Thank you for joining us in person and on the webcast for Cowen's Inaugural Investor Day. My name is J.T. Farley, and I'm Head of Investor Relations at Cowen. To start, I would like to direct your attention to page two of our presentation, which provides a cautionary notice regarding forward-looking statements which we will be making today. Cowen's Chair and Chief Executive Officer, Jeff Solomon, will kick off our presentation today. Following Jeff, you will hear from Larry Wieseneck, Cowen's Head of Investment Banking, Dan Charney, Head of Markets, Director of Research, Robert Fagin, Head of Investment Management, Elizabeth Flisser Rosman, and our Chief Financial Officer, Stephen Lasota. Finally, Jeff will offer some insights on valuation and a recap, and we will be happy to answer your questions. We ask that you hold all of your questions until after the presentation is finished. For those of you attending in person, if you prefer to submit a question in writing, you can send it to me at james.farley@cowen.com. For those of you on the webcast, you will see a prompt allowing you to submit questions. Before I hand it over to Jeff, I thought you might want to hear from some of the people who work at Cowen about why they choose to do so. There isn't one person I've met in my time at Cowen or any point in my career who has said, "I want to be average." At Cowen, we aspire every day to help people outperform. The teamwork at Cowen is absolutely extraordinary. It's completely different than anything I've ever seen on Wall Street. There's generally a mandate, you know, that people should be working together, but I think at Cowen we really thrive on the collaboration. We have a diversity when it comes to the type of people who work here. You know people in research, you know people in banking. It makes it really easy to make those connections and to do creative things for clients. We can ultimately come to investment conclusions that are deeper and better thought out than our competition because of the willingness that we have to collaborate and think outside of the box. We're looking for the best solution to the problem. We're not necessarily looking for a standard solution. You know, the business drives itself because the quality of the product is so good. Coming to work each day and selling that product with people who you can rely on, it just makes it a rewarding place to work. To a person, you will see a very high level of competitiveness, a desire to win. But even the most competitive individual here has no desire to do that all alone. Anyone who works at Cowen has the Cowen attitude, really just being approachable, being someone easy to work with, but also extremely hardworking at the same time. People at Cowen are people that you obviously work with, but you also wanna work with. We have a team that has a lot of grit. They will go to the edge of the earth to get that deal done for clients, but they'll do that in a way where you still have a fun time working with them. It's a unique mix. No one's ever to blame uniquely, and no one ever gets the applause individually. We're all in it together. We win more when we gain capital opportunities. When we get different minds with different views to try to create some consensus around that's hugely valuable. Everyone is empowered to share thoughts, debate, conclude. Great things come from that. The culture is unique because it emphasizes teamwork and empathy. That's different on Wall Street, where there's a lot of superstars and a lot of harsh personalities. I think Cowen's a place that really lets people thrive. The people at Cowen are, yes, intelligent, yes, tenacious, but also filled with empathy. Treating people simply the way you'd like to be treated. We think of our clients as part of our team. We've worked with many over decades. We can help our clients succeed, that's gonna help Cowen succeed, and that should be ingrained in everything we do. There's no cookie cutter. We think about the issues that you're having as our client. We try to put ourselves in your shoes every single day. In an industry like Wall Street, where firms come and go, for 100 years, Cowen has really built a reputation, and people understand what we stand for. We're all rowing together as hard as we can. We all know what our end goals are. That's very fulfilling. I think Cowen turning 100 is an amazing accomplishment. It means that culturally embedded is the ability to evolve. We're working in a very fluid environment. We really need to not just change, but embrace change. What's made me stick around for 18 years is really the people. What really differentiates Cowen is the people and the value that we deliver to our clients. It's the people and the fact that we learn things from each other. My favorite part about coming to Cowen every day is the people. Doing something that's completely different than anything else that exists out there. I love coming in every day because of the tremendous energy from the people at Cowen. There's a collective responsibility to one another to help each other be better. I can't ask for anything else. Thank you, everybody. This is a momentous day. I think some of you. We're a little older than 100 now. I'm not 100. The Cowen is a little older than 100, and I thought, you know, maybe we should start our second century on our very first Investor Day. What do you think about that? Okay. As a memento, I want to everybody. I'm giving it. All right. I'll show it at the beginning of our second century. Hey, it's really great to see everybody. It's good to see so many faces in person, and it's really just, it's wonderful to be able to offer some perspective on kind of what's happening in the world and what's happening in the world at Cowen specifically. I think we've got a lot of information. I'm gonna give you a quick overview of it, but we've got a lot of information to get through. Some of you are here to build models, some of you are here to learn a little bit more about what we do, and how it works at Cowen. There's something in here for everybody. At the end, we'll obviously open it up for questions. I would say the first thing before we really get started is it's important to have perspective. It's easy for each of us to be caught up in what's happening today or this quarter, this month or this year, and forget that really what we do is build business models that are resilient over an extended period of time. Cowen turning 100, a couple of years ago really gave me this perspective of all the things that occur in the world, all the things that occurred in financial markets over the first 100 years, and the fact that Cowen is still here. There's something about that. Just if you get a chance later on, when we're mingling around, talk to Tom Strauss, who's sitting right here. Tom has been a partner of mine for 30 years. Yesterday, Tom turned 80. I'm not sure there's a harder working person at Cowen. In fact, I'm pretty sure there isn't. The things that he's doing on a day-in and day-out basis to help us drive the business, the way that he helped to shape my life as a mentor. This is the kind of stuff that happens at Cowen. You come away from hearing all the things you're gonna hear about who we are as an organization, all the things we do, and the time that we're in. You should talk to Tom. I do. He gives me great perspective to know that sometimes the things that are happening in the moment, while you got to deal with them, there's a longer term perspective, and if you're prepared for that, you can end up in a situation where you take share, where you're effectively driving outcomes. When I look at the business that we built at Cowen over the last decade plus, so much of what we've done is put ourselves in position to be able to navigate multiple market environments. If it was great excess last year, we should make a lot of money. If it's more challenging, we should be in a position where we capture market share from everybody else who's not prepared. That's really, I think, when you look at how we are able to drive value for our shareholders, you know, it's really about being able to put ourselves in a position to be able to have perspective, so that you can effectively drive outcomes over an extended period of time. Those outcomes are tangible. When you take a look at who we are, there's still, believe it or not, after all this time as a public company, things that people don't know. A few things not well understood that I think you should know about Cowen. One, our markets and banking franchises have scaled going well beyond anything that anybody had thought. Really, our traditional core areas of biotech and specialties, which people think of when they think of Cowen, there's so much more going on here. Sometimes, I don't think people pay attention to that. We get stuck in the minutiae. Second, we've got the world-class investment management business, which is not reflected in our book value and certainly not reflected in our enterprise value anywhere. We're going to talk a little bit about today. Elizabeth will come up and spend some time talking about the changes that have occurred in that business. We'll be able to share with you financial information data in that business that you haven't had before. Then third, the intellectual capital, the firm alignment, the culture of collaboration, these are the foundations of our value structure. At the core of that is research. Some of you in this room write research for a living. Some of you know what it's like to be in a research environment. I would make the argument that there isn't a better research environment on the Street. There's not a better research organization on the Street. If you love writing research and we're in your industry, you want to be at Cowen because we're really good at it, and we resource it appropriately, and it drives outcomes. This is the big change that I think people don't understand. Robert's gonna talk about this today. Research drives outcomes. We write a lot of it. It's deep, it's impactful. It forms our strategy, which industries we can be in, where we think revenue pies are likely to be for us, right? Without that knowledge base, it's hard to be different. We started this, investing in these businesses a decade plus ago, and it was a lot less obvious. Here we are today with one of the most scaled and insightful research franchises that really helps to drive outcomes for us. All right, key takeaways, and we'll repeat those. Here they are. Cowen is a sustainable, consistently profitable business with upside optionality and growth. We target mid-teens returns on common equity on a consistent annual basis. We target annual revenues growing to $2 billion over the next five years. When you look at what's in place for us and as we follow a trajectory in times that are not overly ebullient or overly negative, as we drive forward into whatever that new normal looks like, this is a platform that over the next five years will accomplish those two goals. Okay. We focus on opportunities. How do we do it? We focus on opportunities that are both addressable and accessible. Addressable means where we compete, there has to be enough revenue dollars to matter. Accessible means it has to be something that we can do, where we can take share. There are plenty of addressable marketplaces, let's say like fixed income trading, where it's not accessible to us, so we're not going to do things like go headfirst into a business that we're not involved in. When we look at individual sectors or we look at growth opportunities like some of the new ones that Dan will talk about in digital assets, those are going to be addressable marketplaces and they're very accessible to Cowen because right now nobody's there. Nobody like us is there. When we think about how we historically gauge strategic decisions and how we're using those skill sets to identify the opportunities to help us to achieve those goals we have in point number one up here, addressable and accessible marketplaces, you're going to hear about them. Third, not surprising to hear me say this, and I think that's why a lot of you are here. You're tuning in on the web. Valuation is compelling. We intend to unlock value from assets both on and off the balance sheet, and we plan to return additional capital to shareholders in the process. I know everyone's gonna ask me the question of stock buybacks, and I hear you. We continue to do it. We'll share with you all of the things that we've done, you know, in that vein as we've cleaned up some of the balance sheet and returned capital to shareholders in various ways that may not have been obvious. Recognize that we understand that we have value on the balance sheet and off the balance sheet is not recognized. As we go through the process of recognizing that, there'll be plenty of capital around to return capital to shareholders and be in a position to meet those targeted objectives that we laid out in bullet point number one. As always, we try to strike the right kind of balance. Our strategy is, so when you look at who we are, you know, and you heard this a little bit in the video. I always wonder why people don't spend more time. It's hard to model up, right? It's hard to model up culture, but without it, you can't do what you do, right? Why does everybody wanna come work at Cowen, right? People wanna come work at Cowen because working at Cowen enables you to be the best version of yourself, whatever it is that you're doing. The resources are there, the adequate resources are there for you to do that and drive outcomes. It's an organization that's powered by empathy. You heard us talk about it in the video because we believe fundamentally that at the center of every positive human interaction, including financial ones, somebody says, "I get you, I heard you, I feel you. I think I can help." Whether we're advising clients or whether we're trading or whether we're managing fiduciary money. At the end of the day, there's plenty of people in our industry that do what we do. The reason they do it at Cowen is 'cause we think they, we care about their outcomes, they care about us, and we deliver for them on a consistent basis. That's really I think it's important to know the vision, empathy, consistency, and support. You hear me talk about it on the quarterly calls all the time are what essentially allows us to do this over a period of time. In 2012, Cowen was a pretty broken enterprise. Some of you remember it. Some of you were investors back then. Some of you were writing research on Cowen back then. If you just look at the size and the scale of the business, to go from $288 million to $1.5 billion of an LTM, it takes both organic and inorganic growth. When you look at the rebuild period and how we added capabilities, very contrarian to add algorithmic trading. Everyone told me we'd never be able to compete. Today, we've got the best, hands down, bar none, algorithmic trading, electronic trading system on The Street. Dan's gonna talk a little bit about how we've been able to take that not just here in the U.S., but apply it to different geographies like Europe and how that's been a big part of our expansion. If you get a chance, talk to Carl Dooley, you know, who joined our team in Europe a few years ago, why Cowen, when they could have gone to any one of a number of other places when Deutsche Bank left the business, right? It's a story you can repeat over and over again. That's what helps us to get to this. When we positioned the business, we did add other cash registers in the markets business, like prime brokerage, like credit research and Washington research. We also built banking teams along the way in sectors we didn't have. This SPAC capability, we have both trading and our SPAC origination effort came from two different acquisitions. One was Morgan Joseph, one was the CRT acquisition. Getting those cultures to work together to deliver outcomes, that's what we do at Cowen. It puts us in a position where beginning in 2018, you're gonna hear a lot about the changes we've made in 2018 and how that's driven value. That is what's enabled us to put up the numbers that you see on this page, right? Then when the markets come our way, as they did in 2020 and 2021, we were there to capture every last nickel. Actually, this is really important. Like, if we hadn't captured every last nickel, you'd be asking us, "Well, what were you guys doing?" The reality is, when the market was there, we were there. You have to be there first, though. You gotta invest ahead. You gotta make sure that you have that core capability. So you're gonna hear a little bit about some of the things we think are on the horizon, even in this challenging environment, that we think are immutable over the next three to five years and put us in a position to capture marketplaces that, just like these ones, are addressable and accessible. That by the time we get to the $2 billion revenue, it won't look the same as it looked last year when we accomplished that. It'll be different, more diversified. There'll be elements of it that reflect the business opportunities that are in front of us going forward. Recognizing the skill set that we have, our ability to identify markets, our ability to leverage off of research and gain insights into the marketplaces and the industries we should be. Not getting so wedded to them that it, that you can't see what's in front of you. As you hear about these presentations today from everybody, you're gonna hear about the things we did and how it positioned us to take advantage of the market as we saw it then. Christian, it's the foundation for the things we're doing today and identifying the marketplaces that are in front of us, going forward, which may or may not be the same. This is my last slide for this section. I'm gonna turn it over to my partners. What you're gonna hear about the future growth drivers is in one version or another, we're aligned to take share from people who haven't figured it out yet. I'm happy to talk about these strategies because I think it's really hard for people, others who are in our industry to capture it even if they see it. In investment banking, you know, we have a strong and diversified business across products and sectors that allows us to deliver full service capability for the clients we choose to engage in. You'll see continued growth of high margin advisory businesses. Most of you know we started with mostly a financing business and we've parlayed that in through acquisition and organic growth into one that's more balanced. You'll hear about how we continue to press forward there. You'll hear about our continued expansion into middle market sponsors, which we think is a market that is very accessible and addressable, for us. In markets, you'll hear about how we can take our non-conflicted execution capabilities in multi-asset, and take share from underinvested competitors. That's still happening. Growth from areas across the platform, across, cash trading and global prime, security clearance, non-US execution and digital assets as they come online. You'll hear about research and how it's different and how it drives the outcomes, not just in the broker-dealer but in Cowen Investment Management as well. How we're continuing to innovate on that front that make our research product the envy, I think, of just about every other firm on the Street. When you look at the investment management business, the growth that we've seen in assets under management and agency fees for the distinctive strategies that are really unique, that are hard to replicate, and how we've rebuilt that business over the past few years to deliver consistent profitability, strong management fee growth, and why that should be valued a lot more by the investment community than it currently is. With that, I'm gonna turn it over to my partner, Larry Wieseneck. He's gonna go through, you know, some things as it relates to investment banking. Thank you, Jeff. It really is depressing when I have to take the mic from me, and I know how tall Jeff is, so. Anyway, let me just start by saying, thank you, Jeff, for introducing me. Importantly, thank you for convincing me, about five years ago to come join Cowen and join all our partners on this journey. You'll see on the chart a few pages ago where Jeff talked about the value creation phase. You know, that literally was the way that Jeff and Dan and some of the other partners were discussing the phase we were going into when I was considering joining in 2017, which was that we had done an enormous amount of work to scale the markets business. The banking business was still a bit narrow, and if we could just find a way to channel everything we had in markets and research and within banking and deliver it from more clients in more places, we had a big opportunity ahead of us. I signed up for that, and really, really have enjoyed the time since then. Also just wanna say, pleasure to see a lot of faces I have met before in the room, and hopefully for those I haven't met, maybe we'll share a cocktail after this event's over. Look forward to spending time with you as well. Let me. The forward button must be the green one. Perfect. I thought to get us started, it would be helpful if I just give you a little overview of what we'll discuss in the next 15 minutes or so. Importantly, what I really wanna make sure is that you have a sense of kind of what the mission of the banking capital markets effort has been. Again, we kind of refocused this back in early 2018. Over time, slightly changed tactics, but the strategy has been set since really the time that I joined. We'll then talk about how we've executed against that strategy, and then finally talk about the opportunity and the outlook. The one thing I wanna highlight is when I think about the way that we deliver within the business, I really do focus on kind of four C's. Just keep them in mind as we go through it. The first is understanding the competitive landscape. Where can we win? The commitment sort of adjustable and accessible. That's kind of the way to think about the landscape. Second is clients. When we think about clients, the clients and the sectors they play in. Where are we gonna show up? How do we serve them? Our colleagues. Basically, you know, what do we have internally that is distinctive that we can deliver? And then how do we do that within the culture such that, our teamwork in our distinct way that we show up actually adds value to the client base? If we do that properly, we'll get rewarded by clients. That's kind of the basic theme. This is kind of the world that I walked into, we walked into when we were talking about the beginning of that value creation period. That's a lot of hard work that's been done. A few things just to remind folks of, and it's what jumped out at me when I was joining. The first is that the business from a banking standpoint was heavily capital markets dependent, and Jeff mentioned that just a few moments ago. It also was very healthcare dependent. That's great. We are fantastic at healthcare. One of the comments that Jeff has said often, I think sometimes even on the earnings calls, is we root for healthcare, we root for biotech every day and sometimes twice a day. With that said, we knew we had to diversify away from that and make sure that we were broader than that. Then within healthcare, we were very biotech dependent. This slide just shows you both of those teams. Very equity capital dependent, very healthcare dependent. If you're gonna set out to think about how do you broaden out from that and how do you build a more diverse business, the first thing you have to understand is kind of where can independents win and who else shows up in that space? Am I getting the slide to appear? Yeah. Okay. All right. First thing we looked at was, broadly speaking, if we look over time, we can go back to the 1980s, 1990s and think about the role of the independents that were most well known then. They tended to live in two spaces. They were very good in the middle market, and they focused on growth companies as well. Growth and middle market. The question is, how do people line up there, and how did we line up? First thing that I looked at was predominantly because of my background, I looked at the universal banks. That was where I lived. It's what I understood the best. I certainly understood the way that large banks with balance sheets use their strength to their advantage. I also had a good sense of where they don't particularly lean in well. When I judge that and think about the client space and sectors against the competitive landscape, I have to say we've sat here and said universal banks have all the services they need to deliver to that space. However, it's not the most important part of what they do. In fact, working with middle market companies or working with growth companies is generally an afterthought for them. That's one of the reasons why in those spaces you'll see independents, you'll see boutiques do well. We said we have to come up with a strategy to make sure that we can win either alongside or against the large universal banks. Second group. We looked at middle market dedicated middle market M&A advisory firms. I would say that here there's folks that all of you might. Who invest in the industry, cover the industry. Here's some that you might automatically say, "Yeah, that's what they are. They're a middle market M&A firm." These are generally folks from the sell side. That's 95% of what they do. There are many who actually are not necessarily middle market M&A firms, but really masquerade as that with some other kind of titles. What I mean by that is, if you looked over the decades prior to, say, our value creation period, a number of our competitors who are independents basically drifted and underinvested in research, underinvested in markets. When we looked at that, we said, you know, those firms are ostensibly not delivering the same kind of offering that someone like Cowen can offer because we're great at equities. We have an unbelievable insight into businesses like credit and SPACs. We can deliver that to our clients in a way that middle market M&A firms can't, and those independents who drifted away from the markets also can't. We said. The holistic element of universal banks is really interesting, but the middle market cutters don't deliver that. Okay? We put that away. Next thing we looked at was what we call the independent advisory boutiques. You guys know who that would be. These are firms that they are M&A specific firms. They may have some other elements that they lean on at times. Generally, they have no, or if they do have some, they're underinvested significantly in markets and in research. In many respects, using the proverbial comment, you know, when they see a screw or a nail, they have one hammer, and it's a hammer every time. They get paid to do M&A. When we look at them and we say, you know, listen, they have an interesting model. However, they're not dedicated to the middle market. They're not dedicated to growth. They're basically gonna execute on whatever transactions they can find that are M&A centric, and therefore they're also not full service. We said we think there's room there for us as well to compete with all of that group. As we grow up, where was Cowen at the time? I would say we were not delivering everything in our arsenal. We certainly had the capability of being full service, we'll come back to that. The competitor service offering here, I did not give us full credit. Again, if we go back to our middle market, you know what? We really weren't dedicated to the middle market. We had a lot of our banking teams that were trying to cover the entire ocean within their sector. These were folks who have large companies, middle market companies, growth part of the sector, et cetera. We said, you know, we have to really pull back here. We are not equipped to compete with $10 billion, $15 billion enterprise companies, say, in the industrial space. They might be interesting buyers of companies that we represent, but we're not gonna get wallet from them. Why? Because, go back to the page, top of the page, universal banks control 90% of that wallet. Why are we even trying? That was an important part of our pivoting the business. We said we're gonna focus on those areas from just a bit earlier, where there's an addressable market that's accessible to people like us. We then had to basically say, "What's our aspiration?" Our aspiration set again in early 2018. We used slides that looked very much like this, and we rolled it out to the rest of the investment bank, to our research department, etc. Because we wanna become the leading independent, full service, growth-oriented middle market investment bank. A lot of kind of caveats there. You know, just to highlight them. Independent, certainly that's how we show up. Full service. Full service means those services that they might require. It doesn't mean everything. You know, we're not sitting there trying to do FX. We're not trying to do rate trade for some small middle market firm. It's not a particularly deep wallet for them. We are trying to make sure that when we show up, the lane that we swim in is a holistic advisor. We don't care if it's, say, a PE-owned asset. We don't care whether the right next trade is to sell the company, to do a leverage recap, whether it's to bring in third party capital alongside them to do an acquisition. We're indifferent because we can handle all of those. Now, the problem was we weren't necessarily set up for that. The journey began. How do we go from that aspiration to it being something that we could actually do? I broke this down into kind of a few different steps. The first thing was, if our goal was to create a diversified sector and product mix, we had a few things we needed to focus on. One was that we needed to be better across multiple sectors. We had to invest in some of the areas where we had started in 2014, 2015, and 2016 in building out the businesses. Areas like industrials, TMT, consumer, but we were underrepresented there. We needed more bankers. We also needed more services if we're gonna meet our clients, growth clients and the middle market clients, not the same two sub areas within any arena. We have to basically modify both who we have as bankers and add services. That's one. Second was we have to expand beyond biotech within healthcare. We had a great franchise. Our research franchise admittedly was ahead of banking in the way that we lined up against the healthcare space, and so we allowed our intellectual content and research to help us figure out where we should be and build that out. That was the second piece, diversify within healthcare. I mentioned earlier, diversify the product suite. Since we already decided that the growth space in the middle market spaces were where we as a firm, if we were lined up right, could access it, what we then focused on under the how was to make sure that we had the specialization and dedication needed to be able to win as an independent. Because if you're not gonna be all things to all people, you better be great. That means channeling all the teamwork that we have, all the partners, and delivering that to them. That was kind of the stage. We then go to kind of, okay, so what else was part of that kind of strategy? Partnership and the teamwork that, you know, people I hired in the last four years walked into is special. Jeff talked about that earlier in terms of culture. We use the term tenacious teamwork. It allowed us to define areas differently than our competitors. One of the things I learned a long time ago at a different firm at a different time is then I would have said, you know, "Don't play by Goldman Sachs and Morgan Stanley's rules because you're gonna lose." If you allow the landscape to be defined by the biggest or the easiest decision for someone to make, you lose. You have to actually deliver yourselves differently. You have to align yourselves differently. That's what we decided to do here. We decided we're gonna play by our rules. Our rules are with great content and great insights from markets, we need to look at horizontals instead of verticals. That's basically what we saw. We didn't see biotech. We saw biotech connects to tools and diagnostics, connects to med tech, connects to you know, digital therapeutics. You know, we can handle all those because that's where science and technology come together, and we're great at that, and we're gonna basically sell that content. Then we saw that roll over into other areas where the DNA is similar. We think of the world of connected vehicles. To win in that space as we've been winning, it requires folks from your electronic side of TMT, software experts, logistics folks sitting in transportation, and then old line autos all working together, both within research and banking, if you're gonna solve problems. We were able to do that, and we did it earlier in that extent. Again, the rest of the names here, you can see it's true in structured consumer, robotics, automation, et cetera. Then finally, as part of that, we have to basically trust our clients to help lead us in that as well. So we really think of ourselves as partnering with our clients. In these ecosystems that we develop, our view, and you'll hear it again when we talk about Cowen Digital, is, as ecosystems develop in these new areas, if you're there early, you earn the right to be there over time. If you're late in getting there, that's a problem. The content that we have helping us lead there is really important and has been important in the way that we've skated to where the old Wayne Gretzky comment, skating to where the puck's gonna be and not waiting until it's obvious to everybody else. Now to get there, because we started, and if you look in the middle of the page here in 2021, we had roughly 39 MDs in 2018. We really had to do a bunch of things. One was, and that's not on the page, is refocus our existing team to areas where disruption was happening. One of the things we talk about is from a banking standpoint, if we're gonna give advice to folks and we're gonna be their trusted advisor, you kind of have to be where there are disruptors and where there are disrupted. I don't mean it in a harsh way. I just mean it from, again, this addressable and accessible component. If we spend a lot of time with people in the middle who don't understand what's happening in their industry or in the economy and how it's drastically changing their opportunity set, they're not gonna be folks who are gonna do a lot of activity. Again, as bankers, net net, we give advice, and we get paid for that advice. Folks that don't realize they have need aren't gonna pay you for advice. We focus on those disruptors, the areas of significant change, and then those companies that recognize there's change in their space, and they modify their plan. A lot of that is basically when we think about middle market, so much of our business comes from family-run enterprises that recognize, "You know what? In order for me to win in this changing industry I live in, I've got to actually grow. I've got to do that through being different than what's happened here for the last 30 years. So I'm gonna go bring in a third-party investor. I'm gonna sell to private equity funds, stay involved, run the business, but with that bigger player around me with that capital, I'm gonna become a disruptor rather than be disrupted by someone else." Like, that's a huge part of how we think. That's been something that's really proven very valuable for us. We couldn't do it alone just by asking people to change their focus. We had to do a bunch of acquisitions, and we had to do a bunch of hiring. On the hiring front, if you look along the top of the page, there are a number of things we did that are memorable that really helped us move the franchise forward. Maybe none was more important than hiring a fantastic debt advisory team at the same time that we pivoted away from syndicated lending. Again, big banks own the syndicated lending market. Not gonna necessarily compete real well there. We de-emphasized that, jumped into debt advisory, where we said, "We're gonna bank, you know, those folks who basically bring their deals to the club market." Oh, by the way, we made a bet that the club market or the direct lending market was gonna grow. We never could have expected that we were gonna be at the place where you saw $3 billion facilities going to the direct lending market. We've been a beneficiary of that, but we predicted that it would be an important bet for our clients and that would be a good team, and that was one of the changes we made. You can see a bunch of other ones on this page. If you look at the bottom in terms of acquisitions, we knew that to get to better depth in our M&A offering, we had to take the step functions. Along the way, when we did that, we also doubled down on the middle market, in particular in focusing on businesses that line up well against PE organizations. We were doing this at a time when our capital markets were crushing it. I think that's an important element of what I've been very appreciative of in terms of the support from Jeff, from the board, is the obvious thing might have been to just keep pushing our advantage in the capital markets heavy arenas. We went the opposite way. While that was going well, we invested in a number of acquisitions to get us more depth in middle market M&A so that we were gonna be a much more stable business. That's paid off in a significant way. Ultimately, most recently, the acquisition of Portico, which brings us a fantastic team in the verticalized software and data arena. Anyway, that's kind of the how we got there. I'm gonna go real quickly through the next few slides because I think you guys have seen these numbers, generally. A few lessons that come out of it. The first is our clients have been rewarding this focus. The bets we made, that the board supported us on, have been rewarded because clients get to choose who they select. When they select us disproportionately, that's a very positive statement. What you can see here is the breakdown between healthcare and non-healthcare. You can see that we significantly increased both the percentage that comes from outside of healthcare and the absolute number that comes from outside. Importantly, it wasn't at the expense of healthcare. At the same time that our non-healthcare revenues grew, depending on the year you use, call it fourfold, our healthcare revenues had gone up by doubling. It wasn't that under investing in healthcare. It was just that as we showed up in more places outside of healthcare with a better offering, we were rewarded by our clients. On the right side, you can see within healthcare, and maybe this is something we're more proud of as a team, was that we were able to diversify our revenue stream in our core area of healthcare to now be very, very diversified, such that it's not biotech, you know, all the time, that we really do get rewarded across a lot of different areas in healthcare. Same thing is true in product type. Again, those of you who've known us a while, you know that beginning in 2019, we started to break out our capital markets revenues into underwriting and advisory. Prior to that, it was just capital markets and M&A. If you look at the growth in our various buckets, what you'll see is that the advisory business, whether you count that as solely M&A or whether you include the capital markets advisory, has become a significant portion of our revenues. Just in terms of comparison, if you look at last year, you know, the pure M&A revenues north of $300 million compared to roughly $40 million in 2017. Again, that's both organic, all of our sectors doing more M&A, as well as the benefit of the companies that we acquired that are now part of our offering. Another measure of kind of how we've diversified the business and we're different today is by client type. Now, what I didn't do here was break down every different type of client. One of the clients that Jeff mentioned earlier, which is the middle market private equity world, that's an area where we really were punching below our weight back in 2017. I think, you know, when you say it was less than $10 million in revenues, that means we clearly weren't, you know, punching our weight. If you fast-forward over time, it's grown very steadily. Last year was roughly $150 million of revenues that were directly tied to those PE firms. I think as a percentage of revenues, that's just gonna continue to go up. When you think about additions that we're making, one of the things we haven't talked about is the way that we rearranged our coverage universe. We now have a significant number of dedicated coverage professionals solely covering the middle market PE firms. This doesn't happen by chance. It happens by hiring the people. Then as time goes on, time in many respects is the ingredient in our business. It's like adding water to seeds for flowers. Time ultimately is where you start to see the benefits. Decisions made in 2018, 2019 starting to pay off through 2021 around the private equity client space. When you look at the net result, I think the numbers really speak for themselves. Again, there's no question that there's two elements to winning. One is you have to pick the right markets in terms of where you line up. Then second, you have to actually deliver. We certainly I think both picked well and delivered well. It was not a story of kind of, the rising tide benefiting everyone. In a market where, you know, the M&A fee pool was up approximately 50% on a CAGR, we were up 50%, give or take, during that period, on a CAGR compounded standpoint. If you look at overall capital markets as well, that was a CAGR of 15%, clearly well above that. From our standpoint, we do feel that we've been picking up market share. We're small enough, quite honestly, that it's not necessarily that we judge market share on is it 2% or 2.5%? Is it this or that? It's rather are we growing faster than the fee pie? That's basically the way that we measured ourselves and that front. Where are we today? I think hopefully this helps you understand the way that we made investments, the focus on being a more stable business with less dependency on any one area. That said, there's no question that we're in a very challenging capital markets window today. I think the one thing I'd highlight there is that we're not built for any day, any quarter, any month. We're built through cycle. When we think about where we are, we're clearly having come off what, if you look at maybe 18 months beginning in the middle of 2020 to the end of 2021, was a very, very strong part of the cycle in regards to capital markets. We benefited from that, no question. We also believe that we're gonna stabilize issuance levels well above where we are now. Like, where will that be in terms of the levels? You know, we don't know. I kid around when someone asks me that. I say, "Well, if I knew, I'd actually be on the other side of the table. I'd be the investor." You know, I can't predict where markets are gonna be tomorrow. But what I can say is that there's an enormous amount of pent-up issuance waiting to occur. That's true in healthcare. That's true across all areas of aspirational companies. I say aspirational companies because some of them are actually growing and others are businesses that they're still in the business plan phase, and their growth hasn't yet come in. They're not yet cash flow positive, but they need capital, and that's to come. We're also seeing right now, and you'll see it start to show up more throughout this year, that less dilutive forms of finance are coming to the fore. We're very thankful that we invested the way we did in our private client efforts because that business is gonna be a more meaningful part of our offering at a time when companies are less willing to issue equity at maybe a price they feel isn't a fair price. They'll do less dilutive forms, and we're well positioned for that. Importantly, the diversity of our product suite, client suite, we think will stand as well. The private market momentum, we're in a much different place today with both private equity and private credit funds. We're critically important to both, and that will start to become a significant portion of our business, or more significant portion as time goes on. The last thing I'd say is that, one way of thinking about the way that we invest our time and energy, and we've seen it show up in the revenues in the past, and I think it's an area for you to think about where will our revenues come from in the future, is that we can anticipate, and the anticipation part comes from our partnership with both our investor clients, our research teams, our markets business, our friends in investment management, where we think that we have an ability to see the seams, pretty early. We anticipate and participate. The way we participate is to try and be here early, be around those companies when they're not yet public, do private raises, C Vs, et cetera, and therefore grow with them. We have a number of those that are ongoing. Clearly it continues to be the case that healthcare is one of the most innovative places. For sure we swim there, and we'll continue to swim there, but it extends to a bunch of other areas. Just a few of them I wanted to highlight is everything sustainable, whether it's we've already done in connected cars and the future of transportation, whether it's ag tech, just broadly, the thematic of sustainability and ESG is not a one-year phenomenon. That is a mega trend, and we believe that we're well positioned there. Automation in general, robotics, all forms of bots, software bots, et cetera, an area of real focus for us. Then finally, digital assets, Web 3.0, being there both in banking and with our partners in markets, a critical area. I think with that, it's a perfect time to turn it over to Dan Charney, my co-president. Thank you, Larry, and thank you for joining the firm five years ago and helping transform our investment bank. Thank you, Jeff, for giving me the opportunity the last 10 and a half years to have clearly the best chapter in my career. Great to be with everyone. I know some of you. Some of you I don't. As Larry said, look forward to maybe mingling at the end of this. Let's just get right into it. Happy to discuss the markets business. Over the past decade, we have created a scaled, diversified and sustainable markets business. From a $90 million business, primarily high touch cash in 2012, we now have a global markets business with over 12 revenue streams, which did over $730 million last year, and is averaging roughly a little over $3 million a day year to date. We think our growth and strategic vision has not been properly understood or appreciated. We've made seven acquisitions over this time period and honed our ability to integrate diverse and different businesses. No better example than with our acquisition of Convergex, where we're able to cut costs, change their pay structure from a payout to the salary bonus structure that we have at Cowen and dramatically increase pipeline. We have the humility to know that firms we are acquiring actually do certain things better than we do, and we treat them like collaborative partners starting on day one. In addition to being acquisitive, we have started businesses from scratch organically, like our securities finance business, and have added extremely accretive teams like our non-dollar business. We actually have one of our stars sitting in the seats today, Carl Dooley, in 2019, while maintaining our collaborative entrepreneurial culture. As you can see, our growth rate has far, far outpaced our peer group. We are not done yet. I'll say this boldly, we have an aspirational target of $1 billion in our markets business over the next three to five years. How are we gonna get there? We're gonna do what we've done over the last 10 years, be opportunistic, move quickly to trends we identify, and then use our unique, truly unique cross-selling culture to lean into those businesses. As you can see, our top 300 clients average five different products to utilize us for, significantly different than in 2012 and significantly different than any firm that I've been a part of. At the core of this is a belief that a strong, high touch cash business with strong sales traders is critical. While many of our peers have devalued the importance of their high touch business, we understand just how important it is to have A players in those seats. We believe the core cash business is the foundation to all our growth businesses. We truly see opportunities across all those business lines. Even though we are already a top player in U.S. cash, we think there is room to grow. As you can see, one spot in growth in our rankings for cash, which we define as low touch, high touch, and ET, can result in a $36 million uptick in revenue, and one move in U.S. listed options can result in an additional $10 million. Our PB and outsourced trading business has a crazy amount of momentum. With some of our bigger competitors, as you know, getting out of the business, we're seeing more demand for our services than ever before. The same can be said for our subs business, where we are adding top-tier clients for our differentiated client service and customized approach. We offer a very different value proposition in our subs business than our biggest competitors, and our clients are recognizing that. Even though we saw triple-digit growth in 2021, we believe we are in very early innings here. Europe. Europe has been a massive growth area for us. Again, this is another example of our ability to identify opportunities, move quickly, and attract teams to our culture to step function our growth. When Deutsche Bank was getting out of their global equities business in 2019, we were able to identify that their European sales and trading teams were both exceptional and could fill a very important hole that we had in Europe. We were able to hire their top eight players, both in sales and trading. In two years, we've moved from nowhere in the rankings to top 15. We now, as Jeff alluded to earlier, are taking our best-in-class electronic product, plugging that into our amazing sales force, and we see continued growth and serious growth in our non-dollar business. Now to Cowen Digital. We couldn't be more excited about our launch at Cowen Digital. While we just launched officially a week ago, make no mistake, we've been busy building the foundation for the better part of 18 months. In the fall of 2020, when Jeff, Larry and I were discussing what our digital strategy should be, it was clear to us there was an exciting opportunity for Cowen being the institutional firm focused on the ecosystem. One of the first realizations we had was how important a best-in-class institutional-grade technology solution for custody was. Equally as importantly, it's beginning to build momentum in the narrative, whether coming from Gary Gensler or from Coinbase's earnings, the importance that that solution had to be segregated. The segregation of duties is critical, not really existed in the early stage of this ecosystem, but we feel we are the adults in the room, and we'll set that example of transparency, and that sort of traditional finance experience. In parallel with this investment. I'm sorry. We identified PolySign as that best-in-class firm for custody. We made a meaningful investment, and we formed a very special strategic partnership with them. I went one too far. There we go. Since we wanna show that, Tam. In parallel with this investment, we internally formed our Cowen Digital working group and began to build out our strategy. At its simplest level, our vision is to take what we do in equities and some parts of credit and bring it to this asset class by creating the same user experience for our clients. Ultimately, we will provide an elegant prime brokerage solution using PolySign and our preferred custodian to create a smooth workflow that includes all the functions our clients are used to today in equities. Early days, but we couldn't be more excited about what lies ahead. Scale, diversified, entrepreneurial, and sustainable. These are the traits that will lead us to a billion-dollar-plus markets business over the next three to five years. Thank you. With that, I turn it over to my partner of over fifteen years, Robert Fagin. Okay. Good afternoon. My name is Robert Fagin. I am proud to run research at Cowen, which I've been doing for the last 10 years, and I'm proud to be part of this incredible team. I'd like to spend a few minutes discussing why Cowen's research is special, differentiated, and impactful, and how it helps distinguish and grow our business, what I call our five pillars of differentiation. The first is Cowen's general philosophy about research, which is different than almost all of our competitors. We do not view research as a necessary cost center. We see research as a key source of intellectual capital and thought leadership that is deeply integral to driving revenue across multiple parts of the organization, including our investment banking and markets businesses. As such, we have no interest in check-the-box research. We focus on producing the most innovative and highest quality product possible, driving readership rates that are three to eight times the norm. Cowen is, frankly, a great place to be a research analyst. We respect the art of research. Because we are central to the business in an environment which has seen global research headcount decline by 30% in the last decade, we have continued to feed the beast and have grown our research headcount by well over 100% in that time frame. The second pillar of differentiation is scale. Over the last decade, Cowen has invested heavily in its research products and has grown it into a formidable global brand. With 62 publishing analysts and nearly 1,000 stocks under coverage, we matter to clients. We are solidly inside the top 10 in the U.S. in terms of publishing analysts and stocks under coverage, and the numbers are really quite impressive. Our research is distributed to about 40,000 individuals and about 4,000 firms through direct channels and major financial platforms. Last year, we published about 208,000 pages of research and more than 5.2 million of our reports were read. We also hosted nearly 13,000 meetings with our clients, hosted over 1,200 different companies at our conferences, and held 500 non-deal roadshows, which is about two every trading day. On average, our analysts appear twice a day in major business media such as CNBC, Bloomberg, and The Wall Street Journal. We provide broad fundamental coverage in nearly every sector. In addition to some of the finest equity research, Washington policy research, and thematic research on The Street. The third pillar is our constant and relentless drive for innovation. We spend an enormous amount of time strategizing about where we believe we are likely to see disruption and dislocation, because our clients tend to make the most money when we can help them identify what's on the horizon. This has manifested itself over and over again and is a key part of our research culture. We innovate in content. For example, our Washington Research Group is the largest policy analysis team on Wall Street. We were early to identify the impact that robotics would have across multiple sectors, and we formed a partnership with MassRobotics, which links Cowen to extensive market knowledge in the areas of emerging robotics and artificial intelligence. Cowen was also a pioneer in forming an interdisciplinary research team to study digital health and the implications it would have. Our Future Health Conference is now in its seventh year. We weren't just early to the party, we threw the first party. We were the first major Wall Street firm to cover the cannabis industry, recognizing early on the impact it would have on a broad range of sectors, including beverages, tobacco, and healthcare. We were prescient in appreciating how new advances in life sciences and diagnostics tools would change the face of genetic testing, blood screening, and synthetic biology. Our life science and diagnostics tools team is now the largest on Wall Street. We also innovate in products such as our data science initiative, and we innovate in how our product is consumed and distributed, such as our amazing videos and podcasts. All of this manifests in unique proprietary product that drives results for our clients. You can't speak about Cowen Research without discussing our flagship product, the Ahead of the Curve series. To many of our clients, our renowned Ahead of the Curve series is Cowen Research. These in-depth reports showcase the authoritative expertise and thought leadership that is synonymous with the Cowen Research brand. This is perhaps where our culture of innovation manifests best. Indeed, the ahead of the curve, being ahead of the curve means identifying opportunities that both investors and corporate executives can capitalize on. These are the discussions that we seek to dominate. The final pillar is teamwork. Some firms talk about teamwork, but at Cowen Research we truly celebrate it. We live it, and we incentivize it. To begin with, we are the partnership hub at Cowen. We partner with nearly every division of the organization. Our institutional broker vote results help drive increasing trading commission market share in our markets business. Our analysts vet most of the deals that our investment banking team brings to market, and research is a primary ambassador to numerous external audiences such as corporate executives and financial sponsors. This level of internal alignment is something that few organizations can boast. Beyond this, teamwork extends to our product. If you ask any of our clients, they will tell you that one of the key differentiators of Cowen is our ability to truly synthesize data from multiple analysts into actionable and unique insights. Some recent examples include a seven-part series on edge computing that our entire TMT research team contributed to, and a seven-part series on energy transformation. Both require the acumen and cooperation of numerous analysts and resulted in insight that individual analysts would not have been able to produce. I want to leave you with one illustration of how our success has been the result of very deliberate planning, which is our ESG product. One of the themes you've heard today is Cowen's integrated strategic planning process that aligns us across business units. This disciplined process identifies incremental revenue opportunities where we can bring to bear a competitive advantage. In the case of ESG, we were early to identify an acute need for companies and investors to better understand how environmental, social, and governance issues transform how they operate and how they craft their portfolios. We began planning what our ESG research product would look like. If you fast-forward to today, we have an award-winning leading ESG practice, and we were recently recognized by a third party for having the best ESG research on the street. We were the first major Wall Street firm to place company-specific ESG scores on the cover of all of our research reports. We launched numerous ESG events for our clients, and while others eliminated their energy research offering, we completely transformed it and grew it. We now have the largest energy transition stock coverage footprint on Wall Street. We have the street's first dedicated ESG and sustainability policy analyst as part of our Washington Research Group, and we've partnered with our teammates in sales, trading, and corporate access to deliver our products to clients effectively. Thanks again for your time. I will now turn it over to Elizabeth and Cowen Investment Management. Thanks, Robert. Thank you everyone for being here today. Our goal of investment management division over the past five years has been to simplify. Historically, Cowen Investment Management has pursued a strategy to be a sponsor in which our balance sheet and infrastructure were rented by startup liquid alternative asset managers as they completed their track record. We needed the investment management division to be less capital-intensive, and we wanted to focus on less commoditized areas. We shut down five businesses and sold three and focused on the scale businesses as well as manufacturing products that are not as easily replicated and warrant a higher management fee structure. Today, the investment management division is five strategies, and we've successfully reduced the amount of capital that the investment management division uses from the balance sheet. It's currently just less than $100 million. On this slide, you'll see that the assets under management have grown because our efforts to be unique in our product suite. As of April, assets under management are approximately $14.7 billion. The investor growth has come from pensions, endowments, foundations, wealth platforms, family offices, and sovereign wealth funds, many of whom are first-time investors into Cowen Investment Management. They were attracted by our strategies and our conviction around the investment opportunity, particularly in healthcare and in sustainability, as well as reassured by our world-class operations and infrastructure support. Our assets have increased in large part to assets coming into private structures. These structures charge investors on committed capital of a three to five-year investment period and charge management fees in the range of 1%-2%. As a result, our management fee revenue has grown over the past five years, and because we strive to deliver consistent profitability in these alternative asset management structures, we charge incentive fees that have an upside volatility on growth, and we've generated positive incentive fees each year since 2009. In summary, we have delivered strong asset growth, and management fees have increased and are much more predictable. As we look to the future, we continue to follow our approach, which has been very selective when we construct new strategies. I'd note that all five strategies in the investment management division are attractive to investors because they can be classified as ESG strategies. Our focus areas include improving human sustainability, holding companies accountable to realizing their best value, and reducing the carbon footprint. On a final note, last year in August 2021, we assessed the opportunity to realize additional value from the healthcare royalty strategy and contemplated a public company structure. Even though market conditions impacted the ability to execute, we continue to be focused on ways to realize value. Thank you again for the opportunity to be here today. I appreciate your support and interest. Now I'll turn it over to Steve Lasota. Thank you, Elizabeth, and good afternoon, everyone. We've been showing this slide for a number of years in our investor deck, but we changed the layout a bit. If you look at Topco, Activist through Healthcare Royalty Partners, you'll see at the end of the first quarter, we had just under $100 million invested in our five Cowen investment management strategies. That's down considerably from $368 million in balance sheet capital invested in CIM at the end of 2017 that Elizabeth had just talked about. We've agreed to make these LP investments in our strategy so that we have skin in the game alongside our CIM clients, so that the allocation is not likely to drop further from these current levels. Just below the CIM stakes, you'll see we have about $11 million allocated to our portfolio hedge, and that's designed to reduce the beta exposure in our overall portfolio to provide downside protection from market declines. In the first quarter of 2022, it offset almost $4 million in investment losses for Cowen. The next line is our merchant banking portfolio, which I'll cover in a few minutes. I just wanna remind everybody, we have four broker-dealers and one swap dealer. The biggest item here is the broker-dealer capital of $567 million. This net capital supports all of our banking and markets business. Everything from trading across all asset classes, our matched book securities finance business, our swap facility, clearing margin requirements, and point-in-time capital needed for underwriting new issues. Finally, there's AssetCo. As a reminder, these investments are non-core and intended for monetization when we're able to do so. The biggest item here is our stake in Wind Tre, the Italian wireless telecom provider, which is majority-owned by Jefferies. We're working on a monetization of this investment, but it's not likely to happen until we return to more normal market conditions. Our merchant banking investments produce high returns and strengthen client relationships. The detail here. In the same way that our LP investments support Cowen Investment Management, most of the merchant banking investments support our client businesses as we are investing alongside our clients. As you can see, there's a small investment averaging about a million each, and they have generated a significant return. There's $16 million in unrealized P&L in the portfolio at the end of Q1, and that's even without any markups on about 32 of the investments in this book. They've also produced outsized returns on several investments. Our goal is to monetize our merchant banking investments and to recycle the capital when we're able to do so. On this slide, you can see we've generated over $50 million in gains from exits over the past three years, including outsized returns from investments such as Tilray and Nikola. Our balance sheet reflects, you know, accounting gross ups for securities finance and prime brokerage, but it's low leverage. You can see we're required to grow. You know, we're required to gross up things such as the activities in our securities finance business, including the swaps facility and our introducing prime brokerage operations. Cowen's actual level of corporate debt is much lower. As you can see in the notes payable line, we have $626 million in debt at the end of Q1 and another $121 million in perpetual preferred stock. Our capital allocation philosophy. Looking at how we view capital returns. We've returned capital consistently over the last few years, including almost $160 million in stock repurchases in 2021. Our annual target is to buy back shares equivalent to at least 25%-35% of our economic operating income. Although we may be above or below that in any given quarter, depending on market conditions, cash availability, and any compliance restrictions on repurchases. In terms of dividends, we've implemented a quarterly dividend in early 2020 and have increased it three times since then. Our board will consider additional dividend increases based on future operating performance. As we've noted in the past, we intend to be more aggressive in returning capital once we are able to monetize assets. Specifically, we intend to use at least 50% of any cash from monetizations in a combination of capital returns to shareholders and balance sheet optimization. In other words, paying down high coupon corporate debt or retiring some or all of our outstanding preferred stock. Share repurchases offset by convertible debt settlement and issuance for acquisitions. Here we break out our share count and the impact of share buybacks and issuances over the past three years. While we've been aggressive in buying back shares, the impact is offset by shares issued in connection with acquisitions in our investment banking business, as well as the retirement of our convertible bonds. As you can see, we used $135 million in cash and issued more than 2.9 million shares in order to retire the converts last year. If we had opted to settle the entire amount in stocks, it would have increased our share count by approximately three million shares. With that, I'll turn it over to Jeff for a brief discussion of our valuation. Thanks, Steve. Thanks, everybody. You did a great job. This is where you come in. This is the interactive part of the conversation 'cause I'm not really in charge of valuation, but you are. You've seen some of these slides because they've been in our investor deck to try to highlight, you know, some of the, you know, where we typically sit in the new ecosystem and, you know, taking a simple comp table, you can take a look at the people that we think we can compete against in terms for invested dollars. If you look at the book size peers and the M&A peers, you know, pick your subset of this if you don't wanna single out others. We're by far the most, the deepest value stock you can find. I think it's really important to understand that we understand that. Part of doing the day-to-day is to give you the perspective. This has been a decade-long rebuild of a business into something very different than what people know it to be. Hopefully, if you've taken anything away from it, the ability for us to produce consistently over market cycle is why we should be rewarded with a better valuation. If you take a look at even your own numbers, again, from at least as it relates to the sell-side analysts, you can take a look at where we would be in a normalized environment, right? Whatever that normal environment looks like, the consensus, if you look at it, still points to mid-teens ROEs, which we think on an after-tax basis is totally possible. If you take a look at where we were, remember, before 2017, all those were pre-tax. We weren't a taxpayer. Look at the rates of return. Really, 2020 and beyond are the after-tax returns you hear. When you think about our earnings capability, even with increased equity value in the firm. You know, equity debt, the common equity debt has doubled in the last two years, and the earnings power has increased. What we've done is not only returned capital to shareholders, but we've built a broad enough foundation in the business that allows us to have the scale to withstand market volatility. You look at some of the numbers that Dan and his group are doing on a daily basis in an environment like this, it's a very different day in that business than it was, you know, pre-COVID or any years beforehand. It's just. It puts us in a very different position than many of our peers who just don't have a fully scaled markets business. It's what gives us the confidence that as markets return, public markets returns, as performance improves and some of our investment management strategies, there's clearly upside potential to the earnings that we've already posted for the year. We don't need the market. I think it really important, do not need the market to go upward and to the right all the time. These are numbers we obviously think we can produce by doing higher highs and higher lows as we moved into a different band of operating. We think as a function of that, we should be looking at again, if you wanted to take a look at us on a scatter graph that basically looks at the PE ratio versus returns on equity. I mean, again, if we had really low returns on equity, I could understand maybe trading where we trade, but we don't actually. We actually have pretty significant returns on common equity. The valuation gap here, this is really where the opportunity lies for people to get involved. I think this is the thing I think most of you ask me about over time, and we haven't been in the position where we can really break out operating metrics or financial metrics for Cowen Investment Management. In part, this is Elizabeth laid out. There just wasn't a lot to talk about. I know everyone likes to talk about quarterly numbers, like, this is stuff that takes years to undo and redo. It takes a long time to build the businesses we built, especially when you're starting with having to unwind an operation and reposition people in an operation that has just angled towards a different market. It's, you know, managing fee funds different than managing hedge funds, right? It's just they're both alternatives, but when you think about the kind of people you need, where you're selling those products into different investor bases. You're talking to sovereign wealth funds, talking to pension funds. You're just not even talking to the same people. When you're talking about what Cowen has done, both the Cowen healthcare investors and Cowen sustainable investors, you're talking about products that didn't have track records, really, meaningful track records. You're just like double and triple the challenges to get in. The good news is, once you get in, you produce those performance, those are valuable. They're different businesses. We've seen in some instances, you know, particularly in the healthcare space, some of the larger asset managers beginning to recognize they need to have exposure to healthcare. We've seen a couple transactions in that space, which should give you an idea as to what these franchises are worth. If you look at what we've done here, the way that the valuation works in asset management, particularly for alternatives businesses, is twofold. You have management fees, expenses associated with delivering those management fees, like your marketing budgets, your accounting, right? Those things. You've got management fee income. That's repeatable. That's where your expenses are scaled to meet your... You can see that in 2017 we're at $41 million a year. Obviously, 2019, we wound things down to rebuild them. It's a very difficult thing to talk to in the public markets when people are expecting quarterly numbers. I'm gonna take my revenues down. I might take some profitability down because I don't think these businesses are scalable. Some businesses, hey, we're making a little bit of money. We just didn't think you could make enough money over time, but we were putting a lot of resources and effort towards them. We're gonna rebuild from scratch businesses that we actually think have meaningful legs and are investable for decades. Healthcare and sustainability. If you think about today, set aside Starboard. You got healthcare royalties, Cowen Healthcare Investments, Cowen Sustainable Investments. If we do nothing else except continue to grow the AUM and the funds in those businesses because we think they're gonna be investable for the next decade. That is what people should be thinking about in terms of valuing the management fee EBITDA of this business. It doesn't go away. The challenge is that the volatility associated with incentives. I'm not gonna try to be Warren Buffett and tell you not to pay attention to the investment income on my line because there is an element of that that is absolutely true. Most of the time when you see us, we're marking things up because we have to under GAAP, and then we're marking them down in a volatile environment. Right. As Elizabeth pointed out, that is upside value. Last year, the first quarter, we had $100 million worth of incentives. That was more than any other three years combined in the first quarter of last year. I intimated, maybe explicitly said to many of you, "Don't count on that. Don't build that into your models. I might not receive that again." In so many words, I'm saying to you know, there could be volatility to earnings. You need to think about that separately. The way we think about that is. There's obviously accruals of compensation associated with that. As you write it up, you accrue comp. As you write it down, you're unaccruing comp because, you know, there is payments that get made to teams who are producing those performance, but ultimately that has to be crystallized. When the market thinks about, and market participants, public market investors as well as private, you know, folks who think about how to value these business, private enterprises, they look at management fee EBITDA, and they assign and ascribe a higher valuation to those because it's more consistent and a lower multiple valuation of management fee EBITDA. It's pretty straightforward. What I thought I would share with you, in addition to just breaking these out for the first time so you can see them, we thought we'd share with you just, again, publicly available comparables. Just look at the comp groups as you think about our ownership stakes. Percentage in GP, which I cannot share with you. I wish I could, but I'm giving you the economics. I'm trying to shortcut it for you, right? When you look at our ownership, these are, by the way, Cowen's ownership percentages. I should be clear, this is what shows up in our financial statements. When you look at the alternative asset managers, they currently trade at an average of 13.5 times fiscal year EV to EBITDA multiples and 18 times fiscal year 2023 PE. When you look at public comps for asset managers that have an average fiscal year EBITDA multiple for management fee earnings of 24 times and incentive fee earnings of 10 times. Let me turn it back to the previous page for those of you who didn't write down the numbers. Feel free. It's in the book. Circle them. It's just that obvious. I recognize that it's been a big thing that many of you have asked questions about year in and year out. Again, this is all publicly available for you to look at. I just pulled them together to make it easy for you to go do your own work. Ours may be not as scaled as some of these are, but I will guarantee you ours are more special. These are not generic products that we have. Right? It's not your everyday run-of-the-mill PE fund, right? These are highly specialized products with in many instances, differentiated capabilities. I think it deserves, you know, the kind of, you know, kind of recognition that we're giving it here, is a big part of the reason why we wanted to share that with you. I'm sure you'll have lots of questions about it, so we'll wrap things up here in a little bit. Why invest in Cowen? Let's just go through it very quickly. Strong financial results, driving profitability and growth, mid-teens annualized after-tax ROEs in multiple market environments. Expanding banking momentum, which you've seen with a compound annual growth rate of 33% outpaces the 15% fee pool growth. World-class market presence, which you saw and you heard about. Four-year compound annual growth of 16%, which is more than three times the peer average. With a bunch of things on the horizon where we can continue to take share in places where there's just deep pie that's addressable and accessible. An undervalued and differentiated investment management platform, which we just went through. We're cheap. It's an attractive valuation. Even in a market like this one, it's super attractive. And it's difficult to replicate. So when I sat in the back, I wanted to watch everybody's presentations. First time you've all had a chance to meet maybe my partners here. This is what I get to live with every day. I know, because I've experienced this, how much effort goes into creating a flywheel that works without daily micromanagement. If I look back on how I spent my days in 2012 and 2013, it was just getting the rhythm of having people figure out how to work together. We talked a lot about alignment. We talked a lot about building cultural trust so that people could deliver for one another without any one of us having to sit on their shoulder or be in the room with them. The leverage, the operating leverage that we have as a management team is that we have leaders beneath this group who are now doing this reflexively and taking us in places that none of us could have possibly imagined. The size and the scale of the research under Robert's leadership. He doesn't think about everything that needs to get written. These people are among the best. They work with each other to develop crazy content that moves the needle for us so that we're in a position where we can identify those market opportunities and then go after them with alacrity and with intensity. If you have it in your mind that it's the same old Cowen it was 10 years ago, let me disabuse you of that notion expressly and explicitly. This is an organization that is very difficult to replicate, and because it is the breadth and the depth of what we do and the partnerships that we have allows us to navigate and frees up the leaders that you've seen today to think about the next place to be. That is just very powerful. I look at the numbers. The numbers are simply the scoreboard, right? The X's and the O's, the strategy of how we pull that off, the people that we've hired. It's remarkable to see on a daily basis, and I hope that part of what came through is how we started with video at the beginning, right? What you see on a daily basis or what you hear about from Cowen is not easy to replicate because it is an amazing place to be. The only thing missing is the valuation to go along with that. It's facts. Part of what we're doing here is trying to get you up to speed on that. I want to make sure that I leave you with the three things that we started with. Before I do that, I wanna thank J.T., who's done a great job at really connecting us to all of you. Some of you we knew for a while, we've got a deeper and more intimate connection as a result of his efforts. It's been a heavy lift to try to figure out how we shape this story. I mean, we talk about it all the time, and until you actually have a day like this, you pull all together. I guess I can understand why some of you have so many questions because we've hopefully it took us a while to get this into a place where we could present it in a way that was understandable, that there's real processes here. J.T. was the shepherd to that process. J.T. was really the person who helped us think about how we contextualize this and put it in terms that make it much more investable. And hopefully, that's happened today. I'll leave you with the recap. There it is. Sustainable, consistent profitability with an upside option on growth. Goal of mid-teens targeted mid-teens returns on common equity on a consistent basis. That's annual returns. Targeting annual revenue growth to $2 billion over the next five years. Focus on opportunities that are both addressable and accessible. If you take nothing else away, right? You've heard it. You've seen how we've done it. You see how we're identifying market opportunities in front of us. And our valuation is compelling. Those are the three Cs. With that, I wanna thank you all for making the effort to come in person. For those of you that are streaming, really appreciate you tuning in. Now we will open it up for questions. Please wait for the microphone before you ask any questions, to make sure that everybody that's streaming remotely gets to hear your questions. Kevin. Great. Thanks, Jeff. Thank you, everyone, for the presentation. Good to do this for the first time, so appreciate it. I guess I want to start on this slide here with the north of $2 billion over the next five years. I think what the market's trying to figure out is kind of what the jumping off point is from that view. I know that's a tough question to answer, but you said $1.9 billion last year. You said that's the run rate getting to over $2 billion, doesn't feel like much. Even if you run rate the first quarter of this year was I think $1.3 billion. That's like a upper single digit growth rate I think to get to $2 billion, which doesn't feel that aggressive. Now, if you keep that rate, you probably still far more than justify the valuation, most of what you're talking about here. How do you guys think about what the growth rate is at Cowen? Like, is there a way to frame it? Because it seems like even if you take $1.3 billion upper single digits off of that doesn't feel very aggressive. That jumping off point of 1.3 feels really low based on what we all know happened in the first quarter. Yeah. I think when you see what's happening in the first six months of this year versus what you've seen in the last year, the normalized operating rate is somewhere in the middle. Like it was extremely. It's hard to keep all of everything running in the first quarter. Our biggest challenge in the first quarter of last year was just actually the amount of stuff that wanted to get done and printing it. Again, it was a little bit like March of 2020 being able to do $5 million a day in markets business, you know, on a top line basis. That was pretty challenging. You know, where does that settle out? It settles out at a number for us that is, you know, north of the $1.5 million we were doing pre-COVID, right? Now if you look at the markets business, its daily average run rate is double where it was in 2018 or 2019 for all the structural reasons that Dan walked through. Plus, we happen to be a lot more structurally important to everybody and other competitors have left, so we've taken share. When you look at its hard to say that the first quarter is an annualized first quarter. There's been no capital markets activity this year. That's not a surprise to anybody. I would argue that the M&A business was pretty solid the first. You know, we'll continue to see M&A be a big part of what we do. If you normalize that business, it's somewhere north of $1.3 billion in revenues. To me, it would be. We're adjusting for that. But when you look at the point of saying 2 billion is, it doesn't, it's not Herculean. Like, it's not some. We don't have to take a huge amount of share or grow at some ridiculous rate in order to accomplish that. The margins in that business will be in the 14% range. 14, which is, you know, we made really good margins last year. I'm not even gonna project that our margins will be as good. We weren't traveling last year. The costs were lower. When we get to $2 billion again, the fixed costs will be higher associated with that because the revenue mix will be different. The comp could be, you know, still be in the same range. I'm not expecting us to have the same kind of margins. If we're able to accomplish the $2 billion and generate a 15% margin off of that, I don't know. You figured out what that's worth. That's pretty good. If the markets are really good, like super good or, you know, 75% of what last year is, I'm not worried about the $2 billion. I'm just saying to you, it doesn't have to be that way for us to get to $2 billion with the platform we built today. If it's a platform that has $2 billion in revenues and turning $300 million after tax, what is the terminal value of that in perpetuity? That's with low growth rates, nothing Herculean. That's what this business is today in a normal environment. I think as we do that, it's eminently achievable. It's not this. We don't have to do something crazy or risk a ton of capital or buy something really big and integrate it. Already in place. That's why I think, yeah, sure, I'd love to tell you 10% annual growth rates. I'll take it if it comes. We certainly had that last year. I think we've answered the question of whether or not when the markets are in our favor, can we capture that? 100%. I think we just don't necessarily need to have that kind of a market in order to achieve that is the point I'm trying to make here. Dan, you want to add something to that? I was just saying if we were trading at $80, $90, $100 a share, we could think about how we need to accelerate that growth. At, you know, no one seemed to believe these earnings last year, or we would've been trading there. It's over $10 a share at $300 million. Yeah. I was more making the case that at $1.3 billion, even at this low level, it would seem to. With an 8% or whatever that discount to the growth rate is, like, that alone would justify, you know, a much higher P/E multiple. 100%. Yeah. Anyways. It's the right question, but I need your point as well. If I could just ask a real quick follow-up since I have the mic. I think Elizabeth said something around, you know, HealthCare Royalty, and obviously these markets weren't there when that came together. Looking at other ways to realize value. I don't know if that was a broader comment or if there's anything specific we should be maybe thinking about that there could be some opportunities here to see value come through from that. I think what I've said publicly, I don't know, I'll let Elizabeth embellish. What I've said publicly, I'll just repeat it, is that trade hasn't gone away. The idea of creating a permanent capital vehicle and then ultimately floating that public, that's what they were doing last year, right? They were gonna take all their funds, put it in one permanent capital vehicle, float that vehicle, and then have a management fee for managing that vehicle. That trade still exists. There still is a strong desire. The argument is, in irony of all ironies, the demand for that product in an environment where there's little equity issuance or no bid from the equity sponsors to do equity offerings means or they don't like their valuations. Many of them are now looking to do royalty deals and go up in the capital structure. What these guys have done is actually created more pools of capital and co-invest and done things to continue to grow their business. It would be a lot easier for them if they had one permanent capital vehicle, even if it was private, and they could raise money for it as NAV, right? That's the strategy that they're pursuing. They didn't get it done last year. The strategy that we've discussed is how can they make that happen? If it doesn't happen because we can't get it to happen, like, we'll just continue to raise more funds in sequence. When we look at the numbers that you just... We're not counting on HealthCare Royalty Partners going public to hit the $2 billion revenue number. That's not in. This is assuming it would be HRP four, five, six, seven, which is the base case. We're just saying that the option value, so it's an upside option on growth. Like, the option value of them actually getting the permanent capital vehicle done, getting it floated on better market conditions, that's still out there. And when that happens, the crystallization of the carry occurs, and there's a bunch of other features in that that make it a much more attractive ownership for us. Do you wanna add anything to that, Elizabeth? No. We're good. We're good. Okay. Thanks. Sending you to take over for you a bit. Okay. Mike Brown from KBW. Hi, Mike Brown. Hey, Jeff Solomon. Thanks for doing this today. Yeah. Get some questions. I'd like to start with advisory. Because it's certainly been a lot more quizzed over the last couple of years. I want to hear a little bit more about what you've learned with your three acquisitions. When you think about going forward, where are you targeting growth? Did that get you the step function growth that you needed, and now it's a little bit more about building around those acquisitions? Or do you still think, you know, inorganic growth is really just a part of the growth story for advisory now going forward? Yeah. I'll start with the sort of quick strategy to lay it out. I'll turn it over to Larry a little bit because, you know, he's in it on a daily, day-in and day-out basis. When you look at the decision that he put up there with the slides. These slides, and you look at just how we under-index to middle market sponsors. Middle market business in general, when you look at the most addressable market, middle market sponsors are, there's a ladder that's related to that, right? Families sell their businesses to, they get the first sale, and then the smaller PE firms hold them for a while, then they sell them to the bigger ones, and they sell them to the bigger ones. If you can be in a position, the most difficult sale to get, I think, is the first one, right? Ironically, you know, because as you move up in the chain, there's just more competition, right? And there's brands that have been there for a while who are operating like, you know, some of them are owned by big financial institutions. So you know, for Cowen to just, you know, wake up and go after some of those brands and say, "Hey, we want to be in the bigger lower middle, upper middle market," like that would have been a really hard thing to do. May not have been addressable for us as a choke off point. So the land and expand for us is starting with a business like Quarton. We looked at a bunch of them, by the way. You know, I don't know, how many did we look at, Larry? Over the last five years, I'd say 40-50. Right. We looked at a bunch. Even then, we probably looked at 20, right? Before selecting Quarton. Part of that has to do with culture, right? These were people that we thought had a shared view on us culturally. What's interesting is a platform acquisition for us. Two things we got with Quarton. One, the first sale. They're experts in the first sale. They're really good at the first sale. They'd love to be selling the same asset again in two years or three years, right? That's how that works. If you know the exit well, you're actually in the pole position. The problem is, as the sponsors get bigger, you know, they have other mouths to feed because, you know, there's lenders and things like that. You know, they would may or may not have been getting a high percentage of second and third sales. Well, Cowen can because Cowen brings a direct lending capability, agency direct lending capability, a financing capability. There's just a lot more ways to get in front of those sponsors with more products on Cowen's platform. We just didn't have the sponsor relationships. The second thing that Quarton brought was those sponsor relationships. The entrepreneurs and founders, the sponsor relationships that are the initial buyers of these businesses. We didn't have access to that. As Larry highlighted our expertise and our investment bank was much higher. It was actually public to public M&A. Much, you know, it was sort of unfinished. It was big and little, just wherever we could catch a fee outside of healthcare. This was all pretty much outside of healthcare. The Quarton acquisition was a platform acquisition for us. It put us in the business. The integration of that took some time, and by the way, hit COVID in the middle of it, right? We bought it. We closed on that acquisition in 2018, and really at the beginning of 2019, we had one year of operating together in which our goal with you is do no harm. We bought you because we love you and we love what you do. Let's learn each other, and then we can figure out how to make enhancements to be better with each other. Like, that just takes time, learning the rhythm of working with one another, right? Before you can start to cross-sell. I think a lot of the mistakes that a lot of other banks make is they buy something and then they tell them, you know, "This is how we do it in the big bank." That's a huge mistake. We had no muscle memory around this and no knowledge of it. You bring in new partners because they can lead you to places where you can learn, and then you figure out what is the best way to optimize this. What Larry and his team have been able to do in 2019, you know, even through COVID, when the slowdown occurred, we were pitching. We heard a business M&A engine shut off. We were pitching debt refinancing and staying in front of sponsors and staying in front of some of the smaller entrepreneurs who were selling their businesses all of a sudden, you know, pulling their deals. Me and Vince, "What are you talking to them about?" We had a whole panoply of products at Cowen that Quarton didn't necessarily have internally that allowed them to do that. That process got slowed down significantly because of COVID, because of distance and all the things that happened. We're now humming along in that business. The revenue that we generate in the lower middle market and first sale business is much more diverse. We've become experts in areas like HVAC. We're probably the number one bank selling HVAC businesses in the middle market. I don't know if there's a bank that's done more in our space. You'd never think about Cowen in that. Why would you even HVAC? What is that? Right? Cowen does that? Yeah, Cowen does that. When you think about the compound acquisitions that we've done from that point forward, it's really been about either adding sponsor breadth or sector capability, both. Really, the Portico acquisition was really much more about verticalized software, which is an area that we think is showing tremendous secular growth. Now we can layer that into the sponsor community that may or may not have exposure to that. I think the learnings for us have been that it takes some time, but we're much better at it. I will tell you the updates on the Portico transaction, Larry. It's way more integrated, way more quickly because we're making fewer mistakes and getting a lot more leverage. I'll let Larry talk a little bit about, you know, it could be organic or inorganic, but why don't you just talk about some of the things we're thinking about there? I think maybe rather than talk about kind of what might be what we do in the future, I just want to talk to on the first page. I talked about kind of more broadly four Cs. The most important ones when we think about adding people to the team, who are the clients that they serve and the culture, right? When we look at acquisitions in particular, I don't think it's all that different when looking at them for banking than it either, you know, when we're looking at it for markets or what we've done in prior organizations, which is a lot. In the end, it's pipes to clients. Has to start with that, right? Do they have good pipes to clients or don't they? If you go back to Quarton, I would just say what we saw there was, in addition to the sectors they lived in, the most important thing was they had probably of everyone we saw the deepest relationships with somewhere between 200 and 300 financial sponsors in the middle market, and we didn't have those relationships. So we bought relationships. Over time, they changed up significantly actually what kinds of companies they're targeting. They're targeting clients that the sponsors care about. One of the things we did that Jeff alluded to was it was a two-year process to get folks who both covered sponsors and covered companies to understand we're gonna internalize the sponsor relationship to keep those types of clients. We're gonna basically have experts, that's all they do. We're gonna free you up as great bankers to get sectorized. They went from generalists over time to being sectorized. Jeff highlighted one area. I'd throw that into the broader team. That is what in the area that used to be Cowen, his argument is best at residential services. It's, you know, each batch is one area. You know, it's crazy. If you think about your house, think of all the people, service providers that you work with. The guy's rolling up all of them, right? They've become really good there. The point is, it's the same model when we looked at what ended up being the M&A transaction with Portico and with all the ones that we said no to, we really focus on are the clients they serve interesting? Do they have great ties to them that we could ultimately, hopefully deliver more as well? In each case, it's been we want people that are capable. They come from an M&A boutique, but capable to also bring in partners and talk about capital raising, private or public. We won our first mandates out of, you know, all these organizations have now won mandates for three deals, for private capital raises. That's the other thing we're looking for. We're looking for folks who are ambitious, even if the current skill, you know, transactions they're doing are more narrow. So in a smaller firm, just like we said, we have to pick our space. So we have to make sure we're not competing on other people's landscape. That same thing, if they're a smaller firm, you have a 10-person, 20-person firm, even more so, they gotta be focused. We've really focused on guys who are focused. What's next is I would say we use the same process to look at opportunities. If we see areas that are, we think, addressable and accessible and we can't get there through just adding some people, right? It's not necessarily just turn around the corner to get there and think, take what we did with tools and DX. We already were great in biotech. We already were doing deals in tools and DX. We added a few more people to accelerate it. That wasn't a buy. There was no reason to buy there. If there's an opportunity we think is great and we find the right people and put them through the how do they serve their clients? Are they great culturally? Will they be able to cross-sell within our organization? If they do, we'll be talking whether the price is right as well. We have to structure them in a way that's friendly for investors. I just wanted to speak. I know there's gonna be a lot of questions and that's an important part of our strategy going forward, so it's important to talk about it. But I just want to make sure I know we're gonna have a ton of other questions, so go ahead, Mike. You have a follow-up? You get another. All right. Thanks for that, Larry. You know, I guess as a follow-up, it's hard not to see just the intense market volatility out there. We see that the financing markets are still really challenged year to date. Hard to say when that necessarily abates, but it does sound like there is still pent-up demand out there. Should we see this environment really extend throughout the year, can you just speak to the expense levers that you see here? Are you able to maintain your 56%-57% target in an environment that's somewhat similar to what we've seen year to date? I mean, right now that's the guidance we're keeping. I think we'll have to see. The other thing is if it persists like this for a while, there's going to be able to be a little blood on the wayside. You know, we could be opportunistic in that environment. Again, part of the great thing about it is, you know, I can't manufacture revenues when there aren't revenues to be had because of forces beyond our control. A lot of people are wrong-sided. We're not. You know, I'm not gonna make long-term statements on where we are in an environment that goes like this. There'll be opportunities for us to bring on people and people will be all over the Street. It'll be great ways for us to pick up talent cheaply. You know, if we have an opportunity to do that, I'm not gonna promise a 57% comp to revenue ratio because we might be investing forward in the future. The way to think about this is, and it's why I showed sort of the investment period that we made between like 2015 and 2016. 2016 was a challenging year. We still made investments. 2017 was a challenge. Wasn't a great year either. We made investments. Those investments came home to roost, you know, when there was markets there. I think we'll be selective on it. I just, I can't, you know, I don't expect it to be a huge amount of levers to pull on comp in particular. That's why, again, it's because we're gonna if it stays like this, we're just gonna see opportunities to pick people up. That's the way I would think about it. Great. Thanks, Jeff. Okay. Thanks for taking the question. Chris Allen, Compass Point. Maybe just following up on that a little bit, is this current environment creating any opportunities recently, just in terms of competition pulling back? Anecdotally, I've heard some color that you guys have been flooring the gas pedal in terms of client relations, stuff like that, where others have been anecdotally pulling back recently. Then in terms of other competitors being wrong-footed, is there any specific areas that you see issues from competitive perspective? I still think it's early, Chris. I mean, you know, I still think it's early. People are gonna hang on for as long as they can and then when it gets too painful, they'll start cutting muscle. I'm not interested in the first cuts. First cuts are probably not people we want to have on our platform anyway. We'll wait. It's a little early. I don't know that we're doing anything more than just returning to office. There may be a perception out there that we're doing a lot more. We're just in front of clients the way we want to be in front of clients, questions and things to talk to them about. The connectivity, you know, the knock-on effect of being able to talk about talent intentionally, even though it's not a big revenue producer, is leading us into conversations that we're having on the banking side, that are just amazingly robust. There's just such a dearth of talent and capability there from, you know, the TradFi team, the TradFi guys, right? I can't believe there's actually a term for what we are traditional finance people. I'm like, okay, I never really thought about myself that way, but okay. You know, relative to the, you know, crypto native people, right? There's just a ton of stuff going on in there. By the way, that area has gotten torched as much as it has. I mean, everybody needs help. There's an interesting juxtaposition in our business, right? The moment of maximum pain is when everybody needs us the most. You see top line softness in our business. That's when you make the most important client relationships and markets come back around again. When they do, you know who they remember? The people that were there giving them advice when stuff was going down, right? That's the cycle of our business. We all know this, by the way, because we've been in this. You've all worked in firms where you've seen this firsthand, right? To expect us to not be in a position to actually put ourselves in a place where we can garner that share in the downturn, to accelerate that share the next time things are just okay. That's what we're gonna do, because that's how it's worked for us in the past. I think that's. You know, I don't know that we're doing more per se. I just think we're doing. Other people are like, "Ooh, I don't know." Like, that's stupid. Maybe just a quick follow-up from me, just in terms of capital utility by your businesses moving forward. Right now, you're seeing share gains in a bunch of different markets, businesses, swaps, prime services, securities finance. I just want to help us think about which of those businesses than others, and I know you have more of an agency approach for most of the markets businesses is consuming the most capital, and which has the biggest desire for capital to continue to expand moving forward. Maybe help us frame out also just the capital requirements to build out the digital business in terms of is that more or a little bit more capital intensive than some of your other markets businesses? Yeah. Listen, we have a lot of equity and, as you've seen, just in the amount of equity we have in broker-dealers. The swaps business and the securities financing business, that requires an equity base, particularly because we have a rating. We're not gonna under equitize and give up the opportunity to continue to serve clients that way. I think we'll be limited in our ability to scale unless we raise a ton of equity, which I'm not suggesting we do. That, that's probably where you see most of the amount of capital intensity. We're gonna have because we have four broker-dealers to run our various businesses, including the prime services businesses, like, we're required to have a certain amount of that capital anyway. The question is, what do we do with that capital and how do we invest that capital? Some of the things that are on our balance sheet, like our stat pack book and things like that, are a function of the fact that we have to have that capital anyway. The capital charges associated with owning those positions are relatively small. We can earn a real return on that capital while we have it. The capital is well deployed. It's not sitting in like cash balances everywhere. They're a huge drag on earnings. I think it's just, it sort of points to, you know, our business has more scale. The last thing I'll say is, listen, March 2020 happens every now and then, you know, and I've said this over and over again. When it does, if it happens once a decade, there'll be no question about our ability to deliver. You saw, you know, we've all seen when there's volume spikes, like weird stuff happens. We need to be liquid, and we are. That thing is something I can live with in the back of my head, all the time. Again, this is why we peg to things like a 15% after-tax return on equity, because that allows us to manage the amount of equity we have. Believe me if I think that we can't generate a 15% after-tax return on equity because we have too much equity, and I'll help you exhaust this. We've done that too. I think it's a balance, right? That's really kind of the way we think about it. I'm gonna take a few questions here from the audience at home. Just try to keep answers short so we can. They're not at home. They could be in their office. I- Give the questions. Go ahead. Short answers. Not lightning round, but close. I'll start with a softball. At this valuation, why not take Cowen back? That's a softball? Thanks. You know, I'm not gonna comment on that. It's a nice idea. Other assets in the balance sheet that you could monetize given the steep valuation discount and where Cowen stock is trading, would you consider selling them at a discount in order to buy back stock? You know, again, we've owned these things for so long. Lincoln is gonna get monetized eventually. Obviously, the market environment is horrendous for transactions like that. You know what? It's gonna happen. I just don't see why I wouldn't even know sort of in this environment why we'd even start that process. We're on a path to monetization. Markets will normalize. That will get done. I just don't know why we would take a hit to the book value when we don't need to. Again, I think we're generating enough. Look at the amount of stock we bought back in the first quarter. It's not like I'm gonna be more aggressive on that just because, you know, I think we're doing just fine. We'll get there on Lincoln. Switching to the banking business. You know, we've seen a couple of the bulge say that they're exiting the SPACs business. Mm. Would you say that Cowen is still committed to SPACs? Are you seeing any sort of pickup in assignments from the exits of larger- Yeah, I love it when the bulge like says, you know, "We're just not doing SPAC business." I'm like, well, there's no real business getting done anywhere, so it's an easy one, I guess. You know, this effort is definitely in a predatory until the SEC rules are finalized. We've had many good conversations, I think. We'll see how these end up. It's easy for the bulges just to make announcements that they're out. We're not out of the business. We're actually still advising on back ends, and we're still doing business there. The amount of inbound calls from all of the clients that have been taken public by a bulge bank is too many for us to handle. The short answer is, when this gets resolved, people will remember who actually took the phone calls and worked with them and who abandoned them. Same old story it's been for a long time. A question from new father Steven Chubak, Wolfe Research here. Congratulations, Steven. Any thoughts on whether the all-weather business you've built with more diversified revenues can sustain profitability if we are heading into a recessionary scenario? I mean, I think we can. I mean, I think we have businesses that generate, you know, strong cash flows like the market business. You know, we have an advisory business that certainly has sustainability even in a recessionary environment. We've got an asset management business that has pretty cash flows coming off the back of it, so sure. I do think that's the case. It's what we said, higher highs, higher lows. You know, the breadth of the organization is increasingly. Listen, if there is anybody in the room who doesn't think that there is an increased probability of a recession, then I don't know what you're doing, right? I mean, you know, how can you not be thinking that's a possibility? This is a team that we talk about this all the time, and we're prepared. I think the short answer to that is we should be okay. Two more. One on biotech. We have a number of biotech companies in the sector that are trading below cash per share. What sort of banking opportunities are there in this sort of environment in this sector? Yeah. It's right now there's shell shock, I think, for the most part. You know, just, you know, when you look at these boards, they used to be worth X, and now they're worth 60% of X or 8%, 20% of X. I think it's just people need time to readjust. This is why I said we don't need markets to go up and to the right. We just need them to stop going down. When they stop going down, there's gonna be a reflection period where boards and management teams are gonna recognize what they have to do, which is either cut clinical programs, raise money or merge. All those are good for Cowen. It's just when the market is in transition, it's hard for people to make decisions because they're just. They don't know when it's gonna end. It will, because it always does. I think the most important thing I would say is we don't need the NVI or the FDI to double in order for us to start doing that business. There's gonna be a lot of stuff that happens. I would argue, even if the market continues to go down, there's just, you know, it probably hastens the day when people have to start to make really hard decisions around how to finance themselves, even at prices they don't like. Last pair of questions from Sumeet Mody at Piper Sandler, who is ill and decided not to share it with us. Thanks for coming, Sumeet. For Dan. Sorry. On the swaps business, how would you say it's differentiated from the bulge bracket? You know, what has been the driver of the really strong growth you've seen? Then on digital, you know, what do you think is going to unlock the value and really sort of the growth of the institutional business there? Do you have the mic on? Is that good? Yeah. First question. Let me take the second question. Hang on. The mic's coming apparently. I didn't have you. On the digital side, you know, our core client base, which are the 2,000, let's say, biggest mutual funds, hedge funds, family offices in the world, they're in the very, very early innings here. Really what we've been providing is education for them. I think that as institutions come in, and we believe strongly they will, we just have a massive first-mover advantage. I think to underestimate the first-mover advantage we have is a mistake. It's taken us, you know, I said it in the presentation, while we launched only weeks ago, we've been working on this for 18 months. In my 10 and a half years at Cowen, there's been no greater example of sort of what makes us special, I think, than this Cowen Digital build. It really requires the collaboration of every single division in Cowen. I just think our bigger competitors. Oh, including operations and technology. Yeah, every division. Compliance and accounting Every division. I, you know, I think our bigger competitors are gonna have a hard time. As institutional uptake increases, on one hand, and as our brand increases in the crypto native world, which it is accelerating every day, we're gonna see big growth. You know, we closed the markets presentation with the Oliver Wyman slide, where he's anticipating the TAM of many AUMs grow exponentially in the institutional world over the next handful of years, and we're gonna be really well-positioned. I mean, if we end up in the same market position that we're in, and you have a $60 billion TAM in a market that doesn't exist today, that's what probably Oliver Wyman and people talked about at the low end. They're like a $6 billion-$16 billion. I think we're gonna end up at a much higher than a four-- we're 4% of the U.S. equity market roughly, right? I think we're gonna be in a much higher spot for at least a long while. We'll be in a much higher spot. I'm not telling you what it's. It looks like I was saying if they're wrong by a factor of 50%, it's still a meaningful number for us, right? And that's definitely, I think. It's a risk-free call. Right. As an investor, as we're self-funding that business. In terms of our swaps business, you know, it's not completely dissimilar from in banking, where we just offer a different value than our bulge bracket competitors, and we're actually complementary. We just have a far differentiated, customized approach. We do lots of customized work that the bulge just isn't overly interested in. In our swaps business, I think the way we're positioned as a real partner, and we're never, you know, something we've been really passionate about over the past decade. We do not run businesses that compete with our clients. If you think about some of the reasons why people trade and swap that relationship, I think it feels very safe to them as opposed to doing their business with the bigger firms. Just as we scale and our capabilities increase, I think we're really a well, I know we're a very welcome counterparty in that space. As you might tell, it's kind of generic. The fact that it's not generic means we can charge margin for it, right? You know, our capacity is the same because of the capital base we have. We're not interested in taking on kind of, you know, generic, what I would call regular way swap business that the big banks can do, where they compete on cost of capital and win. That's not what we do. The fact that we can be value-add to a client and charge, you know, an appropriate amount for the capital we have to put against it, that's a great thing for us. It's the same in prime brokerage. The demand is there for both of those businesses. We're able to, Jeff's point, be very disciplined around ROE. I'm gonna take a couple more from the audience before we adjourn to drinks. Jeff, we know we're in a relatively slow environment right now. It's no secret. How much capital do you need to generate in a year like this to just support the balance sheet growth, the regulatory capital increases in the business? Or are you in an environment right now where you might be able to kick up the level of buybacks, stock's below tangible book by a considerable amount. Could you comment and say you buy back 100% of net income in this environment because it's so accretive, and then we may come out of this period, and we may need more capital generation to support more rapid growth in the business in the future. We'll change that policy with time. It seems to me like that might be something you can do to sort of demonstrate the capital generative capacity of your business earning 15 ROEs and a stock trading at significant discount to tangible book. Yeah. I mean, listen, I often, to be clear, I don't think we need to buy back stock to generate 15% ROEs, right? It's a chicken and egg. I mean, we'll buy stock back. We have. We used 50%. I'm not gonna commit to buying 100% because if I buy 98%, you're gonna be all over me, right? I'd love to be able to tell you 25%-35% and then do what we did in the first quarter and buy 50, right? We do have opportunities for capital that will help us to do long-term growth. I've been hearing this stock buyback thing, and we've done it, so I'm not opposed to it. I certainly get it. I get the math on it. If we'd been overly aggressive when we were at a smaller capital base, we wouldn't have been able to buy certain businesses like Quarton that have really been, now are, you know, or any of the M&A business or any of the investments we've made in individuals or buying things like Convergex, just wouldn't have been able to do it, to put the firm in the kind of position it is. When we think about buybacks, we think of dividends, we think of capital optimization. I think what we're really focused on is being able to deliver that 15% after-tax return, you know, year in and year out. Like last year we ended at, like, 30%. Right? No one thought that was sustainable, and we're not built to do that, right? We didn't need to buy back a lot of stock to make that 30 a year, by the way. You know, in a slower time, could it be lower double digits? Sure. I guess it could be. We could look at whether or not it made sense for us if we didn't have a place to redeploy that capital to pick it up. The most of it's gonna come, though, when, as I said, when we're able to monetize assets and there's a bulge of capital there. Yeah, then we can be much more aggressive. We will be. I think we made a commitment here that when those things happen, we'll buy back 50%. It's there. It's a place for us to certainly, you know, continue to be aggressive when we can be. I'm not gonna make a commitment to do 100%. I don't think it makes sense because I don't think we need to do that in order to generate the rates of return. Over time, the market will figure out why this stock is so cheap. Again, we bought a fair share of it, and hope a bunch of you will too, and enjoy the ride. Right? Hey, James Kiernan, Goldman Sachs. Sort of two quick ones. First one is, you know, could you size the restructuring business? The second is, you know, obviously the very biggest banks are very balance sheet constrained at this point. Is that an opportunity for you to perhaps, you know, expand some of the financing, provide more financing in the prime broker side of the business? A couple things. Again, restructuring for us is sort of part of our. It's part of the advice we're giving in our industry group. We're not a firm that has a special restructuring practice. A lot of what we're doing is balance sheet restructuring and things like that where we're involved in doing the financing anyway. I think there's a different misimpression. Like, I have a fundamental view that this old restructuring business that people thought about on Wall Street is, I think, it's a lot more challenging because so much of the lending, at least in the middle market, I can't speak to the big, you know, leveraged lending market. We're not in that space. That may be different. I don't really have a natural call in that space. For the direct lenders, most of the people that we're engaged with and the companies we're engaged with, the direct lenders are all former restructuring people, so they just go in and work it out. I'm not sure there's a role for, like, an investment bank in there. I mean, that's the addressable market. Like, I'm not sure there's a role for in middle markets for, like, restructuring per se. You should be advising your clients on a restructuring. Do I need a giant restructuring practice to do that? Probably not. I think we're already engaged in those conversations, and we're helping them to negotiate with lenders and doing all the things we're doing because that's what we do. We're refinancing them and things like that. That's how we think about that business and probably why we're not gonna hire or buy some giant restructuring business. You know, I just don't think it's something that's how we think about it. There'll be a fair share of restructurings and when they occur, for our clients, we'll be in them and it'll just come across as capital markets advisory or something like that in our case, or it'll come across as credit event. That's kind of where it will be. There's some of that, to be fair. There's just, you know, we don't think about it any other than strategic advice, right? The second part of your question is actually funny to hear you ask that question, because you ask about balance sheet all the time. I think there is a... There's no question that, you know, after Archegos, the amount, the giant sucking sound you heard from The Street was everybody taking risk down. There's a part of me that believes, you know, what we're seeing in equity markets today is the manifestation of that giant sucking sound that The Street got really. It started to bring in things on traditional names because everybody had to go through a re-underwriting of every counterparty, and they decide. There were a couple of big players that left, right? That, by the way, those hedge funds who were borrowing money didn't get repotted in other places, right? We know that. That's part of what's enabled us to scale our swap business and our prime brokerage business, in part because The Street isn't doing that. I think we'd have to do a major rethink on the equity bed if we were to scale that business. As Riley pointed out earlier, like we trade at book value, or below book value. The idea of doing a big equity offering to scale that business, I don't know, we'd have to really look hard at what we thought we could generate and how that new equity would be. It's not something that we're really thinking about. I'd much rather be judicious with the balance sheet that we have and know that every client we're taking on meets a ROE objective, meaning X% of the targeted ROE objective and drives our ability to scale our markets business. Dan has laid out a very audacious goal. This is where most of you don't think there's organic growth. He's saying we're going to be at $1 billion in five years. Yeah, we are, because other people are going to miss the boat on that, and we're going to be in a position where we can capture that. It will be less balance sheet intensive than our bigger brethren, but I don't think we need to do that. Again, to get back to this, we can do 15% after-tax rates of returns, and when you capitalize that, you put a multiple on that, like it's worth way more than book value for just about everybody else at Cowen. And I think that, you know, Jim, you put a fine point on it. The challenge that I think people have when you're moving from a tangible book value story or book value story to an earnings story is that crossover period. That's what I would say is we are intentionally focused on driving consistent earnings, and then that just takes care of itself over time. Does that make sense, James? Absolutely. Thank you. Great. Two more. Hey, Brendan O'Brien, Wolfe Research. Thanks for putting this together, guys. I would kind of follow up on James's question and some of your comments there, in the markets business. You clearly had a lot of success growing in Europe, and I think the sensitivity table that you gave, moving up in the rankings there is really helpful. With a number of the large competitors there retrenching following the Archegos incident, what do you view as like a realistic target in terms of rank and wallet share within Europe and over the next three to five years? And how big of a contributor is that to that, It's a great question. I'm going to hand it over to Dan. You know, what's your rationale? What's your saying? Go ahead. Make sure you say that the thing that we think about. Your expectations have to be. Oh, sure. I'm calling you out. Well, I always say, I mean, it's the tenet that we, you know, that we built the markets business. Your aspirations have to be rational or your business model gets upside down pretty quickly. We've been incredibly disciplined about what we're doing in Europe. However, we hit nirvana with the team, and the amount of momentum we have, the collaboration we have with research. Now that we have a monetizable team, what we've asked our research department is if it makes sense for you to cover one or two or three names in your coverage universe outside of the U.S., we now have a team to monetize it. I think we can be, I mean, certainly closer to 10 in the not too distant future. I mean, we have a crazy amount of momentum on the high touch side and our low touch business is just beginning. We have an amazing brand. When you think about the big global mutual funds, we kill it with them in the U.S., high touch. That gives us an enormous amount of tailwind for them to want to do business with us in Europe. Then obviously the untapped area is Asia, so. Here's a good example we talked about. Does that answer your question? Yeah. Here's a good example we talked about earlier. Like other people would go out and buy a European research footprint. Dan, Robert, Larry, and I sit around, we're like, "Wow, if we could just take, I don't know, 10%-15% of our existing research analysts and have them cover more names in Europe against competitors, it's a lot to talk about." No incremental costs that you see, right? No acquisition that has to happen. Like, these are the things we talk about. Someone asked a question earlier about organic versus inorganic, right? This is where the organic elements of, you know, how does one business lead to another? We wouldn't be doing European research without this team. You know, hats off to Deutsche Bank for making the decisions they make, right? Instead of the fancy notes. That's great color and size. Then, within Within biotech, you were discussing how you kind of need the stabilization in valuations for a company to get comfortable to start transacting again, but also at the same time, there's a need for new cash to come in. At what point do you kind of or how long do you think there can be kind of this air pocket in activity where, you know, it just becomes the need for cash becomes too great, and they have to start raising capital more aggressively? How close or how far or how long can these companies survive without cash injection? Yeah. I'll point to a different market that you might be more familiar with, the real estate market. You know, when you don't see transactions in the real estate market, that means sellers aren't willing to come to the price where the buyers are. That's it. The lack of transactions as opposed to the fact that the sellers of stock aren't willing to be where the buyers are. Okay? Like, if the buyers are like, I got a lot of cash, the bunch of new fundraises, getting new allocations, people are buying a lot of stock off of ATMs, frankly, that's a big business for us, the ATM business. They're buying them in smaller increments. Companies are selling smaller pieces. I'll tell you a little bit here, right? It is happening. It's just not the pace you see generally everyone has been used to seeing. There are people that are actually, you know, really they're raising stuff and then capital, right? I think there's also a pressure on them to cut back on clinical activity, right? I think their boards are like, "Listen, I don't want to raise money here. Cut these five programs." There's always a tension in the boardroom that happens. Do I have to? Do I really want to? I think over time, clinical programs don't get cut. That's what ultimately ends up happening. I think right now buyers are there. They're probably lower, right? And they're also doing M&A in their portfolios to be fair. What happened here and this is again, I don't have the statistics to back this up, but I've read enough about it. There were a lot of generalists who got involved in biotechs, tools, and diagnostics that had no business being there. The valuations they were paying for these companies in the first quarter of last year were beyond, you know, in retrospect, even in the moment, they were super high. They're uninitiated. That turned and when it turned, it's been like that since April 1st of last year, on the way down. I think we're closer to the bottoming out in that sector. It could get a little bit worse for folks. There are a bunch of new fundraises that have happened, and I've been talking to a bunch of GMs in the space, and there's certainly enough allocators shifting around to be bullish as is in the market. We talk to people who are allocating to biotech. There hasn't been a slowdown for pension funds. If anything, they're like, "Maybe now's the right time to get in." Right? I do think the. Go ahead, Larry. I would just say I think the question noted about biotech, and biotech is an extreme example, but it. You can go back, certainly over my career. You can go beyond that. You know, markets when they go through the kind of process we've seen in biotech, it's just an analogy for what we've seen in the entire market over the last year and a half. You talked about generalists coming into biotech. We saw hedge funds who are basically the biggest players in late round tech, you know, pre-IPOs. Like, okay, that's a top right then. When that changes, right, you go through a process of the market having to find a new level. I think the only thing I'd say is every market replays the same. The convertible market gets rebuilt the same way, the general IPO market gets rebuilt the same way, and biotech as a sub area, the same thing, which is volatility has to come down because there's no issuer, even if they're willing to accept the marketplace, right? It's a public company. They have to be able to launch a deal to have a sense of where it's going to be tomorrow or the next day, what's going to be a price, right? The enemy of deals is less about the level of the prices in the market. It's the volatility. Yeah. Ultimately, we don't live in elevated volatility forever. I would focus more on vols to figure out when the market clears. What you'll see is, you know, again, we'll be closer to an absolute of transactions where we revolve around those. You'll see some of them in the next weeks or so, months. I think that for equity issuance, look no further than volatility in the VIX, S&P, etc. That will be the tell of when you start seeing a significant increase in activity. We have time for one more question if there is one. Anybody has one? Or maybe it's just time to start drinking. That was your question. Mike, when we start drinking? We're over time. Well, I'll wrap it up. We really do appreciate it. I know it's been a little over two hours of your time, which we know is valuable, and your willingness to spend time with us is always cherished. I mean, I recognize you all have lots of companies that you can cover and lots of companies you can spend time with. The fact that you've chosen to spend time with us today, the fact that we engage with you on a regular basis, I never take that for granted. And everything we do, we do it through this idea of how we create value for you. And that's really, I think, at the center of what we should be doing. I want to thank you all for coming, and we look forward to spending some time with you in the not-too-distant future. For those of you that are here, let's grab a drink.