How Are the Investment Bankers Doing?

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PJT Partners Inc. ($PJT) reported fiscal Q3 numbers yesterday and total revenue hit $174.2mm (up 24% YOY) — no thanks to the restructuring group. Per Mr. Paul Taubman, compared to last year, restructuring:

…revenues decreased meaningfully in the third quarter, but held almost even for the nine month period. Given the increase in distress within certain industries, such as energy, media, telecommunications, pharma, consumer retail, our outlook for the full-year has become a bit more positive and we now expect full-year restructuring revenues to be up slightly year-over-year. This activity level combined with restructurings increasing ability to leverage the expertise and connectivity of our Strategic Advisory bankers should result in a stronger backlog heading into 2020 versus a year ago. (emphasis added)

Wait. There’s distress in energy and consumer retail? Who knew. Anyway, this isn’t fake news but it isn’t really big news either: banker assignments close choppy which makes quarterly reporting for restructuring a tough game. Still, if you’re counting on a sizable year-end bonus, you probably don’t want the company CEO singling you out for being a drag on numbers — encouraging guidance notwithstanding.

💰How are the Investment Banks Doing?(Long Chapter 15s?)💰

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On Sunday, we wrote about the stellar earnings reports from Evercore Inc. ($EVR) and Houlihan Lokey ($HLI). Are they outliers?

Apparently…no.

PJT Partners Inc. ($PJT) reported earnings this week and they, too, knocked it out of the park. The firm reported a 28% increase in revenues YOY ($167mm) and a 35% increase in advisory revenue ($133mm). These guys are killing it. Regarding the restructuring team, CEO Paul Taubman said:

Revenues grew significantly in the second quarter compared to the prior year and are ahead of last year’s levels for the six-month period. Our Restructuring business maintained its leadership position, ranking Number One in US and global completed restructurings for the first half of 2019. Our outlook for the full year remains essentially unchanged, notwithstanding near record low interest rates, historically low default rates and extremely benign credit conditions, we expect restructuring revenues for the full year to be flat to only modestly down. Despite this muted macro backdrop, we are working on an increased number of Restructuring mandates, which should serve us well entering 2020.

In addition to pounding his chest, Mr. Taubman provided some market commentary as well — particularly with respect to the notion that all of the “dry powder” in the market will impact M&A and distressed situations and Europe:

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