Moelis and Company FY 2Q15 Earnings Call Notes

Moelis & Company’s (MC) CEO Ken Moelis on Q2 2015 Results

Mega deals were up but general activity was actually down

“We continue to see strong completion activity for deals greater than 10 billion. Mega deals were four times greater in number of transactions for both the quarter and the year-to-date 2015 periods. However the number of global M&A completions greater than 100 million in value which is how we look at sort of general market activity was actually down 20% for the third quarter and 6% for the year-to-date.”

October has felt more stable

“While September’s volatility in the equity markets was not conducive to deal activity our momentum hasn’t been disrupted and October has felt more stable. However I do want to prolong volatility of that nature could make the deal environment more challenging and is probably the number one risk for deal making activity.”

We look to hire people who want to be part of a team and aren’t looking for immediacy

“in the hiring process Ashley is we look to people who are looking to be part of the team and operate as a team. And it comes out pretty directly when you’re talking about message of compensation et cetera. People elect to either be part of a team or they want to operate individually and we can tell that pretty quickly. So I think what we avoid I’ll tell you two things we avoid. We avoid that and we also avoid people who are looking for immediacy. I have a big believe that the value in hiring people is the duration of which you keep those people. There is very I would say it’s a I would say there is very little value and short-term employee no matter how productive they are”

Restructuring is tough in Brazil

“restructuring mechanisms in Brazil are difficult. They don’t have a very clean chapter 11 procedure”

You could get more going private deals in small companies as valuations haven’t risen as much as large companies

“I think as you get down to small caps you’re not seeing quite the same recovery in valuations and so in mid the rest of the 2000, rest of 5000 index I don’t think it’s recovered quite as much and you could start to see a little more the going private-private equity deals that we saw prior the crisis really.”

September did not feel great but it’s gotten back to stable in October

“I think it got back to pretty stable in October. It was – if it gone on for a longer time it didn’t feel really great like on September I don’t know if it was second or third week. It did not feel great”