On October 30, 2024, investment bank Houlihan Lokey (NYSE: NYSE:HLI) reported significant year-over-year increases in revenue and adjusted earnings per share during its second quarter earnings call for fiscal year 2025. The firm announced revenues of $575 million and adjusted earnings per share of $1.46, marking increases of 23% and 32%, respectively.
The company attributed its strong performance to a favorable M&A environment, new business activity in financial restructuring, and increased demand for market-neutral services. Additionally, Houlihan Lokey discussed its strategic acquisitions and expressed confidence in its outlook for the remainder of the fiscal year.
Key Takeaways
- Houlihan Lokey's Q2 revenues rose to $575 million, a 23% increase year-over-year.
- Adjusted earnings per share increased by 32% to $1.46.
- Corporate Finance revenue grew by 29% to $364 million, driven by a positive M&A environment.
- Financial Restructuring and Financial and Valuation Advisory segments also saw revenue increases of 15% and 12%, respectively.
- The firm's solid cash position stood at approximately $748 million as of the quarter-end.
- Acquisitions of Prytania Solutions and Waller Helms are expected to enhance the company's valuation and financial services offerings.
- Despite macroeconomic challenges, Houlihan Lokey remains optimistic about the second half of fiscal 2025.
Company Outlook
- Houlihan Lokey anticipates ongoing strength in restructuring activities, with a positive outlook extending into 2026.
- The company expects the capital markets business to contribute 15% to 20% of Corporate Finance revenues.
- Executives maintain a robust M&A pipeline despite recent acquisitions.
- Capital allocation priorities are focused on dividends, acquisitions, and share balance.
Bearish Highlights
- Rising interest rates present different challenges for restructuring opportunities compared to previous years.
- The impact of interest rate changes on the company's operations remains a consideration.
Bullish Highlights
- The acquisition of a U.K.-based portfolio valuation business is expected to contribute to recurring revenue.
- The private capital solutions group continues to thrive, especially in the middle market.
- The overall health of private equity portfolios helps mitigate individual company stresses.
Misses
- There were no specific financial misses discussed in the earnings call.
Q&A Highlights
- Scott Adelson and Lindsey Alley addressed the impact of interest rate changes on restructuring opportunities, suggesting a continued presence of distressed balance sheets.
- The executives discussed the capital markets business, highlighting significant refinancing activity and the strength of private capital solutions.
- The call concluded with a reminder of the next earnings update scheduled for winter 2025.
InvestingPro Insights
Houlihan Lokey's strong performance in Q2 fiscal 2025 is reflected in its robust financial metrics and market position. According to InvestingPro data, the company boasts a market capitalization of $11.95 billion, underscoring its significant presence in the investment banking sector. The firm's revenue growth of 11.37% over the last twelve months aligns with the reported 23% increase in Q2 revenues, indicating a consistent upward trajectory.
InvestingPro Tips highlight that Houlihan Lokey has maintained dividend payments for 10 consecutive years and has raised its dividend for 9 consecutive years. This demonstrates the company's commitment to shareholder returns, which is particularly noteworthy given the reported solid cash position of $748 million as of the quarter-end.
The company's profitability is evident from its impressive gross profit margin of 93.51% and operating income margin of 19.11% for the last twelve months. These figures support the firm's ability to generate strong earnings even in a challenging macroeconomic environment.
Investors should note that Houlihan Lokey is trading near its 52-week high, with a price that is 98.03% of its 52-week high. This, coupled with a 66.66% price total return over the past year, reflects the market's positive sentiment towards the company's performance and outlook.
While the P/E ratio of 36.18 suggests a premium valuation, it's important to consider this in the context of the company's growth and market position. The high return over the last decade, as mentioned in the InvestingPro Tips, indicates a track record of long-term value creation for shareholders.
For those interested in a deeper dive into Houlihan Lokey's financials and future prospects, InvestingPro offers 12 additional tips and a comprehensive set of financial metrics to aid in investment decision-making.
Full transcript - Houlihan Lokey Inc (HLI) Q2 2025:
Operator: Good day, ladies and gentlemen. Thank you for standing by. Welcome to the Houlihan Lokey Second Quarter Fiscal Year 2025 Earnings Conference Call. [Operator Instructions] Please note that this conference call is being recorded today, October 30, 2024. I will now turn the call over to the company.
Christopher Crain: Thank you, operator and hello everyone. By now, everyone should have access to our second quarter fiscal year 2025 earnings release, which can be found on the Houlihan Lokey website at www.hl.com in the Investor Relations section. Before we begin our formal remarks, we need to remind everyone that the discussion today will include forward-looking statements. These forward-looking statements, which are usually identified by use of words such as will, expect, anticipate, should or other similar phrases are not guarantees of future performance. These statements are subject to numerous risks and uncertainties that could cause actual results to differ materially from what we expect. And therefore, you should exercise caution when interpreting and relying on them. We refer all of you to our recent SEC filings for a more detailed discussion of the risks that could impact our future operating results and financial condition. We encourage investors to review our regulatory filings, including the Form 10-Q for the quarter ended September 30, 2024, when it is filed with the SEC. During today’s call, we will discuss non-GAAP financial measures, which we believe can be useful in evaluating the company’s financial performance. These measures should not be considered in isolation or as a substitute for our financial results prepared in accordance with GAAP. A reconciliation of these measures to the most directly comparable GAAP measures is available in our earnings release and our investor presentation on the hl.com website. Hosting the call today, we have Scott Adelson, Houlihan Lokey’s Chief Executive Officer; and Lindsey Alley, Chief Financial Officer. They will provide some opening remarks, and then we will open the call to questions. And with that, I’ll turn the call over to Scott.
Scott Adelson: Thank you, Christopher, and welcome, everyone, to our second quarter fiscal 2025 earnings call. We ended the quarter with revenues of $575 million and adjusted earnings per share of $1.46. Revenues were up 23% and adjusted earnings per share were up 32% compared to the same period last year. We are pleased with our results for the quarter, and we entered the second half of the year with momentum across all 3 of our business lines. Corporate Finance continues to benefit from improvements in the M&A markets, and we expect the second half of the year to follow this trend. Financial Restructuring had a strong second quarter as it continues to benefit from record leverage and still elevated interest rates. And our Financial and Valuation Advisory group experienced growth in our market-neutral services as well as developing demand for those service lines affected by an improving M&A environment. While we are optimistic about the second half of our fiscal year, we recognize the challenges posed by the current macro environment. Interest rates, though lower than their recent peaks, remain high, and it may take time to feel the effects of lower interest rates on our clients’ financial performance. Geopolitical volatility, particularly the potential for a wider conflict in the Middle East and Ukraine and the U.S. presidential elections, all add layers of complexity to our outlook. Despite these risks, we continue to experience a steady upward trajectory for markets and the business environment. Corporate Finance produced $364 million in revenues for the quarter, representing a 29% increase over last year’s second quarter. Key metrics for our Corporate Finance business continue to improve and new business generation remains strong. Since Labor Day, we have seen an increasing number of companies choosing to go to market, a trend we expect to continue. While this trajectory of deals coming to market is positive, we continue to experience longer time lines to close these transactions. So while transaction velocity is improving, it is doing so at a slower pace than in previous recoveries. Additionally, within Corporate Finance, our capital markets business performed very well in the quarter, bolstered by strength in private capital and the successful integration of our Triago acquisition. Financial Restructuring produced $132 million in revenues for the second quarter, a 15% increase versus the second quarter last year, reinforcing our view that the restructuring markets remain elevated. New business activity was particularly strong, driven by a combination of large-cap and middle-market opportunities. This heightened activity is expected to benefit our restructuring business well into fiscal 2026. Additionally, as market conditions continue to improve, we are prepared for some restructuring activity to turn into healthy refinancing activity, which we are well positioned to execute on behalf of our clients. Financial and Valuation Advisory produced $79 million in revenue for the second quarter, a 12% increase versus the second quarter last year. Performance continues to be driven by our non-cyclical business lines, particularly portfolio valuation. We observed an uptick in new business generation in the first half of the year compared to the same period last year, and demand for our M&A-related services is starting to rebound. Regarding acquisitions, we recently announced the closing of our acquisition of Prytania Solutions. Prytania is a tech-enabled valuation platform based in the U.K. specializing in structured products. Prytania will be integrated into our Financial and Valuation Advisory business and will complement our highly successful portfolio valuation group. We extend a warm welcome to all our new colleagues joining as a result of this transaction. During the quarter, we announced the acquisition of Waller Helms, which will significantly expand the depth and breadth of our financial services industry group, especially in the insurance and wealth management sectors, areas that are highly active for private equity. This acquisition will create new synergies and strengthen our coverage of these sectors with 48 new financial professionals, including 13 managing directors. The acquisition is on track to close by the end of the calendar year. Separately, we hired 3 new managing directors this quarter as we continue to take advantage of an active hiring market, particularly in Corporate Finance. Our outlook for the second half of fiscal 2025 remains positive. We continue to reap the benefits of a balanced and highly diversified business model. The improving M&A sentiment, strong capital markets and sustained strength in our restructuring business are all encouraging indicators. With the most talented workforce in our history, we are diligently working to capitalize on the market’s recovery as it unfolds. With that, I’ll turn the call over to you, Lindsey.
Lindsey Alley: Thank you, Scott. Revenues in Corporate Finance were $364 million for the quarter, up 29% compared to the same quarter last year. We closed 131 transactions this quarter, up from 117 in the same period last year, and our average transaction fee also increased. Financial Restructuring revenues were $132 million for the quarter, a 15% increase versus the same period last year. We closed 33 transactions this quarter compared to 31 in the same quarter last year, and our average transaction fee on closed deals also increased. As we’ve mentioned in the past, revenues in our Financial Restructuring business can be lumpy quarter-to-quarter, and this quarter benefited from some larger transactions. For Financial and Valuation Advisory, revenues were $79 million for the quarter, a 12% increase from the same period last year. We had 903 fee events during the quarter compared to 852 in the same period last year. Turning to expenses. Our adjusted compensation expenses were $354 million for the quarter versus $287 million for the same quarter last year. Our only adjustment was $7 million for deferred retention payments related to certain acquisitions. Our adjusted compensation expense ratio for the second quarter in both fiscal 2025 and 2024, was 61.5%, and we expect to maintain our long-term target of 61.5% for this ratio. Our adjusted non-compensation expenses were $81 million for the quarter, an increase of 7% over the same period last year. This resulted in an adjusted non-compensation expense ratio of 14.1% for the quarter compared to 16.1% for the same period last year. On a per employee basis, our adjusted non-compensation expense was $31,000 this quarter versus $29,000 for the same quarter last year. For the quarter, we adjusted out of non-compensation expenses $2.1 million in non-cash acquisition-related amortization. We also had an adjustment of approximately $700,000 pertaining to professional fees associated with streamlining our global organizational structure referred to as Project Solo. Our adjusted other income and expense produced income of approximately $5.4 million versus income of approximately $2.5 million in the same period last year. The improvement in this category was primarily due to a net increase in interest income. Our adjusted effective tax rate for the quarter was 31.3% compared to 28.4% for the same quarter last year. The increase in our effective tax rate was primarily a result of increased state taxes and increased taxes due to foreign operations. Our long-term target range for our adjusted effective tax rate is between 28% and 30% and we expect fiscal 2025 to end up at the high end of that range. Turning to the balance sheet. As of quarter end, we had approximately $748 million of unrestricted cash and equivalents and investment securities. As a reminder, we will pay our deferred cash bonuses related to fiscal year 2024 in November, which will reduce our balance sheet cash. With that, operator, we can open the line for questions.
Operator: [Operator Instructions] And our first question today comes from James Yaro with Goldman Sachs (NYSE:GS). Please go ahead.
James Yaro: Good afternoon and thanks for taking my question. Maybe just starting on Corporate Finance, which obviously had best-in-class trends, both year-on-year and quarter-on-quarter as you think about the outlook from here, in the near term, is there any risk of less-than-normal seasonality in the calendar fourth quarter and then longer term, how we should think about the trajectory from here? Is there anything in your view that could catalyze a notable acceleration other than perhaps the election?
Scott Adelson: Good question, as always. Thank you. I think if you look at it, it’s very consistent with what we have been talking about. Things have been improving month-over-month, quarter-over-quarter, and it’s really all been about what’s been the velocity of that improvement in Corporate Finance. And I think we’ve just continued to see it improving. Obviously, we – in our statements recognize there are a number of external factors that could affect that, at least which positive or negatively would be the election, but also the conflicts around the world, and we recognize that. But in spite of that, we do continue to see things going to market on a more regular basis and things moving along. But as we said, it is still an elongated period to close. That part, while getting shorter, is still not in the normal range yet.
James Yaro: That’s very helpful. Thank you, Scott. Maybe just quickly on the Prytania Solutions transaction, anything more that you could just add on the strategic rationale, maybe where the business operates, potential synergies that you see? And anything else that we should be thinking about to help us understand the transaction?
Scott Adelson: Yes, happy to do that. It’s really are pleased about this new opportunity. I mean it is an addition to our portfolio valuation business, which we think is a really wonderful business. And it is much more tech enabled than the bulk of our portfolio valuation businesses, although we do have components of it that are similar. We just believe that they have really superior technology, and we are excited about the opportunity to deploy that initially within our portfolio valuation area. And we believe there may be opportunities that will be applicable in other areas over time.
Lindsey Alley: And the other benefit to that business is its U.K. based. A lot of their clients are focused on non-U.S. geographies. And so it is a kind of a nice step in growing that business or continuing to grow that business outside the U.S.
James Yaro: Thank you so much.
Operator: And our next question today comes from Brennan Hawken with UBS. Please go ahead.
Brennan Hawken: Hi, thanks for taking my questions. I’d like to follow up maybe on that last point on PSL. So this is the first FVA deal, I think, that we’ve seen. So helpful to get that fleshed out a little bit. It sounds like this is going to be sitting in largely that recurring portion of the FVA. Is that right? And pro forma for this deal, what percentage of that FVA revenue do you expect to be recurring?
Scott Adelson: Yes. Thanks for the question. And the answer is, yes, you are correct. That is where it will sit and that it is the recurring portion of the revenue, and that is another reason we do like it quite a bit. It is not going to materially change our results, not at that scale today, but we believe that it will contribute over time in a more meaningful fashion.
Lindsey Alley: And to answer your somewhat subtle question, Brennan, it will continue to be a recurring business similar to the way it was prior to the transaction.
Brennan Hawken: Thank you for picking up on the subject. Okay. Scott, I think you also had some comments in your prepared remarks around restructuring and that it’s looking good and will continue to look good likely into 2026. But also you touched on something that I wanted to ask about actually, which was the idea that some of those restructuring mandates that the bankers have been working on are probably going to be showing up in capital markets revenues because you guys book based on product. So is that right? And if we adjust for that, would you be continuing to see restructuring growth here this year just because that’s probably a better indication around where the strength of the business and the resilience of the business? Thanks.
Scott Adelson: I think the operative word there was could be, right? I mean I think you may be reading a little too much into that. We are continuing to see strong activity in restructuring in the quarter, and that will have – as you know, due to the time frame of it, that will continue on into the future. We’ll see the benefits of that. It is just a general statement that as we get later in a cycle, we recognize that there is the possibility of that occurring. It is not a statement that there’s something in particular that’s happening or happening more regularly or anything like that.
Brennan Hawken: Okay. Got it. So the outlook on restructuring and your expectations, even though you came in above that range, that sort of average range aren’t changing for the year. Is it just it was a quarter maybe timing? Okay.
Scott Adelson: Correct. It was a good quarter, which is it continues to give us confidence in sustaining at the elevated levels that’s been at.
Lindsey Alley: Yes. And I’d say that the only other thing that we mentioned is the activity levels this quarter were strong, and that bodes well for our thesis that this is kind of higher and longer – higher for longer.
Brennan Hawken: For the restructuring activity basically, higher for longer?
Lindsey Alley: Yes. For the restructuring, correct, yes.
Brennan Hawken: Okay, thank you so much.
Operator: Our next question today comes from Aidan Hall with KBW. Please go ahead.
Aidan Hall: Thanks. Good afternoon, everyone. Noted in your prepared remarks, Scott, the capital markets business performed well with strength in private capital, also the integration of the Triago transaction. Just wondering if there’s any update as to how we should be thinking about the contribution of this business to the Corporate Finance line just given the recent additions?
Lindsey Alley: Yes. Look, I think we continue to sort of suggest to the market that you should think of that business as between 15% and 20% of our Corporate Finance revenues in any given year. The capital markets business over the last couple of years has done quite well. We are starting to see momentum in the M&A business, as Scott suggested. And so depending on how fast the M&A business recovers you are still likely looking at that range that we’ve sort of always told to the market.
Aidan Hall: Okay, got it. I appreciate the color there. Maybe just a follow-up on PSL, I understand kind of the specialties in structured credit there. Maybe how is this technology being utilized across other asset classes or verticals? And maybe you could just touch on a little more granular the opportunity and kind of integrating that to the broader platform?
Scott Adelson: Yes. I mean it is an area that we think there will be applicability over time. And I think that it’s really too early for us to get into any details on how we really think that it will play out. But we recognize that, that is an area of our business that already utilizes a meaningful amount of technology, and we think this is particularly good technology and will only be additive to what we are already doing.
Aidan Hall: Thank you for taking my questions.
Operator: And our next question today comes from Devin Ryan with Citizens JMP. Please go ahead.
Alex Jenkins: Hey, guys. This is Alex Jenkins filling in for Devin Ryan. Congrats on a nice quarter. I guess just to start on the MD head count over the last four quarters or so, obviously, it went down a little bit this quarter, but you’ve basically been growing in the low single digits. Maybe you could just touch on the environment and competitive dynamics and how we should think about framing out senior talent going forward over the next year or so.
Scott Adelson: I think that when you think about MD head count from our perspective, it’s a couple of things. It is obviously our annual process of promoting people. That’s one piece of it. You have – we are fairly regularly and certainly right now in the market looking to acquire additional individuals. And we do that, and as we stated in the quarter, hired 3 new people and then we have the acquisitions. Now there – as we’ve said before, we also do have some number of people both in acquisitions and other ways that don’t wind up being as good a fit as in some cases we might have hoped. But that number winds up netting over time. But overall, it has been a growing number.
Alex Jenkins: Okay. Alright. I appreciate that. And then maybe a follow-up, hopefully, this is the last question that you have to answer on the election, but obviously, you work with a lot of small businesses. Can you speak to their sentiment as we head into this election, what might happen once we get past Election Day, and just generally, what are the puts and takes of these two administrations as it relates to activity for your business? Thank you.
Scott Adelson: I think you can pretty well bet that there is individuals on both sides of that equation that believe in each side of the set of possibilities will be beneficial to them. And I think that what we really have seen is people continuing to move forward on transactions and deploying capital and kind of, regardless no longer waiting, if you will, to see what’s going to happen. And I think that, that is, you are seeing that both in our results and our statements about things continue to move forward.
Lindsey Alley: Yes. I mean just to add to that, I think looking in the mid-cap space, we tend not to have the same regulatory pressures on our transactions that a lot of our publicly traded peers in the bulge bracket have. And so that is a big topic in this election that really doesn’t have an impact on us. The other is, we are highly diversified across industries. So, healthcare may be benefited from X, Y, Z winning the election and industrial, the other person. And so we are – I think diversified enough across industry where there is not one theme underlying what’s better for us if someone wins. And then I think third is, for us, probably what happens to capital gains is probably the most important topic to a lot of our clients because we do deal with a lot of entrepreneurs. And I think at the minimum, people think the government is going to be split. And so the idea of movement in capital gains is probably not a huge risk coming into this election, so we kind of mix all of that in a bowl, and that’s kind of what – how we are thinking about the election.
Scott Adelson: The other thing I would add to what Lindsey said, we also have a geographic mix as well, right.
Lindsey Alley: Yes.
Scott Adelson: And so obviously, we are sitting here in the United States are very fixated on our election, but it’s a big world out there.
Alex Jenkins: Sure. That makes sense. Thank you, guys for that color. Appreciate it.
Operator: And our next question today comes from Brendan O’Brien with Wolfe Research. Please go ahead.
Brendan O’Brien: Good afternoon and thank you for taking my questions. I guess to start, I just want to touch on capital allocation. You guys have done quite a few deals over the past year or 2 years. But just wanted to get a sense as to what the acquisition pipeline is looking like today, whether there is any need to take a bit of a breather here to focus on integrating all the deals that you have done recently and how that is influencing your thinking around capital return and buybacks.
Scott Adelson: Yes. I mean I will let Lindsey take the buyback piece. But the – we are always in dialogue. As we have stated before, this is a part of our strategy, and we will continue to do acquisitions. When they come in, when they hit is, it’s lumpy to use a term that Lindsey used earlier. And so while there have been a few recently in short order, that doesn’t mean that it will continue at that pace. But we are constantly looking. When we find things that we think are a good fit and will be beneficial to the organization and our shareholders, we will continue to work on doing them. And so that process will continue.
Lindsey Alley: Yes. And in terms of thinking of the overall pipeline of M&A, the fact that we have had sort of three deals here in the last six months or eight months, either announced or closed, hasn’t affected the pipeline. It’s as kind of robust as it’s been for years, frankly. In terms of capital allocation, I don’t think our position has changed any. We – our dividend is our priority, and I would say acquisitions is second and then maintaining share balance would be third. And I think we have done a pretty good job in all three. We haven’t been in the open market making share repurchases, but we also have quite a few withhold to cover transactions that we do throughout the year and the big one being in May. And so we generally kept our share count flat without having to go to open market. And I think frankly, we like to keep that flexibility on our balance sheet as these acquisitions come about.
Brendan O’Brien: That’s great. And for my follow-up, I wanted to touch on sponsors. From the data that I can see, it’s pretty apparent that there has been a bifurcation in default rates and liability management activity between corporate and sponsor-backed companies. With sponsor defaults and liability management activity continuing to increase as corporate default rates have moderated, how much is the stress among sponsor portfolio companies been a headwind to activity? And do we need to see these pressures abate before sponsor M&A activity like hits normalized levels?
Scott Adelson: That’s not – I mean while I don’t disagree with some of your sentiments that has not been something that there has been a driver there. You got to remember, most of the sponsors that we deal with have a number of portfolio companies. And that is – that may be a problem for an individual partner in that fund who is running that particular deal, but the entire portfolio effect of that private equity firm, they are not still focused on one particular, if you will, sick balance sheet that they are keeping from managing and growing and exiting their successful operations. So, I mean I think that you are – that’s not something that I would say we have seen.
Brendan O’Brien: Great. Thank you for taking my questions.
Scott Adelson: Thanks Brendan.
Operator: [Operator Instructions] And our next question today comes from Kenneth Worthington with JPMorgan (NYSE:JPM). Please go ahead.
Alex Bernstein: Hi. This is Alex Bernstein on for Ken. Thanks so much for taking my question. I wanted to double-click on restructuring. I know you mentioned that some of the processes were taking longer to close. This quarter was strong, in part due to the timing and that your pipeline going ahead continues to look attractive. I wanted to help us think through the different interest rate environment. Obviously, we have had a significant rise in rates over the past handful of years, and that’s starting to abate and continuing to abate. I wanted to get your thoughts on how that impacts the rate cycle that is, the types of restructuring opportunities you are seeing. And as the pipeline continues to build today, do those building blocks look different than they did, say, 18 months or 12 months ago? Thanks so much.
Scott Adelson: Yes. I want to make sure I am clarifying your other statement too. So, I am talking about elongated timeframe that is really relating predominantly to corporate finance business, more on the healthy side. I believe your question is relating to the restructuring business and the interest rates, am I understanding your question correctly?
Alex Bernstein: That’s right. Thank you.
Scott Adelson: Yes. And I think we are still in an elevated interest rate environment. And I think that this quarter and the activity levels that we have seen and continue to see are an indication that there are still a number of sick balance sheets out there that need to be dealt with in some form or another. And we expect that to continue as we have stated for the foreseeable future.
Alex Bernstein: Thanks. And just maybe one more, thinking about the capital markets business and as that continues to grow, to start this year, there is course a pretty significant wave of refinancing activity in the market broadly. To some extent, much of that was driven by the fact that the public markets were largely closed. On the debt side, you had a lot of private credit funding that was going on to balance sheets at more expensive rates. And then a lot of that was flowing through and changing to the public markets in the past handful of quarters. Does that elevated level of activity impact what you are seeing in the capital markets business? And how are you looking at that going forward as that looks to be making its way through the system now broad market-wise?
Scott Adelson: Yes. I mean we have – we believe, the largest private capital solutions group out there, and we have been very fortunate that, that group has been busy, continues to be busy. Private capital, obviously, as an asset class has continued to grow significantly. And we have benefited from that growth, clearly, and that’s not something that we see subsiding anytime soon.
Lindsey Alley: And just given our average transaction size, the public markets opening up isn’t having a huge impact on our private capital business. Remember, we are primarily in the middle market and that middle market, the option of sort of the public markets are generally not available to them, it’s just too small. And so we welcome the public markets opening and even the bank markets opening, but we don’t think that has a huge impact on our private capital business.
Alex Bernstein: It makes sense. Thanks again. Appreciate it.
Scott Adelson: Thanks Alex.
Operator: That concludes our question-and-answer session. I would like to turn the conference back over to Scott Adelson for any closing remarks.
Scott Adelson: I want to thank you all for participating in our second quarter fiscal 2025 earnings call. We look forward to updating everyone on our progress when we discuss our third quarter results for fiscal 2025 this coming winter. Thank you very much.
Operator: The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect.
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