Ryan Michael Kenny

Ryan Michael Kenny asked for insights into the percentage of Moelis's Managing Directors (MDs) who are currently ramped, specifically those hired or promoted since 2021. He also questioned if the time to ramp for MDs in Private Capital Advisory (PCA) is faster than traditional M&A, potentially making it less of a drag on the compensation ratio.

Answer

CEO Navid Mahmoodzadegan provided statistics, noting that about a third of MDs have been on the platform for less than 3 years, and a quarter for less than 2 years, indicating that the firm is still maturing its talent base and their most productive years are ahead. He confirmed that PCA MDs ramp faster because they leverage existing sponsor and industry relationships, plugging a new product set into an established client base, which accelerates revenue generation.

Ryan Kenny asked about client sentiment regarding the economy, the 'animal spirits' in the middle market versus large corporate deals, and the top risks. He also questioned the sensitivity of sponsor clients to interest rates and the potential impact of a Fed pause on the pipeline.

Answer

Scott Adelson, CEO, noted a greater degree of uncertainty due to geopolitical issues but observed clients' impressive willingness to proceed with business despite the 'noise.' Lindsey Alley, CFO, contrasted the middle market's less volatility with the larger cap space's pent-up demand. Lindsey Alley also stated that while lower rates are better, capital availability is the biggest driver for sponsors, and the middle market is less affected by rates than large cap deals.