Earnings call transcript: PJT Partners beats Q2 2025 earnings expectations

PJT Partners Inc. reported strong financial results for the second quarter of 2025, surpassing analysts’ expectations with an adjusted earnings per share (EPS) of $1.54, compared to the forecasted $1.36. This represents a 13.24% earnings surprise, boosting investor confidence despite a pre-market stock dip of 2.48%. Revenue also exceeded projections, reaching $407 million against a forecast of $379.17 million. According to InvestingPro analysis, PJT Partners currently shows a "GREAT" overall financial health score of 3.33 out of 4, and the stock appears to be trading below its Fair Value.

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Key Takeaways

• PJT Partners’ Q2 2025 EPS of $1.54 surpassed expectations by 13.24%.
• Revenue for the quarter stood at $407 million, a 13% year-over-year increase.
• The stock price fell 2.48% pre-market, closing at $182.52.
• Strategic Advisory achieved record performance, with further expansion plans in Europe and Asia.
• PJT ended the quarter with $318 million in cash and no funded debt.

Company Performance

PJT Partners demonstrated robust performance in Q2 2025, with a 13% increase in revenue year-over-year, building on its impressive 16.12% revenue growth over the last twelve months. The Strategic Advisory segment delivered record results, while the firm continued to expand its global reach, particularly in Europe and Asia. The company’s adjusted pre-tax income rose by 22%, reflecting operational efficiencies and strategic growth initiatives. InvestingPro data shows the company maintains strong profitability with a 95.95% gross profit margin and a robust return on equity of 96%.

Financial Highlights

• Revenue: $407 million, up 13% year-over-year
• Adjusted EPS: $1.54, up 29% from the previous year
• Adjusted Pre-tax Income: $80 million, up 22%
• Cash and Cash Equivalents: $318 million
• Quarterly Dividend: $0.25 per share

Earnings vs. Forecast

PJT Partners exceeded analyst expectations with an EPS of $1.54, surpassing the forecast of $1.36 by 13.24%. Revenue also outperformed projections, coming in at $407 million compared to the expected $379.17 million, marking a 7.31% revenue surprise. This positive performance is notable against the backdrop of a challenging economic environment.

Market Reaction

Despite the strong earnings report, PJT Partners’ stock experienced a 2.48% decline in pre-market trading, closing at $182.52. The stock remains within its 52-week range, with a high of $190.28 and a low of $116.06. While the market’s reaction may reflect broader market trends and investor caution, InvestingPro highlights that PJT has delivered a strong 46.2% return over the past year and maintains a relatively low beta of 0.75, indicating lower volatility compared to the broader market.

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Outlook & Guidance

Looking ahead, PJT Partners anticipates strong growth in its Strategic Advisory division, with expectations to exceed 2024 levels. The firm also projects stable performance in its Restructuring and Park Hill segments, aligning with last year’s record results. Future guidance suggests a gradual improvement in M&A activity, supported by a reduction in economic and regulatory uncertainties.

Executive Commentary

"Our North Star remains building the best advisory firm period," stated CEO Paul Taubman, highlighting the company’s commitment to excellence. He noted the significant growth opportunities ahead, emphasizing, "We’re still in early days... we still have an awful lot of ground to cover." Taubman also remarked on the firm’s potential, saying, "Everywhere we look, we see proof of concept that no matter how much white space we’ve filled in, there’s still white space as far as the eye can see."

Risks and Challenges

• Potential economic downturns could impact M&A activity.
• Increasing non-compensation expenses, particularly in occupancy and travel, may affect margins.
• Regulatory changes could influence strategic advisory operations.
• Competition in the financial advisory sector remains intense.
• Currency fluctuations might impact international revenue streams.

Q&A

During the earnings call, analysts inquired about the improving sponsor M&A environment and growth potential in continuation funds. The management addressed concerns about the regulatory environment’s impact on M&A and explored network effects and expansion opportunities. These discussions provided insights into PJT Partners’ strategic direction and market positioning.

Full transcript - PJT Partners Inc (PJT) Q2 2025:

Conference Operator: Good day, everyone, and welcome to today’s PJT Partners Second Quarter twenty twenty five Earnings Call. Today’s conference is being recorded. At this time, I would like to turn the conference over to Ms. Sharon Pearson, Head of Investor Relations. Ms.

Pearson, please go ahead, ma’am.

Sharon Pearson, Head of Investor Relations, PJT Partners: Thank you very much. Good morning, and welcome to the PJT Partners Second Quarter and Six Months twenty twenty five Earnings Call. I’m Sharon Pearson, Head of Investor Relations at PJT Partners. And joining me today is Paul Taubman, our Chairman and Chief Executive Officer and Helen Mates, our Chief Financial Officer. Before I turn the call over to Paul, I want to point out that during the course of this conference call, we may make a number of forward looking statements.

These forward looking statements are subject to various risks and uncertainties, and there are important factors that could cause actual outcomes to differ materially from those indicated in these statements. We believe that these factors are described in the Risk Factors section contained in PJT Partners’ 2024 Form 10 ks, which is available on our website at pjtpartners.com. I want to remind you that the company assumes no duty to update any forward looking statements, and the presentation we make today contains non GAAP financial measures, which we believe are meaningful in evaluating the company’s performance. For detailed disclosures on these non GAAP metrics and their GAAP reconciliations, you should refer to the financial data contained within the press release we issued this morning also available on our website. And with that, I’ll turn the call over to Paul.

Paul Taubman, Chairman and Chief Executive Officer, PJT Partners: Good morning. Thank you for joining us today. This is a day that puts things like earnings calls in perspective. It’s a sad and challenging day as we mourn the loss of life from yesterday’s senseless act of violence in Midtown Manhattan just steps from our office. We grieve for those who lost their lives, pray for healing for those injured and offer comfort to the families, friends and colleagues of those impacted.

And we express gratitude to our first responders who worked tirelessly to keep us all safe. And now we’ll turn to our earnings. This morning, we reported record setting results as revenues, adjusted pretax income and adjusted EPS all set record highs for both the three six month periods. Second quarter revenues were $4.00 $7,000,000 up 13%. Adjusted pre tax income was $80,000,000 up 22% and adjusted EPS was $1.54 up 29% from year ago levels.

For the six months, revenues increased 6%, adjusted pre tax income increased 13% and adjusted EPS increased 19% from year ago levels. Since our last earnings report, the market backdrop has improved appreciably. Equity valuations have come up, market volatility has come down, business confidence has rebounded, capital is more readily available. Last quarter’s tariff uncertainties sparked concerns about the potential for such dislocations to chill investment, trigger an economic slowdown and fan inflationary pressures. Today, concerns regarding these risks are much diminished.

Throughout all this tumult, we continue to invest for the long term. Our firm’s commitment to investing is unshakable through bull and bear markets alike. Our North Star remains building the best advisory firm period. One built on excellence, integrity and an unwavering commitment to client service. Nearly ten years into this journey, we are ever closer to that goal.

After Helen takes you through our financial results, I will review our business performance and outlook in greater detail. Helen?

Sharon Pearson, Head of Investor Relations, PJT Partners: Thank you, Paul. Good morning. Beginning with revenues. Total revenues for the second quarter were $4.00 $7,000,000 up 13% year over year. For the six months ended June 30, total revenues were $731,000,000 up 6% year over year.

Revenue growth for the second quarter and first half was primarily driven by Strategic Advisory, which was up meaningfully for both periods. Restructuring revenues rose modestly in the second quarter and were up slightly for the first half, while PJT Park Hill revenues decreased year over year for both periods. Turning to expenses. Consistent with prior quarters, we presented the expenses with certain non GAAP adjustments, which are more fully described in our eight ks. First, adjusted compensation expense.

We accrued compensation expense at 67.5% of revenues for the first half of the year compared to 69.5% for the 2024. This ratio represents our current best estimate for the full year 2025. Turning to adjusted non compensation expense. Total adjusted non compensation expense was $52,000,000 in the second quarter, up 18% year over year and $101,000,000 for the first half, up 13.5% year over year. As a percentage of revenues, 12.8% in the second quarter and 13.9% in the first half.

The main drivers of the expense increase for the first half of the year were higher occupancy costs and higher travel and related expenses. Overall, for the full year, we continue to expect that our non comp expense will grow at a rate similar to our 2024 growth rate of 12%. We reported adjusted pretax income of $80,000,000 in the second quarter and $136,000,000 for the first six months. Our adjusted pretax margin for the second quarter was 19.7% compared to 18.2% for the same period last year and 18.6 for the first six months compared to 17.5% for the same period last year. Provision for taxes as with prior quarters, we have presented our results as if all partnership units had been converted to shares and that all of our income was taxed at a corporate tax rate.

Our effective tax rate for the 2025 was 16.5%, and this is our current estimate for the full year. Our adjusted if converted earnings were $1.54 per share for the second quarter, up 29 percent and $2.59 per share for the first six months, up 19% from the same period last year. For the quarter, our weighted average share count was 43,400,000.0 shares, up 1% versus a year ago. During the second quarter, we repurchased the equivalent of approximately 642,000

Paul Taubman, Chairman and Chief Executive Officer, PJT Partners: shares, primarily through open market repurchases.

Sharon Pearson, Head of Investor Relations, PJT Partners: Our repurchases in the first six months of the year totaled approximately 2,100,000.0 shares. On the balance sheet, we ended the quarter with $318,000,000 in cash, cash equivalents and short term investments and $461,000,000 in net working capital and we had no funded debt outstanding. And finally, the Board has approved a quarterly dividend of $0.25 per share. I’ll now turn back to Paul.

Paul Taubman, Chairman and Chief Executive Officer, PJT Partners: Thank you, Helen. Beginning with restructuring, we continue to experience elevated levels of liability management activity as an expanding quantum of outstanding debt, elevated interest rates and increasing economic and technological dislocations have increased demand for best in class liability management and restructuring advice. In this period of heightened activity, our restructuring team continued its market leadership ranking number one in announced and completed U. S. And global restructurings for the 2025.

Our restructuring team also continued its track record of exceptional financial results with first half revenues bettering last year’s record performance. Our current expectation is for full year restructuring results to at least match last year’s record levels. Turning to PJT Park Hill. The primary fundraising environment remains challenged as historically low levels of capital return coupled with a market increase in first time fund launches have contributed to a significant supply demand imbalance. In contrast, the environment for private capital solutions is far more favorable where increased demand for alternative liquidity vehicles from GPs and LPs is better matched with investor appetite for these asset classes.

For PJT Park Hill both second quarter and first half revenues were below last year’s results principally due to timing of closings. However, we expect our strong pipeline in both primary and private capital solutions to result in stronger performance in the second half. Turning to Strategic Advisory. Our Strategic Advisory business delivered record performance in both the second quarter and first half as we benefited from increased transaction closings and increased fee realizations. While there are indications that M and A activity is picking up, the year to date data is mixed.

Although annualized global announced M and A volumes are up 20%, the annualized number of transactions is down 15%. Of greater consequence global M and A activity remains near record lows when measured relative to total equity market capitalization or GDP. We’ve consistently maintained that in a world that is speeding up, companies need to respond more quickly to changes in their operating and competitive environment. This in turn requires companies to be more active strategically. Elevated economic and regulatory uncertainty has impeded much of this strategic interest from being acted upon.

As some of this uncertainty has dissipated and the business environment has become more favorable, we now see a more constructive environment for companies to pursue their strategic ambitions and our pre announced strategic advisory pipeline now stands at record levels. We continue to position ourselves for a return to more normalized levels of M and A activity. This quarter four new Strategic Advisory partners will be joining. As we look ahead, reiterating our prior commentary, Strategic Advisory will be up strongly from twenty twenty four’s record levels while Restructuring and PJT Park Hill are expected to deliver results in line with last year’s record levels. As before, we remain confident in our near, intermediate and long term growth prospects.

And with that, we will now take your questions.

Conference Operator: Thank you very much, Mr. Taubman. We’ll go first this morning to James Yarrow of Goldman Sachs.

James Yarrow, Analyst, Goldman Sachs: Good morning and thanks for taking the questions, Paul. Maybe I could just start with the sponsor M and A. Sponsors have remained slower in transacting, but obviously do have a lot to sell or IPO. In your analysis, do many of these assets now have enough EBITDA that they could actually be sold for a gain? And maybe you could just comment based on your dialogues when you expect sponsor sell sides to start to come back to the market more fully?

Paul Taubman, Chairman and Chief Executive Officer, PJT Partners: Well, think we’re seeing an increase in sponsor activity across the board and it’s been challenged for a variety of reasons and the release valves are starting to evidence themselves across the board. So while the IPO market is far from robust, It’s been meaningfully more receptive to initial public offerings in recent months, which has created an opportunity to create liquidity events on portfolio companies. That’s the first point. That’s a necessary condition to get the return of capital right. And what we’ve always said is you got to get the return of capital right so that there’s the confidence to deploy increasing quantums of capital.

The second is, as the credit markets have become more accommodative, there’s been more evidence of dividend recap transactions, which have also been a release valve. I think the third is strategic interest in a number of portfolio companies, which have been expressed, but then sort of retreated around Liberation Day because of all of the uncertainties created by the proposed tariffs. As that uncertainty recedes, think strategics are taking a fresher look at some of those portfolio companies. And then continuation vehicles remain very active and effective means of creating liquidity. So we’re seeing more bids, more interest from strategics, but we’re also seeing that in the portfolio effect with lots of different levers to pull that sponsors are starting to be able to increase the pace of return of capital, which I do believe is going to make them buyers of additional quantums.

And when you think about selling portfolio companies of sponsors, sometimes the buyers are strategic, sometimes there are other sponsors and being able to have robust processes where you have greater confidence that other sponsors will play. And now that some of the clouds of Liberation Day have lifted greater strategic interest, it’s setting up better. It’s still far from perfect. But I think that healing process has begun and it portends ever increasing levels of M and A, we believe, but slowly as we return to a more normalized cadence.

James Yarrow, Analyst, Goldman Sachs: Makes a lot of sense. An adjacent question, continuation fund business, I would imagine, likely slows in terms of growth with the return of regular way sponsor M and A and IPOs. Have you given any thought to what that particular dynamic means for the growth rate of continuation funds? What I guess, what portion of assets should be in continuation fund vehicles versus they’re being put in them right now because regular way exit strategies are not available?

Paul Taubman, Chairman and Chief Executive Officer, PJT Partners: Yes. I don’t know if it’s a substitution effect. I think every day that goes by, there’s greater acceptance of continuation funds as an appropriate means to manage liquidity. I also think that there are many instances where these are assets where there’s still meaningful upside and there’s a desire to continue to operate and manage the asset, but there is a desire on the part of some, but by no means all of the LPs to create liquidity events. So I think of it as a tool in the toolkit that if you go back five years was barely understood and rarely used.

Now it’s much better understood and used. And the biggest governor on using that as a tool today is simply that the dedicated pools of capital for continuation funds is relatively modest in the context of the interest on the part of asset managers to deploy continuation funds. So right now the governor is there’s just not enough dedicated capital to the asset class. And if you believe as we do that the returns over time will prove to be attractive returns and that this is a class of asset that should have appeal to a lot of investors, obvious advantage is you identify the asset and you’re investing in it immediately as opposed to a blind pool concept. Another advantage is you’re making the investment commit and the drawdown of the funds is happening at the same time, which is not the case with the fund structure.

And I could go on, but there are other benefits. So we think that it’s here to stay. It has room to grow. And probably what it does is it substitutes for some of what historically would have been regular way IPO. And the problem with the regular way IPO is there’s oftentimes the IPO at considerable discounts, The funds are almost inevitably used to realign the capital structure to pay down debt to make it a more normalized capital structure for a public company.

Then you’ve got to wait for the expiry of lockups and it starts to be a very long goodbye. And this may in fact be something that competes more directly with the IPO alternative.

James Yarrow, Analyst, Goldman Sachs: That’s very clear. Thanks so much, Paul.

Paul Taubman, Chairman and Chief Executive Officer, PJT Partners: Thank you. Thank you, James.

Conference Operator: Thank you. We go next now to Jim Mitchell of Seaport Global Securities.

Jim Mitchell, Analyst, Seaport Global Securities: Hey, good morning.

Paul Taubman, Chairman and Chief Executive Officer, PJT Partners: Good morning. Hey,

Jim Mitchell, Analyst, Seaport Global Securities: Paul, just I know one area of focus has been leveraging kind of the Park Hill franchise to build out coverage of financial sponsors on the M and A side. Can you just give us an update on where you think you are in terms of moving along that spectrum and kind of getting more into the middle market deals with financial sponsors and leveraging that Park Hill relationships?

Paul Taubman, Chairman and Chief Executive Officer, PJT Partners: Yes. We’re still in the early days of that, but we’re there are many different ways in which those relationships come together. So with the best in class primary distribution and really being the fund placement agent of choice, what we increasingly want to do is for clients to develop a holistic relationship with our firm where there’s a recognition that if we’re going to do the primary raise, we’re also going to be the advisor of choice on the continuation funds and the like. And that’s just an adjacency. We’re having a holistic conversation with the fund manager makes all the sense in the world.

And then on top of that, as we are increasingly sought after to do capital raises that oftentimes are difficult to raise the quantum of capital that might have been desired. So there’s a recognition that we can deliver more capital than anyone else. It’s to have those more holistic conversations about ways in which our strategic advisory colleagues can jointly cover that client and then also have dialogues related to how they think about the GP itself, stake sales, liquidity events and the like. So we’re increasingly having those holistic conversations and I think it’s begun to bear fruit. But when I think about where we are, we’re meaningfully advanced from when we started the firm.

We still have an awful lot of ground to cover before we fully mine that opportunity. So I still think we’re early days.

Jim Mitchell, Analyst, Seaport Global Securities: Okay. That’s helpful. And maybe obviously, seeing good growth on the Strategic Advisory side where a lot of the hiring has been concentrated So in the last few does that give you a little more I mean, I know your comp ratios set your best guess is now 67.5%. But does it give you more confidence with the record pipeline of Strategic Advisory revenue growth picking up that you’re sort of lapping the growth in strategic headcount with revenues and we can start to see some progress in the next year or two on the comp ratio?

Paul Taubman, Chairman and Chief Executive Officer, PJT Partners: Well, I think based on the indicated ratio, you’re already seeing some progress. Yes.

Alex Bond, Analyst, KBW: We

Paul Taubman, Chairman and Chief Executive Officer, PJT Partners: want more. We want more. Know you’d like more on all dimensions and I’ve got to just constantly just ask myself what’s around the bend and what’s around the bend could be, what’s around the bend in terms of additional hiring opportunities or what’s around the bend is competitive dynamics changing. So we’re just going to be thoughtful and cautious. I’ve always said that as we get more productivity, we know where the direction of

Conference Operator: And Mr. Talman, it appears we have lost you on the main line. If you could switch to the backup line. Again, Mr. Taubman, Ms.

Mates, we did lose your audio on the main line. And still not hearing you, Ms. Mates, Mr. Taubman. And Mr.

Taubman, believe we have you back, sir.

Sharon Pearson, Head of Investor Relations, PJT Partners: Yes. Thank you.

Conference Operator: Thank you.

Paul Taubman, Chairman and Chief Executive Officer, PJT Partners: Is there another question?

Conference Operator: We do, Mr. Taubman. We’ll go next now to Brendan O’Brien with Wolfe Research.

Brendan O’Brien, Analyst, Wolfe Research: Brendan? I’m sorry, was on mute. Hey, can you hear me?

Paul Taubman, Chairman and Chief Executive Officer, PJT Partners: Yes. Yes.

Brendan O’Brien, Analyst, Wolfe Research: Sorry about that. I cut out. I don’t know if that was everybody issue. Thanks for taking my questions, Paul. I guess to kick things off, I just wanted to get an update on the regulatory front.

There’s obviously a lot of optimism around the outlook for large cap M and A due to the expectation for a lighter regulatory touch under the current administration and it feels like that’s warranted based on the recent decisions by the FCC. However, just based on your conversations thus far, would you say that C suites are now more willing to push forward with large scale transactions than they were before? Or has some of the volatility and macro uncertainty been too big of a stumbling block?

Paul Taubman, Chairman and Chief Executive Officer, PJT Partners: I don’t know if the available answer is all of the above because it might be all of the above. So let’s parse that a little bit. There’s no doubt that in totality, the regulatory approach of this administration is more conducive to M and A consolidation combinations than the prior administration. That’s good news. Number two, I think there is more willingness on the part of this administration to negotiate remedies as opposed to having an up or down approach to some combination.

So there is the sense that for the right package of negotiated points, the right behavioral remedies, you can secure approval. That’s a good thing. On the other hand, there are industries, I believe, where they are consumer facing, where they may well affect the price consumers pay, where there continues to be a very heightened sensitivity, things like certain retail consolidation and the like. I think media continues to be its own area of inquiry from the FCC and the like. So it’s not clear that all industries are demonstrably easier to have line of sight to consolidation transactions than before, but the direction of travel is definitely better.

The other sort overlay here is until there really is a sense that the timelines from signing to closing are demonstrably shorter. And it’s difficult for this administration to really deal with that directly because in many of these situations you’re dealing with many regulatory bodies around the world who have their ability to put their voice out there. You’re seeing still what are by historic lenses long closing periods. And in a world that moves around quite a bit that is volatile, having the commitment to acquire businesses where even if you have high degree of confidence, you’ll ultimately be able to complete the acquisition. If you have elongated processes and prolonged delays, the type of business momentum that you start out with at closing may be very different than what you anticipated.

And I think that that has subtly made on some of these big deals, just getting the right price where there’s enough risk reduction reflected in the price because of the fact that even if the acquisition makes sense, you may end up with twelve to eighteen months where you’re in no man’s land that does harm the health of the business that’s received. I think that that’s complicated things in a subtle way. So bottom line, we’re in a better place than where we were in the prior administration. We have clarity. There’s a greater sense of willingness to negotiate remedies.

More industries, more situations are likely to go through on an expedited basis. But it’s still in certain industries or in certain politically sensitive areas that may also invite regulatory scrutiny from other areas of the globe. It still makes large transactions quite complicated to effect.

Brendan O’Brien, Analyst, Wolfe Research: That’s helpful color. And I guess for my follow-up, there’s been a lot of optimism on the potential for a meaningful ramp in M and A in the back half now that we seem to be heading towards a resolution on tariffs and getting greater clarity on the macro outlook. But just want to get your views on what the trajectory of that recovery could look like given it feels like there’s significant pent up demands for transactions specifically on the sponsor side, but it does feel like there’s still a few big question marks out there on both trade as well as interest rates and the like.

Paul Taubman, Chairman and Chief Executive Officer, PJT Partners: Okay. I’m going to try and rephrase the question because you came across a little glitchy. And I think it was really just saying, look, there seems to be a general sense that the direction of travel for M and A is up into the right. But can you sort of draw it out a little bit as to what that trajectory is likely to be? I think it’s going to be a gradual plus and gradual in the sense that I think all of these clouds are lifting slowly but surely.

And that would suggest that it’s going to be a prolonged period of just slow gradual improvement. The plus is, I’ve always said that what makes M and A different is many things, not least of which is the competitive responses. And in situations where your competitor makes a bold strategic move, the likelihood that there’s a competitive response and a follow on transaction in an industry is high. So I kind of think that this is a gradual build as it relates to some of these storm clouds continuing to lift. And every day it seems recently there’s just a little bit more clarity, a little less volatility and a little bit more comfort.

But I think that plus is, I expect that in certain industries and the like, you’re not going to see one transaction that’s been on the drawing board, you’re going to see the second and maybe even the third as competitors. We’re more comfortable with the status quo when no one was moving. But if there’s a competitive response, the need to respond in kind is probably greater.

Brendan O’Brien, Analyst, Wolfe Research: Great. Thank you for taking my questions.

Paul Taubman, Chairman and Chief Executive Officer, PJT Partners: Thank you.

Conference Operator: Thank you. We’ll go next now to Alex Bond of KBW.

Alex Bond, Analyst, KBW: Hey, good morning everyone. Thanks taking my questions. Maybe just moving back to Park Hill and the fundraising business. So your placement fees were up quarter over quarter, but you did call out that the broader fundraising backdrop remains challenging. So just curious to what extent that you may have seen an improvement here in the recent weeks as the macro backdrop has improved there?

And then you also mentioned that you expect both the primary and private capital contribution to improve for Park Hill in the second half. But just trying to get a sense of if you think that contribution might be more weighted towards the private capital side given the challenging fundraising backdrop? Thanks.

Paul Taubman, Chairman and Chief Executive Officer, PJT Partners: Right. I think it’s both. I think we’re just dealing with the fact that there is lumpiness in these capital raises. And if things get pushed out a little bit, they don’t show up in Q2, they’re showing up in Q3 and Q4. So we look much more at all the transactions, whether they’re private PCS transactions or fund placement on the primary side as to how many fundraisers are in flight.

And that number continues to build on both sides notwithstanding the challenging conditions on the primary side. So we think that because of just the cadence of transactions and transaction closings, it’s likely to be more in the back half of the year than in the first half of the year. But I also think that structurally the secondary business is just in a better place because there is a better matching of supply demand. And what you’re seeing on the primary side continues to be that everyone wants to fundraise. And in fact, there are even more managers out trying to fundraise, but allocated capital to the asset class is diminished.

And as a result, it’s made fundraisings more challenging. It’s taken longer to get deals done and it’s less likely to have an oversubscription than it would have been before. So the opportunity for positive surprises is reduced. The flip side is in a world where it’s more difficult to raise primary capital and primary capital is the lifeblood of the alternative asset managers, then the flight to quality is greater and that’s been a benefit for our PJT Park Hill team.

Alex Bond, Analyst, KBW: Got it. No, thanks. That’s helpful color. I will jump back in the queue. Thanks, Paul.

Thank you.

Conference Operator: Thank you. We go next now to Devin Ryan of Citizens.

Devin Ryan, Analyst, Citizens: Hey, thanks. Good morning, everyone.

Paul Taubman, Chairman and Chief Executive Officer, PJT Partners: Good morning, Devin. How are you?

Devin Ryan, Analyst, Citizens: I’m doing great. Just kind of bigger picture question, Paul, just around kind of the PJT franchise today and what you guys have built over the past handful of years. Obviously, the firm looks different than 2021 kind of the prior kind of peak cycle and a number of groups that you have today are much bigger from an industry perspective than they were kind of during that time.

Paul Taubman, Chairman and Chief Executive Officer, PJT Partners: So let’s just maybe get a little bit of

Devin Ryan, Analyst, Citizens: sense of where you feel like you’re really getting some network effects on that scaling kind of the future, it’s industries or sectors or geographies kind of where you feel like you’re seeing evidence in network effects? And then maybe areas where you feel like there’s been a lot of investments made, the momentum maybe hasn’t come through yet to the public, but you’re really optimistic about? Thanks.

Paul Taubman, Chairman and Chief Executive Officer, PJT Partners: Sure. Well, the reality is every day there’s evidence of the network effect, literally every day. So I just if I go through my emails every single day, there is a connecting of dots. The call comes into one area. There’s expertise.

There’s a relationship. They’d like to be introduced to partners at another part of our business. We identify situations, we’re trying to connect dots and where in earlier days we might have had a relationship with the C suite. Now we have a relationship with the C suite and the Board, and it’s more likely than we’ve presented to one of the companies where one of the Board members has recently experienced our advice and capabilities. So that network effect is in evidence every day.

But like everything else, it takes time for it to fully be developed. So we see it every day in our ability to collaborate across geographies, across industries, across different touch points. At companies, we’re seeing more conflict adjudication because we may have opportunities to represent a group of creditors. At the same time, we have a strong relationship with the debtor. We’re getting all of that benefit, but I still think we’re really early days compared to what our vision for this franchise can be.

And when you think about it by geography or industry, there are places where we really haven’t made any effort at all. So that’s just complete white space. There are areas where we have made small investments and we’ve gotten outsized returns. And I would just highlight as one of those examples, Japan, where we’ve made very modest commitment of resources, but we’ve received outsized returns in terms of our connectivity to some of the most consequential Japanese companies and opportunities to really showcase the firm. And we’re now going to follow that up with additional resources.

Then we have other areas where we’re in the midst and we’ve seen real benefits, but there’s still so much more to do. And then even in our strongest areas, we’re big believers that oftentimes investing in our strongest franchises can create the greatest results. So you might look at us from the outside in and say, they appear to be strategically complete in these areas. We look at it and say, we can go from strong to stronger or from stronger to strongest or from strongest by a little bit to strongest by a lot. And that’s why we’re going to continue to invest because everywhere we look, we see two things.

We see proof of concept that all the things we believed in ten years ago have proved out. And we see proof of concept that no matter how much white space we’ve filled in, there’s still white space as far as the eye can see. And as a result, we feel really good about the track we’re on, but we still think we’re early, early days in building out the firm and the vision that we have for this firm.

Devin Ryan, Analyst, Citizens: Great. Thanks, Paul. And then can you just touch on the restructuring outside The U. S. And just kind of initiatives to scale the footprint and I appreciate probably you don’t need a lot of headcount, but just kind of where that may go over the next couple of years?

Paul Taubman, Chairman and Chief Executive Officer, PJT Partners: Well, a lot of that, if you just we couldn’t agree more. And if you just look at the increased investment that we’ve made in various European countries, opportunity to do more in France, to do more in Germany, to do more across Europe. As our footprint grows, as our strategic connectivity increases, the opportunity to do more on the liability management side in Europe increases. We have significant commitment to The Gulf Region. The opportunity in The Gulf to do more is considerable.

We have a small but highly successful commitment to non Japan Asia. And those opportunities have already produced great results. There’s an opportunity to do more and there’s an opportunity to do more in Japan. So everywhere we have had footprint and connectivity and success outside of liability management, we’re now spending time trying to make sure that those opportunities we’re in front of and that we’re bringing our teams to those opportunities. And as a result, I think there’s opportunities for us to take that liability management practice that’s outside The U.

S. And make it multiples the size of what it is today.

Devin Ryan, Analyst, Citizens: That’s great. Thanks for taking my questions. Appreciate it, Paul.

Paul Taubman, Chairman and Chief Executive Officer, PJT Partners: Absolutely, Devin.

Conference Operator: Thank you. And ladies and gentlemen, that does conclude our question and answer period. I would now like to turn the call back over to Mr. Taubman for any closing comments.

Paul Taubman, Chairman and Chief Executive Officer, PJT Partners: All right. Well, hopefully you all could hear us and we appreciate your support and your interest in our company. And we look forward to reconvening in three months when we’ll report our third quarter results. So again, thank you for your support and your interest and we wish you a good day.

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