Greenhill & Co Inc (GHL) 2011 Q3 法說會逐字稿

Good day and welcome to the Greenhill & Co. LLC third-quarter earnings conference call and webcast. (Operator Instructions).

Please note this event is being recorded. I would now like to turn the conference over to Richard Lieb, Chief Financial Officer. Mr. Richard Lieb, the floor is yours, sir.

(technical difficulty) -- third-quarter 2011 financial results conference call. I'm Richard Lieb, Greenhill's Chief Financial Officer, and joining me on the call today is Scott Bok, our Chief Executive Officer.

Today's call may include forward-looking statements. These statements are based on our current expectations regarding future events that by their nature are outside of the firm's control and are subject to known and unknown risks, uncertainties and assumptions. The firm's actual results and financial condition may differ, possibly materially, from what is indicated in these forward-looking statements. For a discussion of some of the risks and factors that could affect the firm's future results, please see our 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. Neither we nor any other person assumes responsibility for the accuracy or completeness of any of these forward-looking statements. You should not rely upon forward-looking statements as predictions of future events. We are under no duty to update any of these forward-looking statements after the date on which they are made.

I would now like to turn the call over to Scott Bok.

Thank you, Richard. We are quite pleased with the results we announced today. Our advisory revenue for the quarter was $83.2 million, which is almost identical to our solid second-quarter result, despite what were some extremely difficult market conditions during the quarter. Our last two quarters combined are our best back-to-back advisory revenue quarters since 2007 when M&A was hitting an all-time high.

The third-quarter advisory figure is down 14% from the prior year's third quarter, but it is worth noting that last year's third quarter was particularly strong, almost double our average of the other three quarters last year. For the year-to-date, our advisory revenue is up 11%, and when you consider last year's soft fourth quarter and what I'm about to say about the outlook for the current quarter and beyond, it is safe to say that we feel very good about where the full-year advisory revenue growth figure will come out both in absolute terms and relative to where our analysts are expecting our large bank competitors to end up.

Our total revenue figure for the quarter was heavily impacted by the $23.6 million decline in the value of our stake in Iridium Communications, which is the last significant investment left from the merchant banking business that we announced our exit from two years ago. Suffice it to say that Iridium's operations have continued to perform very well, but it was one of many victims of the carnage in the financial markets in August and September.

It is worth noting that the Iridium investment has still been a money maker for the firm since its inception, but its volatility and the resulting distraction from our core business are such that we decided to adopt a plan to put the liquidation of that holding on autopilot, and Richard will provide more detail on that in a moment.

The sharp drop in the valuation of Iridium also somewhat distorted our compensation ratio for the quarter, and Richard will also give more detail on that.

But standing back and looking at the big picture, it is important to note that two years ago we made the move to become a purely advisory business. We said then that all the principle investments that remained from our prior activities were simply being held until they could be liquidated. While, of course, we want to maximize the value of those liquidation proceeds, whatever they turn out to be, that liquidation is a one-time nonrecurring event that has no effect on our core advisory business.

Since the liquidation proceeds are essentially going back to our shareholders, the only real impact of the value achieved is on how much stock we can buy back. What really determines the long-term growth and profitability of the firm is our advisory business, so let's turn back to that.

Our strong advisory revenue for the quarter again demonstrated the breadth of our business. We list nine completed M&A transactions in our press release with the clients for those coming from five different countries. We have had a number of good transaction announcements lately as well, and those, likewise, demonstrate the strength of our brand across North America, Europe and Australia.

We also noted in our release that our private capital advisory group generated revenue on eight different private capital raisings in the quarter. We have made a significant investment in people to develop this business, particularly with the addition of a real estate focused team last year, and I'm pleased to say that they have now had time to build out a pipeline of projects and are having a meaningful revenue impact.

And apart from all these specifically identified revenue items, it is worth noting that we continue to generate revenue from a wide variety of corporate, government and institutional clients in ways that are not transaction-based. Year-to-date we have earned at least $1 million from 51 different clients, and that is up 21% from prior year. Last year we grew our $1 million or greater fee-paying clients 33% for the full year.

Now let's turn to the outlook. On our last quarterly call, I said that you would have to go back multiple years to find as good a set of large, important and high probability assignments as we had then. Despite what happened in stock markets around the world in August and September, that statement remains true today, and perhaps it is now a bit more visible from the outside as a result of a second consecutive strong revenue quarter and some major recent transaction announcements. Our outlook reflects a continuing high-level of activity in Australia and improving levels of activity in North America, Europe and Japan. The pipeline of fund placement assignments also is continuing to develop favorably after a difficult few years. We are even seeing a bit of an uptick in restructuring activity after a fairly dormant year or so given the change in credit markets.

I recognize that data for the entire M&A market suggests that what we are seeing is different from what others may be seeing. I think the root causes of that are the continuing trend towards use of independent advisors, which is perhaps particularly so in turbulent times like these, as well as the fact that our many senior recruits from the 2008 to 2010 period are now hitting their stride after the initial ramp-up period. I'm certainly not saying our pipeline is immune to whatever may happen in the economy or markets globally, but it is so far so good when it comes to the impact of recent market activity.

Now I will turn it over to our CFO, Richard Lieb, to talk about our costs, profitability and continuing efforts to return excess cash to shareholders.

Thank you, Scott. I want to touch on four broad topics today. First, compensation costs both year-to-date and importantly for the year as a whole. Second, non-compensation costs, including taxes. Third, balance sheet issues, including a discussion of the recent 10b5-1 program we filed for our Iridium shares. Finally, I will provide some commentary on how we see our operating performance and the continued liquidation of our principal investments driving our share repurchase strategy, our dividend and our debt levels.

First, let's talk about the compensation ratio, and I want to first step back as I did on the last call and discuss our philosophy and our history. The philosophy that we laid out at the time of the IPO is to strive to keep the comp ratio below 50%. This is obviously good for shareholders, and it is also good for employees as we believe it leads to a stronger stock valuation over time, which is critical as employees have meaningful stock and RSU positions and will continue to receive meaningful levels of RSUs as part of compensation going forward.

For our first six years as a public company, we came in even lower than our stated objective with a comp ratio right around 46% each year. While that level remains our goal, last year we did not achieve it. After three years of meaningful expansion of our professional staff and three very difficult business years in terms of general market transaction activity, our compensation ratio came in at 57%, still strong on a relative basis but inconsistent with our objective.

So now let's turn to where we stand this year. For the third quarter, we were at 50%, which is slightly above our historical target. On a year-to-date basis, the comp ratio was 54%, also above the historical target. I do want to stress that those ratios are strongly negatively impacted by the mark-to-market losses and our effectively discontinued principle businesses, particularly the value of our shares in Iridium. If we looked at our comp ratio as a percentage of our advisory business, which is our sole business going forward, the year-to-date ratio would be just under 50%.

So now the question is, where will we be for the full year? The answer is, as it was on the last call, it is going to depend on how the year plays out, but you have already heard our comments about our strong level of client activity, and you can hear how focused we are on this issue. So you can see directionally where we hope to be going.

Let me add that in setting our comp ratio, we obviously need to plan to pay our employees competitively. Based on our year-to-date results and our expectations for year-end, we are quite comfortable we are on track to do that.

Now let's talk about our non-comp and other expenses. Our quarterly non-comp expenses came in at $16.9 million, about $1 million or 6% higher than last quarter and about $1 million higher than we would like to see it. This quarter was impacted by major quarter-end foreign currency fluctuations, and higher travel activity for client development also had an impact.

On the other hand, our tax rate of 34% was a bit lower than usual given we generated more revenue in lower tax jurisdictions.

Moving on to balance sheet items, there are a number of issues I want to address. First, let's discuss the progress we are making in exiting our principal investments. Just to review, in June we sold substantially all of our limited partnership interest in two of four funds for approximately $49 million. The proceeds from these sales were used for exactly as we said they would be, primarily for share repurchases. Over the past two quarters, we have repurchased approximately 810,000 shares in the open market.

Continuing our exit from the principal investment business, earlier this month we initiated a 10b5-1 program for our shares in Iridium. Just as a reminder, as a result of our successful completion of our SPAC in 2009, we owned just under 10 million shares in Iridium or approximately 13% of shares outstanding. Our 10b5-1 program represents a way to slowly sell our Iridium position with what we believe to be the least amount of impact on Iridium's stock price. At the pace we have designated in the program, we would expect it would take approximately two years or longer for us to sell our full position. We intentionally stretched it out in hopes of achieving higher prices over time, but as Scott noted, this is a one-time event, and the ultimate proceeds will be what they will be.

Our net cash position remains strong. At the end of the quarter, we had approximately $62 million in cash and approximately $25 million drawn on our line. Given that our line was in place historically primarily to fund capital calls from our now mostly exited fund business, we would expect to continue to maintain a strong net cash position.

So how does all of this fit together? We believe that the market is presenting us with a great opportunity now. We have the ability to generate meaningful cash first from our operations and second from the continued liquidation of our principal investments, including both our nearly 10 million shares in Iridium that I just spoke about, as well as our remaining fund investments worth approximately $28 million net to us today. Given our meaningfully reduced capital commitments going forward, the cash generated can be utilized to continue to both pay a strong cash dividend and to continue our program of share repurchases while still keeping our debt level low.

Now let me turn it back to Scott for some final comments.

Thanks, Richard. I think it is important for us to regularly reiterate what we are trying to achieve as a firm and then measure how we are doing versus those objectives. Our four stated objectives are to continually increase our share of the global advisory fee pool, to have lower cost than our peers and to maintain a flat share count and a strong dividend. As we come down the home stretch of 2011, we feel on track with respect to each of these objectives. You have heard how our advisory business is continuing to grow in breadth and scale. You have heard that our costs are below are closest peers with the objective of going still lower, and as for dividends and share repurchases, you have seen the continuation of our strong dividend, as well as $36.7 million spent on open market share repurchases for the year-to-date.

While our actual results for the year are turning out quite satisfactorily, perceptions have sometimes been different as various market commentators have raised a variety of questions over the year. I think it is worth briefly responding to those now that more actual data is out.

First, we read or heard claims that we could not maintain our dividend and sometimes even that extending our modest line of credit would be a problem. The continuation of our dividend, along with significant share repurchases all while reducing our debt to a minimal level, hopefully clarifies those issues. Second, we heard a variety of people-related comments. For example that we were losing a lot of key people or that our new recruits were not as productive as our earlier partners. On the first of those, the fact is that this is another year of strong continuity in terms of our senior bankers, and I don't think there is a region or an industry sector where we are not at least as strong today as we were at the beginning of the year.

More broadly on people, we will end the year with only a slightly smaller headcount than we started with without the pain of widespread layoffs that many firms are having to deal with. We will continue to fine-tune and upgrade our roster of talent over time as we have always done in order to field the best possible team. And speaking of upgrades, our newer partners are proving their capabilities this year as demonstrated by our great success in newer offices like Chicago, Houston and Sydney, as well as newer businesses like fund placement.

Third, we heard that our compensation costs had grown to high, and while they did get out of line with our history and last year's fourth quarter and this year's first, the data for the full-year 2010, as well as for the year-to-date 2011, reflects lower compensation costs than our closest peers on a comparable GAAP basis. And, as Richard said, our goal is to get all the way back to our historically low cost levels as soon as market conditions allow, and I think that intention is evident in our last two quarterly results.

Lastly, perhaps as a result of the combination of the various concerns noted above, we heard that our business model was flawed and that it was both not diversified enough and no longer capable of generating the growth it had historically.

The short answer is that our seven and a half year record on market share costs, share count and dividend proved the attractiveness of our business model. But, to answer the question more directly, the fact is that the continuing strength of our advisory business across different geographies, industry sectors and types of advice demonstrates the diversity of our revenue sources, and we can achieve that diversity without entering businesses that have significant capital requirements or regulatory issues or create conflicts with our clients.

And as to growth, the resilience of our advisory business in the face of this year's choppy market demonstrates our ability to generate growth. We will confess to being opportunistic on how we pursue growth, which explains our aggressive hiring in the financial crisis and almost no hiring during this year, which initially looked like it would be a good one for both market and our large competitors. Now with renewed concerns about the big bank model, we are, again, seeing high quality recruits come our way, and we will look to selectively capitalize on those opportunities in the months to come.

With that, let me open it up for questions.

(Operator Instructions). Howard Chen, Credit Suisse.

Macro uncertainty is heightened, markets are pretty volatile as you said, Scott, yet you remain pretty constructive on the revenue backlog. As you and the team stand in front of corporate boards and CEOs, what do you think is maybe driving some of that disconnect for us that just obviously are not in the room?

I think it comes from really who our client base is, and that we don't -- I think everybody knows we don't do a lot of work for private equity funds. We also don't do a lot for smaller or mid-type companies that maybe are more dependent, have more leverage or are more dependent on their banking relationships. We tend to work with the biggest companies in each market that we are in, and I think while we can all agree that governments right now are quite weak in many ways, that consumers are quite weak, but the major corporations are really still quite strong. I mean you see with even the earnings being announced from the last week or so, earnings look pretty good, leverage still looks quite low, capital is incredibly available for major companies that want to borrow it. And I think, as a result of all that, at least what we are seeing is that our client base appears to want to proceed with their strategic objectives of acquiring things or divesting things, notwithstanding the fact that there is a lot of bad news in the markets.

Thanks, Scott. That is helpful. And then I think you had made some commentary about some of the early -- your early view of the hiring outlook for 2012 potentially being a big one for you all. Just any evolved thoughts on that?

I mean I don't think it is going to be huge in the way that 2008, 2009, 2010 were. But I have seen I would say, frankly, a marked change since around Labor Day. I mean obviously August was a horrific month in the markets and a horrific month for our big bank competitors, and it just looks like we are seeing some very high quality talent that looks like it may flush out of those banks again. So I don't think it's going to be a giant year for recruiting, but I will be certainly surprised if we don't add some really high quality people in the months to come.

Thanks. And then I just had two quick ones on the numbers, Richard. First, can you just let us know the impact of the RSU amortization on the comp this quarter?

I just want to see what is out there right now versus what is going to be in the Q. (multiple speakers). I think that is going to be in the filing. Because right now all that is out there is what is actually in the press release, which I was just going back to check for a moment. So that information would wait until it is filed for everybody in the 10-Q.

Okay. Great. And just the second one, that is helpful commentary on just going through the state of the balance sheet as you see it. I guess, before we think about any proceeds from Iridium, how do you all think about the pace of share repurchase from here, or is there a way for us to frame the dry powder as you see it?

That is a hard one to quantify because it is for us -- frankly, we hope it will be quite meaningful, and maybe flat will be an understatement, frankly, if trends continue, and we continue to see a strong advisory business. But essentially what we do is, we do on a very regular basis, we do cash flow forecasting. Again, we don't have a lot of uses for cash. Our debt is nearly paid down to zero. We don't have much in the way of capital investment at all. We have minimal commitments left to our funds. So we look at what we are working on, what the receivables are, what the pipeline looks like, what the asset sale proceeds are going to be going forward, and just kind of continually recalculate what we can afford to buy back without leveraging up, which is what our objective is. We don't intend to borrow a lot of money to buy back stock, but we are hopeful there will be meaningful cash we can use to buy back shares without leveraging up.

Devin Ryan, Sandler O'Neill.

Just to be a little bit more clear on the comments about the impact of -- or I guess that you are not seeing much of an impact on the book of active advisory assignments. I just want to get a sense of, are you seeing any impact on the timing of when deals are being announced versus maybe what you had maybe previously expected or seeing an impact on the pace of new deals filling into the backlog relative to what you had been expecting prior to the market volatility picking up?

You know, I would say it kind of surprises me every time I'm able to say this, but we really have not seen a big impact on timing. I will not say we have seen no impact. Certainly some deals may need to be renegotiated or restructured given changing stock prices or changing credit markets, but there has not been a big impact. And, frankly, there had been other things that, frankly, have been somewhat accelerated by various events in the market around the world.

So I don't see a big impact on timing. Obviously if things get worse, certainly there could be, but so far we have not seen it. And on the new assignments, frankly, again, I would say no, we have not really seen any kind of slow down in that. I mean obviously in a firm our size it comes in fits and starts all the time, but certainly many times in my career I can remember post-9/11, post the long-term capital failure, post the stock market crash of 1987 where things kind of went quiet for a couple of months. I would not say things have gone anything like quiet in terms of new opportunities as a result of August/September.

Okay. Good to hear. And then just on the fourth quarter and given what to me sounded like positive expectations for the fourth quarter, are there more substantial deals that need to be announced to maybe fulfill that, or is it more of function of deals that are already out there being closed or getting closed as expected?

I probably cannot comment terribly specifically on that. I mean obviously when we talk about how the future looks, we are not sort of making heroic assumptions. When we do that, we try to be pretty realistic about what is going to happen. And clearly we are at a time of the year where there are not going to be a whole lot of transactions announced by anybody in this market in the remaining 10 weeks or whatever it is of the year that are going to still close this year. There will be some because some private company deals are asset sales you cannot close off within a month or so. But there will not be a huge amount more of those, if that is helpful to you.

You know, that is helpful. I just wanted to make sure. And then just lastly, I apologize if you guys touched on this but getting back to the uses of capital and cash, it sounded like acquisitions in Latin America had maybe seemed to be on the radar in recent quarters. I just want to get a sense of any change in appetite there or getting any closer to maybe finding something on that front?

I think no, certainly no change in strategic appetite at all. That is still an objective to expand further geographically, but frankly -- and you hear it in our comments about share repurchases -- given where our share price has been and is, we are not excited about issuing stock. And we are not talking about huge amounts either, but even in small amounts, we are not excited about issuing it at this kind of level. So we would rather be a buyer than a seller of our stock, and we will revisit I would expect even in the fairly near to medium term going ahead with those expansion plans but not immediately.

Okay. Got it and --

And one thing I would add to that is you kind of linked that with uses of cash, even if we were to go ahead with something like that consistent with how we have done other things in the past, I don't think those would be big users of cash anyway. I think we would certainly structure it in a very different way.

Sure. Fair enough. And then just lastly, back to the comp expense and the amortization, I know you guys don't want to give that number. But just as we think about the impact going forward, is there going to be a material impact on, I guess, the fixed amortization expense? Was it enough of a reversal to help materially, I guess, in future quarters?

I mean clearly -- look, it is hard -- there are so many -- we have kind of said what our "fixed compensation cost" is for this year, and there are really no material changes at all in that. I think, as you look forward to next year, I mean clearly there is an ongoing benefit to the extent that somebody who had RSUs, a couple of people that you are aware of, gave those back and effectively that clearly has some kind of a long-term impact. But there are lots of other factors that come into it as well in terms of how much stock we pay out at year-end, how many recruits we bring in, and what stock we give them, whether we do a deal in Latin America or something like that. So it is really premature for us to say anything about what we think that the RSU amortization or, in fact, the "fixed compensation costs" will be for 2012.

Certainly our hope is -- and it always was the case in more normal positive environments -- is that you don't spend a whole lot of time thinking about what your minimal fixed compensation costs. I mean for the first six and a half years we were public, we never thought in those terms. It was only when things got very difficult for a very long period, that you start bumping up against what is the minimum. Hopefully, if things continue to evolve, that is not going to be a focus of ours next year.

Douglas Sipkin, Ticonderoga.

Good afternoon, guys. How are you? Three questions. First, can you maybe go into a little bit more detail about the private placement business? I mean it really looks like that business is finally starting to hit its stride. Is there something in the market, or is it more just you guys just added and finally just really knocking down the doors of clients? And then maybe give us the outlook for that business. It just seems like more and more people are looking to diversify into alternatives, private equity, what have you. So it seemed to make sense that the outlook is pretty good there, and that is just question one.

Sure, okay. Clearly we are picking up some good traction there, and I would say it is for two reasons. Remember we have kind of two halves of really the same group. One does private equity fund. They have been with us a few years, but it has been a brutally difficult few years. I mean there was a backlash against illiquid investments by institutions, many whom had become over-committed before the bubble effectively burst and the financial crisis came. So it was a very difficult period for them.

And then the second half of that group was the real estate groups that only joined us at the end of last June. And if you think about how long it takes to raise these funds, I think that the databases will tell you the average fund is like 15 months or something like that to raise a fund now. So even if they got hired on something six weeks after arriving and then they went out and bought a prospectus and then they started marketing, you know, clearly it is only really in this quarter, in this third quarter that you would have started to see any kind of meaningful impact even in a positive scenario.

And just as luck would have it really, at that same time, the market was loosening up, and our longer-term private equity team, which obviously has been here longer, started to get better results.

So I think in our recent investor presentations and a number of them we have listed by type, the various deals by distressed debt, healthcare, Asia, whatever that we were working on, and I think that is a pretty good representation. I think there are about a dozen deals on that list, and that is probably a decent representation of how many we have in the market at any given time. The revenue, as we have said on those pages, can range from as little as $1 million if somebody wants you to raise money maybe just one region of the world or maybe it is top up in a fund that already exists, up to something like $10 million or potentially even more for a big fund where you are the sole global advisor.

On average, it is probably sort of toward the middle of that, and again, those fees, as we have said, don't all come in one lump. Even the most successful fund, I would say, probably ends up having three or four closes, so you get paid a third to a quarter of your fee when each one of those kind of closings of commitments takes place.

But we are quite hopeful as we always have been, but now the hope is kind of coming to fruition that that this will become quite a meaningful business for us, and when you look at the productivity of the people in that area, that ultimately there is no reason it should look that different from the productivity of people who do M&A.

Got you. Okay. Second question, I know you guys don't do IPOs or secondaries or anything like that, but I mean is there an opportunity for you guys in Europe to serve as an advisor? I know you guys have done more of that. I mean obviously the papers are suggesting some significant capital raises there, rights offerings, what have you. I mean is that an opportunity for you guys? Is that more going to be a function of the big banks who can underwrite stuff?

You know, we certainly do have a history, mostly outside the US, a few examples in the US, but mostly in the UK and Australia where we have advised on rights issues or on equity offerings where the client wanted an independent advisor alongside the underwriters. And I think there is some scope for that, and clearly that is part of what is the revenue that you don't see through your Dealogic databases. I don't think it is probably an enormous one, but having said that, I think our non-M&A business seems to be continuing to grow, and I think that is an important part of it.

And then just finally, I'm just curious, I mean did you guys ever disclose a separation agreement in terms of how should we be thinking about future stock, sales for certain critically important former employees? I'm just trying to gauge how do we think about that over time as it is impacting the stock or maybe an opportunity for you guys to buy that over time?

We certainly have not, and at this stage I really would not worry about that. There certainly was a day when a lot of stock was held by a small number of people. But, if I just look at what the current holdings are for, even for people like myself and some of the people who moved on or retired, have holdings similar to mine. I mean the percentages are really quite small. And I think if you look at it relative to the trading volume of our stock, I don't think, frankly, even if somebody wanted to sell a whole bunch of it in a hurry, which I would be surprised if somebody wanted to do, but if they did, I cannot see that having some big impact. It would have been different two or three years ago, but that is the reason we did those various secondaries to get a much more liquid stock and to reduce the overhang from the top six or eight individuals.

Got you. And then just finally, I know I have a bunch. I mean nothing happened with boards or the like in, like, early October? I mean it just seems like we are still dealing with all this uncertainty, but yet M&A seemed to really perk up here in the last two weeks. Is that just a coincidence?

I think --

I mean not just for you, for the whole industry.

I know. I think my argument that the big companies, the sort of Fortune 250 and the global equivalent of them, are still steadfastly pursuing their strategic objectives. I actually think it is true. And you know what? Maybe some of those deals, it is probably fair to say, would have been announced in the second week of September and got pushed back a little bit because there was just such crazy volatility in August and September. But obviously those time delays did not turn out to be very meaningful because, again, it is not just us, as you said, but there are really quite a lot of good announcements. If all you did was watch CNBC in August and September, you would think everybody would have put their pencils down. But clearly that is not what we have seen, and now that we have seen more announcements come out, that is clearly not what was happening.

Lauren Smith, KBW.

I guess we have covered most things here, so one just really housekeeping and then just one other question. What was your MD headcount at the end of the quarter and total headcount?

MD is I think 65. Total headcount, as I said, is very modestly down from where it was. I think in the beginning there it was 323, and as I said, we will probably end the year at maybe 315 or something like that. It is really modestly down from where we started the year.

Okay. Great. And then I was interested, Scott, in your opening commentary where you mentioned that restructuring is beginning to pick up again. Maybe if you could just elaborate a little there what you are hearing and seeing, and was there anything meaningful in the quarter related to restructuring, or was it really pure advisory, private fund placement, etc.?

I would say it was really, to take the last part of your question, it was really a minimal impact in Q3. I think what I'm saying -- and I don't want to play this up as kind of a huge factor yet, which is why I said just a slight uptick because, again, M&A still feels like it is developing quite nicely for us and usually that is kind of in counter cycle to the restructuring activity. But given what happened in credit markets, just with the closing of the high yield market effectively and things like that, we did certainly see some new assignments pop up, which really when credit markets were kind of wide, wide open, you really were not seeing almost at all. And those -- what that means is some retainers for Q4 and beyond that was not like -- you know, how long these things take. It is not like we (multiple speakers) fees in September or something. But it was -- I mean it is a good thing for us. Because I think the biggest swing factor between, for example, the results we had last year and what we hope to have this year and what we hope to have next year is some of the more dormant areas like a little more restructuring activity, more fund placement activity, more out of Europe, I mean it is those kind of things where the comparison is so, so so low last year where there is the most upside for us to get meaningful improvement overall.

Great. Thanks a lot. That is very helpful. Appreciate it.

Okay. I think that is our final question. Thank you all for your time, and we will speak to you again in a quarter. Thank you.

And we thank you, gentlemen, for your time. Today's conference call is now concluded, and we thank you all for participating in today's presentation. At this time, you may disconnect your lines. Thank you.