Perella Weinberg Partners

Good morning and welcome to the Perrella Winebird Partners Third Quarter 2021 Earnings Conference Call. During today's discussion, all callers will be placed in listen-only mode, and following management's prepared remarks, the conference call will be open for questions from the research community. This conference call is being recorded. At this time, I'd like to turn the conference over to Taylor Reinhart, Head of Investor Relations, please go ahead.

Thank you, Operator, and welcome to our third quarter 2021 earnings call. Joining me today are Peter Weinberg, Chief Executive Officer, and Gary Brancic, Chief Financial Officer. A replay of this call will be available through the Investors page of the company's website approximately two hours following the conclusion of this live broadcast through November 18, 2021. For those who listened to the rebroadcast of this presentation, we remind you that the remarks made herein are as of today, November 4, 2021, and have not been updated subsequent to the initial earnings call. Before we begin, I'd like to note that this call may contain forward-looking statements, including PWP's expectations of future financial and business performance and conditions and industry outlook. Forward-looking statements are inherently subject to risks, uncertainties, and assumptions that could cause actual results to differ materially from those discussed in the forward-looking statements and are not guarantees of future events or performance. Please refer to PWP's most recent SEC filings for discussion of certain of these risks and uncertainties. The forward-looking statements are based on our current beliefs and expectations, and the firm undertakes no obligation to update any forward-looking statements. During the call, there will also be a discussion of some metrics which are non-GAAP financial measures which management believes are relevant in assessing the financial performance of the business. PWP has reconciled these items to the most comparable GAAP measures in the press release filed with today's Form 8-K, which can be found on the company's website. I will now turn the call over to Peter Weinberg to discuss our results.

Thank you, Taylor. Good morning, and thank you all for joining us for our third quarter 2021 earnings call. Before I get into our results, I would like to share a few overall observations that set the tone for our quarter. First of all, our markets continue to be as active as I've ever seen them. The activity is sourced by continued macroeconomic and structural factors the increasing attraction of the independent advisory model to clients, and what we are calling a liquidity super cycle, the enormous amounts of capital across our financial system that will support the velocity of activity for some time. Second, Perrella Weinberg Partners is a growth company. We see very clear opportunities to grow the size and scope of the firm into industry subsectors and products in which we do not now participate. and both clients and talented professionals around the world are embracing our platform as a place to hire and work, respectively. Third, as of this past Monday, our firm is back to the office, and while our team performed extremely well together remotely, achieving record results for the firm, we will certainly benefit from more in-person interaction amongst our people. The office will be the center of our work life, while allowing more flexibility to our people than pre-pandemic. Now, on to our financial performance. I am pleased to report that our firm recorded revenues for the quarter of $177 million and revenues for the nine months ending September 30th of $603 million, a 44% increase and an 83% increase versus the respective prior periods in 2020. Both of these revenue amounts were records for their respective periods. Commensurate with the market, we saw healthy M&A and financing advice fee realizations across our platform, driven by very active levels of strategic dialogue and transaction flow, while fees from restructuring and liability management contracted to pre-pandemic levels. Diving a bit deeper on our M&A activity, We experienced strong results across our industry coverage universe with particularly robust activity in the healthcare, energy, and industrial sectors. The activity was driven by an array of clients spanning from large-cap corporates to mid-cap emerging growth companies and was reflective of a balance of both buy and sell side transactions. These drivers of activity are in line with what we are seeing in the market where large cap companies are both considering how to be proactive coming out of the crisis and evaluating how they might use M&A to anticipate or respond to changes in their end markets, notably by investing in growth and technology transformation. Separately, emerging companies are seeking to grow their scale, raise capital, or are grappling with interest from larger companies. Furthermore, Private and public financing markets are robust, and the private equity community has experienced record activity, showing again its importance to the strategic landscape across every sector. Activity in the restructuring and liability management market continues, but has dropped significantly relative to the peak levels seen in 2020. The activity has been tempered by low interest rates, the wide availability of capital, and the impact of government stimulus. It is possible that we will continue to see such dynamics through the medium term until some technical factors begin to turn. Despite the decline in restructuring and liability management activity both across the market and on our platform, we continue to believe that liability management services will contribute meaningfully to our business over the long term, largely driven by the cyclicality of the market and expanded balance sheets resulting from the pandemic. Our restructuring and liability management pipeline for 2022 is healthy. From a geographic perspective, we generated record results in our European business for the first nine months of 2021. While we do not look at our business on a regional basis, we believe our significant presence and attractive branding position in Europe differentiates us when compared to advisory peers and our strong performance is commensurate with that differentiation. We are well positioned to take advantage of the recent acceleration of activity in that region, and we continue to invest behind the business to support future growth. Although third quarter revenues did not reach the record levels of the second quarter, where we experienced an unusually high level of completions and fee realizations by historic standards, we nonetheless saw a continued heightened level of strategic dialogue and transaction flow. While we recognize that revenue results can fluctuate quarter over quarter and that numerous macroeconomic factors could affect the trajectory of the currently favorable M&A and financing environment, we have yet to see any sign of a slowdown in dialogue with our clients. Across market participants, activity is healthy and the overall mindset of business leaders is quite positive. Our backlog at the end of Q3 remained extremely strong and was close to an all-time high. We continue to add talent at all levels to support our strategic growth. As of September 30th, we had 58 advisory partners, and year-to-date, we have added nine partners. This figure does not reflect an additional partner who has agreed to join the firm in 2021, and our recruiting pipeline remains strong. Our 10 new partners, including three internal promotes, bring significant expertise in tech and fintech broadly, as well as financial institutions, industrials, and healthcare, both in the U.S. and in Europe. We are focused on further strengthening our partner base with individuals who will help expand our coverage and expertise from a sector, product, and geography standpoint, as well as those who we deem collaborative and franchise-enhancing. In a busy environment, the market for talent is certainly more challenging. We are confident that our platform and collaborative culture, along with being a growth company with momentum, will continue to attract exceptional professionals. We are encouraged by the level of interest that we are seeing and feel confident in our ability to successfully attract individuals who fit our strategic needs and our culture. To wrap up, we feel very good about the momentum we continue to experience in the third quarter. We are well positioned to take advantage of the currently favorable environment, and we will continue to invest behind our simple, clear, client-centric model to support future growth opportunities. We remain committed to providing trusted and high-quality strategic and financial advice to our clients and delivering long-term value to shareholders. On that note, Gary, I will turn it over to you. Thank you, Peter.