Greenhill delaying bonus payments
Saw the litquidity post. Anyone have any idea what's going on over there?
Is the firm at risk of going under?
Aug 29, 2022
Aug 29, 2022
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Comments ( 50 )
Anyone know about Chicago office?
Take a look at their PCA Rebuild and you'll understand the financial position of the company.
What does that mean?
Hahahaha, +SB. Though the ex-Greenhill Cogent team now at Jefferies is world class... They even beat Evercore on CALPERS 6 billion dollar PE sale.
I think they're close to being illiquid. Does their restructuring group advise themselves if it comes to that?
Is it really that bad?
Lol that's cap. Their quick ratio is 2 .44 and they have a healthy cash balance.
To answer OP's question, firm seems fine. Struggling this year but not at risk of going under in the near future
well if the quick ratio is 2.44 then it seems like thats all there is to debt dynamics, that probably solves for the 300mn TL they have coming due in early 2024. You a distressed investor or something?
Neil Augustine about to add "Advised Greenhill on successfully completing the restructuring of $300m of debt" to the website's creds page.
PJT probably would still win the company side with GHL doing equity committee.
Following. Anyone to confirm the news with insights to add?
They have a couple hundred million of debt that will NEVER be repaid and will be tough to refi as rates increase and performance spirals down market. Pulled this same move a few years back. Train wreck…
I just looked up Greenhill 's stock and it's a dumpster fire….
Market cap of only $150M with $300M+ debt. Negative net income . Negative growth.
They also only did $30M revenue last quarter, which is like 2 deals? On top of having 25+ MDs?
Don't know a ton about Greenhill but always seen them posted about here as an EB . Obviously none of this relates to analysts and exits are great so save the MS, but what does the future of Greenhill really look like?
Greenhill actually has 80 MDs and is roughly the size of CVP, which makes their situation look even worse. A significant amount of Greenhill's stock is owned by the MDs, and the very generous dividends that the stock pays has allowed the MDs to get compensated quite well while coasting without having to put in huge amounts of effort, and thus incentivizes them to stay. Personally, I either see Greenhill slowly fading into mediocrity and dying a slow death, or that Greenhill may face a face a distressed situation with its maturity cliff if their cash flow doesn't improve and the debt markets stay bad through 2023. If Greenhill does become distressed, I could honestly see some bank wanting to make a push into advisory or to bolster their weak practice (say, Capital One , HSBC , or Northern Trust) swooping in, buying Greenhill for the cheap and locking up the MDs with medium-to-long-term contracts, and starting up/improving their advisory arm that way. Everything is pure conjecture though, I only know as much as you do.
Can't wait to see the rivalry in 2026 M&A league tables between BofA and US Bank after US Bank acquires Greenhill.
Nobody is swooping in to buy GHL. Maybe and I mean maybe 10/80 MDs are productive (not kidding) and someone will just hire those guys directly for pennies on the dollar given how cheap the stock is. About 1/3 of MDs evidently have produced 0 rev this year. Bok's decision to issue debt and buy back shares at $20+ was an all time terrible blunder.
The firm has $270M of debt with considerable non-financial covenants due early 2024 that they'll have to refinance at maturity, which has gotten significantly more expensive. Their cash position (cash and cash equivalents ) has deteriorated quite a bit, going from $135m to $65m in the past 6 months and will likely continue to deteriorate given the how the worrisome markets have affected their advisory practices (and the rest of the street) and their relatively high employee compensation outstripping their revenue required to keep the bankers around. Take a look at their 10-Q .
Honestly, how do you have 80 MDs, many industry veterans with very reputable backgrounds and strong past deal experience, only generate $30m in revenues over 3 months? That level of underperformance is honestly impressive.
My understanding was EBs target $10-12M of revenue per MD, and even MMs are more in the $6-8M range. According to these numbers, Greenhill's revenue per MD is $2M
is what???????? don't keep us waiting (or is that the joke)
Should I be concerned as an SA /incoming FT?
I am always the person saying absolutely don't renege, but I would be shopping around given their cash and debt problems
Ngl Scott Bok was absolutely the wrong person to lead Greenhill after Rob stepped down. He's lacked ambition since day 1 to keep Greenhill going and has always been far more focused on keeping the firm's dividend to keep the MDs' wallets fat while other boutiques have soared past Greenhill.
In b4 Greenhill has to raise financing at 1000+ bps with extreme covenants from an alternative credit investor like Ares for its maturity cliff due to its bad cash flow profile and current debt markets, ends up defaulting, restructures with Ares getting 100% equity and effectively owning it, becomes Ares's in-house advisory arm, and eventually gets spun out in 5 years Blackstone /PJT-style due to conflicts of interest between Ares's investing and its advisory, and relaunches with some Greek name like Athena Partners in 2030.
Incoming 2023 SA , should I be concerned?
Yes. McDonald's advisory practice is hiring. Heard they are a mainly food and beverage industry coverage team. Work on a lot of deals involving burger and ice cream companies. Might be worthwhile to look into
Could also be a move to justify low bonuses as they can give more credit to the current very bad market environment. DB delayed promotions/pay increases by 3 months as well
Greenhill recently had some billion $$ deals, but barely did anything in Q2, maybe they literally are running out of cash?
Former GHL employee:
1) GHL in many respects acts like a small company rather than a publicly traded one, and there could be a stupid and unthoughtful reason for delayed bonuses - people on vacation, etc.
2) The rumor has always been that GHL will sell or go private as the debt matures, and they have sufficent connections where I assume that is still possible.
With that out of the way, the firm is suffering the consequences of 15 years of mismanagement:
Greenhill failed to evolve following the financial crises.
1) The firm missed the sponsors wave and was proudly a corporate advisor. Subsequently, they have struggled to compete in the business which is a large portion of wallet share.
2) The firm got old - MDs in their 40s in the 2000s are now in their 60s. (Some heavy hitters died in a plane crash which changed the trajectory of the firm.) But it seems like are are a core number of MDs who go into the office, because they are too frugal to pay country club dues.
3) There is an extreme pareto principle with respect to MD performance. Average Revenue / MD substantially lags peers, and I suspect the Median Revenue / MD is far worse. Folks such as James Babski, Kevin Constantino, and regional offices keep the lights on. There are few if any rock star MDs. For every Babski there are four Richard Steinman's who haven't done a deal in a decade.
4) Recent hiring has been questionable. Scott Bok does not want to guarantee comp, so it is hard to poach / pay for talent. A software banker was brought on from a no-name firm, the PCA team has a lot of heads, but not a lot of revenue.
5) Analyst retention is not encouraged. Analysts sign a 2 year contract and are encouraged to move on following their tenure. If an analyst wants to stay on for a third year (which is are) they do so as an Analyst 3 rather than an Associate 1.
6) While different in the small regional offices, true sector coverage groups in places such as London and New York does not exist in any traditional manner. There are one or two MDs per ground, and juniors Analysts - VPs are largely generalists. This does not apply to RX , PCA, or offices such as Houston or Toronto.
6) MBA Associates are barely trained - a two week training program - and tend to leave as soon as it is financially feasible.
7) The firm has been pennywise and pound foolish when it comes to investing in the business. Front office staff are often asked to take on non-revenue generating roles - moving offices, coordinating seating, recruiting (above and beyond what is expected at a typical bank) updating the website, and supporting IR. There are few if any templates, etc.
8) Bankers struggle to develop internally. There is limited revenue generation ascribed to Principals, and it is a multiple-year role. Without a balance sheet and a track record of doing M&A deals these Principals struggle to originate when they earn their MD stripes.
9) All of the above has pushed the firm down market. A $2.5m fee on a $125m deal rather than a $5m fee on a $1bn deal.
10) Lastly, on the D&I front, there could not be firm with more white men.
Out of curiosity, if there are so many non-performers at Greenhill, why are they still employed? Don't MDs usually have fee targets to hit over a period of time?
It's a slippery slope. Once GHL starts firing underperformers, even some of the good employees will start looking for the exits. See what happened to other banks that attempted the same - UBS, DB etc.
There are easily 30-40 MDs that they could cut.
.
LMFAO for the idiots that are throwing MS at me, I'm replying to the idiot intern who thinks every other boutique has the same issues that Greenhill has. I'm not disagreeing with the original comment.
??? What? Do you even know what the other boutiques are like?
2/3. CVP, PJT and PWP constantly poach rainmakers from other firms. There's a reason why CVP and PJT's revenue per head and revenue/MD lead the industry.
6. A lot of MDs sit in the New York office for CVP, PJT and PWP. Come on now. CVP and PJT choose to run a generalist model simply because they believe it'll attract junior talent, but you start specializing as an associate/VP.
8. CVP, PJT and PWP have a great track record of doing M&A deals. Lots of homegrown talent too.
9. Take a look at their fucking pages, will you? CVP, for example, hardly does deals for less than $1 billion.
10. Lol.
Come on now.
Would you say the firm is still a good place to do your analyst stint if exits are the main goal here?
So is it just Neil sourcing restructuring these days? Have seen Eric Mendelsohn here and there but not many others.
Any insight into how successful the regional offices are (Chi, Toronto, Houston) versus the NY hq?
you mentioned the regional offices are carrying much of the deal flow
Wait what? White men!
Really hate to see it.
Holy shit I thought you were exaggerating with #10 but god damn you're correct.
Client Advisory Managing Directors | Greenhill & Co
Anyone working at ghl confirm? Saw another thread about layoffs
From what I've heard from folks who work there is that it sounds like the layoff rumors were a result of one non-performing MD, the head of real estate, being let go.
Any word on if these were paid out and how they were numbers wise?
Anecdotally heard they were actually good. Just awkward timing
any specific numbers?
Any word on their year end numbers?
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