Moelis & Co at Morgan Stanley Conference: Leadership and Strategic Expansion

On Tuesday, 10 June 2025, Moelis & Co (NYSE:MC) presented at the Morgan Stanley US Financials, Payments & CRE Conference 2025, offering insights into its leadership transition and strategic growth plans. Incoming CEO Naved Mamuzadigan emphasized a seamless leadership change and highlighted the company’s focus on expanding high-revenue verticals. Despite challenges, Moelis remains optimistic about the M&A environment and is committed to strategic hiring and technological advancements.

Key Takeaways

• Naved Mamuzadigan will assume the role of CEO on October 1st, with a seamless transition anticipated.
• The company is aggressively expanding in tech, oil & gas, and private funds advisory (PFA).
• Moelis is optimistic about the M&A pipeline, which is nearing record levels.
• The firm is investing in AI and technology to enhance efficiency and maintain competitiveness.
• Moelis targets a compensation ratio in the low 60s but is flexible to support strategic growth.

Leadership Transition and Strategy

The leadership transition at Moelis & Co is presented as a natural evolution. Naved Mamuzadigan will take over as CEO, with Ken moving to Executive Chairman and Jeff Rach becoming Executive Vice Chairman. The company emphasizes seamlessness in this transition, with no significant departures expected. Moelis continues to focus on aggressive hiring in major verticals, including tech, oil & gas, and PFA, with a strategy that remains consistent and revenue ramps that have met or exceeded predictions.

Market Environment and M&A

Moelis expresses optimism about the M&A environment, noting a robust pipeline that is close to record levels. While tariffs and trade pose challenges, other segments remain active, with new business activity and clients eager to launch transactions. The IPO market is opening for growth companies, benefiting sponsors and overall transaction activity. Although rising interest rates are a concern, clients are not delaying actions in anticipation of rate cuts.

Private Funds Advisory (PFA)

The expansion of the PFA business is a major focus for Moelis, with the hiring of key figures like Matt Westley seen as transformative. The company aims to be a market leader in this space, offering products such as continuation vehicles, LP-to-LP secondaries, primary fundraising, and GP stake sales. While PFA is not expected to surpass M&A’s current contribution, it is anticipated to be a significant revenue source.

Expenses, Hiring, and Technology

Moelis continues to prioritize hiring top talent that fits culturally with the firm, particularly in the PFA team. The company maintains a pristine balance sheet to capitalize on strategic opportunities. Although the target compensation ratio is in the low 60s, Moelis is operating at a higher ratio to support growth. The firm is also investing in technology and AI to improve efficiency, especially for junior bankers, with positive early feedback on AI applications.

For a detailed understanding of Moelis & Co’s strategic insights, please refer to the full transcript below.

Full transcript - Morgan Stanley US Financials, Payments & CRE Conference 2025:

Unidentified speaker, Analyst, Morgan Stanley: All right. So before we begin, I have to read disclosure. So for important disclosures, please see Morgan Stanley research disclosure website, www.morganstanley.com/researchdisclosures. Any questions, please reach out to your Morgan Stanley sales representative. All right, so we are pleased to have with us Naved Mamuzadigan, co founder and co president of MoLIS.

And Naved, I want to start by congratulating you on the news earlier this week. So you will become CEO of MoLIS on October first of this year. And as part of this transition, you’ll join the board. Ken will transition to Executive Chairman. And Jeff Rach will be appointed executive vice chairman of Moelis.

So maybe just to start, just give us some insight on the planning around this transition, why now, how your role, how Ken’s role will change.

Naved Mamuzadigan, Co-founder and Co-President (Incoming CEO), Moelis: Sure, well thanks very much. I appreciate it. Nice to be with everyone today. And off, let me say how excited I am about this appointment. It’s a real honor to have the opportunity to lead our great firm.

We have incredible people at the firm and great momentum. So I’m really, really excited about stepping into that role. I mean, as Ken said, I think in the press release, this has really been originated by him as part of the natural evolution of the firm. I think Ken felt that even though he’s fully active and will continue to be fully active with clients going forward and has as much enthusiasm for the business as he’s always had that this was a great opportunity at a great time to give more responsibility not just to me, but to the next generation of bankers that we’ve been developing at the firm that are ready to step up and take more active roles, not just with clients, but with helping us manage the firm. I can’t tell you how excited I am that not just Ken, but Jeff is also going to continue to be full time working and helping me manage the firm.

To be able to have a transition with nobody important leaving is great. And I think if take a step back and look, we promoted Chris ano to CFO, that was an internal transition that’s been seamless. We promoted Kate Pilcher to COO not too long ago, that’s been an internal promotion that’s been seamless. We talk a lot about talent development. 45% of our MDs are internally promoted managing directors of a stat we’re super proud of.

And so I kind of look at it and say, this is just another example of Moelis and Company really developing a culture that allows people to succeed. If I was a young person thinking about which firm to go to, where do I want to work? I can’t think of a better firm that sends the signal that we develop people internally and give them opportunities than I think what we’ve been exhibiting at Moelis and Company.

Unidentified speaker, Analyst, Morgan Stanley: Great. So seamless transition. And with that seamless transition, any change in strategy at all people should expect? Just how do you think about strategy once you take that CEO?

Naved Mamuzadigan, Co-founder and Co-President (Incoming CEO), Moelis: The strategy that we’ve really been focused on the last few years is one that I’ve been central to and been helping to drive along with the rest of our senior management team. So I think we have the right approach. We’ve been aggressively hiring into major verticals with major revenue opportunities, tech, oil and gas, now with the hire of Matt Wesley and Paul and Jeff, a major expansion into what we used to call PFA, I think we’re going to rename it, but it’s the business of continuation vehicles and raising money for private equity firms. We’re going to do a lot there. That’s a major opportunity for us.

And all of these strategic initiatives so far have been really well executed. Our teams are fantastic. They fit into the culture beautifully. The revenue ramps have been exactly what we predicted, if not better. And so that’s the strategy that I want to make sure our foot is fully on the gas on going forward and we think there’s other opportunities like that.

Unidentified speaker, Analyst, Morgan Stanley: Great. Let’s turn to the environment. So in M and A advisory April earnings call, Ken noted backlog was down March to April. Since then we’ve gotten some relief on tariffs. I saw the quote in the journal article yesterday that seemed a little bit more positive.

How are you thinking about where the backlog currently stands and how are your clients thinking about the confidence to move forward right now?

Naved Mamuzadigan, Co-founder and Co-President (Incoming CEO), Moelis: I’m optimistic. It definitely feels better and better each day since kind of the announcements of April, which I think set us back a little bit in terms of the M and A environment. Everywhere I go, people want to transact, they want to lean into transactions, whether it’s companies or private equity firms or capital providers. Sure, there’s parts of the market, especially companies that are directly affected by tariffs and trade and all of that, that where it’s tougher to do deals right now and maybe tougher for a while. But there’s a whole segment of the market that’s much less affected.

And in those segments of the market, we’re definitely seeing in our pipelines, a lot of new business activity, stuff coming into the pipeline that really never stopped even through some of the volatility of April. We’re seeing transactions get done. We’re seeing new transactions get launched. We’re seeing our clients push us to launch transactions even if the environment isn’t crystal clear. And all of that leads me to conclude that we’re hopefully coming back into the kind of environment that we thought we were going to get.

Is it perfect? No. Could something happen? Sure. To take us off track, but I’m bringing a lot of optimism to this.

And as I talk to our bankers, I’m seeing a lot of that same feeling in their client dialogues.

Unidentified speaker, Analyst, Morgan Stanley: And so pipeline is up from April?

Naved Mamuzadigan, Co-founder and Co-President (Incoming CEO), Moelis: Pipeline is up. Think it ties pretty much as it’s ever been at the firm or close to it. So we feel good about the pipeline. And as I said, our bankers are busy and working really hard to try to get deals out there and hopefully get them to the finish line.

Unidentified speaker, Analyst, Morgan Stanley: Let’s talk specifically about the sponsor clients. So we’re going on three or four years now of limited exit activity. What are your conversations like with sponsors right now and what will get them moving?

Naved Mamuzadigan, Co-founder and Co-President (Incoming CEO), Moelis: Yeah, look, the sponsor business is all about deployment and it’s about returning capital to their LPs. And I think given that over the last few years, sales and IPOs are down because of the turmoil in the M and A markets and the IPO markets. There is pressure on private equity participants to return money to their investors. And so, you’re definitely seeing that in, back to this point of desire to transact. We feel from our clients that they do want sell some of the portfolio companies and return capital to their investors.

They need to do that. Sometimes that reflects itself more in continuation vehicles, which is why we’re super bullish on that business and the business Matt’s going to develop for us because that’s another alternative to get investors back some money. And so that focus on DPI is really there, which I think is a good indicia of what’s to come on the M and A side as the market continues to recover. And on the deployment side, a lot of capital has been raised by a lot of different firms and that capital needs to be put to work. And so that’s what we’re in the business of doing, helping find and helping sponsors find places to put that capital to work.

Unidentified speaker, Analyst, Morgan Stanley: And on the IPO front, we have seen some IPOs over the last few weeks. They priced well. So there seems to be some build there. Do you need IPO market fully open for sponsors to get moving? Are they waiting for the IPO market to open more?

Is it fully open? What are your thoughts?

Naved Mamuzadigan, Co-founder and Co-President (Incoming CEO), Moelis: I don’t think it’s fully open. I think it’s starting to open for certain types of companies, certain type of growth companies. Think if you see some success with those kinds of companies, I think the aperture then opens to other types of companies to access the IPO market. And yes, we’d like to see a healthy, vibrant IPO market that’s good for the capital markets, it’s good for our sponsor clients, and it’s good for overall transaction activity.

Unidentified speaker, Analyst, Morgan Stanley: And before we get to private funds advisory, we have seen activity in stake sales from university endowments, local municipalities that are exiting, reevaluating their private equity stack. Does that impact sponsor ecosystem at all in a negative way?

Naved Mamuzadigan, Co-founder and Co-President (Incoming CEO), Moelis: No, I don’t think so. I think, look, I think the idea that there’s liquidity amongst LPs to sell stakes if LPs need to do that for whatever reason, I think is just part of a healthy ecosystem that’s developed around alternatives. And so if you have an LP to LP trade, it doesn’t directly impact a sponsor. But the fact that there’s liquidity in the marketplace to do that, I think it makes it more likely that LPs will invest in the next set of funds and the next set of alternative opportunities. And so, this is again, this is why the team that Matt’s going be building for us once he joins the firm, which will be shortly.

That’s part of the opportunity that he’s going to go after as well. The LP secondary opportunity is part of that whole panoply of businesses that we hope to build.

Unidentified speaker, Analyst, Morgan Stanley: And then what about interest rates? Fed funds, there’s two cuts priced into the forward curve this year, several more next year. Are sponsors waiting for cuts to get moving?

Naved Mamuzadigan, Co-founder and Co-President (Incoming CEO), Moelis: I think everybody wants rates to come down. Are people necessarily waiting? I don’t know. That’s a tough game to play because you just never know what’s going to happen there. I don’t have a lot of conversations with people where they say, everything else is right, I’m just waiting for rate cuts in order to move forward.

I think that’s a very tough line to follow, just given the uncertainty in the world. If the business is performing well, if you think there’s an active market of participants who will show up to take a look at your business and you think you can achieve a good outcome to try to optimize that outcome on the margin because you think rates will be cut. I don’t find a lot of people doing that.

Unidentified speaker, Analyst, Morgan Stanley: What about long end of the curve is rising ten year yields coming up in client conversations at

Naved Mamuzadigan, Co-founder and Co-President (Incoming CEO), Moelis: Something to watch, not directly, but yes, something to watch. Think longer term, if you sort of said what are the one of the risks to the market long term, if the whole concerns about deficits and debt and fiscal set of issues keep the ten year at elevated rates, that’s not good long term for business. Let’s hope that doesn’t happen. Let’s hope our politicians can have some sensible fiscal policy to help get those issues under control.

Unidentified speaker, Analyst, Morgan Stanley: All right, let’s turn to private funds advisory. We’ve talked about it briefly, but it’s an area Moelis is very focused on building out. It’s been a big growth area for the industry. You’ve announced several key hires in recent months. Can you just give us an overview of where you’re at in building out the private funds advisory business and what your vision is for this

Naved Mamuzadigan, Co-founder and Co-President (Incoming CEO), Moelis: piece of Moelis? Yeah, look, this should be and needs to be a big part of our offering here. The firm is beautifully set up given our relationships with sponsors, our deep sector expertise to have a really big business in that set of businesses and what we used to call PFA, which I think we’re going to rename. The hiring of Matt Westley was a game changer for us in terms of having a real leader, a proven leader to help us build out those businesses and recruit the right people to do that. It’s really important in those businesses to be a market leader.

When you kind of look at who’s doing well in those businesses, it tends to be pretty concentrated in terms of the top franchises in those space and we want to have a top franchise. And I think Matt is exactly the right person to help us get there. He starts next week. So he hasn’t even hit the ground running yet. But we’ve been able to recruit beyond Matt, Paul and Jeff, who were on the sell side of the business at Houlihan Lokey, went to the buy side and are now coming back to the sell side to help Matt build the business.

And we also had a really good team of talented people within the company that we’ve been building over the years that I think are going to plug into that really beautifully. And we’re going to be off to the races with more to come.

Unidentified speaker, Analyst, Morgan Stanley: Can you walk us through the different products here GP advisory, LP advisory, anything else? And how investors should think about opportunities and challenges of each?

Naved Mamuzadigan, Co-founder and Co-President (Incoming CEO), Moelis: Yeah, so look, I think the business that Matt’s going to start to build for us with Paul and Jeff is continuation vehicles. That’s a very core strategic business. That’s the business of helping financial sponsors get partial liquidity for their LPs in a specific portfolio company. That’s on a continuum of exit options. One end of the spectrum is go sell my business for me.

We’re in that business in a big way, the sell side business. There’s the recapitalization business. So sometimes sponsors won’t sell a business, but they’ll recapitalize the balance sheet and pay themselves a distribution or a dividend or bring in other investors. That’s a business we’re in with our capital markets function. And this business allowing LPs to cycle out who want to get out and bringing new LPs in the continuation vehicle business is one where we have not participated in a meaningful way.

And that’s again very strategic to our sponsor coverage business and the business we’re going to focus on. But there are other ancillary businesses to that business that we think there’s major opportunity, LP to LP secondaries, which we’ve talked about is an opportunity. Primary fundraising private equity firms is an opportunity. GP stake sales, which we already do some of out of our asset management group is a further opportunity to grow that business. And so when you look at all of that, that’s a major, major, major opportunity the firm.

Unidentified speaker, Analyst, Morgan Stanley: And is LP more of a volume game where you need scale and infrastructure set up? Do you need to be bigger to have it be

Naved Mamuzadigan, Co-founder and Co-President (Incoming CEO), Moelis: think we do. I think the LP to LP secondary business is more of a flow business and scale business. And so, again, we don’t want to be in any of these businesses if we can’t be a market leader. The spoils really do accrue to the market leaders in the space and then that’s why we’re really focused on not necessarily being everywhere tomorrow, but being really great and then building out from there.

Unidentified speaker, Analyst, Morgan Stanley: And the disclosure around how big this business is kind of limited across the industry right now. So any sense just on how big you are? Could it ever get bigger than M and A over time?

Naved Mamuzadigan, Co-founder and Co-President (Incoming CEO), Moelis: I don’t know that it’ll get bigger than M and A over time. I do think M and A for the foreseeable future is going to be the key driver of our business right now. I don’t know, M and A is 70% of our business, something like that, depending upon where we are in the cycle. I see this business necessarily overtaking that, but I think this will be, if we do it right, and I’m really confident we’re going to do it right, given the team we’re building, we’ll be a very meaningful contributor to the company.

Unidentified speaker, Analyst, Morgan Stanley: And on the secondary side, how do you think about the structural demand for secondaries through the cycle? So right now we’re hearing it’s elevated, but in different parts of the cycle, how do you see it evolving?

Naved Mamuzadigan, Co-founder and Co-President (Incoming CEO), Moelis: I think there’s going to be long term demand for continuation vehicles and those types of structures, because I think many sponsors look at some of their portfolio companies and say, I think this company is going to be great for a long time. I love this management team. I love this industry. I love this company. I do need to get my investors some liquidity, but that doesn’t mean I need to sell the company.

I want to continue to ride the upside of this asset. I’m going give some of my investors ability to exit because they want an exit and they deserve an exit. But others of my investors want to stay in and we want to stay in and continue to oversee this company. And the continuation vehicle is the perfect product to achieve all of those goals.

Unidentified speaker, Analyst, Morgan Stanley: What about the restructuring piece of the business? Are client conversations still elevated?

Naved Mamuzadigan, Co-founder and Co-President (Incoming CEO), Moelis: Are they picking up, slowing down? There’s a good steady stream of activity in what we call CSA, which is not just restructuring, but liability management, balance sheet management, etcetera. We have a top ranked franchise in that space doing great. And in any given one year, you could have spikes if there’s economic volatility or high default rates. We’re not in that kind of environment today.

In any given year, you could have extraordinary client events and we had some of those last year. So but our business is doing really well and they have a nice base steady stream of clients and activity that we’re excited about.

Unidentified speaker, Analyst, Morgan Stanley: And if we do get resolution on tariffs and we get a soft landing and economy starts growing again fast accelerating, can restructuring decline from current levels or do you think

Naved Mamuzadigan, Co-founder and Co-President (Incoming CEO), Moelis: it will still stay elevated? I think there’s going to be a steady stream of activity there. Because look, even if the economy is doing great, there are some industries that are going to be affected. There are still companies that even if they’ve engaged in liability management exercise and pushed out maturities, they aren’t going to necessarily solve the problem. They may need to come back again and reengage with the marketplace about further extensions and further optimization of balance sheet.

Some of those companies still have balance sheet issues and it’s not like those problems have been solved. So I’m optimistic we’ve seen now, we’ve been in the restructuring business CSA now since 02/2009. And it’s been a really good business for us. Sometimes it’s a great business when you get these spikes, like we saw during the financial crisis, we saw during COVID. But it’s been, if you have a leading business, like we have a leading business, a market share, a company that is very, a business that is very high market position and great reputation, there’s going to be a steady stream of companies that need our services.

Unidentified speaker, Analyst, Morgan Stanley: Alright. Let’s turn to expenses and hiring. So maybe just more broadly, we talked about the growth opportunities in the various businesses. Is it getting more competitive where on the hiring front, maybe you’re seeing more competition out there? Or is that pretty stable?

Naved Mamuzadigan, Co-founder and Co-President (Incoming CEO), Moelis: Look, it’s always competitive. We are trying to find the very, very best people in the world in these sectors and with these products. That kind of talent is scarce and we’re competing with other good firms to try to get that talent. And for us especially, it’s really important that that talent fits culturally in our company. And culture is really critical to our company.

And so we’re looking for incredible people who want to be on our platform who fit. And there’s not a limitless universe of people who can do that in the spaces we want to be in where there’s the biggest market opportunity, right? So we also want people who can go after big revenue opportunities. And so whenever we find those people, it’s competitive. It would be unusual for us to be the only person wanting to hire that person.

And so, yeah, you have to be there. You have to convince people that we’re the best place in the world to work. We’ve been able to do that. Because I think we are the best place in the world to work. And so it’s always competitive and have to attract the talent.

And then once they’re there, retain the talent, which is really important as well.

Unidentified speaker, Analyst, Morgan Stanley: And on the pace of hiring, what are you seeing in terms of pace this year? Is it accelerating, decelerating? And then as you take over the CEO role, what’s really your philosophy on the pace of hiring? Do you think Molisk needs to hire more and more?

Naved Mamuzadigan, Co-founder and Co-President (Incoming CEO), Moelis: Look, at the partner level is three sixty five endeavor. You’re always monitoring, developing relationships, figuring out who the great people are. Look, our tech hire, Jason Auerbach, I had built up a relationship with Jason going back kind of four years before we actually hired them. The reason, one of the reasons we were able to quickly move to hire that team in the middle of the regional banking crisis is because we had put in the work together to get to know each other. Jason had spent time with other partners at the firm.

We had got to meet some of his people. So we knew him and we knew how great he was and we know how great his team was and there was a comfort level there. And so if we end up put that work in, I don’t know that we get them once the regional banking crisis hit. So we’re always out there trying to figure out who the great people are, who the people are who would fit on the platform. Right now, one of the big focus areas is obviously building out the CSA team, I’m sorry, the PFA team, Matt Wesley’s group.

That’s a very, very high priority. But we have other priorities within the firm too. There are other big market areas, big TAMs where we don’t have coverage, that we need coverage and and finding those people who can help us join our partnership to go after those opportunities is critical. But we’re not going to hire anyone who we don’t think is a top talent who is going fit on the platform.

Unidentified speaker, Analyst, Morgan Stanley: And the regional bank crisis hiring spree was a great example because Moelis historically has been very nimble whenever there’s uncertainty or things are slower and leaning in and then taking share the next cycle. Is that still the framework you’ll deploy? That’s still the framework.

Naved Mamuzadigan, Co-founder and Co-President (Incoming CEO), Moelis: I mean, Ken always talks about pristine balance sheet and it’s critical that we keep that. The fortress balance sheet, having the resources to move, even if it’s a scary time, because you can’t pick your time when the talent is available. And so if you’ve limited yourself without the resources to move, you’ve missed an opportunity. And so we’re always going to, I think, adhere to that. We want to make sure we have the flexibility to create value when the opportunities arise.

That’s a fundamental tenant of the firm that we’re going to keep. And then you obviously have to have the conviction to do it when the regional banking crisis has hit and the world looks like it’s uncertain and you don’t know when another tech deal is going to print. You actually have to have the nerve to follow through and hire those people. I’m really happy we did.

Unidentified speaker, Analyst, Morgan Stanley: And you talked a little bit earlier about white space and you’re hiring in PFA. That’s where you’re focused. But any sectors in particular on the M and A side that you’re more focused on?

Naved Mamuzadigan, Co-founder and Co-President (Incoming CEO), Moelis: Look, don’t want to necessarily talk specifics. But yeah, look, there’s within industrials, there’s some white space, within healthcare, there’s some white space. There’s areas in Europe where there’s white space. And look, pretty much in all of our sectors, even in some of our top ranked sectors, are sub sectors where we’re not covering all the companies there and if we can find the right talent to do that. But I personally want to stay focused on the biggest TAMs, where can we really move the needle.

Hiring is hard, hiring, there’s a lot of energy and effort that goes into that, not just from me, but our bankers who meet the people, because again, culture is important. Our administrative staff, our ops team, our HR team, a lot goes into hiring any banker. And so I really want to kind of stay focused on the areas that can move the needle the most.

Unidentified speaker, Analyst, Morgan Stanley: All right, comp ratio question I have to ask. So it was 69% in the first quarter. Do you still feel comfortable with that level for the rest of the year? Any changes or things we should be thinking about?

Naved Mamuzadigan, Co-founder and Co-President (Incoming CEO), Moelis: Yeah, we’re not making any changes to that guidance that Chris gave on our first quarter earnings call. I mean, again, at the end of the day, a lot of that will be dependent upon how the year shapes up and baked into that too was an assumption on some of the hiring we’re doing, including the hiring we’re doing behind Matt’s build out. So as of now, that’s how we’re thinking about it.

Unidentified speaker, Analyst, Morgan Stanley: And what do you think of as a normal comp ratio in a regular solid year?

Naved Mamuzadigan, Co-founder and Co-President (Incoming CEO), Moelis: Yeah. Look, we do not want to be at 69%. That’s not what we think of as sort of equilibrium for our company. I think we’ve said through cycles, we’d like to be in the low 60s, plus or minus a little bit depending upon how any particular year shapes up. That feels right to us.

Having said that, we have this pristine balance sheet with the resources to move to go build value and capitalize on opportunities. What we’ve asked from our shareholders who’ve been great about giving us this flexibility in the past is allow us to go capitalize on those opportunities in the short run. Like don’t let the comp ratio be the limiting factor in our ability to go and create value. And if you allow us to do that, we promise we’re always going to be super mindful and respectful of what equilibrium needs to be over the long run. And our pledge to you is we’re going to do everything we can to bring it back down.

Unidentified speaker, Analyst, Morgan Stanley: So it sounds like nothing structural changing that’s changing comp ratio outlook over the long term? No.

Unidentified speaker: No.

Unidentified speaker, Analyst, Morgan Stanley: All right, great. On non comp target for non comp growth this year is 15% year over year. How do think about balancing investing for growth versus getting efficiency?

Naved Mamuzadigan, Co-founder and Co-President (Incoming CEO), Moelis: Before we get to non comp, one thing I do want to talk about is I do think, and again, I don’t want to put up benchmarks there. But I think there really is an opportunity hopefully for technology AI to help us with comp ratio and managing that on the margin. I think, and we’re testing out some applications that really good early feedback on from our bankers and we’re rolling that out more broadly about how do we get more efficiency, especially from our, at least for now, from our junior bankers and making A, their lives better. So that there’s a higher percentage of their work that’s intellectually stimulating as opposed to just rote. I think AI can help us with that.

And I think if we’re successful in smartly adopting technology, the right technology when it’s available, I think that could help in terms of the size of our pyramid. And if the size of our pyramid can be managed down a little bit, I think that’ll make the lives of our junior bankers better. And I think that could help with comp ratio over time. Again, early days, I don’t want to predict anything yet, but I think that’s something that we’re staying on top of carefully. And then look, on non comp, look, we have a great team.

They’re very mindful of what we spend money on. There are parts of our business where we do need to be and have good office space, good real estate. We’ve upgraded our real estate in New York recently in LA. We’ll be doing that in London soon. That’s in process.

And so I do think it’s important to have good facilities that impacts culture a lot. It impacts client perception a lot. But we’re very mindful of the spend on the non comp side as well.

Unidentified speaker, Analyst, Morgan Stanley: When you talk about the pyramid getting a little smaller, is that the bottom of the pyramid, the associate?

Naved Mamuzadigan, Co-founder and Co-President (Incoming CEO), Moelis: I think so. Again, I don’t know what it’s going to look like, you know, once we really embrace technology the right way. But my instinct is it will be a little tighter. Again, if we can have our junior people doing more in a way that’s more intellectually stimulating for them, we’re never not going to have a pyramid. We need a pyramid because we’re in the advice business and we want to develop talent.

We need to keep developing the next generation of people who are going to interact with clients and all that. But on the margin, can we be a little more efficient on the pyramid down the road if technology develops the way I think it will? I think there’s a possibility of that.

Unidentified speaker, Analyst, Morgan Stanley: And what about the revenue side of AI? Are you seeing clients Well, that’s the big Yeah, that’s

Naved Mamuzadigan, Co-founder and Co-President (Incoming CEO), Moelis: the big Well, sure, AI is impacting lots of spaces. And so our tech bankers, other bankers in the firm are becoming experts quickly in how AI is developing. And so there’s a crop of companies to bank that are playing in the AI space and related spaces. And then I think even further than that, even if you look out even in the horizon, I do think AI has the potential to help senior bankers be smarter about opportunities to put companies together, be smarter in their dialogues with clients, be more efficient in our ability to create transactions. If you think about what really expands the pie, it’s that, right?

How do we make more smart transactions happen faster? AI could help with that.

Unidentified speaker, Analyst, Morgan Stanley: I want to pause. Are there any questions in the room for Naved? Alright, no questions. So maybe just let’s wrap with overall thoughts. You’re taking over as CEO.

What do you really want to leave investors knowing about what your overall strategy and approach will be?

Naved Mamuzadigan, Co-founder and Co-President (Incoming CEO), Moelis: Yeah, look, the fundamental pillars of the company, collaboration, shareholder friendly, transparency, fortress balance sheet, culture, none of those are changing. That’s very much part of the philosophy we all created together, Ken, Jeff, myself, the whole management team, I really believe in all of that. And what I hope to do is to help execute at the very, very highest level our strategy. We want to continue to strive to be the best independent investment bank in the world and more than anything clients front and center. All of, everything we do, every success we’ve had, every reputational advancement, every dollar of revenue that comes in the door is directly tied to doing a great job for clients and building these long term relationships.

And relationships and clients are front and center and everything we talk about as a company and that’s not going to change.

Unidentified speaker, Analyst, Morgan Stanley: Great. Nava, thank you so much. Thank you. Appreciate it.

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