Moelis and Company 2Q16 Earnings Call Notes

Moelis & Company’s (MC) CEO Ken Moelis on Q2 2016 Results

M&A driven by low growth

“In US, M&A activity should continue to be driven a consistent and predictable low growth environment which CEOs are able to plan for. Interest rates remain low, capital markets were open and companies are planning accordingly. Our outlook remains positive, our M&A dialog remains healthy, our restructuring activity is growing and our internal talent has developed to serve a growing client base.”

Restructuring activity is episodic

“I would call it at this point episodic. I think some of it is little retail oriented. I think the consumer and some part of that sector you’re seeing more than episodic, but I can’t discern a trend across the economy in some ways that’s the good news I don’t think it’s yet hit across the high yield spectrum all industries. I think that’s still to come.”

UK is responding quickly to Brexit

“We were, I think we were slow in Europe and I can’t attribute that to BREXIT, I’m not sure it was, I’m not sure it wasn’t. I think people have attributed a lot to BREXIT, but I’m not sure how you know exactly what BREXIT did or did not do during that timeframe. I actually I’m very bullish. I think the UK is responding quickly.”

I think the market is prepared for either outcome in the election

“I don’t expect the elections to have much input. I said there’s a plenty bumper sticker I saw which said, the good news is we can only elect one of them. So I think all the possibilities are out there and so there’s only two outcomes and I think the market is kind of ready for either one.”

I’m bullish on the UK

“I think I’m bullish over Europe and the UK over the future. I actually I’ve been, I wasn’t surprised but I think the UK has moved to solve a lot of problems pretty quickly but politically, they are solving some of the issues that were deemed to be unsolvable prior to the vote. I think that we’ll see a lot of activity there, but in the short-term there’s a hangover I think from the vote.”

Companies are pretty confident that the economy is going to be lousy

” I feel no diminution in level of activity from sort of fee standpoint. We haven’t really incurred it, I know there is volume changes and the restructuring revenues are ramping up and it’s all because of a very poor economic environment as somebody said, how confident are CEO’s, I said yes they’re confident that the economy will be lousy and they may need to do things about it, but that they’re confident, that they understand that there will be a no growth economy that’s not good for leverage companies, but it does allow corporations to plan around a very predictable and unchanging low growth economy”