PJT Partners Inc. (PJT) Earnings Call Transcript & Summary

Good day, and welcome to the PJT Partners Fourth Quarter 2024 Earnings Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Sharon Pearson, Head of Investor Relations. Please go ahead, ma'am.

Thank you very much, and good morning. and welcome to PJT Partners' Full Year and Fourth Quarter 2024 Earnings Conference Call. I'm Sharon Pearson, Head of Investor Relations at PJT Partners. And joining me today is Paul Taubman, our Chairman and Chief Executive Officer; and Helen Meates, 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 PJT Partners' 2023 Form 10-K, which is available on our website at pjtpartners.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. Thank you all for joining us today. Earlier this morning, we reported record-setting full year 2024 results. Highlights include record revenues, record adjusted pretax income and record adjusted EPS. For the full year 2024, revenues were $1.49 billion, up 29% year-on-year. Adjusted pretax income was $278 million, up 52% year-on-year and adjusted EPS was $5.02 per share, up 54% year-on-year. This strong performance was broad-based as PJT Park Hill, restructuring and strategic advisory, all delivered record performance. Our substantial free cash flow generation enabled us to direct a record $333 million to share repurchases while still ending the year with a record cash balance of $547 million. Our 2024 performance reflects continued progress in building the best advisory-focused investment bank through sustained, disciplined investment and a competitively advantaged culture. We remain committed to building upon the strong momentum through further investment. After Helen takes you through our financial results, I will review our business performance, recruiting initiatives and outlook in greater detail. Helen?

Thank you, Paul. Good morning. Beginning with revenues. For the full year 2024, total revenues were $1.493 billion, up 29% year-over-year. And as Paul mentioned, we had record revenues in all of our businesses. For the fourth quarter, total revenues were $477 million, up 45% year-over-year, also reflecting year-over-year growth across all of the businesses. Turning to expenses. Consistent with prior quarters, we presented the expenses with certain non-GAAP adjustments, which are more fully described in our 8-K. First, adjusted compensation expense. Full year adjusted compensation expense was $1.030 billion, representing a compensation ratio of 69%, which compares to 69.8% for the full year 2023. Given the higher compensation accrual for the first 9 months of the year, we accrued compensation at 67.9% for the fourth quarter. We expect our full year compensation ratio will decline in 2025 and we'll provide more specific guidance when we report our first quarter results. Turning to adjusted non-compensation expense. Total adjusted non-compensation expense was $185 million for the full year 2024, up 12% year-over-year. The largest driver of the year-over-year increase was higher occupancy costs. The increase also reflects higher travel and related expense and continued investment in Communications and Information Services. In the fourth quarter, total adjusted non-compensation expense was $47 million up 8% year-over-year. And as a percentage of revenues, our adjusted non-compensation expense was 12.4% for the full year and 9.8% for the fourth quarter. Overall, we expect our total non-compensation expense in 2025 to grow at a similar rate to 2024, with the highest contribution to growth coming from travel expense driven by increased business-related activity as well as continued investment in our technology and data infrastructure. Turning to adjusted pretax income. We reported adjusted pretax income of $278 million for the full year 2024 and $107 million for the fourth quarter. Our adjusted pretax margin was 18.6% for the full year and 22.4% for the fourth quarter. The provision for taxes, as with prior quarters, we've presented our results as if all partnership units had been converted to shares, and that all of our income was taxed at a corporate tax rate. Our effective tax rate for full year was 20.6% as we realized a significant tax benefit from the delivery of vested shares. The 20.6% rate was slightly below our previous estimate of 21%. We expect our 2025 effective tax rate to be at or below 2024's level given the continuing tax benefit from the delivery of vested shares, and we will provide a refined view at the end of the first quarter. Earnings per share. Our adjusted if-converted earnings were $5.02 per share for the full year compared with $3.27 in 2023 and $1.90 for the fourth quarter compared with $0.96 for the fourth quarter of 2023. On the share count for the year ended 2024, our weighted average share count was 44.1 million shares, which grew by about 2.3 million shares or 6% year-over-year. The increase in the share count was due to both the share price increase and the achievement of price hurdles for performance awards. During the year, as Paul mentioned, we repurchased 3.1 million share and share equivalents, including the repurchase of 489,000 share in share equivalents in the fourth quarter. In terms of our fully diluted share count, we ended 2024 with 46.7 million shares up just over 1% year-over-year. We are in receipt of exchange notices for an additional 324,000 partnership units, and we intend to exchange these units for cash. And consistent with our capital priorities, we will continue to invest in the franchise while using excess cash to over time reduce our share count. On the balance sheet, we ended with a record $547 million in cash, cash equivalents and short-term investments and $490 million in net working capital, and we continue to have no funded debt outstanding. Finally, the Board has approved a dividend of $0.25 per share. The dividend will be paid on March 19, 2025, to Class A common shareholders of record as of March 5, 2025. And with that, I'll turn it back to Paul.

Thank you, Helen. Beginning with restructuring. Liability management continues to be the principal driver of activity as corporates and sponsors confront elevated interest rates, challenged business models, technological disruption and changing consumer preferences. Our global restructuring business, again ranked #1 in announced restructurings globally and in the U.S. and again delivered record results, surpassing 2023's prior record performance. Turning to PJT Park Hill. While global primary fundraising volumes declined for the third straight year, our performance ran counter to this trend with meaningful increases in capital raised and revenues realized. In Private Capital Solutions, our business benefited from both a strong macro environment as well as market share gains. Differentiated performance in both primary fundraising and private capital solutions enabled PJT Park Hill to deliver record revenues in 2024, besting our previous record results achieved in 2022. Turning to Strategic Advisory. Our Strategic Advisory business also delivered record results in 2024, surpassing our previous high watermark set in 2021. Even with 2024 worldwide completed volumes, down nearly 50% from 2021 levels, we achieved this record performance through significant market share gains as we benefited from an expanded industry and geographic footprint, enhanced capabilities and greater brand recognition. On the talent front, we had another strong recruiting year in 2024, expanding our industry and geographic coverage as well as enhancing our overall advisory capabilities through a sustained influx of senior hires. We intend to remain forward leaning in our recruiting efforts as we continue to build out our strategic advisory franchise. Over the past 5 years, our steadfast efforts to attract best-in-class talent have resulted in a 50% increase in partner count, furthering our coverage footprint and contributing to the substantial growth in firm-wide revenues. As we look ahead, we expect the macro backdrop for primary fundraising to remain challenging in 2025, while the private capital solutions business should continue to experience secular growth. In restructuring, we continue to believe we are in a multiyear cycle of elevated activity in liability management, and we expect 2025 to be another active year for our liability management team. In Strategic Advisory, we expect to see higher levels of global M&A activity in 2025 as activity levels continue to normalize. We remain focused on further expanding our firm-wide capabilities by broadening our industry and geographic reach. We continue to focus on providing clients with differentiated advice and differentiated outcomes. And as before, we remain confident in our near, intermediate and long-term growth prospects. With that, we will now take your questions.

[Operator Instructions] And we will take our first question from Devin Ryan with Citizens JMP Securities.

I want to start with a question that touches on both the environment and productivity. And I appreciate that partner productivity is just an output, but $13 million per year-end banking partner in 2024 was a new record, just above 2020. Restructuring bankers, roughly 15% of the partners were obviously well above average, maybe pushing 2x the productivity is kind of our estimate. So maybe a little bit of upside there, but they're doing great and pulling the average up. And then Strategic Advisory had a record year, as you mentioned, but seemingly still has a lot of upside as productivity and the environment improves. And so just thinking about the broader backdrop for productivity, how would you frame where each business is today relative to its potential, just given that you have brought in so many bankers and then you have the environment, particularly in areas like M&A and for Park Hill recovering from tough levels?

Well, you asked a question where I can give you some general guardrails, but it's hard to be overly prescriptive because a lot of this is a function of the operating environment that is presented to you. And clearly, as the environment becomes more active, all else equal, you're going to see an increase in productivity. So what we focus in on is for a constant macro environment, do we see productivity upside? And the answer to that is an unequivocal yes. So if we were to go back and rerun 2024 today, my expectation would be that we would be more powerful rerunning those conditions of 2024 than we were a year ago. Why? Because more of our partially built networks are now built. We have greater footprint. We have more continuity. We have greater brand recognition. We have a lot of attributes today that we didn't have 12 months ago, and I expect 12 months from now, we'll have more of those attributes. So I never like to talk about a dollar number for a couple of reasons. Our bankers aren't producing widgets, they're giving best-in-class advice. And sometimes, you can make progress, but there's no crystallizing event not because there's an issue with the platform, but because it's not the right time, either for your clients or it's not the right macro environment. But if you said to me what's the direction of travel, it's up and to the right. Now if you then said, where do you expect the greatest upside to be not surprisingly, it's in the least mature of our businesses, which would be Strategic Advisory.

Okay. I appreciate that. And then as a follow-up, I'll maybe try for one on the comp ratio. And I also appreciate there's a lot of variables that will go into that as we think about for 2025 in that analysis. But can you give us a sense of whether you were able to bring down deferrals after a really good record 2024, if there's anything else that would help structurally. And then just more broadly, how we should think about the relationship of revenue growth versus comp expense growth as we look into the next year?

I think I've said -- I think I looked back just in preparation and I look back on what we said after the second quarter, what we said after the third quarter, I think we've been remarkably consistent that we're set up very well to deliver comp leverage beginning in 2025. I think we delivered, if you will, a little early sign of what's to come in the fourth quarter, but I'm not trying to manage this business on a quarter-to-quarter basis. What I've suggested from the very beginning is if you go back and you need to look at your comp expense over a multiyear period because when there are onboarding costs through buyouts and the like, those get amortized over a period of time. You then have bankers who are on the platform who are just ramping up. There's a mismatch and it doesn't go away the moment or the quarter or even the year after they're onboarded. And you need to look at the totality of the investment and you need to look at where the revenue recognition is and you need to take a multiyear lens to all of that. And what I've said consistently is if you go back to 2021, the good news is we have surpassed our 2021 Strategic Advisory revenues in 2024. But the reality is we have a lot more individuals on the platform today and whatever revenue growth you've observed over 3 years pales in comparison to the growth in headcount over those 3 years. I think when we move forward, and we don't look at a '21 to '24, we look at a '21 to '25 that starts to change meaningfully, and that's why we've said you should expect to see meaningful comp leverage beginning in 2025. But it's just too early to determine exactly how much, but we've been on a journey. We said when we hit 69.8% that we thought that was as high as it would go that we had swam as far offshore. And it wouldn't necessarily get better, but it certainly wouldn't gap out further from there. I think we held to that. And then we got into this year, we said we think we're starting to swim slightly closer to shore and we had an accrual that was just a bit better. I think we finished the year a little bit better. But as you look at the arc of all of this, it's going to be '25 and beyond where you'll start to see us return to more "normalized levels".

And then, Devin, you'd asked about deferrals, the deferral rates vary year-to-year. But if you look at the last few years and you look at the average. In 2024, we would say the deferrals were below average. In '23, they were probably above average. But -- so we definitely had a lower deferral rate in '24, but nothing significant in terms of changing the philosophy of the structure.

We're managing this business for the long-term, we're not going to kind of just start tweaking things just to hit numbers and the like.

And we will take our next question from James Yaro with Goldman Sachs.

Paul, I'd just like to touch on the economic growth dichotomy between the U.S. and Europe and the ramifications of that for M&A. So GDP seems to be falling slightly in Europe versus growing fairly well in the U.S., and rates are falling as a result faster in Europe, but less so in the U.S. laying out these impacts, maybe you could just compare and contrast the health of the M&A backdrop and outlook for each jurisdiction?

Well, I think clearly, the U.S. economy is the envy of the world and it's a remarkable growth engine. And certainly, when you compare it to other countries, that continues to be the case. So when you ask though about M&A activity, presumably, it's from where we are today and what do the vectors, where are they pointing. And if you said to me, from where they are today, I actually think a case could be made for a meaningful uptick in European activity. Now some of that is there's a meaningful valuation disconnect between U.S. and Rest of World. And at some point, notwithstanding the stronger prospects for growth the larger uniform market in which U.S. companies operate versus a lot of small European markets that aren't fully stitched together through the EU and then you've got the U.K. standing separate and distinct. At some point, you have to ask yourself whether that valuation disconnect over penalizes European companies and just to be a bit contrarian, I am of the view that, that probably starts to narrow, maybe not instantaneously. But I think there's a perception that there's greater value to be had in Europe. So I think that potentially creates a little bit of a catalyst to activity in Europe. I also think that European governments are keenly aware that they need to stand up stronger European champions. And I wonder whether or not we're going to see a more constructive view on consolidation and mergers within Europe from European company combining with other European companies to better compete on the global stage. And I think that, that's a positive. And then the reality is there are a lot of European companies that want to increase their exposure and access to the U.S. market. So all of those things, I think, suggest that, that all is not lost in Europe, and that's one of the reasons why we've made a concerted continued effort to build out our franchise in Europe. We've had great success. But we're not looking at that investment with a view towards what happens next quarter or next year, but it's an integral part of the global stage. And as you have more and more multinational companies who are in each other's market, you cannot have a leading practice without having a leading European franchise. And with every passing day, we are further along in that journey, and we are quite proud of what we've built in Europe.

Maybe just one more on advisory here. Obviously, very strong results in the quarter. You talked about stronger strategic advisory being the driver there. But any additional color you could just give on the drivers of the strength? I am estimating the highest multiplier on Dealogic revenues this quarter since 2019. And then separately, on secondaries, I think I've seen some industry estimates that secondary volume is up 40% in '24, but flowing to a central case of only 15% growth in 2025. Maybe you could just comment on the secondaries contribution in this quarter, but then on your expectations for whether the growth rate could slow in secondaries in 2025.

I think this quarter, the standout for this quarter was Strategic Advisory, no matter how you look at it. If you look at it sequentially, if you look at it year-on-year, it was Strategic Advisory. If you look at it over the entire year, all of the businesses were standout performers. I think on a percentage increase. Clearly, the Park Hill business was up the most on a percentage increase, but not necessarily on a dollar increase, but we benefited from strength across all of our businesses. There's only 2 years in our 9-year history when all 3 of our businesses were up year-on-year. It was 2019 and 2024, and you start to see a bit of the power of the franchise. But we're not really operating in anywhere near ideal strategic advisory conditions. We're still looking at M&A activity levels that are far down from peak levels, far down based on traditional metrics of activity to GDP or to global market capitalization. As I mentioned before, the primary fundraising business continues to be quite challenged. There's no doubt that secondaries is a great spot. It's a very important part of our business, and we are a leader in that business, and I expect that to continue. I don't spend a lot of time focusing on what some report suggests it's going to be up or not because reality is no one knows for sure. But as I look out further, I get greater clarity. So I could look out 3 years, 5 years, and I think there is many compelling reasons as to why our private capital solutions business should benefit from both long-term secular trends as owners of assets in the private market want to add other liquidity alternatives to portfolios. I continue to think that IPOs for many of these companies become less attractive options. And this presents another quite attractive option that is ever more interesting to the owners of these assets. I think the issue has been that the amount of capital that's dedicated to this asset class pales in comparison to the ultimate demand. And as you marry that capability with our best-in-class fundraising distribution efforts through the PJT Park Hill business we have unique abilities to attract more capital to the class and to have a superior track record in terms of being able to execute on these transactions. So it's kind of all of the above.

And we will take our next question from Brennan Hawken with UBS.

This is Marc Palucci on for Brennan Hawken. You had a record year in restructuring. And I was hoping you can help us understand how much that was up versus 2023. And do you still believe revenue growth in 2025 in restructuring is feasible?

It's absolutely feasible. I'm not prepared to guarantee it, but it's certainly feasible. I mean we're in a multiyear wave of extended activity and liability management. If you look at 2019 to 2024, one thing that may surprise you is default rates are pretty much on top of one another. What's changed is the quantum of debt outstanding. So if you take a similar percentage and apply it to a much larger debt stack. Guess what, you have a lot more activity. It doesn't look as if rates are coming down nearly as fast as others, including myself, had thought. It's a bit stubborn on the long end, doesn't appear as if the Fed is likely to be more accommodative in the short-term. You have all of this economic uncertainty, tariffs and the like, I imagine that the amount of pain or number of companies who find themselves wrong-footed either to a different trade and tariff framework or technological change or consumer preference changes and the like, they're not going away. And I think it's a very important part of our business, and I expect it to be a very important part of our business going forward. And we knew going into the year, it would be active, but it could have been down a bit and still been highly active and near record, it turned out it was yet another record. I think it was comfortably another record, but probably the growth rate in that business was slower up -- than our other 2 businesses this year, but that's just a reflection of the other businesses having a different mix of opportunities in front of them.

Great. And then just for my follow-up, we've seen mixed performance in IPOs recently. What's your sense of how sponsors are reacting to the volatility and what do you expect to be the implication that sponsors don't have that option for monetization?

Well, I appreciate the question. And I think it goes back to what I said a few moments ago on the last question. I think it probably feeds into greater interest and deployment of fund continuation vehicles and the like to create liquidity for assets. And probably, at some point, it creates more impetus for there to be outright sales with companies rather than taking them public. And one of the challenges is that there are so many assets that are owned by sponsors that are very large and that still have large amounts of leverage. And as a result, it means that a lot of the primary capital ready to IPO is likely to go for debt reduction rather than monetization of the GP ownership. And then it means given the size of the business, the long period of time it might take to go public. I mean, to be fully out of the business just as you have future sell-downs. And then when you think about the number of companies that are all competing to be taken public and with a somewhat mixed record of IPOs, I just think it makes that option less attractive, and it means more M&A portfolio companies if possible. And to the extent you have companies that are perhaps too large for other sponsors to acquire, I think that fits very, very nicely into the narrative of greater fund continuation activity.

We will take our next question from Brendan O'Brien with Wolfe Research.

To start on your advisory business, you had previously spoken about your expectation that 2024 would be more of a transition year for activity with a more significant acceleration in 2025. And while you're certainly correct on '24, quarter-to-date announced M&A volumes are tracking down about 10% year-on-year. So I just want to get a sense as to what is driving the disconnect between some of the optimistic outlook commentary from you as well as many of your peers and the trends that we're actually seeing in announcements quarter-to-date and when we could actually begin to see activity for the broader industry begin to accelerate more meaningfully?

Well, first of all, I'm optimistic about our business, and I've always said we're a micro story more than we are a macro story. And I think we have tremendous white space in front of us and opportunity to grow our coverage footprint and to interface with more clients and to serve more clients. And even if volumes are flat, I think our business can grow materially and can do so for an extended period of time. But on the macro, I do believe that we are heading towards a normalization of M&A activity. And if you go back and look at where we've been, '21 was aberrational in terms of level of activity. And I don't suspect we're getting back anytime soon to '21. But after 2 punishing years of '22 and '23, if you recall, we had the view that it would be a modest slow recovery, and I believe the market ended up approximately 14% in '24. But as I just said a few moments ago, on almost every metric, it is well below historical norms. And we think that there are a lot of constructive conditions that suggest that we should get more of a normalization trade. And that's not just a '25 -- '24 -- I mean, sorry, '25 phenomenon, but that's '25 and continuing. Now as far as the data, everybody has their own data sources. When I look at January, I'd make 2 observations. Number one is January is typically a slow month for activity levels. And if you go back 10 years and you take January and you multiply it by 12, I think 7 out of 10 or 8 out of 10 times, you end up with an annualized level that's less than what the actual year is. So I don't want to make too much of January. That would be #1. Number two, I actually think that January, if you just look at the month of January, it was marginally up from a year ago. So I don't take much stock one way or the other. I do recognize, though, that the news flow that we're experiencing every day as it relates to tariffs and the like, it will take some time to clarify. And I do think that is having a short-term impact. And my expectation is this is the storm before the calm. And I think that being the case, I would expect that as we get further into the year, you're likely to see an acceleration of activity. And I think a lot of the debates we're having are how much better than the baseline of 2024. So while we can debate how restrictive antitrust review will be competition commission, valuation of deals what I think almost everyone can agree on is taken in its entirety, it's going to be more favorable than what we experienced in '24. We can just debate the magnitude of it. So I continue to think we're in a multiyear normalization trade here because there are a whole host of companies who are quite desirous to transform their businesses. They either need to be out of certain businesses where they no longer are scale players or they need to double down. I think there's a more favorable environment in this administration than there was in the last administration. I think at some point, it's less an issue about where rates are and more an appreciation that the rate environment is likely to stay. And when people talk about are rates too high or rates too low, I think what they miss is the most difficult time to do M&A is when rates are high and everyone thinks they're coming down because when everyone thinks they're coming down, sellers don't sell. And where we're getting to now is probably a new normal. So all of this, in my mind leads to a normalization trade, but I'm not counting on a runway year in 2025, but I still have every expectation it will be an up year, and it will be just another continuation of that normalization.

That's helpful. And for my follow-up, also, I guess, on the Strategic Advisory business, Paul, when you entered last year with what you I believe categorize, as an abnormally depressed backlog, but yet you were able to deliver a record result in Strategic Advisory which would imply that you've seen a pretty significant improvement in the velocity or the turnover of that backlog. So it would be great to get a sense as to where we are today in terms of time to close transactions relative to what you would categorize as a more normal level? And given many of your peers have continue to cite this elongation of deal timelines. Why would you be seeing a more significant improvement here relative to your peers?

I mean I can't really comment on anyone other than ourselves. We came in the last year with a historically low level of announced pending close, but I also said that we had a very robust pre-announced pipeline. And I think what ended up happening was we had a lot of transactions that had yet to be announced that were announced relatively early in the year and completed during the year. And we had a very broad base of assignments. And there weren't that many very large deals that closed in the year for us. I think we have a much bigger backlog of large transactions that we expect to close in '25. So that's kind of our story. And you are correct that as the year went on, we became more optimistic about '24. We've always been optimistic about '25 and beyond, that continues, but I think we had an added bonus that we were able to deliver record results in 2024.

We will take our next question from Aidan Hall with KBW.

Maybe just a follow up on Brendan's question, but more on the kind of backlog of activity for restructuring. It sounds like the pipeline for advisory is considerably higher Park Hill and kind of both lines of business there continues to see strong momentum. But curious how you would characterize like the restructuring backlog relative to maybe this time last year? So like flat or slightly lower? Anything to kind of help contextualize that would be appreciated.

I just say broadly consistent. I mean we were quite active last year. We're quite active now. We think we're in a multiyear period of extended activity. And if you go back, I think most of the investor concerns about that business for us was that it was somehow kind of come plummeting back to earth. And we've said consistently, that's not the case. That continues not to be the case. But when year in and year out, you're delivering record results, it's very hard to calibrate. Is it going to be yet another record? It may well be. I'm not suggesting that it couldn't be. I'm just not prepared to tell you it will be. And what I am prepared to tell you is that it's very robust activity. We are a market leader. And as I look at the macro conditions out there, I don't see them becoming less hospitable to liability management.

Got it. Okay. I appreciate that color. Maybe just as my follow-up on the talent and the outlook for 2025. I appreciate you guys have a lot of white space in advisory, but any main areas of focus you're trying to really focus on right now or teams that you think you're on the cusp of being a critical mass that you may need a couple more bankers in. And then just as a base case, any way to be thinking about hiring expectations in '25?

Look, on the hiring expectations, we've got the micro is helping us and the macro is hurting us. So the micro is, like every day that goes by, that we deliver success and we deliver success for clients and that we have more folks who come over from other platforms and see that this is a differentiated platform. It's a better place to work and it's better positioned to support their clients. It just makes our story easier. So every day that goes by, we have an easier story to communicate to potential hires. I've also said, though, that when the world heats up, that makes it harder from a macro perspective for talent to leave their incumbent position, whether they're happy or not, just because when they're sitting on top a lot of activity, no one really enjoyed having to take their gardening leave and the like. So I think we've got the micro tailwinds. We have the macro headwinds. That's one of the reasons why we were so focused on continuing the recruiting in the depths of the M&A market in '22 and '23. We're going to continue to do it. We have a long pipeline of highly attractive candidates that we're in discussions with. And I expect to see meaningful conversions of those. But the timing and pacing of that is hard to know. And as far as where we have white space, I mean my sort of answer is pretty clear. It's almost everywhere. There's almost no place where we wouldn't benefit from more talent. If you have a firm that's built on intellectual capital, goal #1 is make sure you have more intellectual capital and better intellectual capital than anyone else. That is our investment philosophy, and that is unchanging.

That concludes our question-and-answer period. I would now like to turn the call back over to Mr. Taubman for closing remarks.

Once again, we thank everyone for their interest in our company and their support, and we look forward to doing this again in 3 months when we report our first quarter results. Thank you all very much.