Earnings Call Transcript - PJT Q4 2022

Operator, Operator

Please standby. Good day. And welcome to the PJT Partners Full Year and Fourth Quarter 2022 Earnings Call. Today’s conference is being recorded. At this time, I would like to turn the conference over to Sharon Pearson, Head of Investor Relations. Please go ahead.

Sharon Pearson, Head of Investor Relations

Good morning. And welcome to the PJT Partners full year and fourth quarter 2022 earnings conference call. I am Sharon Pearson, Head of Investor Relations at PJT Partners and joining me today is Paul Taubman, our Chairman and Chief Executive Officer; and Helen Meates, our Chief Financial Officer. Before I turn the call over to Paul, I want to point out that during the course of this conference call, we may make a number of forward-looking statements. These forward-looking statements are subject to various risks and uncertainties, and there are important factors that could cause actual outcomes to differ materially from those indicated in these statements. We believe that these factors are described in the Risk Factors section contained in PJT Partners’ 2021 Form 10-K, which is available on our website at pjtpartners.com. And I want to remind you that the company assumes no duty to update any forward-looking statements. The presentation we make today also contains non-GAAP financial measures, which we believe are meaningful in evaluating the company’s performance. The detailed disclosures on these non-GAAP metrics and their GAAP reconciliations, you should refer to the financial data contained within the press release we issued this morning, also available on our website. And with that, I will turn the call over to Paul.

Paul Taubman, Chairman and CEO

Thank you, Sharon, and thank all of you for joining us. This morning we reported 2022 full year revenues of $1.026 billion, adjusted pre-tax income of $221 million and adjusted EPS of $3.92 per share. We are pleased with how we navigated 2022’s challenging market environment, with total revenues up 3% from year ago levels. As PJT Park Hill again delivered record performance, our Restructuring revenues grew meaningfully, and our Strategic Advisory business performed well on a relative basis, down significantly less than the declines in global M&A and capital markets activity would suggest. Our 2022 cadence of face-to-face client meetings and engagement returned closer to pre-COVID levels, which not only helped build new relationships, but strengthened existing ones. While this significant ramp in spending on travel and events drove our aggregate non-comp expense 19% higher, our non-comp expenditures, excluding these categories, grew low-single digits. Partner headcount was up 8% and total headcount was up 9% for the year, as we continue to attract highly talented professionals to our firm. We remain focused on managing share dilution resulting from these investments in talent, ending the year with a fully diluted share count below year ago levels. All in all, we are pleased with how we navigated 2022’s myriad of challenges. After Helen takes you through our financial results, I will review our business performance and outlook in greater detail. Helen?

Helen Meates, CFO

Thank you, Paul. Good morning. Beginning with revenues. For the full year 2022, total revenues were $1.026 billion, up 3% year-over-year, with increases in Restructuring and PJT Park Hill more than offsetting declines in Strategic Advisory revenues. For the fourth quarter, total revenues were $280 million, down 11% year-over-year. Significant revenue growth in Restructuring was more than offset by year-over-year revenue declines in PJT Park Hill and Strategic Advisory. With lower corporate capital raises during the fourth quarter, the principal driver of the decline in placement revenues in the quarter. Total revenues that met the criteria to be pulled forward in the quarter were less than $8 million, compared with approximately $12 million in the same period last year. Turning to expenses. Consistent with prior quarters, we presented the expenses with certain non-GAAP adjustments, these adjustments are more fully described in our 8-K. First, adjusted compensation expense. Full year adjusted compensation expense was $657 million, up 5% year-over-year with a compensation ratio of 64.1%, up from 63% in 2021. We will communicate our accrual for compensation expense for 2023 when we report our first quarter results. Turning to adjusted non-compensation expense. Total adjusted non-compensation expense was $148 million for the full year 2022 and $38 million for the fourth quarter. As a percentage of revenues, our adjusted non-comp expense was 14.4% for the full year 2022 and 13.7% for the fourth quarter. For 2022, the majority of the year-over-year increase in non-comp expense was due to increased travel and related expense. Our non-comp expense, excluding travel and related, grew 6% in 2022. Looking ahead, we expect our travel and related expense to increase in 2023, reflecting more normalized levels of travel, increased headcount, and higher travel costs. With our full year run rate for 2023 more consistent with the fourth quarter run rate of 2022. Away from travel and related expense, we expect our non-comp expense to grow in aggregate in the mid-to-high single digits year-over-year, driven primarily by higher professional fees and a modest expansion of our office space. Turning to adjusted pre-tax income. We reported adjusted pre-tax income of $221 million for the full year 2022, down 9% and $61 million for the fourth quarter, down 24% year-over-year. Our adjusted pre-tax margin was 21.5% for the full year and 21.9% in the fourth quarter. As with prior years, we have presented our results as the full partnership units have been converted to shares and our income was taxed at a corporate tax rate. Our effective tax rate for the full year was 26%, up slightly from the 25.8% estimated rate that we applied for the first nine months of the year. In 2023, we would expect our effective tax rate to be in line with 2022 and we will refine our view at the end of the first quarter. Our adjusted converted earnings were $3.92 per share for the full year, compared with $4.44 in 2021 and $1.08 in the fourth quarter, compared with $1.52 in 2021. The share count for the year ended 2022, our weighted average share count was 41.7 million shares, down 2% year-over-year, and during the year, we repurchased the equivalent of approximately 2.2 million shares primarily through open market repurchases. On the balance sheet, we ended the year with $223 million in cash, cash equivalents, and short-term investments and $355 million in net working capital and we have no funded debt outstanding. And finally, the Board has approved a dividend of $0.25 per share. The dividend will be paid on March 22, 2023, to Class A common shareholders of record as of March 8th. I will now turn back to Paul.

Paul Taubman, Chairman and CEO

Thank you, Helen. Beginning with PJT Park Hill. As the year progressed, the fundraising environment for alternative investments became significantly more challenging. Sharply lower public market valuations left many investors overextended on their alternatives allocations, which in turn reduced the quantum of capital available for new commitments. This denominator effect, coupled with the frenetic pace at which capital was called in 2021 made for a difficult fundraising environment. Even with this backdrop, revenues grew modestly year-over-year as PJT Park Hill delivered another record year. Our close relationships with capital allocators and our best-in-class distribution capabilities enabled us to represent the highest quality managers with in-demand investment strategies. Turning to Strategic Advisory. In 2022, a sharp downturn in equity markets, greater economic and geopolitical uncertainty, and slowing global growth all adversely impacted the pace of strategic activity. The 425 basis points in Fed tightening across seven consecutive rate hikes represented the largest and sharpest annual rate increases in more than 40 years, significantly impacting valuations and rolling financial markets. Announced global M&A volumes were down roughly 25% for the first half of the year and nearly 50% for the second half of the year, as the impact of these rate hikes and continued political and economic uncertainties weighed on markets. While we were not immune to these market dynamics, we performed well on a relative basis, with full year Strategic Advisory revenues down only modestly, notwithstanding the dramatic decline in industry-wide volumes. Our shareholder engagement practice continued to evidence strong momentum as these dislocated markets resulted in increased client engagement on shareholder advisory, strategic IR and shareholder activism topics. This strength offset the considerable drop-off in our corporate placement revenues, particularly in the fourth quarter. We continue to invest, adding talent across industries, product capabilities, and geographies, including the opening of a Paris office this past year. Strategic Advisory headcount grew 10% and Strategic Advisory partner count grew 18% year-over-year. In Restructuring, in 2022, the headwinds that dampened M&A activity became tailwinds for Restructuring and liability management activity. A combination of sharply higher financing costs, dislocated capital markets, and more challenging operating fundamentals pressured an increasing number of highly leveraged companies. We experienced an uptick in liability management mandates, as companies worked to restructure debts and create additional liquidity runway. Overall, our Restructuring revenues increased in 2022 and we ranked number one in announced U.S. and Global Restructurings. As we look ahead, while 2023 is shaping up to be another choppy year, our firm remains well positioned to navigate these uncertain times. In PJT Park Hill, we expect the environment for alternatives fundraising to remain challenging as investors remain highly selective, with many fundraises expected to be smaller in size and take longer to close. PJT Park Hill’s 2023 revenues are forecast to be around 2022’s record results, even though Q1 revenues could well be down $30 million to $40 million, given the expected timing of 2023 closings. In M&A, the environment while improving, is still not particularly favorable for deal making. While the recent snapback in equity valuations and the first green shoots of a reopening in the IPO market are promising harbingers for M&A activity, the low level of global M&A announcements in recent months may well continue for some significant part of 2023. In contrast, we expect our Restructuring activity levels to remain elevated for an extended period. For 2023, we expect significant growth in our Restructuring revenues beginning in the second quarter. Any headwinds we face in Strategic Advisory in 2023 will be more than offset by tailwinds in Restructuring. Looking beyond 2023, we remain highly confident in the intermediate and long-term outlook for our Strategic Advisory business as we benefit from the significant investments we have made, which expand our client reach and increase our market share. As before, we remain confident in our growth prospects. And with that, we will now take your questions.

Operator, Operator

We will take our first question from Devin Ryan with JMP Securities. Please go ahead.

Devin Ryan, Analyst

Good morning, everyone. Thanks for taking the questions.

Paul Taubman, Chairman and CEO

Absolutely. Good morning, Devin.

Devin Ryan, Analyst

I guess I just want to start on where you left off, Paul, on the outlook. So piecing it all together, it sounds like there’s still an expectation right now for some level of revenue growth in 2023. Is there any way to maybe parse out a little bit around what you are seeing in Restructuring and the order of magnitude of acceleration? It doesn’t feel like we are back to pandemic era stress yet, but have been building maybe in that direction. So just wanted to get a little more context around what you are seeing there?

Paul Taubman, Chairman and CEO

Sure. Well, the reality is that we have been living in abnormal times as it relates to distress. So 2020 was aberrationally extreme in the level of distress and we are not seeing anything remotely like 2020 levels. The flip side is 2021 and 2022 were equally aberrational in the other way, given risk-on appetite, near zero interest rates and abilities for even the most highly leveraged companies to secure financing and to manage their debt stack. I think where we are headed is to a more normal environment, and I think there are two things that I look at, which frame that. The first is default rates. The last two years were in the 1%, 1.5% range, which is meaningfully below what the long-term default rate average is, even if you strip out the extreme peaks of global financial crisis and COVID and the likes. Simply getting back to a more normal environment creates significant momentum in the Restructuring business. The second is that the quantum of debt outstanding and the liabilities potentially to be managed in some form are meaningfully greater today than they were five years ago. And then here’s the most important point, while companies have done a very good job in moving out their maturities, the reality is that we are sitting here today with less runway for most companies than they have had in more than a decade. By that, I mean, if you just look at how much debt is likely to mature in the next few years, that number is at levels we haven’t seen since 2009 or 2010. I think there’s an opportunity for just in a more normal operating environment for there to be significantly more Restructuring and liability management activity. And finally, just given how much debt was issued with relatively light covenants, the opportunity to be creative in managing liabilities for companies means there are more degrees of freedom now than there were historically. As a result, we see a lot of runway for a long period of time without having to be doom and gloom.

Devin Ryan, Analyst

Okay. Terrific. Thanks, Paul. And just a follow-up on Strategic Advisory. I’d love to maybe discuss the visibility that you feel like you have heading into this year just in terms of that outlook. It feels like it’s harder to have conviction in the outlook maybe more than normal just in the current environment. And so just trying to think about the framing here, I appreciate announcements have been relatively light over the last few months and so that’s going to feed into the first quarter or two of this year. But at the same time, it sounds like maybe conditions have improved a bit in recent months, but it’s way too early to say it’s sustainable, especially with all the macro uncertainty. So I’d love to just maybe think through the Strategic Advisory comments and maybe what could make things turn out better this year and maybe where it could get bearish as well?

Paul Taubman, Chairman and CEO

Yeah. This is probably a year where there is less visibility on how things will shake out than historically has been the case. And I think part of that is, as the marketplace heals, you need certain conditions to present themselves, and we are certainly getting there. I view what has transpired in the first five weeks of the year as necessary but not sufficient for a return to a higher level of deal making. Therefore, the good news is we are seeing those conditions fall into place and we are starting to check them off, which gives us a reasonable degree of confidence that it’s just simply a matter of not if, but when during the year that you start to see that. But when you try and figure out when do you get lift off, is it a week from now, a month from now, three months from now? And given the extended periods of time for transactions to ultimately close and how much of that hits in 2023, it’s just a cloudy crystal ball as it relates to Strategic Advisory this year. But if I step back just a little bit, I can see much more clearly just given the client engagement that we have, the revenue opportunities, and the opportunity to bring the entire firm together. We are a far more advanced organization today than we were two years or three years ago, and at the right time, that will all work through. Where I do have clarity is because those headwinds, which may lean on Strategic Advisory in the near-term, serve to elevate Restructuring in the near-term. If I think about it as a pair trade, I am quite confident that we will be net beneficiaries of this uncertainty, and then as I get a little bit further out, I have greater clarity in where we can take the business next.

Devin Ryan, Analyst

Got it. Perfect. Just to clarify there, Paul, and then I will hop back in the queue. So when you talk about kind of the engagement with clients and the momentum, because again, we see the deal announcements, but we don’t get to see a lot of the behind-the-scenes kind of new client wins and even some time mandates way before the announcement. Any kind of either qualification or quantification around that type of momentum that you are seeing and maybe how that’s progressed over the last couple of years, just that’s kind of behind the scenes that we don’t see as well? Thank you.

Paul Taubman, Chairman and CEO

Sure. I will just give you a few highlights. One of which is we continue to build out our geographic presence and we continue to build out our industry presence. So we are now at a point where we have had enough success and we have a critical mass that we opened an office in Paris, and I think that follows what have been very considerable successes in France and across all of Europe. Our European business continues to build out. It continues to establish its brand and its presence. As we have more industry colleagues who can help and as we leverage the fact that we have a differentiated culture, we are doing more and more on a cross-border transatlantic way that really wasn’t available for the taking a few years ago. The second is the way in which we have integrated our Camberview capabilities into Strategic Advisory and where we are from shareholder engagement, strategic IR, activist defense and the like, and how wrapped in that is and the opportunities and the boardrooms that we are present in, as well as the commercial opportunities for the firm. And then the third is just as we have continued to build out our holistic capital markets advisory business, the ability to be much more present as it relates to direct lending initiatives, to be working more closely with Restructuring to deal with companies that are not yet ripe for traditional Restructuring but would benefit greatly from the capabilities. I think those are just a handful of examples where we are touching more clients, far more clients and these are elevated revenue potentials. The only thing that I cannot control is just how quickly the macro environment shifts into gear and then it becomes very much a micro story, which is client by client, what’s the cadence of their reengagement and then how quickly do some of these mandates translate into revenues. But it’s all being built, and we are very comfortable with where we are at this point, and we love the fact that we have this diverse but highly integrated group of businesses, which continually present more opportunities for us. And I guess one last thing I’d address is, we have gotten increasingly better at integrating the Park Hill sponsor relationships into our broader sponsor coverage, and that becomes another opportunity where we are more present and better able to commercialize some of these relationships.

Devin Ryan, Analyst

Great. I will leave it there. Thank you very much.

Operator, Operator

We will take our next question from James Yaro with Goldman Sachs. Please go ahead.

James Yaro, Analyst

Good morning, Paul and Helen.

Paul Taubman, Chairman and CEO

Good morning.

James Yaro, Analyst

I just wanted to start with a little bit more on the M&A backdrop, the differences between the dialogues with sponsors and strategics, and how your expectations have changed or what your expectations are for how the mix of M&A should evolve in 2023 and 2024?

Paul Taubman, Chairman and CEO

I have always believed that trees don’t grow to the sky, and the idea that financial sponsors would always dominate M&A discussions may not be accurate based on recent trends. While financial sponsors are accumulating more assets and diversifying their strategies by pursuing traditional buyouts, minority investments, and venture partnerships, they will undoubtedly play a significant role in the ecosystem. However, this does not mean that the focus will be solely on sponsors. In a climate where capital has been abundant, interest rates low, and LPs willing to invest heavily in alternatives, we saw a notable increase in activity. We are now witnessing a regression to the mean, which presents an opportunity for corporates to benefit from the slowdown in capital deployment from sponsors. This slowdown is due to a tougher fundraising environment, prompting sponsors to adopt a more cautious approach. Additionally, securing committed financing has become more challenging and expensive, making it difficult for sponsors to be involved in every strategic conversation. Corporate boards are recognizing that, at least in the short term, the competitive landscape has leveled out, possibly leaning slightly in favor of corporates. As activity increases, I anticipate that it will be more driven by corporate strategies than by sponsors. Ultimately, the market will find balance again, and while sponsors will continue to be a vital part of the ecosystem, I doubt they will remain the dominant force.

James Yaro, Analyst

That’s incredibly helpful, Paul. I just want to touch on one other one, which is you are obviously very focused on investing in new talent. So maybe if you could just touch on how the hiring backdrop has evolved versus earlier in the year, whether you are seeing better opportunities to bring in top talent, and then just sort of what your hiring aspirations are for 2023 and whether that could impact the comp ratio trajectory at all for the coming year?

Paul Taubman, Chairman and CEO

Yeah. So we have been consistent that the years 2020 and 2021 were difficult recruiting years but for very different reasons. In 2020, it was hard to recruit when everyone was locked down and it’s a virtual world, and there are bigger issues as you have got a global health crisis and the like. Trying to find the next platform to be an investment banker is not necessarily the highest on the list. I’ve said consistently that the best way for us to continue to recruit at a very aggressive clip is to return to a more normal cadence of face-to-face engagement and the like, and we are there. That’s been incredibly helpful and you have seen that our hiring has ramped from there. The second issue was in 2021 with everyone so busy and with such activity in strategic world, it was hard for individuals to leave their clients at large and to make a shift, and as a result, we also said that we needed the world to calm down a little bit. I think in 2022 and 2023, where we are in a lower velocity environment, where a number of larger banks are creating less attractive opportunities for their best talent and where we can engage face-to-face. That’s the perfect recipe for us to attract talent, and we are seeing that in the number of incomings and we are seeing it in the quality of candidates that are appearing before us, and our conversion rates are higher. So I think this is a much better recruiting environment for us and we are going to take advantage of all of that. As far as how that flows through the comp ratio and the like, it’s very hard to see until you get further into the year, understand what’s the actual pace of onboarding, as well as what’s the revenue profile for the firm in 2023.

James Yaro, Analyst

Okay. Thank you for that.

Paul Taubman, Chairman and CEO

Thank you. I love this environment. This is a perfect recruiting environment for us.

James Yaro, Analyst

Okay. Great. Thank you so much.

Paul Taubman, Chairman and CEO

Thank you.

Operator, Operator

We will take our next question from Steven Chubak with Wolfe Research. Please go ahead.

Brendan O'Brien, Analyst

Good morning. This is Brendan O'Brien filling in for Steven. I just want to follow up...

Paul Taubman, Chairman and CEO

Good morning.

Brendan O'Brien, Analyst

Good morning. I just wanted to follow up on the comp ratio. Based on your comments on the current environment, your expectations for revenues to grow in 2023 is encouraging. However, given we have already seen some pressures on the comp ratio this year despite revenue growth and your headcount is up 9%. I was hoping you could speak to your confidence in your ability to hold the line on comp next year?

Paul Taubman, Chairman and CEO

Look, we have always thought that as we get further and further into the build-out that we will be able to demonstrate meaningful compensation leverage, but that we are not going to resist making investments, which are the right thing for the long-term, if there’s a little bit of short-term turbulence. So if you give me a wider berth of two years to three years, I know the direction of travel. If you ask me in any given year, does it stay flat? Does it come down? Does it bump up a little bit? There’s just so much information we need to have, and I do not want to be deterred from that. We have always said that we don’t add just to hit a recruiting target, and therefore, in some years, if we don’t see the talent, we are going to be light on additions. In other years, we have an abundance of opportunity, and we will lean in a little bit more. I think it’s too early this year to know exactly where that’s all going to land. And as I said, I think we have a differentiated platform that enables us to navigate these turbulent times better than most, and therefore, that should be an advantage for us. We will just sort of play it out. But one thing I think everyone appreciates we have incredible regard for creating shareholder value; we are big owners in this firm and we are always going to do the thing that creates the most value over the longer term even if it creates a bit of noise back and forth. But sitting here today, I have no reason to believe 2023 is going to be aberrational one way or the other and hopefully, we will be able to continue to show progress on all dimensions.

Brendan O'Brien, Analyst

That’s great color. Thanks for that. And then I guess for my follow-up, in your remarks, you noted that our Restructuring prospects have continued to improve and it seems like you have had greater success than some of your peers in winning these mandates so far. Just wanted to get a sense as to what you feel is driving that relative strength versus peers so far or in this past year and do you feel like you are better positioned for an environment where mandates are more coming on the debtor side due to the higher level of covenant loans outstanding?

Paul Taubman, Chairman and CEO

That’s a great question. Look, it’s a highly competitive environment and we compete against very formidable firms. There’s always a cadence of mandates that you win and mandates that go elsewhere. So everything is not always a straight line up into the right. Having said that, we have had impediments in competing against others that each year those constraints melt away and it really boils down to two. If we have a smaller advisory footprint and if we are competitive in fewer industry verticals, it means that the heads-up or the front-end sales force is less able to present opportunities to our Restructuring colleagues than if it was further built out. Every year that we build out and we are in more geographies, have more presence, have more industry domain expertise, and have more corporate relationships, that gets us better aligned with the competitive set, and therefore, we are able to leverage that. The second is as we continue to build out our sponsor capabilities, we are picking up more and more liability management opportunities for sponsors as well. It’s just all part and parcel of the methodical build-out of the firm. As the Strategic Advisory business gets bigger, more formidable, and more present, it becomes greater additive to the Restructuring franchise. I think that’s the macro trend you are seeing, but as far as any given quarter, what mandates travel to us or elsewhere, I try not to get too caught up in that because there’s always noise in the very short term. You have got to look over the longer term, but there’s no doubt we have been pleased with our performance on both a relative and an absolute basis.

Brendan O'Brien, Analyst

That’s great color. Thanks for taking my questions.

Paul Taubman, Chairman and CEO

Absolutely. Thank you.

Operator, Operator

We will take our next question from Jim Mitchell with Seaport Global. Please go ahead.

Jim Mitchell, Analyst

Paul, several of your peers have mentioned that engagement levels in Strategic Advisory remain high, but they are struggling to take action due to the current financing markets. You haven't really addressed this aspect of Strategic Advisory. In the past, you've discussed backlog and engagements, as well as pre-announcement insights. Can you share your observations regarding Strategic Advisory? Are you experiencing similar engagement levels, but without the necessary triggers being activated?

Paul Taubman, Chairman and CEO

Yeah. It’s a great question. It’s complicated just because of the way this world has unfolded. I would say the following: If you started last year, strategic engagement and interest was red hot and as the market cooled, engagement levels did not waver. In some respects, the crisis of confidence was on the investor side, not in corporate boardrooms, and we saw our engagement levels at record levels for most of the year. I think it’s got to the end of the year, some of these transactions just were not viewed to be actionable in the near-term. Clients suspended sort of working on some of these things because while they still had every interest in pursuing them, they were deemed to not be actionable. The mandate count that were active sort of receded a bit. What’s happened is in the first five weeks of the year, there’s a clear recognition that things that were maybe put on the hold pile are now coming back. We are seeing a lot of that just because it’s been so fluid and so volatile. The sentiment moved sharply negative from Thanksgiving to the end of the year and it started to inflect to the positive. I haven’t talked about it as much because I don’t want to make too much of either the downturn in the last six weeks of 2022 or the pickup in the first five weeks of 2023. I think it’s still muddied. But the reality is, if you step way back, the corporate needs for transition and transformation are as great today as they have ever been, and when you think about what really drives M&A activity, you can run all the correlations, you can do all the analysis; the single biggest correlation is equity valuations. Given the start to the year, that is a very healthy sign, and I suspect that if we can maintain some of these levels for a bit, you are going to start to see a lot more of the hold pile come back into the active or red hot pile.

Jim Mitchell, Analyst

Okay. That’s helpful. And maybe for Helen, just to make sure I heard correctly, it seemed like you guys had a few large transactions closed in early January, but I think your pull forward comment was $8 million, is that correct?

Helen Meates, CFO

That is correct. Yeah. That’s correct.

Jim Mitchell, Analyst

Okay. Paul, you mentioned the Restructuring business as a second quarter event and noted that Park Hill started off weak but is improving. What is the visibility on the Strategic Advisory as we move into the beginning of the year?

Paul Taubman, Chairman and CEO

It's difficult to say. I have the least confidence about this aspect, especially when discussing quarter-to-quarter performance. Last year started off slow but eventually picked up, and I believe this year will likely follow a similar pattern, starting soft but gradually improving. This is a fair assessment of how I expect our business to perform. However, I lack precision in my predictions because the M&A environment is more uncertain than it has been. When we are in a recovery phase, it's easier to identify trends, but during periods of fluctuation, it becomes more challenging to connect those changes to revenue recognition. All the factors you mentioned are relevant, and if I had to make a bet, I would predict that the second half of the year will be significantly stronger than the first half.

Jim Mitchell, Analyst

Right. Right. Okay. I appreciate the help. Thanks.

Paul Taubman, Chairman and CEO

Okay.

Operator, Operator

We will take our next question from Matt Moon with KBW. Please go ahead.

Matt Moon, Analyst

Hi. Good morning. Thank you for taking my questions.

Paul Taubman, Chairman and CEO

Absolutely.

Helen Meates, CFO

Hi.

Matt Moon, Analyst

So just one on Park Hill. I am just curious on the environment there. Very clear on the fourth quarter impacts. But you did say 2022 was a record year for the overall Park Hill business, which given the place for GP performance, I think it would suggest a strong level of secondaries activity. So with this in mind, I am just kind of curious on the environment as we start 2023 on this front kind of the impact specific to a New Year on the side of the businesses, GPs and LPs kind of reset? And then kind of just secondarily on placement revenues, I didn’t hear your comment on placement revenues to be down $30 million to $40 million or is that to come in at $40 million in the first quarter?

Helen Meates, CFO

So, first of all, I’d just get back to placement. We did highlight the fact that corporate placements were down significantly in Q4. So you can attribute that decline to Park Hill. So when we say Park Hill was up year-over-year, it was up in both secondary and in the primary business. That would be the first thing. Secondly, just looking at Q1, given the timing of what we see coming in Park Hill, we see it being down significantly year-over-year. Last year was a record Q1 for Park Hill. So that would be down $30 million to $40 million year-over-year.

Paul Taubman, Chairman and CEO

But just for the first quarter, with recovery for the rest of the year.

Matt Moon, Analyst

Understood. Understood. And then one of your competitors also cited kind of a strong year in 2022 as it relates to shareholder activism that persisted from the 2021 level. So just kind of curious on what you are seeing with respect to Camberview, what you saw in the year and kind of how we should kind of consider the environment for that business as we enter 2023 as well?

Paul Taubman, Chairman and CEO

Yeah. I think as I was mentioning in my remarks, turbulent environments play well for shareholder engagement, right? You have companies with dislocated share prices who may look for help on strategic IR to better position their story with investors to try and figure out how to get the right investors in. They may be vulnerable to an activist taking a position or creating a distraction for the company. So all of that creates a more productive environment for shareholder engagement. When times are good, it’s probably less top of mind than when you are dealing with the dislocated equity market. So I think just as our Restructuring business benefits from a more challenging environment, I think it also has a read across to our shareholder engagement initiatives.

Matt Moon, Analyst

Okay. Great. And then last one for me, buybacks are relatively light in the quarter. So just given the M&A advisory outlook and kind of some of the uncertainty there, is it fair to think that there’s a general sense of conservatism as it relates to the buyback, I guess, near-term? Just wanted to think about that outlook over the course of the early parts of this year?

Paul Taubman, Chairman and CEO

We initially planned to front-load our share buybacks last year and clearly stated our intention to manage dilution. We decreased the share count, strengthened our balance sheet, and opted to retire shares earlier in the year rather than later, which is exactly what we did. While we don't have a fixed schedule for 2023, we aim to be proactive in buying back stock. Overall, our inclination is to buy back more shares in the first half of the year compared to the second half.

Matt Moon, Analyst

Very clear. Thank you, guys.

Paul Taubman, Chairman and CEO

Okay. Thank you.

Operator, Operator

That was our final question. We will now turn the call back to Paul Taubman for his closing remarks.

Paul Taubman, Chairman and CEO

Well, once again, I want to thank everyone for joining us on this morning’s call and we very much appreciate the dialogue and the interest in our firm and we look forward to speaking with you when we report first quarter results in the spring. Thank you.