Perella Weinberg Partners Q4 FY2024 earnings call

• Record full year 2024 revenues of $878 million, up 35% y/y and 10% from previous record.
• Earned single largest fees in M&A and restructuring businesses; stock reached new highs; returned record capital to equity holders.
• Ranked #4 boutique by global deal volume by DealLogic and #1 in announced restructurings by Debtwire.
• Performance driven by strong contribution across all business lines, with U.S. business leading and Europe showing early 2025 activity pickup.
• Tailwinds in M&A market globally to continue, though with volatility from U.S. admin policies; restructuring and liability management services in high demand.
• Added new clients in 2024 and saw increasing advisory roles with repeat clients; productivity at 2021 levels with upward potential.
• Milestones as public company: exceeded $20 stock price, $2 billion market cap, closing in on $1 billion annual revenue goal.

Perella Weinberg Partners reported full year 2024 revenues of $878 million, the highest in the firm's history, up 35% year over year. The U.S. business led performance, and the firm is seeing increased activity from its European business in early 2025. Revenue contribution was led by the U.S. business, with Europe showing emerging growth potential.

• Expect current M&A market tailwinds to continue, albeit with volatility from U.S. admin policies.
• Restructuring and liability management services to remain in high demand due to structural challenges and pause in rate cuts.
• Non-compensation expense increase to moderate to single-digit percent range in 2025.
• Optimistic on growth of both M&A and non-M&A businesses, with no market share constraints.
• Recruiting pipeline strong, expecting better conversion of candidates for partner and MD roles this year.

• Volatility related to policy decisions by the new U.S. administration impacting M&A market.
• Structural challenges and pause in rate cuts continuing to drive demand for restructuring and liability management, but also posing operational complexities.
• Currency and valuation dynamics potentially impacting cross-border transaction activity.
• Competition in recruiting, with previous year seeing some candidates staying at incumbent firms instead of joining Perella Weinberg Partners.

Q: How is the M&A advisory business outlook, especially post-election?

A: Conversations in M&A market are more ambitious now, with clients having more confidence to transact in accommodative environment though with volatility.

Q: Thoughts on non-M&A advisory businesses growth relative to M&A?

A: Both M&A and non-M&A (including liability management, capital markets advisory, etc.) have significant growth opportunity, with no market share constraints and coexistence at peak performance.

Q: What's driving activity pickup in Europe?

A: Europe is seeing increased activity as a lag to U.S. trends, with early dialogue promising; conversations include gaining U.S. exposure and enhancing scale for European companies.

Q: Impact of steeper yield curve and fewer rate cuts on sponsor M&A?

A: Sponsors still have capital but need to monetize assets first; expect sponsor activity to pick up but at a pacing forward rather than vertical lift-off.

Q: Outlook for restructuring into 2025?

A: Restructuring business remains strong due to complex environment, proactive liability management, and valuable advisory services provided.

Q: Comp ratio and progress towards mid-60s target?

A: Still in growth mode; made progress by reducing comp ratio, with expectations of getting comp and non-comp leverage as business scales, though no specific algorithm for 2025 yet.