Good afternoon, and welcome to the Greenhill fourth quarter and full year 2021 earnings conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. To withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Patrick Suehnholz, Head of Investor Relations. Please go ahead. Thank you. Good afternoon, and thank you all for joining us today for Greenhill's fourth quarter 2021 financial results conference call. I'm Patrick Suehnholz, Greenhill's Head of Investor Relations, and joining me on the call today is Scott L. Bok, our Chairman and Chief Executive Officer. Today's call may include forward-looking statements. These statements are based on our current expectations regarding future events that, by their nature, are outside of the firm's control and are subject to known and unknown risks, uncertainties, and assumptions. The firm's actual results and financial condition may differ, possibly materially, from what is indicated in those forward-looking statements. For a discussion of some of the risks and factors that could affect the firm's future results, please see our filings with the Securities and Exchange Commission, including our annual report on Form 10-K, quarterly reports on Form 10-Q, and current reports on Form 8-K. Neither we nor any other person assumes responsibility for the accuracy or completeness of any of these forward-looking statements. You should not rely upon forward-looking statements as predictions of future events. We are under no duty to update any of these forward-looking statements after the date on which they are made. I would now like to turn the call over to Scott Bok. Thank you, Patrick. We had a strong finish to 2021, consistent with our commentary on recent quarterly calls. Our fourth quarter revenue was $116.7 million, and we earned $1.21 per share. For the full year, we had revenue of $317.5 million and earnings per share of $1.73. Revenue for the year was up 2% over last year, and earnings per share was up 27%. Industry data makes clear that 2021 was a record year for global M&A deal activity. Financing and capital raising activity was also strong. Meanwhile, bankruptcy-related restructuring activity was down materially, given highly accommodating financing markets. At Greenhill, our global team was very busy. We enjoyed a significant increase in new client assignments to a record level. Likewise, we saw a significant increase in the number of transaction announcements, which can be tracked on our website, also to a record level. Momentum continued to build throughout the year, and in the fourth quarter, we played a role in more deal announcements than in any quarter in our history. The number of million-dollar or greater fees we earned for the year was also a record. The only thing that held us back from an even stronger 2021 performance was the fact that we had fewer transactions in the very large fee category than has been the case historically or than we expect going forward. On a regional basis, we saw improvement in the U.S., had a very strong year in Australia, and another good year in Canada. In contrast, European revenue was down materially from a particularly strong result the prior year. By sector, financial services, healthcare, and industrials were the standouts, while consumer and retail was down materially from an outsized performance in 2020. By type of advice, M&A was the primary contributor to our results. Restructuring activity remained relatively low all year, following an extraordinary year in 2020, beginning when the pandemic first hit trading markets early in the year. We made good progress on our new initiative to win and execute more financing advisory assignments. Some of our most significant assignments of the year involved our helping clients get funding from the large and growing direct lending market, and we also advise on various types of equity financings. For our private capital business, 2021 was a year of rebuilding and expansion, resulting in a modest decline in revenue. By year-end, we had a fully functional global team capable of raising private equity, infrastructure, credit, and other types of funds, and that team had a substantial and growing backlog of capital-raising assignments that had already begun to generate revenue. Meanwhile, we continue to be active in advising institutional investors around the world on sales of interest in such funds. Across all our businesses, we are making good progress in our initiative to provide more services to the financial sponsors that manage private equity and other types of funds. In addition to raising capital for such entities, we advise on buy-side and sell-side M&A projects and work on financing and restructurings of companies owned by financial sponsors. In total, about 30% of our 2021 revenue related to financial sponsors, and we believe we have only scratched the surface in terms of how important that client base can be to our business. Now turning to costs, we managed our fourth quarter compensation ratio to a level that resulted in a full year ratio that was at the high end of our target range. Meanwhile, our non-compensation costs were materially lower than in the prior year at around the low end of our target range. Our pre-tax operating margin for the year was 22%, significantly better than in the prior year, and our near-term objective remains to get that to at least 25%. Our interest expense continued to trend lower given a declining debt level and continued low short-term interest rates. Our effective tax rate for the year was 28%, higher than we normally expect due to the fact that our profitability was skewed to higher tax rate jurisdictions. In the prior year, our profitability skewed to lower rate jurisdictions. We continue to expect our annual tax rate to be generally in the mid-20% range before adjusting for charges relating to changes in the value of restricted stock when it vests. At our current share price, we would see a tax benefit this year as restricted stock vest at stock prices higher than which it was granted. We ended the quarter with $134.6 million in cash and $271.9 million in debt, meaning we had net debt of $137.3 million. During the quarter, we made additional voluntary debt payments of $20 million that are reflected in those numbers. Having made $55 million of voluntary debt repayments in 2021, we now plan to pause further debt repayments so that we maintain an appropriate level of trading liquidity in our outstanding debt, which we believe will facilitate a favorable refinancing when the time is right for that. We continue to be focused on deleveraging, but now with an emphasis on increasing our cash flow in a manner that improves our credit statistics. In addition to repaying the $55 million of debt in 2021 and maintaining our usual quarterly dividend of $0.05 per share, we repurchased $45.1 million of stock. During the fourth quarter, we repurchased 677,851 shares and share equivalents for $11.8 million at an average price of $17.33 per share. For the year, we repurchased 2.9 million shares and share equivalents for $45.1 million at an average price of $15.80 per share. After quarter end, we repurchased an additional 267,945 shares for $4.9 million at an average price of $18.21 per share. For the year ahead through January of 2023, our board has approved share repurchase authority for shares and share equivalents of $70 million. In addition, we are announcing today a doubling of our modest dividend in order to bring it to what we consider a more normal level consistent with most of our peers. I will close with a few thoughts on strategy. We continue to believe in the pure advisory business model, where our interests are fully aligned with those of our clients. We believe we have the right geographic footprint in place. In M&A, we aim to continue to expand our industry sector coverage in high potential areas. Apart from M&A, we aim to continue our recent initiative to provide more financing advisory services while also seeking more restructuring advisory opportunities as interest rates rise and credit markets tighten. In our private capital advisory business, we aim to continue to expand both our primary capital raising and our secondary sales businesses. In all these areas, we aim to continue our recent initiative focused on serving financial sponsors, which we believe can be a major source of growth for our firm. In order to meet our growth objectives, we will continue to seek talent externally. 2021 was a productive recruiting year for us with respect to senior bankers, and we also grew overall headcount slightly despite increased turnover that I think every firm in our industry is facing. Looking ahead, we expect a very active recruiting year in 2022. At the same time, we had a record number of internal promotions to Managing Director at the start of the year. Many of our top bankers around the world are homegrown, and internal talent development will remain an important source of growth for our firm alongside external recruiting. With that, I'm happy to take any questions. We will now begin the question and answer session. To ask a question, you may press star then one on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star then two. At this time, we will pause momentarily to assemble the roster. Our first question will come from Devin Ryan of JMP Securities. Please go ahead. Hey, Scott. Hey, Patrick. How are you guys? Very well. How about you? Doing great. I guess first question here, want to dig in a little bit on the outlook and maybe just think about if you can characterize just the backlog, you know, momentum or any kind of qualitative perspective you can give, kind of how the backlog feels heading into 2022. Then just kind of beyond that, you did allude to, you know, expectation for some larger deals. Are you seeing that in the backlog or mandates of deals you're working on, or is that just more of an expectation that we normalize around that? If you can just maybe some additional flavor around areas that you're excited about in the business, as we think about the 2022 relative to 2021. Sure. I would say, look, we feel good about the current environment. We feel good about the backlog. We saw the number of deal announcements we were associated with throughout the year kinda grow pretty steadily. Fourth quarter was the best one. With the flow of new assignments continues to be quite strong, and so I feel like we've got, you know, a good book of business coming into the year. I both kind of in general expect a reversion to the mean in terms of, you know, some portion of those being in kind of the very large fee category, but we also certainly see that in the pipeline. I mean, I'm talking about, you know, actual live assignments, not all of which, of course, will come to fruition. It certainly feels like we'll be back to the norm in terms of the, you know, the right mix of very large along with midsize and smaller things. As for where we're excited, I mean, in a lot of areas I think we can do better than last year. I mean, we had commented that we had a great year in Australia. I think we'll have a better year in 2022. We had a very good year in Canada. I think we'll do better there. You know, the industrial sector, which I've always said is the biggest sector group within our firm, you know, it got hit pretty hard. I'd say during the pandemic, there wasn't as much activity. Those companies were impacted by, you know, fears of weak economy and tariffs and supply chain issues and all the rest. Toward the end of the year, we saw, you know, tremendous finish in terms of deal activity in that space, and that group has got a very strong backlog right now. I feel very good about what is the largest sector group in our firm. Lastly, I would say Europe. Look, for whatever reason, while 2020 was an extraordinary year for us in Europe, 2021 was the year in which, you know, we did a number of things over there, but many of the more important ones were for, you know, American and other foreign clients doing things in Europe. Our kind of European-based clients were less active last year. You know, we think both just because it's always worked this way and also because we can look at the pipeline we've got that we'll see, you know, again, a reversion to the mean over in Europe as well. I would be very surprised if we didn't do a lot better in Europe and frankly, probably in each market in Europe than we did in 2021. You know, if you can add that to some improvement in Australia and Canada and some of the key sector groups in the U.S., you know, we're feeling pretty good about the year ahead. Okay, great. Thanks, Scott, for that color. Then just on non-compensation costs. You know, this was the highest non-comp, you know, quarter of the year, also the strongest revenue quarter. Just trying to think about is this a good jumping off point you had, you know, kind of travel seems like it's coming back a bit, but I don't know how much of that is just because of, you know, the attachment to the strong revenues. Just trying to think about the trajectory. Is this the new launching pad or do we maybe revert back to something below this and then kind of work our way back up as kind of a run rate? I mean, I think for the year, we would still hope to be within the range we lay out on our investor presentation of $55 million-$60 million. We happen to be very near the low end of that range this year. Obviously, travel did pick up toward the end of the year, but there are always a lot of sort of one-offs built into the quarterly data as well. You know, I think we'll be in that range, probably not at the very bottom of it in 2022, but you know, I don't expect you know, a huge increase in non-comp costs. Okay, terrific. Just to squeeze one more quick one in just to make sure I understand. The new buyback authorization, $70 million, is the expectation to fully repurchase that over the next year, or is that just the max capacity? Is the intention that you will work that or you're gonna be opportunistic, and that just gives you a kind of enough runway where you could be aggressive to the extent you know there's attractive opportunities? I would say we're pretty inclined to use it. I mean, last year, I think we used almost the last penny of it, literally up to the last day of the authorization. Because, you know, there's only a certain amount of liquidity in the stock, and you have all kinds of rules about how much you can buy back. But we bought back the full authorization, essentially last year, and we will, you know, aim to do something very similar to that in the year ahead. Great. Okay, I'll leave it there. Thank you very much. Okay. Thank you. The next question comes from Michael Brown of KBW. Please go ahead. Great. Hi, Scott. Hi, Patrick. How are you guys? Hello. Very well, thanks. Good. Scott, I wanted to narrow in on something that you mentioned on the capital allocation side. I think you made a comment that you don't plan to do any accelerated debt payments in 2022, and you mentioned a desire to refinance the debt. Could you just expand on that comment a little more? Do you see debt as a you know, piece of your capital structure longer term? I kind of always thought that the goal was to pay that off over time and you know, go back to being kind of a debt-free firm. Mm-hmm. I don't know if that's shifted or maybe I just had that thought wrong. Sure. Well, you know, we obviously did make a significant borrowing to buy back a very large portion of our shares, as part of a plan, you know, based on the fact we just thought the stock was very, very undervalued. We have repaid a lot of that debt on a much more accelerated basis than was required. All we're saying now is that we're gonna pause that because we hear from, you know, various capital markets participants that it's a very good market for us to refinance. There's absolutely no urgency to that. We could do that, you know, in a month. We could do that in a year. We're just gonna be completely opportunistic about that. What we do know is that again, these capital markets firms, you know, of the kind, the larger kind that we often compete with for M&A as well, you know, are saying that it's a good idea to have a significant degree of liquidity, that not to let the issue get too small or it's, you know, just not as easy to refinance. So we're just gonna pause for a bit on the debt repayment front, let ourselves de-lever through, you know, just higher cash flow and perhaps a bit more cash on the balance sheet. And frankly, you know, there's not really a fixed view as to what exactly capital structure we want. I think I've always been clear that we monitor opportunities, and if it's, you know, really cheap to borrow money and we think very attractive to buying our shares, you know, we're gonna do more of that. If we think the shares are more fully valued and we think having, you know, debt is more costly, we're gonna focus the cash on repaying the debt instead of buying back shares. Frankly, where the stock is right now, relative to our results, we find it very attractive. I think the combination of wanting to keep some liquidity in the trading of our loan on the market and wanting to take advantage of where the share price is right now, you know, the combination of that means that today the right strategy, we think, for us is to shift more toward buyback. Obviously, last year, we spent $100 million between debt repayment and share repurchase, and we're just talking about basically allocating, you know, a bigger portion of the cash flow to buybacks in the year ahead. Okay. Understood. Thanks for that, all that color. Scott, you talked about the private capital advisory business, and it sounds like you've you know really rebuilt that business quite quickly in 2021. Can you just talk a little bit more about how the revenues contributed in the fourth quarter? You know, what's your outlook for that business as we get into 2022? Obviously, you talked a bit about the you know the strength of the sponsor relationships and how important that is. Do you still see that as a business that you will you know look to add more talent to, or has it really kind of reached critical mass at this point? Okay. A couple different questions there. The capital advisory business was not a big contributor really last year. I mean, it was not a huge contributor the year before, and it was down, as I noted in my remarks, down slightly. Last year, what we saw toward the very end of the year, and it certainly was not even a meaningful part of the fourth quarter, is starting to book revenue on assignments that will run for quite a long time and have significant revenue potential. We feel like we've spent, in that business, 2021 rebuilding the team, but actually going well beyond rebuilding it and building out a really broad primary fundraising capability. We've put in place a book of business, a pipeline of things that we'll be working on for the next 18 months in that area. I think that I probably should have mentioned that earlier when somebody was asking, what are the sort of the potential positives in 2022 versus 2021. A really obvious one is in this business where, you know, the team barely existed at the beginning of the year, and we certainly didn't have primary fundraising capability. Now we not only have that capability, but we've got an attractive list of assignments. That that's a significant area for potential improvement. More broadly, on the financial sponsor side, clearly, we wanna do everything for them. We had some really important M&A assignments over the course of the year, especially toward the end of the year, some financing assignments where we were working for financial sponsors. As I noted in my remarks, I really feel like we've only scratched the surface as to what's possible there. We are, you know, adding more resources internally. We also are looking to recruit senior people in that space because we just think the potential is so enormous. We wanna accelerate a bit our move into providing, you know, the full range of services, M&A, restructuring, financing, capital raising to that important client base that, you know, for many years, we really kind of ignored, frankly, while we focused on public companies. You know, it's now become an absolute, you know, core part of what we're focused on here, and we're gonna add more personnel to accelerate our accessing that opportunity. Okay, great, Scott. I will leave it there. Thanks for taking my question. Okay. Thank you. The next question comes from James Yaro of Goldman Sachs. Please go ahead. Hey, thanks, and good afternoon, Scott. I just wanted to start with one of the advisory trends that, you know, we're seeing across the market, which is, you know, large cap M&A and the potential for increased antitrust review. I think, you know, recently we've seen a number of regulators, certainly in the U.S., appearing to be examining a greater number of deals. Basically, what's your view on the ability for large cap M&A to continue at the current pace, you know, overall, accelerate from here or potentially slow down? You know, I don't expect it to be a huge factor, to be obvious. I mean, to be honest, I mean, we've seen many administrations, obviously, over the 26 years we've been in business, and some have been kind of very free market-oriented and some have been much more regulatory-oriented. In the history of our firm, I believe there are only, like, four transactions that ever got blocked by a regulator that we announced. So that's not many over a 26-year period. I think among the deals. You know, if you're talking about deals that are $50 billion, yeah, there's probably gonna be more risk of getting a deal blocked there. Deals in certain sectors like technology, perhaps there's gonna be more risk to those. The kind of deals that can, you know, generate a $5 million or $10 million or $15 million or $20 million fee for us, I think few of them will be of a scale that will end up being blocked by our government or any other government. I don't expect, you know, a big issue there except for the very, very largest deals and probably in the most sensitive sectors like technology. Okay, that makes a lot of sense. Then I just wanted to ask about your comp ratio, which declined over 200 basis points for the full year this year to, you know, 60%. When you think about the competitive hiring market out there, as well as, you know, general fears that M&A could slow in 2022, what's your confidence in the ability to remain at this comp ratio and potentially improve from here? Well, the comp ratio is always really a function of revenue. My goal for 2022 is to materially grow the revenue, and then I think it's easy at that point to keep the comp ratio, you know, within our target range. You know, notwithstanding whatever's happening in competitive markets. Because, you know, for most people, especially the senior people in our industry, compensation is related to revenue. So if people produce a lot of revenue, they're gonna get paid a lot. If they produce a lot less, they'll get paid less. So I, you know, I think if we have the kind of year that I'm hopeful of, I certainly would expect to be able to have a comp ratio that's, you know, in line with our recent history. Okay. Just one last one, which is, you know, just on the liquidity in the stock, which you touched on, but also, you know, you did touch on the fact that you plan to do some additional buybacks. Do you think the smaller float, as you shrink the share count is a headwind for your stock, and is there a point at which you would, you know, stop buybacks as a result of diminishing liquidity? You know, I'm only really interested in getting to a higher market cap through a higher share price. I just think as long as it's valued at a price that's considerably less than what I think it's worth, I kind of can't resist. I think it's to the benefit of all of our remaining shareholders that we buy out shareholders who are willing to sell at low prices. You know, I've done a fair amount of that personally as well. I think in due course, the market cap and the liquidity of the shares will take care of itself when the stock reacts to, you know, not only good results, but the fact that, you know, the shrinking share count and, you know, a reasonable dividend and, certainly the debt has declined quite a lot. You know, I think all that's gonna add up to a different result. Until it does, I think we're gonna keep buying back the shares. Okay, thanks a lot. Okay. Thank you. That's our last question. We thank everybody for your time and look forward to speaking again, in a few months. The conference is now concluded. Thank you for attending today's presentation, and you may now disconnect.