Evercore Inc
NYSE:EVR
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Evercore Inc
Earnings Call Analysis
Q3-2023 Analysis
Evercore Inc
In a notable rebound from previous quarters, the company's various advisory businesses demonstrated a modest uptick. With third quarter underwriting fees climbing 7% to $31 million compared to the same period in the previous year, the firm cited witnessing market recovery and engagement in significant transactions.
Asset management and administration fees surged 9%, a direct result of a 13% year-over-year increase in Assets Under Management (AUM), now standing at $11.3 billion. While commissions and related revenue dwindled slightly, the outcome seems acceptable as it corresponds with reduced trading volumes and market volatility when compared to the year-ago period.
The bright spot in the revenue mix was a net gain of roughly $10 million in other revenues, buoyed by $15 million of interest income on cash balances, which countered the $5 million loss from the investment funds portfolio. Adjusted compensation expenses maintained a ratio of 68% during the quarter, and the firm prepared investors for a likely uptick in this ratio for the year's end, reflecting the impact of new hires and market-level compensation adjustments.
Non-compensation expenses ramped up by 12% year-over-year to $102 million, primarily due to increased rent, relocation costs, and higher information services fees. However, the firm noted that on a per-head basis, these costs are still competitive with pre-pandemic levels and only marginally higher than the previous year. With revenue uptrends on the horizon, the firm anticipates a potential improvement in margins, signaling optimism for operational efficiency and profitability.
The company's balance sheet remains strong with cash and investment securities totaling approximately $1.6 billion. The firm's calculated approach to capital management has enabled it to return $490 million to shareholders through dividends and repurchases while also investing in strategic initiatives. A steadfast dedication to returning excess capital to shareholders was reaffirmed, with a historical perspective that more than one-third of the market cap has been returned over the last three years.
Despite a reduction in the count of advisory Senior Managing Directors (SMDs), the firm emphasized the hiring of quality personnel, paired with the disciplined management of headcount. The company has promoted internally and added new talent, aiming to boost production per individual and banker. With an increase in partner headcount over multiple years, the narrative suggests a long-term strategic play towards driving productivity and enhancing revenue capacity.
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Good morning, and welcome to the Evercore's Third Quarter 2023 Earnings Conference Call. Today's call is scheduled to last about 1 hour, including remarks by Evercore management and the question-and-answer session. [Operator Instructions] I will now turn the call over to Katy 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 Third Quarter 2023 Financial Results Conference Call. I'm Katy 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 third 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 1 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 Evercore's 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 Evercore's performance on an annual basis. As we've noted previously, our results for any particular quarter are influenced by the timing of transaction closings. I will now turn the call over to John.
Thank you, Katy, and good morning, everyone. I want to start this morning by addressing the crisis in the Middle East, and to acknowledge the profound sadness we are all feeling for the innocent victims. At Evercore, we live by our values, and I want to emphasize that terrorism and acts of hate must be condemned.
Over the past quarter, we've seen a continuation of the improved market conditions that began over the summer. Internally, we see client activity levels tracking at an elevated pace and moderately increasing confidence levels across management teams and in boardrooms, greater financing accessibility, albeit at higher costs, and a slow return to equity capital markets activity. The normalization of market activity takes time, but we believe these positive indicators are a first step towards an improving backdrop, which should provide a broad-based benefit to many of our markets.
Clearly, market uncertainty remains, driven by increased geopolitical tensions as well as higher rates. We do not expect the positive shift in activity levels and market sentiment seen over the past quarter to translate into meaningfully improved results in the near term. That said, barring an unexpected significant shift in the macro environment, we expect activity levels to continue to build in 2024. While it is still early days, we are seeing this reflected in stronger backlog similar to our last quarter.
As discussed last quarter, the current environment has presented 1 of the strongest hiring opportunities seen in our firm's history, and we have capitalized on it. We've made significant investments in talent this year, our largest SMD hiring year ever. When paired with an improving market backdrop, we believe these investments as well as our ramping SMD hires and promotes from the last 2 years, all in more than 40 ramping SMDs, will drive significant productive capacity and help us build a stronger foundation for growth over the medium and long term.
9 of our 11 new SMD hires year-to-date have started and are working at Evercore. These new SMD hires have joined areas, which we have identified as strategically significant, including TMT, both in the U.S. and Europe, sponsored coverage, business services, industrials, real estate and capital advisory. We will continue to engage in discussions with other strong candidates, but we believe our 2023 new hire plans have largely been completed. As we build our recruiting pipeline for 2024, we remain steadfast in the execution of our strategic initiatives, which I've outlined on past calls.
Now I will briefly discuss the quarter. Our third quarter results, while up sequentially, reflect the muted market backdrop as merger activity has remained challenged and the recent improvement in market sentiment has yet to have a substantial impact on announcement and in completion activity. In our global Advisory business, we've advised on several transformative transactions, including notably this week, Chevron's $60 billion acquisition of Hess, and in the quarter, WestRock on its $20 billion merger with Smurfit Kappa, Danaher on its spin-off of Veralto, as well as Bristol-Myers Squibb it's $4.8 billion acquisition of Mirati.
Our European Advisory Group experienced strong activity levels, including in debt advisory. Additionally, we continue to make strong progress with our sponsor coverage efforts. We're excited for what this expanded group will accomplish over time, especially as the collaboration with our private capital advisory and fundraising businesses will continue to drive synergies. We see momentum building across our sponsor-related businesses.
The private capital advisory and fundraising businesses were resilient in the quarter, highlighting the strength of our market-leading franchises. Continuation fund activity has persisted at an elevated pace and new business activity is strong. While the broader fundraising environment remained muted, our private funds business had a better quarter relative to a year ago.
Our Strategic Defense and Shareholder Advisory business had another busy quarter as activist campaigns continued at elevated levels. Restructuring remains strong, similar to what we saw in the second quarter, with activity levels driven by liability management and distressed financing advisory assignments. In our Underwriting practice, corporates continued with regular way follow-ons, particularly in biotech and traditional clean tech energy.
The third quarter saw an opening of the IPO market. In the quarter, we served as an active book runner on the second largest biotech's IPO year-to-date for RayzeBio. We also were an active book runner on the largest biotech overnight follow-on offering this year for Madrigal Pharmaceuticals'. Our overall ECM market share continued to rise, a testament to the strength and growth of our business.
In our equities franchise, we are pleased to have been awarded for the second year in a row, a #1 ranking on the weighted basis in Institutional Investors all America Equity Research Survey. We also had the most #1 ranked analysts on Wall Street for the first time ever. Lastly, in Wealth Management, our assets under management declined modestly in the quarter, both performance and client retention rates continues to be strong.
Before I turn it over to Tim, I want to wrap up with a few thoughts. 2023 has undoubtedly been a challenging year for our industry. Despite the operating backdrop, we've remained focused on purposely executing on our strategic plans by continuing to invest in our franchise, pushing to strengthen and broaden our coverage and geographic reach, building out our product and execution capabilities and continuing to enhance our intellectual capital. We are hopeful that 2024 will be a better year for the market and, in turn, Evercore. Our client contact remains active and robust across our businesses. We're excited for the opportunities an improving environment will present for us.
With that, let me turn it over to Tim.
Thank you, John. Our third quarter results show sequential improvement compared to the second quarter, and do not yet meaningfully reflect the early-stage improvements in the environment. We are seeing internal client activity levels discernibly picking up from earlier this year. However, as I mentioned on our last quarterly call, the road to significantly improved financial results is a gradual one as there is a time lag that exists between client dialogues and announcements and then between announcements and completions.
Additionally, we have taken advantage of an attractive partner recruiting market with a record SMD hiring year, yet coupled that with disciplined head count management across all areas of the firm as we strive to increase our productivity. I will now discuss our third quarter financial results.
For the third quarter of 2023, net revenues, net income and EPS on a GAAP basis were $570 million, $52 million and $1.30 per share, respectively. My comments from here on will focus on non-GAAP metrics, which we believe are useful, when evaluating our results. Our standard GAAP reporting and a reconciliation of GAAP to adjusted results can be found in our press release, which is on our website.
Our third quarter adjusted net revenues of $576 million declined 1% versus the third quarter a year ago, but were up 14% sequentially. Third quarter adjusted operating income and adjusted net income of $83 million and $55 million decreased 39% and 42%, respectively, versus the third quarter of 2022. Adjusted earnings per share of $1.30 decreased 41% versus the prior year period. Our adjusted operating margin was 14% for the third quarter.
Turning to the businesses. In Investment Banking, third quarter adjusted advisory fees of $468 million declined 4% year-over-year compared to $489 million of advisory fees in last year's third quarter. Sequentially, advisory revenues were up 25% as market activity levels across our various advisory businesses were modestly stronger compared to last quarter.
Third quarter underwriting fees of $31 million were up 7% compared to the third quarter of 2022. We are seeing some improvement in the market with a number of significant transactions more recently. Commissions and Related Revenue of $49 million in the third quarter was down slightly year-over-year, which is a respectable outcome, given that market trading volumes and volatility have been lower than last year's levels. Third quarter adjusted Asset Management and Administration Fees of $19 million increased 9% year-over-year. This is primarily due to a third quarter AUM of $11.3 billion, which is up 13% year-over-year.
Third quarter adjusted other revenue net was a gain of approximately $10 million, reflecting approximately $15 million of interest income earned on our cash balance, due to higher short-term rates, partially offset by a $5 million loss in our investment funds portfolio, which is used as a hedge for our DCCP commitments, driven by a decline in equity market values in the quarter.
Turning to expenses. The adjusted compensation ratio for this third quarter is 68%. As I discussed at some length on last quarter's earnings call, our compensation ratio continues to be meaningfully impacted by the revenue environment, the amortization of prior year deferred compensation awards, the onboarding of our new senior hires, 5 of whom have joined the firm, since the middle of the third quarter, as well as the market level for compensation. Given that many of these new SMDs have joined late in the year, and we recognize their 2023 compensation from their start through year-end, we would expect to see additional upward pressure on the fourth quarter compensation ratio.
Based on what we know today and incorporating our current best estimates about fourth quarter revenue and market compensation rates, we would expect the comp ratios of these past 2 quarters to be generally representative of our full year compensation ratio estimates. Note that variations in the actual fourth quarter revenues or market compensation levels could impact our future quarter and year-end comp ratios in either direction.
Shifting to non-compensation expenses. In the third quarter, our non-comp expenses were $102 million, up 12% from a year ago. The year-over-year increase reflects some increased rent expense for new lease space related to required relocation of part of our corporate group and higher information services fees. Additionally, our non-comp expenses from a year ago reflected an expense reversal, which decreased our non-comp expense materially at that time, resulting in a larger increase year-over-year.
I would note that our non-comp expense on a per head basis is still modestly below, where it was in 2019, the pre-COVID year, and modestly above a year ago. We expect our non-comp to be similar to our second and third quarter levels for the remainder of the year. We are continuing to diligently monitor and manage our non-comp expenses. Our adjusted tax rate for the quarter was 27.6%, virtually identical to the 27.4% tax rate from a year ago.
Turning to the balance sheet. As of September 30, our cash and investment securities totaled approximately $1.6 billion, which is up from $1.5 billion at the end of last quarter. We continue to maintain a strong cash position, taking into consideration the current economic and business environment, cash needs for the implementation of our strategic initiatives, including hiring plans, and preserving a solid financial footing.
Year-to-date, we have returned a total of $490 million to shareholders through dividends and repurchases of 3 million shares at an average price of $128.97. Our third quarter adjusted diluted share count is 42.8 million. As a reminder, that is down about 5 million shares from where we were at 2 years ago. In the past 3 years, we have returned to shareholders cash equating to more than 1/3 of our market cap.
We continue to maintain a strong capital position, and we remain committed to our philosophy of returning to shareholders cash not needed to implement our strategic plan and to provide financial stability for our stakeholders. As John mentioned, we are encouraged by the early signs of an improved market backdrop. That, coupled with the SMDs, who joined us in the third quarter, those still to join, and SMDs, who are promoted or hired in the last couple of years, position Evercore for greater revenue and earnings leverage over the medium to longer term.
With that, we will now open the line for questions.
[Operator Instructions] Our first question is from Devin Ryan with JMP Securities.
First, I guess two-question, maybe make it 2 parts, since I have 1 here. So I guess, first off, the advisory SMD count declined by [ 5% ]. So I just wanted to get any color there, since you guys are hiring just to make sure I understand that dynamic? And then the other part of the question, we're getting a lot from your clients recently, just about expense inflation and what that means for normalized margins for Evercore and the industry more broadly?
And obviously, I appreciate the biggest driver of that is going to be revenues, we're not in a normal revenue environment today. But how are you guys thinking about kind of normalized margins over time? Have we structurally shifted higher -- or excuse me, are you structurally shifted lower because of some of the expense inflation? Or do you think we can get back to levels that you guys have been at historically?
Yes. And thanks, Devin.
Let me take the first question. Then you can take the second.
Okay. Go ahead, John.
In terms of the advisory SMDs, what we have said to the market, what we've said to you all is that we are in the mode of hiring very high-quality talented people. But at the same time, we're managing our headcount. And there are people, who are shifting out and there are people, who we are bringing in. We've obviously been aggressive about promoting high-quality talented people.
We've promoted 24 people to SMD internally in the last 2 years. And as you know, this year, we're hiring from the outside 11. What we've really done is we've basically tried to be disciplined. And so this is just a really an execution of what we said we were going to do, which is we are making sure that we are bringing in high-quality people and those people, who are -- who, for all different reasons, may not be the right fit, so they're shifting out.
Sure. And let me just add 1 thing to that, and then I'll comment a little bit on the expenses. And that's that we've always guided research community and our investors to look at our firm on a multiple quarter and multiple year time span in order to assess what we're doing. And so if you look at our partner headcount and the most recent numbers, of course, 137 in the Advisory business, that number 3 years ago would have been 107, so it's plus 30 and up about 28%.
If you looked at that number compared to where we were in 2021, our peak revenue and earnings year, we're up about 20%. Now on John's commentary about also being disciplined about headcount management, over that same period of time, while our head count increased -- pardon me, our partner headcount increased 20%, our overall headcount increased 13.6%. And so what you can see there is some evidence of our striving to increase our productivity per person and per banker.
Now turning for a moment to the expenses. What you would see in our numbers is a modest amount of inflation impact. But interestingly, if you look at our non-comps, for instance, on a per head basis, they're actually slightly lower still on a per head basis than they were in 2019, and only marginally higher than a year ago. And so we're optimistic about what we've been able to, and may be able to continue to do with respect to inflation. And with -- and in terms of returning to normal margins, certainly in our business, the largest impact on our margins is generated by revenues.
And so when you see the market turning with respect to transaction announcements and subsequently increasing revenues, you can expect significant margin improvement, but I think it's too soon to predict exactly, when that will occur and what the magnitude will be and the timeframe for returning to a more normalized margin structure.
Our next question will come from Brennan Hawken with UBS.
I'd love to start, Tim, on your comment on the comp ratio. I think I got it, but I just want to clarify and based on a Bloomberg chat, I think there's a few other people, who are a little confused too. So I believe what you suggested was that the full year is going to look like the last couple of quarters, which would mean, given 1Q in the low-60s, that we're going to be looking probably at the fourth quarter, the comp ratio in excess of 70%. Did I hear that correctly?
Well -- hi, Brennan. I certainly didn't say in excess of 70%, but I understand the mathematics that might lead you to that conclusion. And so the first point I'd make is, it's impossible for us to precisely predict what the comp ratio will be in the fourth quarter or for the full year because it's so dependent on the revenues. And as we all know, as one approach is year-end, sometimes there are certain significant fees that fall inside the quarter and sometimes they fall outside the quarter.
And so I want to be careful about providing guidance that's too precise. It is the case that there's some natural upward pressure on the latter part of this year, which, of course, is the fourth quarter, and that's due to the fact that, as you know, we've announced 11 partner hires this year, 10 of which will arrive before year-end. And of those 10, 6 are arriving anytime from mid-August through year-end. And as we need to -- we don't start accruing for those people, until they arrive at the firm.
What that does do is put some additional pressure on the fourth quarter. But I still -- I would say, our best estimates or what I said in my prepared remarks, which is something that would look generally like what we saw in the second and third quarter for the full year.
Yes. All that's totally and completely fair. And it's going to make answering my next question even more challenging, but I'm going to try anyway. So you guys do have the benefit of having a decent forward look just given how long it takes to close deals and how -- what a great franchise you have in large-cap M&A in particular. So given what you're seeing and at least based upon expectations for the beginning of 2024, when I go through the model, and take my best guess, where your fixed comp base works out at and all of this, it's hard for me not to see continued upward pressure even given a pretty substantial ramp in advisory revenues and a decent recovery here in 2024.
And I continue to kind of like shake out at an upward -- at an above historical range comp ratio for '24. Of course, there's a ton of uncertainty still embedded in '24. We have no idea what the magnitude of the ramp and maybe even given -- maybe I'm not giving enough of a ramp, which could end up helping to drive that comp ratio down. But is it reasonable to think that at least for the first half of the year, we'd probably be continuing to deal with an elevated comp ratio until we can get these revenues really moving strongly and back to the potential that you can achieve?
Right. And so, look, we, of course, as a matter of practice, don't provide guidance. And so I want to be very careful about what I say. But the right -- there's a mathematics behind all of this. And the mathematics are that the prior year amortization awards hit you in a larger-than-normal way on a percentage basis, when you're in a market, where revenues are declining.
And when you're in a market where revenues are improving, sometimes that can provide some tailwind. In addition, as you pointed out, it's too soon to know what the ramp rate will be for the new hires. All we know is we're really glad they've joined us, and we're really positive about their prospects, but too soon to really say more than that.
Our next question will come from James Yaro with Goldman Sachs.
So it does seem like the M&A recovery continues to be pushed out. Obviously, you've had some success in the past few months and that's been positive. But overall, the industry continues to recover quite slowly. And this doesn't appear to be the 2020 to 2021 recovery. So I guess what is your view of the likelihood that this M&A recovery ends up taking a number of years to build back to a more robust level like we saw post 2008?
Thanks, James. It's really hard to call the pace of recovery. I would just say that if you look at really some of the firm indicators internally, our backlogs are building, our other internal indicators seem to be strengthening. And I would just say anecdotally, inside the firm, the activity level and the client dialogues are very robust. But as you said, it does take time. And the fact that activity takes time to lead to announcements, which then take time to lead to closings, that is absolutely true. And there's no question that there's an elongation with respect to deals right now.
We feel optimistic about the activity level we have right now. I think it's probably safe to say that there is going to be a ramp in '24. We just don't know exactly what the pace will be. It's very hard to call. But I think that, if our indicators say that we have a very healthy amount of activity inside and we'll just see how that translates.
Our next question will come from Steven Chubak with Wolfe Research.
I was hoping to -- yes, I was hoping to unpack some of the commentary you made on '24, really trying to distinguish between strategic and sponsor activity. And we've seen a number of large strategic transactions announced most recently in the energy space. At the same time, sponsor activity has remained fairly muted, and the commentary from the public all suggests that it's likely to remain subdued at least in the, call it, the near to intermediate term. And I was hoping you could speak to the dialogue you're having with sponsors and strategics and any differentiation would be really helpful?
Sure, Steve. And by the way, I don't want to frustrate you, but it's very hard to call what's going to happen with sponsors. The interest rates are higher, which does really impact kind of the economics of sponsor deals, but sponsors really want to get going. They've got a lot of dry powder. They've got real need to actually monetize and return capital.
And so there's pressures at the sponsor level to really get going. And I think that, on the other hand, they don't want to capitulate and take lower prices on their assets. But sponsors are in business to do transactions that they can monetize and then bring back to their investors. And so there's a real pressure going on there. And I think that what you'll really see is you'll see -- you'll see deals start to happen, but we don't think that there will be a massive rash of deals immediately coming from sponsors.
Having said that, if you look at some of the other activities and sponsors that we engage with, which is continuation funds and fundraising, we see the fundraising environments feeling a little bit better. We see the continuation fund activity building, and I'd say that the way that we're seeing sponsors on that side of the business seems to be building. And so in general, we think sponsors have, on the one hand, some concern with respect to going -- that it hasn't gone faster. On the other hand, we do see what we think is a strengthening, and we do think that there will be activity that builds.
On the strategic side, as you've seen, there has been quite a bit more activity publicly. You've seen some deals, which have come out that are somewhat larger relatively recently. It's hard to say, whether that will continue and build at this point. But I think it's safe to say that activity levels, dialogue levels are at quite a high pace. As I said earlier in the call, if you look at us anecdotally, we think that there's a lot of dialogue inside that is -- that's not just in terms of number, but also quality.
So I'd say that the strategic side is starting to begin to build some momentum. It will take time. As I said, it's hard to call the timing. And I do think sponsors will start to move forward, but it may take a little bit longer, so this is what I think.
[Operator Instructions] And our next question comes from Ryan Kenny with Morgan Stanley.
So you talked about encouragement from leading indicators. And just when we think about the last few weeks specifically, where we've seen 10-year yields briefly spike above 5%. Is that recent volatility enough to have any significant impact on moving deals forward? And does that push things out a quarter? Or is the impact more limited?
I think that interest rates certainly impact the way people think about financings for deals. It has a bigger impact, I think, on sponsors. Will it push it out? It could. I do think though that the deal activity will move forward if, for example, there tends to be a stabilizing of what I think are the risk conditions existing in the market.
I think 1 of the things that are holding back some of the deal environment is that we have real uncertainties, both geopolitically and economically. And I think people are watching that really carefully. So I think it's not necessarily -- I think rates will impact to a degree. But I think the bigger impact is people watching what's happening in the environment and really how the equity market is going to look at deals generally. So I think that's the case.
I mean, from our standpoint, we think that the dialogues that have been high quality are continuing to move forward. So I don't necessarily think that the interest rates are going to materially impact exactly the fact the things that get done. But I do think it will moderate to a degree, and I think people are watching it carefully.
Our next question comes from Jim Mitchell with Seaport Global.
Maybe we can talk a little bit about restructuring. It seems like it's been pretty active, increasingly so. I think a lot of out-of-court restructurings. Can you just sort of discuss the impact in the quarter? And how you're looking at activity and your thoughts going forward? That would be great.
Sure. Restructuring is quite robust right now, and our business is doing quite well. We're very busy, and as you said, there's some -- a lot of liability management going on and there is out-of-court restructurings as well as, from our standpoint, both the debtor and the creditor side advisory work.
I think that, that velocity continues and will continue. Interest rates going up does actually impact restructuring. And we think that there is -- as you know, there's a maturity wall coming in 2024 and 2025. And also with higher rates, if there is -- there are more companies that have capital structures that we'll need to basically get advice and to actually restructure some.
So I think our restructuring business is quite robust, and we think the prospects of that will continue even if the merger market picks up.
Our next question will come from Brennan Hawken with UBS.
I am curious about the non-M&A revenue. Previously running around, I believe it was at least 1/3 of total Advisory. So if you could give an update there and then also speak to maybe the private capital advisory and private funds business and how that's doing in an environment like this?
Yes, sure. And so if you look at the non-M&A revenue, I think we've said that for the past 4 years, it's represented more than 1/3 of our overall revenue. And during periods of challenging M&A, it tends to be even higher. And I think it's reasonable to assume that's the case currently. And so on the PCA and PFG, as John mentioned a little earlier, we feel that the PFG fundraising environment is returning to a more normalized fundraising environment, and we think that the results reflect that. And with respect to PCA, we would characterize it as a strengthening market for PCA, where we're seeing increased -- certainly increased activity levels, and we're hopeful that those will continue for a while.
And just to make sure everybody knows, PCA is more our secondaries business, and PFG is our fundraising business.
Thank you. Ladies and gentlemen, this concludes today's Evercore Third Quarter 2023 Financial Results Conference Call. You may now disconnect.