Evercore Inc.

Good morning and welcome to the Evercore second quarter 2023 earnings conference call. Today's call is scheduled to last about one hour, including remarks by Evercore management and the question and answer session. In order to ask a question, please press the star key followed by the number one on your touchstone phone at any time. I will now turn the call over to Katie Haber, Managing Director of Investor Relations and ESG at Evercore. Please go ahead.

Thank you, operator. Good morning and thank you for joining us today for Evercore's second quarter 2023 financial results conference call. I'm Katie Haber, Evercore's head of investor relations and ESG. Joining me on the call today is John Weinberg, our chairman and CEO, and Tim Lalonde, our CFO. After our prepared remarks, we will open up the call for questions. Earlier today, we issued a press release announcing Evercore's second quarter 2023 financial results. Our discussion of our results today is complementary to the press release, which is available on our website at evercore.com. This conference call is being webcast live in the For Investors section of our website, and an archive of it will be available for 30 days, beginning approximately one hour after the conclusion of this call. During the course of this conference call, we may make a number of forward-looking statements. Any forward-looking statements that we make are subject to various risks and uncertainties, and there are important factors that could cause actual outcomes to differ materially from those indicated in these statements. These factors include, but are not limited to, those discussed in Evercourse filings with the SEC, including our annual report on Form 10-K, quarterly reports on Form 10-Q, and current reports on Form 8-K. I want to remind you that the company assumes no duty to update any forward-looking statements. In our presentation today, unless otherwise indicated, we will be discussing adjusted financial measures, which are non-GAAP measures that we believe are meaningful when evaluating the company's performance. For detailed disclosures on these measures and the GAAP reconciliations, you should refer to the financial data contained within our press release, which is posted on our website. We continue to believe that it is important to evaluate Evercraft's performance on an annual basis. As we've noted previously, our results for any particular quarter are influenced by the timing of transaction closing. I will now turn the call over to John.

Thank you, Katie, and good morning, everyone. The current environment has presented one of the strongest hiring opportunities we've seen in the firm's history. We've capitalized on this by hiring exceptional senior talent who are attracted to our entrepreneurial platform, strengthening our ability to execute on our strategic initiatives. We're pleased to announce that so far in 2023, year to date, 11 new senior advisory managing directors, seven since our last earnings call, have joined or have committed to Evercore. This new group of SMDs represents talent in areas such as TMT, both in the U.S. and Europe, sponsor coverage, business services, real estate, and capital advisory. These are the sectors we have identified as part of our long-term strategic plan. Once the market recovers, these new additions and those to come, coupled with our recent promotes from earlier this year, will drive significant productive capacity to service our clients. We believe this positions Evercore for even greater success over the medium and long term. As we've experienced many times before, to successfully operate in a cyclical business, we must position ourselves for recovery. We've shown repeatedly that our strength comes from investing through periods like we are operating in today so we can emerge stronger. Our second quarter results reflect challenging market conditions, which we will discuss at greater length in this call. Although it is still early days, we've recently begun to see an uptick in client dialogue levels in conjunction with improving equity markets, stabilization of interest rates, and the first signs of a recovery in the capital markets. Anecdotally, we're encouraged based on what we are hearing from our bankers, and we're seeing some of that reflected in increased backlogs, which include announced transactions as well as mandates. However, there is still uncertainty in the market, which has an impact on transaction timelines and closings. Additionally, there is a lag between announcements and closings, which impacts the timing of revenue recognition. Now, turning to the quarter, Evercore achieved $505 million in adjusted net revenues, $40 million in adjusted net income, and $0.96 in adjusted earnings per share. Broadly, macro uncertainty and higher financing costs continue to weigh on markets, resulting in global announced M&A transactions greater than 100 million in the first half of 2023, down almost 40% on a dollar basis versus a year ago. In our global advisory business, while M&A activity continues to be slow, we've started to see increased momentum in client activity. in the quarter we worked on several important transactions including chevron on a 7.6 billion dollar acquisition of pdc energy and the 5.2 billion dollar sale of arconic to apollo our advisory team in europe performed well given the challenging market conditions but was down relative to the record quarter achieved a year ago we continue to see significant progress in our european business as we strengthen both our sector coverage and capabilities Our leading strategic defense and shareholder advisory business continues to see strong activity as activist campaigns remain at an elevated pace. In restructuring, activity remains strong, similar to what we've seen over the last couple of quarters, driven by liability management as well as our market-leading debtor and creditor practices. Our private capital advisory and fundraising businesses, while experiencing some challenges, remain active, particularly with respect to continuation funds and private equity fundraising, areas in which we are market leaders. Our underwriting business had a better quarter as equity capital markets started to show signs of strengthening in May and June, which were better months as measured by dollar value of issuance than any since November 2021. In the second quarter, of the six follow-on offerings that were greater than $1 billion, we were a book runner on three. Notably, we were the lead left book runner on GE Healthcare Technologies' $2.2 billion deal, which was the largest secondary offering in the quarter. We continue to focus on broadening our sector coverage. In our equities business, client interactions across our research and sales and trading platform were robust. with increasing opportunities to talk to clients. Lastly, in wealth management, AUM increased from prior quarter and year end, driven by market appreciation. Long-term client retention and performance remain strong. Tim will provide more details on this shortly, but as you know, hiring of additional senior talent coupled with a challenging revenue backdrop, put significant upward pressure on our compensation ratio. Yet we remain committed to a disciplined approach to managing our overall headcount and expense base. While we continue to be focused on maintaining a durable balance sheet, we remain committed to returning excess cash not invested in the business to our shareholders in the form of dividends and share repurchases over time. Looking forward, we are preparing for the eventual recovery in the markets, and we are cautiously optimistic about the recent shift in sentiment. As we execute on our strategy, we believe we are well positioned for sustained growth and success in the medium and long term. With that, let me now turn the call over to Tim to review our financial results and other financial matters.