PJT Partners Inc.

Good day and welcome to the PJT Partners full year and fourth quarter 2020 earnings call. Today's conference is being recorded. At this time, I'd like to turn the conference over to Sharon Pearson, Head of Investor Relations. Please go ahead.

Thanks very much, Katie. Good morning and welcome to the PJT Partners full year and fourth quarter 2020 earnings conference call. I'm Sharon Pearson, Head of Investor Relations at PJT Partners. Joining me today is Paul Taubman, our Chairman and Chief Executive Officer, and Helen Mates, 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 PCOT Partners 2019 Form 10-K, which is available on our website at PCOTPartners.com. I want to remind you that the company assumes no duty to update any forward-looking statements and that the presentation we make today contains non-GAAP financial measures, which we believe are meaningful in evaluating the company's performance. For 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. Good morning, everyone. Thank you for joining us today. Once again, we are reporting our financial results against the backdrop of a pandemic which has caused so much suffering and loss. In discussing our record results, we are mindful that this pandemic continues to roil communities and economies around the world. But in these extraordinary times, our team did in fact deliver extraordinary results. Before we review our 2020 performance, I wanted to reflect on all we have accomplished in just five years. From the beginning, our intent was to build a premier strategic advisory business from scratch, fortified by leading restructuring and Park Hill businesses. We had unwavering conviction that these businesses would be even more successful as part of an integrated yet independent firm. And we believe that by building closer alignment and by removing legacy conflicts, each business would become larger and more powerful and in turn deliver exceptional results. We have consistently focused on creating a culture where all of our businesses work hand in glove together to better serve clients. Our unique culture of close collaboration and teamwork coupled with our differentiated capabilities have enabled us to gain traction with clients faster, scale our business faster, and reach $1 billion in revenues faster than even our most optimistic forecast from five years ago. Now turning to our full year 2020 results. Firm-wide revenues grew 47% to $1,052,000,000. adjusted pre-tax income more than doubled to $271 million, and adjusted earnings per share also more than doubled to $4.93 per share. Now drilling down on our results in greater detail. Beginning with restructuring. Our restructuring business continued to be a market leader and in 2020 delivered its highest revenue ever. The pace of activity increased dramatically as a result of far-reaching business disruptions caused by the global pandemic. Our restructuring practice was bolstered by strong strategic advisory relationships with corporates as well as financial sponsors. This ever closer collaboration enhanced our restructuring win rates and enabled us to seamlessly redirect resources when needed. Our fourth quarter restructuring revenues were our second highest ever, surpassed only by our record third quarter performance. Everywhere we turn, we see companies and entire industries severely impacted by the pandemic. The inevitable tapering of government support programs over time will further stress already weakened companies. For many, it will simply be a matter of when, not if, their balance sheets need to be restructured. While we expect these elements to drive elevated restructuring activity for an extended period of time, we do not anticipate 2021 restructuring activity to match 2020 levels. Turning to PJT Park Hill, we saw a gradual return to a more normal fundraising environment as market volatility subsided and investors became increasingly comfortable making capital commitments in a virtual world. In this pandemic environment, our roster of best-in-class managers coupled with PJT Park Hill's superior distribution capabilities resulted in revenues rebounding in the second half of the year. This snapback was led by strength in the private equity and hedge fund verticals. As a result, 2020 revenues were only modestly below 2019 levels. We expect PJT Park Hill to carry over into 2021 the positive momentum experienced in the second half of 2020. Turning to strategic advisory. In strategic advisory, we saw significant growth in 2020 revenues compared to the prior year. as we benefited from the completion of the strong pipeline of transactions announced prior to the M&A market shutting down in March. Our franchise benefited from an expanding footprint as well as greater breadth and depth of capabilities. This in turn enabled us to provide our clients with superior advice and execution across a broader range of products, industries, and geographies. In the most volatile and complex markets we have seen since the global financial crisis, our highly experienced capital markets team advised an increasing number of clients on liability management, capital structure optimization, and public and private capital raises. Our commitment to developing a leading capital markets advisory business was rewarded this past year as revenues more than doubled. Looking ahead, we expect this business to grow significantly in 2021 and beyond. In 2020, we also benefited from the continued integration of PJT Camberview into strategic advisory and our firm more broadly. We are increasingly capitalizing on our expanding capabilities in activism defense, strategic IR, shareholder advisory, and ESG. Our steady investment in our strategic advisory franchise continued in 2020 with the addition of seven new partners. Post the depths of the market dislocations caused by the pandemic, we have experienced a significant increase in client dialogues and strategic mandates, which largely track the rebound in market sentiment. Our pre-announced pipeline, as measured by the number of new mandates and the revenue potential of these mandates, has steadily increased over this timeframe and now stands at its highest levels ever. While we cannot control the pace and timing at which mandates convert into announced and completed transactions, the increasing number and quality of mandates has, in our experience, been an important leading indicator of future strategic advisory performance. Now over to Helen to review our financial results in greater detail.