This conference call transcript was computer generated and almost certianly contains errors. This transcript is provided for information purposes only.EarningsCall, LLC makes no representation about the accuracy of the aforementioned transcript, and you are cautioned not to place undue reliance on the information provided by the transcript.
spk07: of 2023. During the question and answer session, securities industry professionals may ask questions of management. The company will make forward-looking statements on this call that are not historical or current facts, including statements about beliefs and expectations, and involve inherent risks and uncertainties. Factors that could cause actual results to differ material from those anticipated are identified in the company's earnings release and reports on file with the SEC which are available on the company's website at pipersandler.com and on the SEC website at sec.gov. This call will also include statements regarding certain non-GAAP financial measures. The non-GAAP measures should be considered in addition to, and not a substitute for, measures of financial performance prepared in accordance with GAAP. Please refer to the company's earnings release issued today for a reconciliation of these non-GAAP financial measures to the most directly comparable GAAP measure. The earnings release is available on the investor relations page on the company's website and at the SEC website. As a reminder, this call is being recorded, and I'd like to turn the call over to Mr. Chad Abram. Mr. Abraham, you may begin.
spk03: Good morning, everyone, and thanks for joining us today. to talk about our fourth quarter and full year results for 2023. I am here with Deb Shoneman, our president, and Kate Kloon, our newly appointed CFO. I'd like to welcome Kate to her first of many earnings calls. She is an excellent addition to Piper Sandler and our leadership team. Kate has an impressive skill set, and we look forward to leveraging that to help drive the firm's next stage of growth. We also have Tim Carter with us today, our former CFO, who is serving as Senior Vice President of Finance through the transition before retiring in April. I'd like to thank Tim for his leadership. He has been an incredible partner to me and instrumental in helping guide us through our growth over the years, including several transformative acquisitions.
spk00: Thanks, Chad. I feel incredibly fortunate to have spent over 28 years at Piper Sandler. and I'm really proud of everything we've accomplished. The firm is well positioned, and I'm excited to have Kate in the CFO seat to guide us through the next stage of growth. It's been an absolute honor to have worked side by side with so many fantastic people at Piper Sandler, which is what I'll miss most.
spk03: Thanks, Tim. Now turning to our results. Our diversified platform performed well during 2023, despite challenging market conditions for much of the year. We finished the year strong with the fourth quarter representing our best quarter of 2023, as well as our third highest quarterly revenues on record. We generated adjusted net revenues of $457 million, a 21.7% operating margin, and adjusted EPS of $4.03. On a full year basis, adjusted net revenues were $1.3 billion, generating a 16% operating margin and adjusted EPS of $9.28. There are a number of highlights worth noting from 2023. Advisory services revenues represented over half of our total net revenues for the third consecutive year. The business delivered its second strongest quarter on record and accounted for 60% of total net revenues for the fourth quarter. We grew market share in our advisory, equity capital markets, and equities brokerage businesses. We generated record revenues in our restructuring practice and in our agent in debt business, demonstrating the strength of differentiated product offerings for clients. And we repaid $125 million of senior notes upon maturity, which completes the repayment of our long-term debt financing procured for the acquisition of Sandler O'Neill. Overall, 2023 marks another successful year as we continue to grow market share and maintain strong operating discipline to generate $166 million of adjusted net income, demonstrating how durable our diverse platform is in a challenging market environment. I'll provide an update on our corporate investment banking business. We generated revenues of $314 million for the fourth quarter of 2023, a significant increase on a sequential basis as well as an increase from the fourth quarter of last year, driven by the strong performance of our advisory business. For the year, corporate investment banking revenues of $840 million increased declined 7% from 2022, but delivered a strong performance relative to the overall market. Contributions were relatively diverse across sectors, led by our market-leading healthcare and financial services franchises, followed by another strong year from the energy and power team, and record results from our restructuring group. Our performance within healthcare was powered by MedTech Advisory, and increasing market share in biopharma equity capital raising. Healthcare remains a large and growing feed pool, and with one of the largest and most respected teams in the marketplace, we're well positioned to benefit from this growth. Our performance within financial services was led by depositories, where we were the number one advisor in U.S. bank M&A based on number of announced transactions and aggregate deal value. and we advised on seven of the largest 10 bank mergers and acquisitions completed during 2023. Additionally, we saw increased contributions from our insurance team. We had another record year in this vertical as the team leveraged our robust financial sponsor coverage to win larger mandates. Contributions from our asset and wealth management team continue to grow as well. Another sector with strong performance in 2023 was our energy and power group. We retained our leadership in oil field services, where we were one of the top advisors based on the number of completed deals. With one of the largest and most tenured teams in the street, we continue to feel great about our market position. Specific to advisory services, we generated $284 million of revenues during the fourth quarter, nearly double the sequential quarter, and up year over year. We benefited from a higher average fee and more completed transactions as we experienced an elevated close rate during the quarter. For the year, we generated $709 million of advisory revenues, which were more resilient than the overall market. Our revenues declined 9% from 2022, while M&A market activity was down approximately 20% to 30%. We maintained our rank as the number two advisor on announced USM&A deals under $1 billion. The sector and product diversification of our business, along with balanced coverage between strategic and private equity clients, drove our strong performance for the year. Private equity activity in the market was down sharply in 2023. However, our advisory revenues from PE clients grew in 2023, highlighting the scale of our PE business and the increased relevance of our platform to a broader universe of financial sponsors. A key contributor to our strong performance with PE clients was our debt advisory business. Our debt advisory team excels at finding creative and tailored financing solutions to help clients navigate a challenging leveraged finance landscape. Another success was record revenues from our restructuring team. including advising the FDIC on the sale of substantially all of the deposits and loans of both Silicon Valley Bank and Signature Bank in March of 2023. In addition to partnering with our financial services franchise, the team completed a number of restructuring deals in collaboration with our healthcare, energy and power, and consumer groups. Looking forward, our advisory pipelines remain strong. With improving market conditions, we expect the first quarter of 2024 to be modestly better year over year. Given the elevated close rate in the fourth quarter of 2023, we anticipate a similar seasonality in our 2024 advisory revenues to what we experienced last year. Turning to corporate financing, we generated revenues of $30 million for the fourth quarter of 2023, down sequentially and year-over-year. For the year, corporate financing revenues of $131 million improved from 2022. Equity financing revenues increased 28%, which was offset in part by a decline in debt financing activity for financial services companies. We completed 88 equity and debt financings, raising $20 billion in capital for corporate clients. Equity issuance has remained depressed after robust activity in 2021. The equity capital markets fee pool for 2023 represented approximately 51% of the average over the last 10 years. Our relative performance in equity capital raising for 2023 was strong, with fees from sub-$5 billion market cap companies increasing 46% over the last year versus a 17% increase in the market fee pool. Healthcare again led our equity issuance activity, serving as a book runner on 45 of the 46 deals priced this year. Additionally, we ranked as a top five investment bank based on the number of book run deals for sub $5 billion market cap companies within the biopharma space. We expect equity and debt financing activity to increase in 2024 as companies raise needed capital to execute on their strategic plans. Turning to investment banking managing director headcount, we finished the year with 169 managing directors, up a net 10 from last year. A significant component of our 2023 MD growth was driven by internal promotions across our industry and product teams, highlighting our success at developing talent, which remains a priority for us. We also continue to focus on building a culture of growth that makes us a destination of choice for top tier talent. Over the last 10 years, we have grown MD headcount by an average of 13% annually. Given this growth, we remain intentional about strategically managing headcount and driving productivity while consistently looking for opportunities to strengthen the platform. Before handing it off to Deb, let me make a couple of concluding remarks. Over the last decade, we have executed on our strategic vision and delivered strong growth and shareholder returns. We have built a diverse and resilient platform with significant scale, margin, and cash flow. We continue to focus on growing annual corporate investment banking revenues to $2 billion by scaling industry groups, product share gains, increasing transaction and fee size, continuing our momentum and growth with private equity clients, and corporate development. Now, I will turn the call over to Deb to discuss our public finance and brokerage businesses.
spk08: Thanks, Chad, and congratulations to both Tim and Kate. I'll begin with an update on our public finance business. Market conditions were challenging for most of the year in this business due to higher nominal rates and weak investor demand. However, conditions improved during the fourth quarter. We generated $29 million of municipal financing revenues for the quarter, up 47% sequentially as the better market conditions allowed us to execute a few more high-yield offerings. For 2023, we generated $83 million of municipal financing revenues, down 23% from last year. We underwrote 413 municipal negotiated transactions, raising over $12 billion of par value for our clients. Based on the number of municipal negotiated underwritings for the year, we maintained our number two ranking. The number of new issuances in the overall market for 2023 declined approximately 13% from the prior year. High-yield new issuances decreased approximately 21% due to higher interest rates for issuers and depressed demand from buyers. This impacted our performance as a meaningful component of our public finance business is in high-yield specialty sectors. As we look ahead to 2024, market conditions continue to be challenging. However, declining rates and more investor demand have us cautiously optimistic that momentum will continue. Our diversified middle market model is a key differentiator in the marketplace, and we're excited about our growth prospects for this business. Turning to our equity brokerage business, equity markets rallied during the quarter to finish the year strong, and volumes increased 8% compared to the third quarter. We generated revenues of $55 million for the fourth quarter, up 9% sequentially and down modestly year over year. For the full year, equity brokerage revenues of $210 million were consistent with 2022. Performance was broad-based with our high-touch program and derivatives trading all generating strong activity. Market share gains in 2023 offset the declines from lower market volatility and volumes compared to the prior year. The strength of our platform attracted over 1,700 unique clients, and we traded 10.7 billion shares on their behalf. Strong collaboration between our fundamental analysts and our macro research analysts continues to bring a valuable and differentiated view to our clients, recognized by increasing client votes. We maintain one of the largest research platforms in the small and mid-cap space with approximately 1,000 stocks under coverage. As we look forward to 2024, we expect a more challenging market environment with a lower fee pool and likely less volatility. We continue to gain market share, which should help mitigate these headwinds. Lastly, turning to fixed income, we generated revenues of $48 million for the fourth quarter of 2023, up 19% compared to the sequential quarter, and down modestly year over year. A perception that interest rate increases by the Fed are finished help motivate clients to move from the sidelines and take advantage of the higher yields. Our depository clients were active in repositioning their portfolios ahead of the new year, and we were engaged on multiple balance sheet yield optimization assignments. For 2023, we generated $168 million of fixed income revenues, down 14% from the prior year. Marketing additions were challenging during the first nine months of the year, as interest rate volatility and liquidity concerns in the banking sector muted client activity. We continue to invest in this business and we made several targeted hires in 2023 that increased our product depth and client specialization. The current market dislocation should provide opportunity for more targeted hiring in 2024 as we look to continue elevating our platform. From an outlook perspective, we expect clients to be more active in 2024 as the fixed income asset class represents an increasingly attractive investment opportunity. Now, I will turn the call over to Kate to review our financial results and provide an update on capital use.
spk04: Thanks, Deb, Chad, and Tim. Let me begin by saying how happy I am to be here at Piper Sandler. I'm honored to be named the new CFO. I'd like to thank Tim for his continuing invaluable support and mentorship during this transition. Before reviewing our non-GAAP financial results, let me discuss a couple of items impacting our GAAP results this quarter. For the fourth quarter of 2023, our GAAP results included $5.2 million of non-compensation expense related to potential regulatory settlements with the SEC and CFTC regarding record-keeping requirements for business-related communications as well as the related legal costs. GAAP results also include a $3.8 million restructuring charge associated with headcount reductions as we continue to align headcount with our 2024 outlook. Turning now to our adjusted non-GAAP financial results, which should be considered in addition to and not a substitute for the corresponding GAAP financial measures. Net revenues of $457 million for the fourth quarter of 2023 increased 49% from the prior quarter and 17% compared to the fourth quarter of last year. An excellent performance from our advisory business accounted for 62% of total net revenues, which drove the strong results. For the year, net revenues totaled $1.3 billion, down 7% compared to 2022. We generated solid operating results despite reduced market activity for much of the year, as well as a decline in market fee pools in most of our businesses. Turning to operating expenses and margin. Our compensation ratio for the fourth quarter of 2023 was 63.4%, lower compared to the sequential quarter driven by increased revenues. For 2023, our compensation ratio was 63.6%, a 110 basis point increase compared to 2022. Our compensation philosophy remains unchanged. We continue to balance employee retention and opportunities to invest in new talent with delivering appropriate operating margins and shareholder returns. Based on our current outlook of improving conditions, we expect our compensation ratio for 2024 to trend closer to 63% absent significant hiring activity. Non-compensation expenses for the fourth quarter of 2023, excluding reimbursed deal expenses, were $60 million, up 5% on a sequential basis. For the year, excluding reimbursed deal costs, Non-compensation expenses total $243 million, up 3% compared to 2022, illustrating solid expense management in the face of inflationary pressures and a challenging operating environment. Non-compensation expenses are a key driver of operating leverage, and we remain focused on managing the actionable expenses. Looking forward, we maintain our guidance of approximately $62 million per quarter, excluding reimbursed deal expenses, as business continues to improve. During the fourth quarter of 2023, we generated operating income of $99 million and an operating margin of 21.7%. For the year, operating income totaled $213 million with an operating margin of 16%, a solid result on an absolute basis. Our income tax rate was 26.7% for the fourth quarter of 2023 and 19.9% for the year. Income tax expense for the year was reduced by $17 million of tax benefits related to restricted stock festings. Excluding these benefits, our 2023 tax rate was 27.9%. We expect our tax rate for 2024 to be within a range of 27 to 29%, excluding the impact from stock festings. During the fourth quarter of 2023, we generated net income of $72 million and diluted EPS of $4.03. For the year, net income totaled $166 million and diluted EPS was $9.28. Let me finish with an update on capital allocation. We remain committed to returning capital to shareholders through market cycle. Our earnings resilience and capacity combined with our capital light approach enables us to generate meaningful amounts of excess cash to deploy through share repurchases, dividends, and corporate development. During 2023, we returned an aggregate of $155 million to shareholders. We repurchased approximately 495,000 shares of our common stock, or $71 million, which more than offset the share count dilution from this year's annual stock grant. We paid an aggregate of $84 million, or $3.65 per share, to our shareholders through our quarterly and special cash dividends. We also repaid the $125 million of our Class B notes upon maturity in October of 2023. Given our level of earnings, today the Board approved a special cash dividend of $1 per share related to our 2023 full-year results. Including this special dividend, our total dividend for fiscal year 2023 equals $3.40 per share of common stock, or a payout ratio of 37% of adjusted net income. In addition, the board approved a quarterly cash dividend of $0.60 per share. Both the special and the quarterly cash dividends will be paid on March 15th to shareholders of record as of the close of business on March 4th. Our 2023 results demonstrate our firm's resiliency during complicated market conditions. As we look forward, we remain confident that the execution of our strategic priorities will strengthen client engagement, drive durable revenue growth, and provide strong returns for our shareholders. With that, we can open up the call for questions.
spk07: Thank you. If you'd like to ask a question, please signal by pressing star 1 on your telephone keypad. If you are using a speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment. And again, please press star 1 to ask a question.
spk05: Hey, good morning, everyone. Thanks for taking the question here.
spk09: I just want to start on the fixed income brokerage business. You clearly, nice to see the improvement there and hear the depositories are more active. And my sense was that improvement kind of progressed through fourth quarter. So maybe the full quarter, you know, wasn't even fully reflecting that improvement. So I'm just curious if the fourth quarter level is a big jumping off point as we look to 2024. Could it actually improve off of that if you see more acceleration from depositories? Just want to get maybe sensitized a bit around what you guys saw during the fourth quarter and then what that means for how to think about jumping off into 2024. Thanks.
spk08: Yeah. Hey, Devin. We did see that build in Q4, as you said, and I think a lot of that ended up being with banks at almost at the end of the year looking to get their balance sheets repositioned for the start of 24, taking the loss trades, locking in higher yields. As we look to 2024, it ultimately is probably one of our harder businesses to predict because what we've seen already in the first quarter and one of the factors that seems to impact the business is not just only level of rates, but rate volatility. And so as we've seen rates move around a lot here again in January, we have seen it start off just a little slower. But when I step back and look at the whole year in total, we do expect that it's going to be a better year. It's going to be a function of the rate environment, importantly, rate volatility, shape of the yield curve, and then that bank and credit union liquidity, which as you've noted here, has improved. So I guess a cautiously optimistic viewpoint on fixed income in 24.
spk05: Okay, great. Thanks, Deb.
spk09: One on the M&A environment, probably for Chad here, just on the breakdown between sponsor activity and corporate activity. Obviously, you guys have good connectivity to kind of both subgroups, and sponsors were really absent from the market last year. But we have been hearing that they're starting to come back. Technology, you know, is the largest sector and hearing some more positive commentary there where I know you guys participate as well. So we'll have to just get a little flavor between your sponsors versus corporates. And then also just I hear the comments around kind of the cadence of 2024. and the acceleration through the year. But what are some of the kind of key things you're looking for when you talk to clients to get the sense that things are improving and then the order of magnitude that it feels like? Is it a coiled spring or is this just a really kind of long, slow, kind of drawn out grind tire? Thanks.
spk03: Yeah, I would say, Devin, obviously we had really good Q4 advisory results. Frankly, the sponsor business had a lot to do with that. You know, obviously I've heard the commentary from others. So I think, you know, you just, you look at this year in Q4 and we certainly gained some share. You know, we sort of highlighted our sponsor activity, you know, depending on how you look at it, was up somewhat, you know, in a market where the fees were down. I would say the first few quarters when we were looking at sort of what transactions we're going to close. You know, the close rates were just incredibly low leading into that. And so, you know, we were obviously cautious going into Q4. I would say that flipped for us quite a bit in Q4, just looking at, you know, the potential deals we could close with private equity. You know, we had a very high close rate. And I do think, you know, financing has picked up. It's certainly not perfect. I do think the bid between Buyers and sellers, these sort of new valuation levels have settled in for most. Pitch activity is good. So yeah, we definitely expect 2024 to be a better sponsor year. I don't think it's going to be a coiled spring. And then I would just remind people that Sponsor activity is always more back half-weighted than other M&A activity. So by its very nature, it's a heavy pitch cycle, February, March, April, May, and heavy deal execution. And frankly, one of the highlights of our Q4 business was we did a lot in our diversified industrial services business, and that's primarily 100% sponsor business, just as an example.
spk05: Okay, great. If I could squeeze just one more quick one in here.
spk09: Just on the equity capital markets side of the business, you guys have such a big healthcare book, and that's an area, just looking at some of the industry data, it was up roughly 2x from in January 24 over January 23. So seeing some improvement, obviously. early days there. But I think the recovery in equity capital markets is going to be sector by sector. And so just love to get a sense of kind of the order of magnitude you guys are expecting. And then within some of the verticals, because you guys are active in some of the maybe the more active areas, kind of what that could mean for Piper, maybe even relative to broader industry trends. Thanks.
spk03: Yeah, so, you know, for us in Q4, ECM actually was a bit of a disappointment after we started with a strong October, you know, deal activity, you know, really slowed, you know, the last five, six weeks. I would say January has started pretty strong for us in ECM, and it's, you know, exactly the data you're seeing, and it is driven by, yeah, by primarily healthcare. You know, I think we would We would expect sort of with the overall markets and volatility in client conversations that, you know, 2024 should be a measured, you know, continued improvement for ECM. A lot of our, you know, we actually outperformed ECM if you look at all of 2023, but a lot of that was just market share gains in healthcare. We do expect that entire ECM fee pool to get better in 2024. So, we don't even need market share gains to drive some of that. What will make it great would obviously be broadening into some other sectors, very limited IPOs, and obviously tech's a big part of that. But if we started to see the tech IPO cycle pick up, we started to see some of the capital markets and energy pick up, that's what would broaden out, at least for us, And then I do think there's a chance, I mean, we saw really low capital markets activity in financial services, just given all the turmoil. And you're starting to see many institutions just sort of take the medicine on capital and other books. So we do think you'll see more capital raising in that sector as well.
spk05: Thank you. We'll go next to James Euro from Goldman Sachs.
spk01: Hi. Good morning, and thanks for taking my question. So, Chad, starting with advisor, I thought these were excellent results, but I do think the overarching question in investors' minds is whether advisory transactions came forward into the fourth quarter and whether this sets up for a slightly more challenging first quarter. I think you sort of alluded to the seasonality for 2024. So I think the question is how you think about the starting point for 2024 and then when you think you can get back to fourth quarter levels in 2024 and start to build from there.
spk03: Yeah, I would say, look, especially given our sponsor mix, first quarter is always the toughest seasonal quarter for us. You know, with, like I said, with our close rate being high in Q4, you know, it's hard to imagine we didn't have some pull forward there. You know, all that being said, you know, a lot of our sponsor business, like I said, is driven from pitching in the first half that closes in the back half, which is why we sort of said we think we'll have the similar seasonality. So, you know, it's not like in 2023, our first quarter was, you know, fantastic from an M&A result either. So as the year progresses, you know, it didn't really pick up for us until Q4. I do think as this year progresses, you know, we might see a little more of that in Q2 and Q3 and not just Q4, but we'll have to see how that plays out.
spk01: Okay, that makes sense. And then just maybe quickly on financials, DCM and M&A, which you touched on a little bit before, does the stress on the regional banks over the past few days as a result of commercial real estate in particular push out the timeline for these businesses to reaccelerate? Just curious what you're hearing from your bankers. And then just more generally, are those two businesses expected to pick up in 2024, or is that a longer-term trajectory?
spk03: Yeah, I mean, I've been obviously reading all the various bank earnings reports, and obviously we cover a lot of the smaller and mid-sized banks as well, and there's been certainly some tougher reports. I do think that does set up for eventual improvement. I would say relative to our corporate financing results last year, The DCM ECM financing part of financials was a really low number for us You know look back many many years certainly one of the lowest So while we think it'll be a slow recovery We do think there will be more capital raising and we certainly don't think there's a way it can go much lower so I think we would say it would be an improvement but a slow improvement in financials capital raising this year and
spk01: Very clear. Thank you so much.
spk07: Thank you. We'll go next to Steve Chubak from Wolf Research.
spk02: Good morning. This is Brendan O'Brien filling in for Stephen. I guess to start, I just want to touch on the advisory business. The improvements in the environment are encouraging, but just want to get a sense as to whether the election could have any dampening effect on activity levels. I would be specifically interested in the potential impact on activity in the financials and healthcare sectors, which can be in or out of regulatory crosshairs, depending on the administration.
spk03: Yeah, I mean, I'm in my 33rd year of doing this, obviously have seen some elections, have certainly been asked about elections a lot. I think people spend a lot of time on it. I would say the few times, both for advisory and ECM, you know, that we've actually looked at the long-term data, it It doesn't have that much impact on either of those businesses, but there's definitely some short-term noise that can be created. I mean, certainly for our healthcare business, every time you get a lot of talk about regulating different pricing, that impacts healthcare. I definitely think in our financials business, people will look at you know, the administration and figure out is it going to be as difficult to get depository transactions done. So while I think there'll be a lot of noise, I think if you just look at the trends long term, it doesn't have that big an impact.
spk02: That's helpful. And I guess something a bit more tangible, you know, the OCC gave new guidance that eliminated the expedited review process for bank mergers. I know it's still early days. But would you expect this to change the velocity of activity or put it simply, prolong deal cycles and therefore the eventual revenue tailwind if and when bank consolidation were to really pick up?
spk03: Yeah, I mean, I think what our team is certainly feeling now is the level of activity and conversation has picked up. I would also say if you just look at the empirical data, even from this year, we've already been on a small handful of depository transactions. So I think we think it's going to pick up. I do think all the noise around regulatory activity, I mean, bank CEOs talk to other bank CEOs, and if it's a hassle and it takes longer and it adds risk, that uncertainty always scares people. So I certainly don't think any of that's going to help, but I think it's against the backdrop where, you know, the environment's going to just warrant consolidation as a way to drive more earnings. And, you know, that's certainly what we're seeing, but it's going to be a real slow recovery there.
spk02: Great. Thanks for the call, Chad.
spk05: Thanks for taking my questions.
spk07: Thank you. We'll go next to Mike Grondahl from Northland Securities.
spk06: Hey, thank you. So, Chad, you know, we're in a new year, 2024. What are your top two strategic priorities for 24? And then just secondly, how should we think about the growth of MD headcount the next year or two?
spk03: Yeah, I would say... It's hard to just pin the priorities down to a couple. If I had to give you a couple, certainly we've talked for years about our interest in wanting to increase our market share dramatically in technology and software. I think when you look at our largest industry teams, and it played out last year, by far the two largest are financials and healthcare. We had a big year. In energy, and I think certainly in our diversified and industrial businesses, we've added enough pieces that that's a big leg on the stool. But overall, you know, we're going to be disappointed over the next five years if we can't get the tech and software business, you know, to a similar size with healthcare and financials. And we've obviously made, you know, a lot of those investments. Last year was a pretty tough year in the tech advisory fee pool to have that play out. So You know, we expect quite a bit of improvement there. And then I would say if I could just highlight, you know, one other strategic priority for us in advisory is just work with PE clients. You know, the type of work we're doing with PE clients, whether it's, you know, some GP advisory, you know, looking more at other services you can offer that PE client base. We really have a strategic advantage in the middle market, you know, that shows through in our results. It shows through in most of our industry teams with private equity. We had a really, really good year in debt capital raising in our debt advisory business, and the vast majority of that is related to sponsors. So I think we're just going to look at how do you press that advantage and continue to gain share and, you know, How can we offer more products and services for what we think is going to continue to be a growing P.E. feed pool? Oh, your second question was MD headcount.
spk06: Yeah, headcount MDs in banking.
spk03: Yeah, you know, for us, nothing has really changed. We always kind of talk about, on average, trying to add people. five to seven net MD headcounts. Obviously, we've grown faster than that if you look the last five years, but that average is in the acquisitions we've done. So, you know, we always put that on top. I would say we went a little slower on sort of external hiring, just given the environment. I would say just sort of given our momentum and success in just... The overall environment, we are seeing a lot more opportunity, you know, early this year. And, you know, obviously we've got to be careful with that. So, you know, there might be some chances to accelerate that. But, you know, I think we're sort of banking on the steady Eddie 5 to 7 ads that, you know, consistent with the last several years.
spk05: Okay. Hey, thank you. And at this time, I'll turn it back over to Mr. Abram for any additional or closing remarks.
spk03: All right. Thank you, operator, and everyone that joined. We very much look forward to updating you on our first quarter results. Have a great day.
spk07: That does conclude today's conference. Thank you for your participation. You may now disconnect.
Disclaimer