the Time Warner Cable transaction for example.

So our M&A business performed, under the circumstances, rather well.

Now, the restructuring side is just doing quite well, and in fairness, so are other of the high-quality restructuring firms doing well. And so we received substantial compensation in regard, for example, to LyondellBasell, the giant global chemical company which we are advising in bankruptcy. I think it is well-known that we and Morgan Stanley are advisors to General Motors. You can imagine how active that is. We must have 20 people working close to full-time on that. We have a whole series of other large restructuring assignments, including Delphi, including MGM Mirage, and Sirius XM, which we were able to complete this past quarter. That side of the business is doing extremely well.

But we had very diversified revenue. I mean, I mentioned that we had a higher number of fee-paying clients this quarter over the quarter a year ago by a meaningful margin. In general, business was reasonably good, but I want to be again careful here. This is not a quarter-over-quarter, a quarter-by-quarter business, as you guys know.

Sure.

You are going to continue to see, on a quarter-by-quarter basis, up-and-down results because we have no control over when a transaction closes. You know, I worked together with a whole group of other people on the Pfizer-Wyeth deal. I can't tell you myself right now precisely when that's going to close. It has to do with regulatory review and so forth.

So, predicting this business on a quarter-by-quarter basis is truly impossible. We always try to urge people, please do not evaluate us on a quarter-by-quarter basis, because we will all wish we didn't.

Okay, that's fair enough. As you kind of talked about, I mean, in the release, you note you had about 69 fee-paying clients this quarter versus 60 a year ago. I mean, there too is kind of an equal balance between restructuring clients and kind of the more traditional stuff, or is it skewed one way versus the other?

Well, first of all, it is important that we provide a little background on that number.

Okay.

A meaningful percentage -- it's not half but it is a meaningful percentage -- of those clients are in Mexico and Latin America, where you tend to have a lot of clients from whom you receive, on average, less revenue than you might in the US and Europe, so keep that in mind. But if you put that aside and look at the US and Europe, business is just quite diversified from the point of view of restructuring versus M&A, quite diversified. I don't know how to say more than that without providing information that we don't want to provide.

Okay, that's fair. Then just the last one for me -- the traction you talked about in Evercore Wealth Management, the $650 million. That seems a good pace of net new money. Can you give us any more color on the kind of distribution strategy there, where you are sourcing new assets from?

Well, remember this is a financial advisor-centered business, meaning that we are recruiting what will eventually be a very substantial team of financial advisors. What they are fundamentally doing is bringing in their previous clients and some new clients. So, if I were one of them, what I'm doing is reaching out to those I know and trying to persuade them to be clients of mine at Evercore Wealth Management. So you know, it is not really all that much -- it is not that unlike investment banking where the senior managing directors of the firm work with the clients they are responsible for. The financial advisors at Evercore Wealth Management work with and collect assets from the clients and prospects whom they know.

Okay, great. Thanks a lot, guys.

Ken Worthington, JPMorgan.

This is [Sunda Akar] in for Ken Worthington. If I remember correctly, you previously mentioned you expect Investment Management to contribute 20% to 25% of revenues by 2010 or 2011. Is this still a realistic expectation?

I would say we are probably behind on that objective. I expect Investment Management to be an important profit contributor in 2011, but I don't think we're going to hit our goal in 2011, but it's accounting for 25% of the profits of the Firm.

That is still a goal I would say that is probably reasonable for the year after that, but I would say we are a bit behind. It needs to be 2011 on that. It will be an important profit contributor based on our -- at least our forecast and our expectations. Will increase 25% of total net income? I don't think so.

Okay, thank you. Just a follow-up on that -- as you are restructuring ECP and investing in Wealth Management, is it reasonable to expect that they will go back to the $8.5 million comp expense level that we've had in the fourth quarter last year for the Investment Management business?

Well, the press release indicates we will have some additional charges in the second quarter associated with the restructuring of the private equity business. Then as we bring on the new businesses, of course the mix of compensation between the businesses change.

So I wouldn't look to the past as a precise indicator. Once we get past the second quarter, of course the compensation of our private equity team will -- the compensation costs of that business will be down significantly.

Yes, down very significantly. I mean, we have reduced the size of the team. We've entered into a new agreement with the team which, among other things, involves about 750,000 shares that are being reacquired by the Firm from the team. The costs, the ongoing day-in and day-out, month-in and month-out costs of ECP are being sharply cut.

Okay, that's very helpful. Thank you for taking my questions.

Eric Bertrand, Barclays Capital.

In the Wealth Management business, can you help us out with what the average balance was during the quarter, or if not the exact number, was it back-end loaded such that the revenue spread was much lower than what we would have expected off of $650 million?

By the way, that is because the mix so far between fixed income and equity management is skewed more to fixed income. Eventually, the mix between the two, in our judgment, will ultimately be more favorably proportioned as relates to the equity side where margins are higher, versus the fixed income side. But that's the reason for that.

As to the average assets, we are not going to disclose that.

Yes, I don't know the average. As Roger said, that wouldn't be a number we would give. But of course, Eric, as a practical matter, it is a bit backend loaded. Much of the team had a garden leave and only joined us at the beginning of the quarter. So it takes time to ramp up.

Okay, that's fair.

If you are saying that $2.5 billion is the breakeven for that business being profitable, is it fair to say that you would expect Evercore Wealth Management to be a positive contributor to the segment's breakeven in 2010?

I think it is a little early for us to forecast when we would hit that point, Eric. Again, the first quarter is encouraging. The team is doing great and the backlog as we look at the second quarter is also attractive. But to translate that into a run rate to 2010, it's just a little early.

My comment about breakeven on 2010 pertained to Investment Management as a whole. That's our goal; that's our goal. I can't guarantee we will achieve it, but that's our goal and I take that very seriously.

Right. With the three pieces going into the segment, private equity is probably not going to be a profitable business in 2010 with ECP III delayed. With Wealth Management, I'm not really sure what's going to happen, so the remaining pieces, the investment management, Evercore Asset Management, which I don't know that we could count on profitability from that, either. So I'm getting the impression that Wealth Management is probably going to be ramping up pretty quickly.

Well, keep in mind that Evercore Trust Company/Special Fiduciary Services will be in that group, will be substantially profitable. It's difficult to forecast Evercore Asset Management, but right now, that is the sector they serve. Small/mid-cap, deep value is roaring. We would like to think that Evercore Asset Management will reasonably soon become a profitable contributor of profit.

So if you look at it, Evercore Wealth Management will become an important profit contributor. It's very hard to forecast exactly when -- Evercore Asset Management we believe also. SFS is very profitable right now. ECP, as you just said, will likely not be for the time being. Pan is a very small-business, so it has no material impact on the P&L. We've decided not to proceed with HighView, so that is behind us. And there you have it.

Okay, that's helpful. On the expense side, we've noticed the acquisition-related costs over the last couple of quarters adding up to almost $2 million. Was this associated with the trust business that you acquired, or is there something else?

It was predominantly associated with the trust business.

Okay, thank you. Could you help us understand the second-quarter '09 charge? You know, I understand you had $1.6 million on a pro forma basis. Is the majority of it from the equity comp adjustments, or is that from the actual restructuring part? Could you walk through the equity comp modification?

You mean the upcoming charge?

Yes, in 2Q '09.

Well, there's a very bizarre, very bizarre situation from an accounting point of view, which goes like this and you're going to think I am making this up. We arranged to reacquire approximately about 750,000 shares from the ECP team. Now, of course, from a medium and long-term P&L point of view or EPS point of view, that is a good thing -- fewer shares outstanding. But, in reward for that accomplishment, we are taking a large charge.

Now, this is my 40th year in business. If you can explain to me the underlying rationale, I would love to hear it. I haven't found anybody -- and as good as Bob Walsh is, even Bob can't explain exactly why that happens, but it does. So the world of accounting -- I think I recently saw Pan's Labyrinth for the third time. The two of them have a lot in common.

But we did a good thing, reacquired these shares. We are taking a charge. Obviously you've got to look at our adjusted pro forma net income. I will bite my tongue as it relates to GAAP, but a little bit mysterious -- why you would take a charge for doing the right thing and getting the shares back, but you do.

So Eric, as we think about the second quarter, again we've tried to totally recast the comp of our private equity team so that it would be aligned with the generation of revenue and profits for the business going forward. On an adjusted pro forma basis, we've disclosed that we will be taking a small charge in the second quarter that results from accelerating a little bit of equity as well as some other costs associated with downsizing the team. The remainder, the substantial remainder, relates to the additional accounting charge we will take on a GAAP basis.

Okay, that's helpful. The last question I've got is around HighView. Why did you or the founding partners of the business actually decide to fully unwind the business as opposed to rather just delaying it for better conditions? So it's going to take too long to get better, or --?

Well, the key answer is we have some other thoughts in regard to ways of working with Ralph Schlosstein, the founder. He is not going to sit around and just wait. He is a very successful, in fact hugely successful guy, having been cofounder and President of BlackRock for 19 years. So he is not going to tread water. He is going to move from HighView to another strategy, and we are involved in discussions with him about that. What exactly happens with that, I don't know, but that's what's going on.

Okay, that's helpful. Thank you, guys.

There appear to be no questions at this time. I would now like to turn the floor back to Roger Altman for any closing comments. Please go ahead.

I will just thank all of you for participating and I very much appreciate your questions.

This concludes today's Evercore Partners first-quarter 2009 financial results conference call. You may now disconnect.