PJT Partners Inc (PJT) 2022 Q4 法說會逐字稿

Good day, and welcome to the PJT Partners Full Year and Fourth Quarter 2022 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.

Good morning, and welcome to the PJT Partners Full Year and Fourth Quarter 2022 Earnings Conference Call. I'm Sharon Pearson, Head of Investor Relations at PJT Partners. And 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 there 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' 2021 Form 10-K, which is available on our website at pjtpartners.com. And I want to remind you that the company assumes no duty to update any forward-looking statements. The presentation we make today also contains non-GAAP financial measures, which we believe are meaningful in evaluating the company's performance. The 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.

Thank you, Sharon, and thank all of you for joining us. This morning, we reported 2022 full year revenues of $1.026 billion. Adjusted pretax income of $221 million and adjusted EPS of $3.92 per share. We're pleased with how we navigated 2022 challenging market environment with total revenues up 3% from year ago levels. As PJT Park Hill again delivered record performance, our restructuring revenues grew meaningfully and our Strategic Advisory business performed well on a relative basis, down significantly less than the declines in global M&A and capital markets activity would suggest.

Our 2022 cadence of face-to-face client meetings and engagement return closer to pre-COVID levels, which not only help build new relationships, but strengthen existing ones. While this significant ramp in spending on travel and events drove our aggregate noncomp expense 19% higher. Our noncomp expenditures, excluding these categories grew low single digits. Partner headcount was up 8% and total headcount was up 9% for the year as we continue to attract highly talented professionals to our firm. We remain focused on managing share dilution resulting from these investments in talent, ending the year with a fully diluted share count below year ago levels. All in all, we're pleased with how we navigated 2022's myriad of challenges.

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

Thank you, Paul. Good morning. Beginning with revenues. For the full year 2022, total revenues were $1.026 billion, up 3% year-over-year with increases in restructuring and PJT Park Hill more than offsetting declines in Strategic Advisory revenues. For the fourth quarter, total revenues were $280 million, down 11% year-over-year. Significant revenue growth and restructuring was more than offset by year-over-year revenue declines in PJT Park Hill and Strategic Advisory. With lower corporate capital raises during the fourth quarter, the principal driver of the decline in placement revenues in the quarter. Total revenues that met the criteria to be pulled forward in the quarter were less than $8 million compared with approximately $12 million in the same period last year. Turning to expenses. Consistent with prior quarters, we presented the expenses with certain non-GAAP adjustments, these adjustments are more fully described in our 8-K. First, adjusted compensation expense. Full year adjusted compensation expense was $657 million, up 5% year-over-year with a compensation ratio of 64.1%, up from 63% in 2021. We will communicate our accrual for compensation expense for 2023 when we report our first quarter results.

Turning to adjusted noncompensation expense. Total adjusted noncompensation expense was $148 million for the full year 2022 and $38 million for the fourth quarter. As a percentage of revenues, our adjusted noncomp expense was 14.4% for the full year 2022 and 13.7% for the fourth quarter. For 2022, the majority of the year-over-year increase in non-comp expense was due to increased travel and related expense. Our noncomp expense, excluding travel and related grew 6% in 2022.

Looking ahead, we expect our travel and related expense to increase in 2023, reflecting more normalized levels of travel, increased headcount and higher travel costs. With our full year run rate for 2023, more consistent with the fourth quarter run rate in 2022. Away from travel and related expense we expect our non-comp expense to grow in the inaggregate in the mid-to high single digits year-over-year, driven primarily by higher professional fees and a modest expansion of our office space.

Turning to adjusted pretax income. We reported adjusted pretax income of $221 million for the full year 2022, down 9% and $61 million for the fourth quarter, down 24% year-over-year. Our adjusted pretax margin was 21.5% for the full year and 21.9% in the fourth quarter. The provision for taxes. As with prior years, we have presented our results as the full partnership units have been converted to shares and that our income was taxed at a corporate tax rate. Our effective tax rate for the full year was 26%, up slightly from the 25.8% estimated rate that we applied for the first 9 months of the year. In 2023, we would expect our effective tax rate to be in line with 2022, and we will refine our view at the end of the first quarter. Our adjusted converted earnings was $3.92 per share for the full year compared with $4.44 in 2021 and $1.08 in the fourth quarter compared with $1.52 in 2021.

The share count for the year ended 2022, our weighted average share count was 41.7 million shares, down 2% year-over-year. And during the year, we repurchased the equivalent of approximately 2.2 million shares primarily through open market repurchases. On the balance sheet, we ended the year with $223 million in cash, cash equivalents and short-term investments and $355 million in net working capital, and we have no funded debt outstanding. And finally, the Board has approved a dividend of $0.25 per share. The dividend will be paid on March 22, 2023, to Class A common shareholders of record as of March 8.

I'll now turn back to Paul.

Thank you, Helen. Beginning with PJT Park Hill. As the year progressed, the fundraising environment for alternative investments became significantly more challenging. Sharply lower public market valuations left many investors overextended on their alternatives allocations, which in turn reduced the quantum of capital available for new commitments. This denominator effect, coupled with the frenetic pace at which capital was called in 2021 made for a difficult fundraising environment. Even with this backdrop, revenues grew modestly year-over-year as PJT Park Hill delivered another record year. Our close relationships with capital allocators and our best-in-class distribution capabilities enabled us to represent the highest quality managers with in-demand investment strategies.

Turning to Strategic Advisory. In 2022, a sharp downturn in equity markets, greater economic and geopolitical uncertainty and slowing global growth all adversely impacted the pace of strategic activity. The 425 basis points and Fed tightening across 7 consecutive rate hikes, represented the largest and sharpest annual rate increases in more than 40 years. significantly impacting valuations and roiling financial markets. Announced global M&A volumes were down roughly 25% for the first half of the year, and nearly 50% for the second half of the year as the impact of these rate hikes and continued political and economic uncertainties, further weighed on markets. While we were not immune to these market dynamics, we performed well on a relative basis with full year Strategic Advisory revenues down only modestly, notwithstanding the dramatic decline in industry-wide volumes.

Our shareholder engagement practice continued to evidence strong momentum as these dislocated markets resulted in increased client engagement on shareholder advisory, strategic IR and shareholder activism topics. This strength offset the considerable drop-off in our corporate placement revenues, particularly in the fourth quarter. We continue to invest, adding talent across industries, product capabilities and geographies, including the opening of a Paris office this past year. Strategic Advisory headcount grew 10% and Strategic Advisory partner count grew 18% year-over-year.

In restructuring, in 2022, the headwinds that dampened M&A activity became tailwinds for restructuring and liability management activity. A combination of sharply higher financing costs, dislocated capital markets and more challenging operating fundamentals pressured an increasing number of highly leveraged companies. We experienced an uptick in liability management mandates as companies work to restructure debts and create additional liquidity runway. Overall, our restructuring revenues increased in 2022, and we ranked #1 in announced U.S. and global restructurings.

As we look ahead, while 2023 is shaping up to be another choppy year, our firm remains well positioned to navigate these uncertain times. In PJT Park Hill, we expect the environment for alternatives fundraising to remain challenging as investors remain highly selective with many fundraises expected to be smaller in size and take longer to close. PJT Park Hill's 2023 revenues are forecast to be around 2022's record results. Even though Q1 revenues could well be down $30 million to $40 million, given the expected timing of 2023 closings.

In M&A, the environment while improving is still not particularly favorable for dealmaking. While the recent snapback in equity valuations and the first green shoots of a reopening in the IPO market, are promising harbingers for M&A activity. The low level of global M&A announcements in recent months may well continue for some significant part of 2023. In contrast, we expect our restructuring activity levels to remain elevated for the extended period of time. For 2023, we expect significant growth in our restructuring revenues beginning in the second quarter. Any headwinds we face in Strategic Advisory in 2023 will be more than offset by tailwinds in restructuring.

Looking beyond 2023, we remain highly confident in the intermediate and long-term outlook for our Strategic Advisory business as we benefit from the significant investments we have made which expand our client reach and increase our market share. As before, we remain confident in our growth prospects.

And with that, we will now take your questions.

(Operator Instructions) We will take our first question from Devin Ryan with JMP Securities.

I guess I just want to start on where you left off Paul on the outlook. So piecing it all together, it sounds like there's still an expectation right now for some level of revenue growth in 2023. Is there any way to maybe parse out a little bit around what you're seeing in restructuring and the order of magnitude of acceleration? It doesn't feel like we're back to pandemic era stress yet but have been building maybe in that direction. So just wanted to get a little more context around what you're seeing there.

Sure. Well the reality is that we've been living in abnormal times as it relates to distress. So 2020 was aberrationally extreme in the level of distress. And we're not seeing anything remotely like 2020 levels. The flip side is 2021 and 2022 were equally aberrational the other way, given risk on appetite, near 0 interest rates and abilities for even the most highly leveraged companies to secure financing and to manage their debt stack. And I think where we're headed is to a more normal-normal. And I think there are 2 things that I look at, which frame that. The first is default rates the last 2 years were in the 1.5% rate, which is meaningfully below what the long-term default rate average is. Even if you strip out the extreme peaks of global financial crisis and COVID and the likes. So simply getting back to a more normal environment creates significant momentum in the restructuring business.

The second is that the quantum of debt outstanding and the liabilities potentially to be managed in some way, shape or form are meaningfully greater today than they were 5 years ago. And then here's the most important point. While companies have done a very good job in moving out their maturities, the reality is that we're sitting here today with less runway for most companies that they've had in more than a decade. And by that, I mean, if you just look at how much debt is likely to mature in the next few years, so that number is at levels that we haven't seen since 2009, 2010. So I think there's an opportunity for just in a more normal operating environment, for there to be significantly more restructuring and liability management activity. And then finally, just given how much debt was issued with relatively light covenants, the opportunity to be creative in managing liabilities for companies. I think there are more degrees of freedom now than there were historically. So as a result, we see a lot of runway for a long period of time without having to be doom and gloom.

Okay. Terrific. And just a follow-up on Strategic Advisory. I just love to maybe discuss the visibility that you feel like you have heading into this year just in terms of that outlook. It feels like it's harder to have conviction in the outlook maybe more than normal just in the current environment. And so just trying to kind of think about the framing here. I appreciate announcements have been relatively light over the last few months, and so that's going to feed into the first quarter or 2 of this year. But at the same time, it sounds like maybe conditions have improved a bit in recent months, but it's way too early to say it's sustainable, especially with all the macro uncertainty. So I'd love to just maybe kind of think through the Strategic Advisory comments and maybe what could make things turn out better this year and maybe where it could get south as well.

Yes. This is probably a year where there is less visibility on how things will shake out and historically has been the case. And I think part of that is as the marketplace heals, you need certain conditions to present themselves, and we're certainly getting there. I view what has transpired in the first 5 weeks of the year as necessary but not sufficient for a return to a higher level of deal making. And therefore, the good news is we're seeing those conditions fall into place, and we're starting to check them off. And that gives us a reasonable degree of confidence that it's just simply a matter of not if, but when during the year that you start to see that. But when you try and figure out when do you get lift off, is it a week from now, a month from now, 3 months from now? And then just given the extended periods of time for transactions to ultimately close and how much of that hits in 2023. It's just a cloudy crystal ball as it relates to Strategic Advisory this year. But if I step back just a little bit, I can see much more clearly just given the client engagement that we have, the revenue opportunities, the opportunity to bring the entire firm together.

We're a far more advanced organization today than we were 2 or 3 years ago. And at the right time, that will all work through. Where I do have clarity is because those headwinds, which may lean on strategic advisory in the near term, serve to elevate restructuring in the near term. If I think about it as a pair trade, I'm quite confident that we'll be net beneficiaries of this uncertainty. And then as I get a little bit further out, I have greater clarity in where we can take the business next.

Got it. Perfect. Just to clarify there, Paul and then I'll hop back in the queue. So when you talk about kind of the engagement with clients and the momentum because again, we see the (inaudible) deal announcements, but we don't get to see a lot of the behind the scenes kind of new client wins and even some time mandates way before announcement. Like any kind of either qualification or quantification around that type of momentum that you're seeing and maybe how that's progressed over the last couple of years, just that's kind of behind the scenes that we don't see as well.

Sure. I'll just -- I'll give you a few highlights. One of which is we continue to build out our geographic presence, and we continue to build out our industry presence. So we're now at a point where we have had enough success and we have a critical mass that we opened an office in Paris. And I think that follows what have been very considerable successes in France and across all of Europe. And our European business continues to build out. It continues to establish its brand and its presence. And as we have more industry colleagues who can help and as we leverage the fact that we have a differentiated culture, we're doing more and more on a cross-border transatlantic way that really wasn't available for the taking a few years ago.

The second is the way in which we've integrated our CamberView capabilities into Strategic Advisory and where we are from shareholder engagement, strategic IR, activist defense and the like and how wrapped in that is and the opportunities in the boardrooms that we're present in as well as the commercial opportunities for the firm.

And then the third is just as we've continued to build out our holistic capital markets advisory business, the ability to be much more present as it relates to direct lending initiatives, to be working more closely with restructuring, to deal with companies that are not yet ripe for traditional restructuring but benefit greatly from the capabilities. I think those are just a handful of examples where we're touching more clients, far more clients, and these are an elevated revenue potentials. The only thing that I cannot control is just how quickly the macro environment sort of shifts into gear. And then it becomes very much a micro story, which is client by client, what's the cadence of their reengagement and then how quickly does some of these mandates translate into revenues, but it's all being built. And we're very comfortable with where we are at this point. And we love the fact that we have this diverse but highly integrated group of businesses, which continually present more opportunities for us.

And I guess one last thing I'd address is we've gotten increasingly better at integrating the Park Hill sponsor relationships into our broader sponsor coverage and that becomes another opportunity where we're more present and better able to commercialize some of these relationships.

We will take our next question from James Yaro with Goldman Sachs.

Paul and Helen, I just wanted to start with a little bit more on the M&A backdrop. The differences between the dialogues with sponsors and strategics and how your expectations have changed or what your expectations are for how the mix of M&A should evolve in 2023 and 2024?

Well, look, I was always taught that trees don't grow to the sky and the notion that financial sponsors would just be all things at all times and M&A dialogues. I just -- I'm not sure that was the right extrapolation from where we've been over the last few years. I think there's no doubt that financial sponsors as they continue to accumulate assets as they continue to move into broad and broader reach of strategies as they look at traditional buyouts as well as minority investments, venture and the like, they're going to become an increasingly important part of the ecosystem. But that doesn't mean that it all becomes all about sponsors all the time. And I think there's no doubt that in a risk-on world where capital was incredibly plentiful, where rates were at historic lows and where LPs were very comfortable, pushing a lot more dollars into alternatives that you saw a meaningful spike up.

I think what we're just seeing now is a little bit more of a regression to the mean where this is an opportunity for corporates to take advantage of the fact that the capital deployment that's coming from sponsors has slowed and it slowed for a few reasons, one of which is, as the fundraising environment becomes more difficult, sponsors are appropriately more conservative in capital deployment, that's a macro trend. And then at the micro level, when it's harder to secure committed financing or where the committed financing is available, but far more costly, it just makes it more difficult to be everywhere in strategic dialogues. And I think that there's a recognition in corporate boardrooms that at least in the near term, while the playing field may not have tilted to strategics, it's at least leveled. It's either leveled or tilted a bit their way. And I suspect that you will see with the increasing pickup in activity in to be more corporate-led than sponsor-led. But ultimately, this all gets back into equilibrium and sponsors will be and has been an incredibly important part of the ecosystem, but I'm not sure it's going to be the dominant part of the ecosystem.

That's incredibly helpful, Paul. I just want to touch on one other one, which is you're obviously very focused on investing in new talent. So maybe if you could just touch on how the hiring backdrop has evolved versus earlier in the year, whether you're seeing better opportunities to bring in top talent. And then just sort of what your hiring aspirations are for 2023 and whether that could impact the comp ratio trajectory at all for the coming year?

So we've been consistent that the years 2020 and '21 were difficult recruiting years but for very different reasons. In 2020, it is hard to recruit when everyone is locked down and it's a virtual world, and there are bigger issues as you've got a global health crisis and the like. Trying to find the next platform to be an investment banker is not necessarily highest on the list. And I've said consistently that the best way for us to continue to recruit at a very aggressive clip is to return to a more normal cadence of face-to-face engagement and the like. We're there. And that's been incredibly helpful. And you've seen that our hiring has ramped from there.

The second issue was in 2021 with everyone so busy and with such activity in strategic world, it was hard for individuals to lead their clients' at large and to make a shift. And as a result, we also said that we needed the world to calm down a little bit. I think in 2022 and 2023, where we're in a lower velocity environment, where a number of larger banks are creating a less attractive opportunities for their best talent and where we can engage face-to-face, that's the perfect recipe for us to attract talent, and we're seeing that in the number of incomings and we're seeing it in the quality of candidates that are appearing before us and our conversion rates are higher. So I think this is a much better recruiting environment for us, and we're going to take advantage of all of that.

Now as far as how that flows through the comp ratio and the like, it's very hard to see until you get further into the year and understand what's the actual pace of onboarding as well as what's the revenue profile for the firm in 2023. The headline is, I love this environment. This is like a perfect recruiting environment for us.

We will take our next question from Steven Chubak with Wolfe Research.

This is Brendan O'Brien filling in for Steven. I just want to follow up, sorry -- I wanted to follow up on the comp ratio. Based on your comments on the current environment, your expectations for revenues to grow in 2023 is encouraging. However, given we've already seen some pressures on the comp ratio this year despite revenue growth and your headcount is up 9%. I was hoping you could speak to your confidence in your ability to hold the line on comp next year?

Look, we've always thought that as we get further and further into the build-out that we'll be able to demonstrate meaningful compensation leverage but that we're not going to resist making investments, which are the right thing for the long term, if there's a little bit of short-term turbulence. So if you give me a wider birth of 2 to 3 years, I kind of know the direction of travel. If you ask me in any given year, does it stay flat? Does it come down? Does it bump up a little bit? There's just so much information we need to have at that moment to make those decisions, which, as I said, are how much talent can we attract in 2023, and I do not want to be deterred from that.

We've always said that we don't add just to hit a recruiting target. And therefore, in some years, if we don't see the talent, we're going to be light on additions. And in other years, we have an abundance of opportunity, we'll lean in a little bit more. I think it's too early in this year to know exactly where that's all going to land. And as I said, I think we have a differentiated platform that enables us to navigate these turbulent times better than most. And therefore, that should be an advantage for us. And we'll just sort of play it out. But one thing I think everyone appreciates, we have incredible regard for creating shareholder value. We're big owners in this firm, and we're always going to do the thing that creates the most value over the longer term even if it creates a bit of noise back and forth. But sitting here today, I have no reason to believe 2023 is going to be aberrational one way or the other. And hopefully, we'll be able to continue to show progress on all dimensions.

That's great color. And then I guess for my follow-up, in your remarks, you noted that our restructuring prospects have continued to improve. And it seems like you've had greater success than some of your peers in winning these mandates so far. Just wanted to get a sense as to what you feel is driving that relative strength versus peers so far or in this past year. And do you feel like you're better positioned for an environment where mandates are more coming on the debtor side due to the higher level of cove-lite loans outstanding?

That's a great question. Look, it's a highly competitive environment, and we compete against very formidable firms. And there's always a cadence of mandates that you win and mandates that go elsewhere. So everything is not always a straight line up into the right. Having said that, we have had impediments in competing against others that each year, those constraints melt away. And it really boils down to 2. If we have a smaller advisory footprint and if we are competitive in fewer industry verticals, it means that the heads up or the front-end sales force is less able to present opportunities to our restructuring colleagues than if it was further built out.

So every year that we build out and we're in more geographies, have more presence, have more industry domain expertise, have more corporate relationships, that gets us better aligned with the competitive set, and therefore, we're able to leverage that. And then the second is as we continue to build out our sponsor capabilities, we're picking up more and more liability management opportunities for sponsors as well. So it's just all part and parcel of the of the methodical build-out of the firm. And as the Strategic Advisory business gets bigger, more formidable, more present, it becomes a greater additive to the restructuring franchise. And I think that's the macro trend you're seeing. But as far as any given quarter, what mandates travel to us or elsewhere, I try not to get too caught up in that because there's always noise in the very short term. You've got to look over the longer term. But there's no doubt we've been pleased with our performance on both a relative and an absolute basis.

We will take our next question from Jim Mitchell with Seaport Global.

Paul, a number of your peers have talked about engagement levels still remaining high in the Strategic Advisory side, just not being able to pull the trigger, given the financing markets. One thing you haven't really talked about is sort of that aspect of Strategic Advisory, you've talked in the past about backlog, engagements and sort of pre-announcement type thoughts. Can you kind of give us a sense of what you're seeing on the Strategic Advisory side? And are you seeing that same level of engagement, just not seeing triggers get pulled yet?

Yes. It's a great question. It's complicated just because the way this world has unfolded. So I would say the following. If you started last year, strategic engagement and interest was red hot. And as the market cooled engagement levels did not waver. And in some respects, it was -- the crisis of confidence was on the investor side, not in corporate boardrooms. And we saw our engagement levels at record levels for most of the year. I think it's got to the end of the year, some of these transactions just were not viewed to be actionable in the near term. And I think clients, they suspended sort of working on some of these things because while they still had every interest in pursuing them, they were deemed to not be actionable. So the mandate count, if you will, that were active, sort of receded a bit.

What's happened is in the first 5 weeks of the year, I think there's a clear recognition that things that were maybe put on the hold pile are now coming back. So we're seeing a lot of that just because it's been so fluid and so volatile and the sentiment moved sharply negative from Thanksgiving to the end of the year, and it started to inflect to the positive. I haven't talked about it as much because I don't really want to make too much of either the downturn in the last 6 weeks of 2022 or the pickup in the first 5 weeks of 2023. I think it's still muddied. But the reality is, if you step way back, the corporate needs for transition and transformation are as great today as they've ever been. And when you think about what really drives M&A activity, you can run all the correlations, you can do all the analysis, the single biggest correlation is equity valuations. And given the start to the year, that is a very healthy sign. And I suspect that if we can maintain some of these levels for a bit, you're going to start to see a lot more of the hold pile come back into the active or red hot pile.

Okay. That's helpful. And maybe for Helen, just to make sure I heard correctly, it seemed like you guys had a few large transactions closed in early January, but I think your pull forward comment was $8 million. Is that correct?

That is correct. Yes, that's correct.

Okay. And Paul, do you have any -- you commented on the restructuring business sort of a second quarter event. You talked about Park Hill being starting off week and getting better. But how do we think about any visibility on the Strategic Advisory into the beginning of the year?

Honestly, it's hard. It's really hard to tell. I mean that's just the one where I have the least confidence, particularly trying to talk about how it's going to be quarter-to-quarter other than sort of state the obvious, which is, if you think about last year, last year started down, but respectively down and then inflected further. My gut is that this will look sort of as the mirror image of that, which is soft building. And I think that probably is a good read across to -- how I would expect our business to be. I just don't have the same precision because the world is more unsettled for M&A than it's been.

And when we're in a recovery phase, trying to pick the exact recovery -- when you were at a stasis when you're in like a regular cadence of activity, it's easy to sort of see it. But when you're either seeing it turn down or turn up, trying to see how that matches to revenue recognition is a little bit more challenging. It should be, if you ask me to go to Las Vegas and put a bet, I'd say second half is a lot stronger than the first half.

We will take our next question from Matt Moon with KBW.

So just one on Park Hill. I'm just curious on the environment there. Very clear on the fourth quarter impacts. But you [did mention] 2022 was a record year for the overall Park Hill business which given the placement [revenue] performance, I think it would suggest a strong level of secondaries activity. So with this in mind, I'm just kind of curious on the environment as we start 2023 on this front -- kind of the impact specific to a new year on the side of the business, GPs now just kind of reset. And then kind of just secondary on the other side on placement revenues. I did hear your comment on placement revenues to be down $30 million to $40 million? Or was that to come in at $30 million to $40 million in the first quarter?

So first of all, I'd just get back to placement. We did highlight the fact that corporate placements were down significantly in Q4. So you can attribute all that decline to Park Hill. So when we say Park Hill was up year-over-year. It was up in both secondary and in the primary business. So that would be the first thing. And then secondly, just looking at Q1, given the timing of what we see coming in Park Hill, we see it being down significantly year-over-year last year was a record Q1 for Park Hill. So that would be down $30 million to $40 million year-over-year.

But just for the first quarter, with recovery for the rest of the year.

Understood. Understood. And then one of your competitors also cited kind of a strong year in 2022 as it relates to shareholder activism that persisted from the 2021 level. So just kind of curious on what you're seeing with respect to CamberView, what you saw in the year and kind of how we should kind of consider the environment for that business as we enter '23 as well?

Yes. I think as I was mentioning in my remarks, turbulent environments play well for shareholder engagement, right? You have companies with dislocated share prices who may look for help on strategic IR to better position their story with investors to try and figure out how to get the right investors in. They may be vulnerable to an activist taking a position or creating a distraction for the company. So all of that creates a more productive environment for shareholder engagement. When times are good, it's probably less top of mind than when you're dealing with the dislocated equity market. So I think just as our restructuring business benefits from a more challenging environment. I think it also has a read across to our shareholder engagement initiatives.

Okay. Great. And then last one for me. Buybacks are relatively light in the quarter. So just given the M&A advisory outlook and kind of some of the uncertainty there is, is it fair to think that there's a general sense of conservatism as it relates to the buyback, I guess, near term? Just wanted to think about that outlook over the course of the early parts of this year.

Yes. I just -- probably just the opposite. We said at beginning of last year that we were going to deliberately front-end load our share buybacks for the year. And we were very clear that we were going to manage the dilution. We reduced the share count for the year. We increased our balance sheet strength. And our view was if we're going to retire the shares, we'd rather do it early in the year rather than wait until late in the year, and that's exactly what we did. And while I don't think we have a committed cadence to what we're going to do in 2023. We intend to be very forward-leaning in buying back stock. And all else equal, our bias has been, if we're going to do it, it'll probably do more in the first half of the year than the second half of the year, as simple as that.

That was our final question. We will now turn the call back to Paul Taubman for his closing remarks.

Well, once again, I want to thank everyone for joining us on this morning's call, and we very much appreciate the dialogue and the interest in our firm, and we look forward to speaking with you when we report first quarter results in the spring. Thank you.