EVR
#We don't break that out.
We never have and it's just not our policy to do that, but you can imagine that energy-related restructuring levels are very high.
As a general matter, hiring tends to be concentrated in the first few months of the year.
So we may have one or two walk-ins as we have had in the last couple years in the second half of the year who initiate conversations with us for one reason or another.
In those cases, more typically associated with something that caused dissatisfaction of their current firm.
But you should assume ---+ we generally have hired four to seven people in our advisory business during the course of the year.
I think in the first quarter we said we expected that our hiring this year would be probably [be a little] towards the lower end of that range.
We've hired four, and I would still expect that we'll be at the low to mid end of that range.
Well, on the first part, we're not seeing any impact at the moment of the impending US election on transaction volumes.
There's no impact at all.
I'm not smart enough to know whether that might change or not, but I'm dubious that it will.
I don't think so, but so far nothing.
<UNK>, if you want to comment on BREXIT.
Look, I think it's too early to tell with respect to the impact on the pound.
If you look at how the British equity markets have performed, today the FTSE 100 is above ---+ in pound terms, above where it was the day before the vote.
The FTSE 250, interestingly enough, the sort of the next tier of companies, is still below in pound terms and obviously, because of the depreciation of the pound is even cheaper, as is the FTSE 100, because of the depreciation of the pound in terms of ---+ in dollar terms or in euro terms.
So things are, from a currency point of view, a little cheaper in Britain, a little bit more the case in this mid cap, small and mid cap world.
But I think it's too early to tell whether this will have any meaningful effect on inbound activity in the UK.
Well, I think first of all we have to discuss or reiterate our hiring philosophy.
Clearly, we have some holes in our coverage, probably the most ---+ two most notable are consumer globally and some of the larger general industrials companies and we are always looking for people who can perform excellently on our platform who can also fill in that coverage.
But what is different about Evercore, I think from most, if not all other firms, is that we only hire, even though we have holes, when we find someone that we feel highly confident that they will be successful on a platform where they're competing solely on the basis of their ideas, their intellectual capital, and their relationships without the benefit of a balance sheet.
So if you sat in our management committees over the last five years, you would have heard the consumer being at the top of the list of sectors that we would like to be more active in.
But we haven't found a person yet or a team of people who we feel can successfully execute on our platform.
So we wait.
We're not one of these firms that says we have to cover everything.
We want to make sure that the things that we cover, we cover at the absolute highest quality of excellence.
And there are a limited number of people who can do that.
Independent firms.
I'm sorry, <UNK>.
Good point.
And so for me, I sometimes comment facetiously internally, that in 2000 for Cisco to justify its valuation, which was roughly 90 times earnings at the time, they would have had to capture 150% of the global router market.
Obviously, something that was not likely to be achieved.
We have the benefit of having a direct comparable with exactly our business model in the advisory business that's doing 50% more revenues.
So for us, I think that's a good intermediate-term goal of what we would hope to achieve over time.
Obviously, adjusted for the environment that you're in.
If you're in a really depressed M&A environment, Lizard did as little as $1.1 billion or so of revenues the period after the financial crisis.
But certainly we have a fair amount of room to grow.
Okay.
I would say that, first of all, the most important metric that you cited really needs to be looked at on a two-year basis, not a one-year basis.
And that is the new hiring.
So, when we do hiring, it obviously has a depressive effect in the year that people join because, as we've said many times, and there are exceptions to this, but the best assumption about someone's revenue contribution in the sub year is zero and there are exceptions to that, fortunately.
And in the first full year the best assumption is somewhere between 50% and 75% of a normalized SMD production.
So while we had a ---+ while we'll probably be at the lower end ---+ the mid end of the range in terms of number of hires this year, last year we had ten.
So the comp effect of that still is flowing through this year's income statement in terms of its effect on the comp ratio.
So that's a subtle difference in assumption from the assumption in your question.
And, look, I think we've said, not infrequently, that we believe that the business can operate with comp ratios in the mid to mid high 50s, 55% to 57.5%, 58%.
We're in that range today.
And then the mitigator upward and downward is the impact of new hires either the prior year or the current year.
This is our best judgment of where we'll be for the full year.
Obviously, when we get to the fourth quarter of every year we do real hard person-by-person analysis, and we sometimes find that our best judgment is a little bit high or a little bit low and I think you've seen that in the last couple of years in our Q4 numbers.
Well, that makes two of us.
We don't know either.
That's certainly what we saw last year.
Good morning.
Let me make two points.
Evercore has been steadily broadening its investment banking platform.
If you stop and think about it, we're the only independent firm which is a leader in M&A.
We're number one among independent firms for the first six months, which is a leader in restructuring.
We believe we're one of the top three in the world in restructuring, and which is a leader in cash equities and equity capital markets.
We're the only independent firm with that three-pillared platform.
Now, within those pillars, especially the broad category of M&A, you really have a lot of different categories.
You have activist defense, you have takeover defense, for example, and you have various types of strategic advisory services that don't necessarily result in an M&A deal.
But we don't know where M&A volume is precisely going to go.
As I said earlier, we think the ingredients are there for continued healthy volume.
We don't know precisely where restructuring volume will go.
A lot of that is being driven today by energy-related distress.
So I can't answer your question beyond what I just said.
It's quite active.
Not that I'm aware of.
I attended a board meeting out in New York yesterday with a healthcare company and we looked very carefully at all these levels of regulatory challenge and volumes of M&A and so forth during that discussion yesterday.
Again, every transaction is unto itself.
And when you get ---+ when you begin to dig in on a potential transaction, you're able with a requisite legal advice, to make a judgment as to whether you think that transaction will or will not face regulatory challenge.
So the vast majority of transactions, whether they're in healthcare or any other sector, don't face regulatory challenges, but you're referring obviously to Aetna, Humana, and Anthem Signa and those two have been challenged as of the past two days by the Department of Justice.
But broadly speaking, I don't know what the percentage would be, but 95% of transactions we work on don't face regulatory challenges.
And if regulatory challenges were causing hesitation, you wouldn't see the level of M&A volumes you're seeing and you wouldn't see backlogs like you're seeing.
So it's not causing hesitation, generally speaking.
So let me take the second question first.
In the beginning of the transaction there were a bit more than 8 million shares that could have gone in.
We put in just about 7 [million shares], just a little over, and none of that has changed.
The actual mechanics have reduced the ISI number down from the 7 [million shares] because of the mechanics of the deal, some of the ease invested, they have been converted into (technical difficulty) shares, et cetera.
But nothing has changed in terms of the aggregate day one assumptions or expectations.
In terms of what may or may not happen with buybacks for the second half of the year, I couldn't comment specifically.
What I would say is that nothing has changed in our philosophy, which is, we think the buyback shares to cover any equity granted as part of the bonuses to offset shares of new hires and then we are working to reduce the dilution that was caused by the ISI acquisition, as <UNK> noted.
We made some progress in reducing that ISI-related dilution in the first half, and we'll see how cash and the market looks in the second half and be opportunistic.
Hi, <UNK>.
<UNK>, the one thing I would add is that we do believe over the next three years there will be some combination of significant restructuring activity, significant re-equification, and significant consolidation.
And as <UNK> went through earlier, we're really literally the only firm in the world that can take advantage of all three of those and also has a very strong energy practice.
So we see this as something that's quite good for Evercore generally.
I agree with <UNK>'s response.
It happens that our two ---+ the two largest global independent firms one of which has been in business about 165 years and one that has been in business over 200 years, have businesses where their revenue mix is a little more oriented towards (technical difficulty) as opposed to us But I don't think that, that necessarily in anyway suggests that if we're to get to their scale that our geographic mix has to mirror theirs.
I think we have actually a decent shot this year of having the largest independent advisory revenues in the US, notwithstanding, that we'll still be smaller than at least one of those two firms.
Yes.
It's a tried and true filibustering strategy which we have down pat.
