PJT Partners Inc. (NYSE:PJT) Q2 2020 Earnings Conference Call - Final Transcript

Jul 28, 2020 • 08:30 am ET

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PJT Partners Inc. (NYSE:PJT) Q2 2020 Earnings Conference Call - Final Transcript

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Presentation
Executive
Paul J. Taubman

they continue to receive the highest quality advice and insights. While none of us can predict the depth, breadth and duration of this crisis, we are confident that when this period passes, we will emerge a stronger firm.

Now, turning to each of our businesses in a bit more detail. Turning to restructuring. Our world-class restructuring franchise maintained its leadership position in the first six months of 2020, ranking number one globally in completed restructuring volumes and number two in announced restructuring volumes. The pandemic and the corresponding economic shutdown have caused a dramatic spike in global restructuring activity. As a result, our market-leading restructuring team has seen a significant increase in the level of its restructuring activity. While our restructuring results reflect some financial uplift from these higher levels of distress across industries, the second quarter financial performance principally reflects the momentum in our restructuring business heading into the year. We expect elevated restructuring activity to persist for a considerable period of time as the economic dislocations caused by this global health crisis impact an increasing number of companies.

Turning to PJT Park Hill. While the macroeconomic backdrop has benefited our restructuring business, it has also caused a significant slowdown in PJT Park Hill's fundraising activity. In PJT Park Hill, revenues declined meaningfully in the quarter versus year-ago levels. Notwithstanding the dislocated fundraising environment, PJT Park Hill was able to successfully close a number of fundraises in the quarter. Similar to our April comments, we continue to expect PJT Park Hill's revenues to be down significantly in 2020. However, we expect the business to return to its pre-COVID growth trajectory when market valuations stabilize and on-site due diligence between managers and investors is able to resume.

Turning to strategic advisory. In strategic advisory, we enjoyed record results for the quarter and the six-month period. Our financial results increasingly reflect the investments we have made to increase our footprint and capabilities. The strength in our business this quarter was broad-based across M&A, capital markets, liability management, shareholder engagement and strategic IR. Our number of active mandates continues to grow substantially. However, given we are operating in a challenging environment for transaction activity, it is uncertain how many of these mandates will lead to announced transactions, and if and when these transactions will be completed and reflected in our financial results.

Before I turn the call over to Helen to review our results, please allow me to welcome our newest Board member, Grace Reksten Skaugen. Grace has been a leader in the international business community for many years, and has served on the boards of some of the largest and most consequential European companies. She has extensive public company experience, deep corporate governance expertise, and we are honored to have her join our Board.

Helen?

Executive
Helen T. Meates

Thank you, Paul. Good morning. Beginning with revenues. Total revenues for the quarter were $233 million, up 40% year-over-year. The breakdown of revenues: advisory revenues were $193 million, up 45% year-over-year, driven by a significant increase