2012 kbw conference presentation (1)
TRANSCRIPT
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KBW Securities Brokerage & Market Structure Conference
November 28, 2012
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This presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of
1933 and Section 21E of the Securities Exchange Act of 1934, which reflect our current views with respect to,among other things, our operations and financial performance. In some cases, you can identify these forward-looking statements by the use of words such as outlook, believes, expects, potential, continues, may,
will, should, seeks, approximately, predicts, intends, plans, estimates, anticipates or the negative
version of these words or other comparable words. All statements other than statements of historical fact includedin this presentation are forward-looking statements and are based on various underlying assumptions andexpectations and are subject to known and unknown risks, uncertainties and assumptions, and may includeprojections of our future financial performance based on our growth strategies and anticipated trends in ourbusiness. Such forward-looking statements are subject to various risks and uncertainties. Accordingly, there areor will be important factors that could cause actual outcomes or results to differ materially from those indicated inthese statements. We believe these factors include, but are not limited to, those described under Risk Factors
discussed in our Annual Report on Form 10-K for the year ended December 31, 2011 and subsequent QuarterlyReports on Form 10-Q and current reports filed under Form 8-K. These factors should not be construed asexhaustive and should be read in conjunction with the other cautionary statements that are included in thisdiscussion. In addition, new risks and uncertainties emerge from time to time, and it is not possible for us topredict all risks and uncertainties, nor can we assess the impact of all factors on our business or the extent towhich any factor, or combination of factors, may cause actual results to differ materially from those contained in
any forward-looking statements. Accordingly, you should not rely upon forward-looking statements as a predictionof actual results and we do not assume any responsibility for the accuracy or completeness of any of theseforward-looking statements. We undertake no obligation to publicly update or review any forward-lookingstatement, whether as a result of new information, future developments or otherwise.
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Overview of Evercore
Strategic Objective: Create the premier global independent investment bankingadvisory firm delivering superior returns to investors
Advisory Ranked among the top 3 independent M&A advisors globally in each of the past 3 years(1)
Institutional
Equities
Serving more than half of the top 50 institutional money managers and top 50 hedge
funds in the U.S.
WealthManagement Managing $4.5 billion
(2) of assets for high net worth individuals and family offices
InvestmentManagement
Completed three investments in boutique institutional investment managers and oneprivate equity manager
(1) Based on announced transaction volume(2) Includes $645 million in assets under management through the acquisition of Mt. Eden Investment Advisors
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Investment highlights
Fastest growing global investment banking advisory firm
Consistently advising on leading transactions
Well positioned for recovery in M&A
Recruiting 5 7 senior managing directors per year
Favorable operating leverage
The addition of A+ talent sustains and improves productivity
Early stage businesses are growing and continue to take market share
Shareholder friendly capital deployment
Returning more than 100% of earnings to shareholders
Increased the quarterly dividend to $0.22, an 83% increase since 2008
Repurchased shares to offset the dilutive effect of bonus equity in2010, 2011 and 2012
Board authorized additional 5 million share repurchase
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Investment Banking
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$0
$300
$600
$900
$1,200
$1,500
$1,800
$2,100
$2,400
$2,700
$3,000
$3,300
$3,600
$3,900$4,200
80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 1112*
GlobalannouncedM&Adealvolum
e
Source: Thomson Reuters* 2012 annualized based on 10M 2012
1980 2012 global announced M&A deal volume ($ in billions)
5 years8 years7 years
Market environment
Secular trends for M&A remain positive
M&A recovery slowed in the second half of 2011 and early in 2012
Volatile markets impact pace of recovery
5
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Global announced M&A ($ in bi l l ion s)
Source: Thomson Reuters as of 10/4/2012
6
664
882
789
501 487441 446
610
509540
647682
707673
551 560
491
605540
$0
$200
$400
$600
$800
$1,000
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Q1 2008 Q3 2012 quarterly global announced M&A deal volume
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EuropeNorth America
Global announced M&A ($ in bi l l ion s)
South and Central AmericaAsia (including Japan)
Source: Thomson Reuters as of 10/4/2012
Current activity is below historic averages in virtually all major markets
7
158
398
313
125
200 211
152
281
182
228 227 239
324
265
220234
175
222
284
$0
$100
$200
$300
$400
$500
Q108
Q208
Q308
Q408
Q109
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Q309
Q409
Q110
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Q112
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324
237
348
237
181
111136 138
106
147169
192 199206
142 153172
200
99
$0
$100
$200
$300
$400
$500
Q108
Q208
Q308
Q408
Q109
Q209
Q309
Q409
Q110
Q210
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Q411
Q112
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126
185
92 9371
87
129 141
107 112
155186
125156
140 130104
119 132
$0
$100
$200
$300
$400
$500
Q108
Q208
Q308
Q408
Q109
Q209
Q309
Q409
Q110
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3649
1934 23 24 20
34
77
40
7643 44 32 37 33 29
48
14
$0
$100
$200
$300
$400
$500
Q108
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Q308
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Evercore is consistently gaining market share compared to the leadingindependent advisory firms as well as the larger universal banks
Growing market share
All Firms M&A announced transactions ($ in billions)
U.S.
Global
1. Source - Thomson Reuters as of 11/26/2012
1 Goldman Sachs $4,846.9 1 Goldman Sachs $205.92 Morgan Stanley 3,664.5 2 JP Morgan 163.03 JP Morgan 3,577.9 3 Credit Suisse 153.94 Bank of America Merrill Lynch 3,423.5 4 Morgan Stanley 127.85 Citi 2,917.8 5 Barclays 123.76 Credit Suisse 2,437.1 6 Citi 115.6
7 Barclays 2,369.7 7 Deutsche Bank 111.58 UBS 1,398.7 8 Evercore Partners 103.39 Lazard 1,324.1 9 Bank of America Merrill Lynch 96.2
10 Deutsche Bank 1,238.1 10 Lazard 71.6
11 Evercore Partners 1,008.4 11 UBS 53.5
1 Goldman Sachs $9,071.4 1 Goldman Sachs $569.62 Morgan Stanley 7,671.1 2 Morgan Stanley 417.93 JP Morgan 7,054.6 3 JP Morgan 383.4
4 Bank of America Merrill Lynch 6,497.3 4 Deutsche Bank 358.55 Citi 6,263.7 5 Credit Suisse 357.26 Credit Suisse 5,190.3 6 Citi 351.77 UBS 4,414.7 7 Bank of America Merrill Lynch 295.18 Deutsche Bank 3,954.7 8 Barclays 275.29 Barclays 3,163.8 9 UBS 197.610 Lazard 3,127.1 10 Lazard 191.7
11 Rothschild 2,735.7 11 Rothschild 162.4
14 Evercore Partners 1,189.4 13 Evercore Partners 122.3
2000 - YTD 20121
YTD 20121
2000 - YTD 2012 YTD 2012
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Evercore is increasing the gap between its market share and the marketshare of the true boutiques
Boutique market share
Boutiques M&A announced transactions ($ in billions)
1 Evercore Partners $1,008.4 1 Evercore Partners $103.3
2 Houlihan Lokey 415.7 2 Centerview 50.6
3 Blackstone 366.5 3 Greenhill 34.7
4 Greenhill 301.9 4 Perella Weinberg 26.0
5 Centerview 289.9 5 Moelis 20.4
6 Sagent 211.3 6 Tudor Pickering 19.47 Moelis 202.9 7 Houlihan Lokey 12.9
8 Duff and Phelps 186.5 8 Qatalyst 7.6
9 Perella Weinberg 164.3 9 Blackstone 7.0
10 Allen 95.7 10 LionTree 6.6
1 Evercore Partners $1,189.4 1 Evercore Partners $122.3
2 Greenhill 783.2 2 Centerview 83.7
3 Houlihan Lokey 533.3 3 Greenhill 48.14 Blackstone 524.7 4 Lambert 33.3
5 Centerview 465.0 5 Moelis 32.9
6 Perella Weinberg 289.4 6 Perella Weinberg 31.4
7 Moelis 263.0 7 Houlihan Lokey 21.6
8 Leonardo 234.2 8 Tudor Pickering 19.7
9 Sagent 231.3 9 Blackstone 14.2
10 Duff and Phelps 200.5 10 Ondra 13.0
2000 - YTD 2012 YTD 2012
2000 - YTD 20121
YTD 20121
U.S.
Global
1. Source - Thomson Reuters as of 11/26/2012
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Demonstrated record of advising on large and complex transactions
In 2012, we have also advised on 3 of the top U.S. deals
For four straight years, we have advised on the largest U.S. deal
2009
2010
on its$22.4 billion merger with
Advised
2010 2011
2011
on its$36.2 billion merger with
Advised
on its $64.5 billion
sale to
Advised
2009
Advised
2012
on its $36.1 billion spin-off of
2012
on its$6.9 billion acquisition of
and subsequent sale of half of itsinterest in Amylin to AstraZeneca
on its pending $24.2 billionmerger with
Advising
2012 2012
on its sale of EP Energy for$7.2 billion to
Advised
2012
Advised
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Sustained advisory fee growth
Evercores advisory fee growth has significantly outpaced that of otherleading publicly traded investment banks
Source: Company reports and SEC fili ngs; 2012 annualized based on 9M 2012
159%
17%
(4%)(16%) (18%)
(19%) (23%) (26%) (26%) (29%) (32%) (35%)
(57%)(75%)
(50%)
(25%)
0%
25%
50%
75%
100%
125%
150%
175%
EVR GHL LAZ CS DB PJC BX MS GS BAC-ML
JPM C UBS
2008 - 2012
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Market share has grown at 27% CAGR from 2001 to the first ninemonths of 2012
0.3%0.3% 0.4%
0.7%1.0%
1.2%1.3%
1.3%
2.6%2.5%
3.2%
4.3%
-
50
100
150
200
250
300
350
400
450
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
3.5%
4.0%
4.5%
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 9M 12
EVR Advisory Revenues Market Share
Source: Company reports and SEC filingsTotal fee pool includes all advisory revenues from Bank of America (includes Merrill Lynch), Blackstone, Citigroup, Credit Suisse, Deutsche Bank, Evercore, Greenhill, Goldman Sachs, JPMorgan (includes Bear Sterns pre-acquisition), Lazard, Morgan Stanley, Piper Jaffray and UBS
Sustained advisory fee growth ($ in m il l ions)
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Evercore is gaining advisory fees at a faster pace relative to the globalindependent advisory firms and separating itself from other publicly traded
boutique advisory firms
Sustained advisory fee growth ($ in m il l ions)
Advisory Revenues1
$178
$1,024 $1,000
$218
$287
$990 $1,000
$216
$291
$1,121
$992
$252
$406
$992
$907
$303
$462
$986
n/a
$255
$0
$200
$400
$600
$800
$1,000
$1,200
2008 2009 2010 2011 2012 2008 2009 2010 2011 2012 2008 2009 2010 2011 2012 2008 2009 2010 2011 2012
EVR LAZ ROTH GHL
EVR2012 vs. 2008: 159%
LAZ
2012 vs. 2008: (4%)GHL
2012 vs. 2008: 17%
Source: Company Filings;1. 2012 annualized based on 9M 20122. Rothschild revenue for 2010 and 2011 is based on publicly available information for Paris Orleans, the primary holding company for the Rothschild Group; converted using an exchange rate of
$1.286:1.0 (rate as of 9/30/2012). Prior year amounts are not publicly reported; however such amounts are reported to be comparable. Rothschilds fiscal year ends on March 31
ROTH2011 vs. 2008
2
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16.3
17.8
7.6
9.0
7.98.9
7.8
17.1
14.8
6.9
8.17.2
8.0
7.1
$0.0
$4.0
$8.0
$12.0
$16.0
$20.0
2006 2007 2008 2009 2010 2011 LTM toQ3 2012
U.S. & Europe Global
21
28
34
41
46
59 60
0
10
20
30
40
50
60
2006 2007 2008 2009 2010 2011 YTD2012
U.S. Europe Mexico
14
Evercore advisory revenues per SMD(1) (2)
($ in millions)Advisory SMD headcount
(1) Pro Forma revenue per SMD including Lexicon; Lexicon revenues presented for fiscal years ending in March 31 of each year(2) Uses beginning of period SMD count; includes 6 SMDs for Mexico for 2006 2009, and 7 SMDs in 2010 and 2011; includes 8 Lexicon SMDs for 2006 2009, 9 SMDs in 2010 and 7 SMDs in 2011
Productivity drives profits
Choosing the right senior managing directors is critical
A+ senior managing directors sustain and improve productivity
Carefully and constructively manage performance Independent Advisory model is not the right platform for everyone
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Recruiting A+ talent
New SMDs have achieved orexceeded targeted productivity of$8 - $10 million in their secondfull year(1)
Average productivity in the first full yearranges from $5 - $7 million of revenue perSMD
Alignment of interests
Targeting 55% compensation ratioexcluding new senior managingdirectors
Disciplined cost management
15 20% non-compensation ratio,over time
15
Advisory growth creates long term shareholder value
Annually
contributes$2.40 $5.60
in per share value(2)
(1) Based on average revenue per newly hired SMD in the U.S. by recruiting year(2) Assumes marginal EPS ranging from $0.15 - $0.35 and multiple of 16x
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Drive top line revenue growth
Foundation is in place High-touch distribution delivering strong intellectual content
Market share growing consistently each quarter
Serving more than half of the top 50 institutional money managers and top 50 hedgefunds in the U.S.
Building out platform to include REITs team
Focus on delivering distinctive value and service while increasing andoptimizing revenue per client
Top quartile in votes from eleven leading long-only and hedge fund clients
Revenue generated from the top 30 clients for the first nine months of the yearincreased by 32% year-over-year
Each $5 million of incremental revenue1:
Lowers the Investment Banking Compensation Ratio by 0.7%
Increases the Investment Banking Operating Margin by 1%
Institutional Equities Focus on profits
1. Based on 2011 Pro Forma results for Investment Banking
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Provides independent advice and experienced judgment on all aspects ofcapital formation
U.S.
2012 continues to be a healthy and active equity new issuance market
YTD underwritten 15 equity and equity-linked transactions, 4 debt
transactions, and acted as lead placement agent on a registered direct equityoffering
Helped raise approximately $10 billion for issuers
Since formation, 37 transactions underwritten across seven industries, helpingto raise approximately $26 billion for issuers
Mexico Completed a follow-on offering raising $690 million for leading public REIT in
Mexico
A differentiated Capital Markets franchise
Enhances the Advisory and Institutional Equities businesses
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Investment Management
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Investment Management Overview
EvercoreWealth
Management51%
Evercore Casade Bolsa
72%
Trilantic~10.0%
Unconsolidated
EvercoreMexico Capital
Partners100%
EvercoreCapital
Partners100%
EvercoreTrust
Company86%
EvercorePan Asset
50%
AtalantaSosnoff
49%
InstitutionalAsset
Management
WealthManagement
Private Equity
Consolidated
Holding company model
Interests aligned through equity ownership
Combination of the Evercore brand and CEOs expertise provide anattractive platform for high quality firms
ABS
44%
19
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Investment Management Current developments
InstitutionalAsset
Management
Assets under management of $7.3 billion at September 30,2012 a 5% decline from the prior quarter
Year-to-date performance of key portfolios is positive -sustained returns are required
Unconsolidated affiliates contributed $615 thousand ofearnings in Q3 2012
WealthManagement
Private Equity
Increased AUM to $4.5 billion1
Acquired Mt. Eden Investment Advisors, LLC, a San Francisco-based wealth management firm
Selectively adding talent
Focused on realizations and liquidity for investors
1. Includes $645 million in assets under management through the acquisition of Mt. Eden Investment Advisors
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Business is a profit contributor, with assets primarily tied to equity
markets
Assets under management($ in billions)
Fee based revenues($ in millions)
Investment Management
$2.0$2.3
$2.9
$3.8$4.2
$14.8
$16.1
$16.9$17.3
$16.2
$13.2$13.0$12.9
$11.8$11.6
$0
$2
$4
$6
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$18
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Private Equity Institutional Wealth Management
$3.5
$5.5
$9.3$8.4
$9.7
$13.7
$21.2$22.1
$23.0$23.0
$21.6
$20.4
$18.7 $19.1$18.6
$0
$3
$6
$9
$12
$15
$18
$21
$24
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Private Equity Institutional Wealth Management
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Financials
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$54
$94
$143
$212
$316
$193
$312
$373
$520
$409$427
$0
$100
$200
$300
$400
$500
$600
03 04 05 06 07 08 09 10 11 9M11
9M12
$8
$16
$22
$41
$51
$4
$33$38
$63
$49
$43
$0
$15
$30
$45
$60
$75
$90
03 04 05 06 07 08 09 10 11 9M11
9M12
23
(1) Net revenues and net income reflect Adjusted Pro Forma figures. A reconciliation to the equivalent GAAP figures is available in the Investor Relations sections at www.evercore.com
Return to strong revenue growth ($ in millions)(1) Net income ($ in millions)(1)
Financial performance Long history of strong growth
Strong cumulative annual growth of net revenues and net income
Investment banking business drives performance delivering more than 75%
of revenues and a much higher percentage of profits
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18%
24%
17%
21% 20%19%
22%
0%
5%
10%
15%
20%
25%
30%
2007 2008 2009 2010 2011 9M2011
9M2012
$206
$143
$126 $132 $131
$100 $99
$0
$50
$100
$150
$200
$250
2007 2008 2009 2010 2011 9M2011
9M2012
24
(1) Figures are on an Adjusted Pro Forma basis. A reconciliation to the equivalent GAAP figures is available in the Investor Relations sections at www.evercore.com(2) Headcount is based on an average of heads for the period and excludes depreciation and amortization costs, and acquisition and transition costs of $2.4 million, $2.3 million, $2.3 million, $11.1
million and $14.0 million for the year ended 2007, 2008, 2009, 2010 and 2011 and $10.0 million and $9.7 million for 9M 2011 and 9M 2012 respectively
Non-compensation expense ratio(1)Non-compensation expenses per employee
($ in thousands)(2)
Financial performance
We remain focused on controlling non-compensation costs as we invest in thegrowth of our business
The YTD 2012 non-compensation ratio of 22% reflects acquisition-related facilitiescosts
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71% 72%
60%58% 58%
62% 62% 61%59% 59%
62%
56%
63%60% 60%
0%
20%
40%
60%
80%
100%
Q109
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25
LTM compensation ratio(1)Compensation ratio(1)
Compensation ratio
Committed to a goal of a compensation ratio at 55%, but pace of achievinggoal must be balanced against investments for future growth
75% 76%71%
63%61%
59% 60%61% 61% 60% 60% 59% 60% 60%60%
0%
20%
40%
60%
80%
100%
Q109
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Q309
Q409
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(1) A reconciliation to the equivalent GAAP figures is available in the Investor Relations sections at www.evercore.com
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Returning earnings and delivering value to shareholders
(1) Adjusted Pro Forma Net income as of 9/30/2012(2) Includes dividends to Class A shareholders and equivalent amounts distributed to holders of LP units.
Trailing twelve months ending September 30, 2012
($ millions)
Net income(1) $ 56.8
Dividends paid
(2)
28.9Cash expended on share buybacks 75.2
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