Financial Data and Key Metrics Changes - For the full year 2025, the company reported revenues of $751 million, a decrease of 14% from 2024's record results, but still the third highest revenue year in its 20-year history [4] - Fourth quarter revenues were $219 million, which included $18.5 million related to closings that occurred within the first few days of 2026 [7] - The adjusted compensation margin for 2025 was 68%, up from 67% in 2024, reflecting strong discipline in managing compensation despite record talent investment [7] Business Line Data and Key Metrics Changes - The M&A business had a productive year in expanding coverage and expertise, although revenue ambitions were not fully met due to several large transactions not completing as hoped [4] - The Restructuring practice achieved record revenues, gaining market share in a growing market, particularly in Debtor-Side Mandates [5] - The Financing and Capital Solutions business also performed well, with a strong pipeline and positive sentiment from clients [6] Market Data and Key Metrics Changes - In Europe, the company delivered record revenues, solidifying its position as a leading advisor in active regions [5] - The company noted a strong environment for its restructuring business, with no slowdown observed, particularly in liability management engagements [24] Company Strategy and Development Direction - The company is focused on building a differentiated platform that can perform across various market conditions, with a strong emphasis on client relationships and talent acquisition [4][6] - The firm is optimistic about growth opportunities in 2026, with a gross pipeline at record highs and a strong backlog [6] - The company aims to balance investments in talent with shareholder returns, maintaining a focus on profitability while strategically investing [7][8] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism for 2026, citing a better starting point with a $15 billion transaction already announced [12] - The geopolitical landscape is creating opportunities rather than obstacles, with clients seeing potential in various sectors [36] - The company is not currently seeing negative impacts from the midterm elections, indicating a stable outlook for client decision-making [35] Other Important Information - The company returned over $163 million to equity holders in 2025 through dividends, share repurchases, and unit exchanges, while retiring 6.5 million shares [8] - The firm ended the year with $256 million in cash and no debt, and declared a quarterly dividend of $0.07 per share [8] Q&A Session Summary Question: Impact of large deals not completing in 2025 - Management acknowledged that several large transactions did not complete, impacting results, but expressed optimism for 2026 with a better trend in large-scale M&A transactions [11][12] Question: Performance of the Devon Park addition - Management reported positive early results from the Devon Park integration, with successful joint mandates and a strong pipeline [14] Question: Outlook for restructuring revenues in 2026 - Management is optimistic about the restructuring business, expecting strong performance driven by proactive financial management among clients [24][25] Question: Recruiting outlook for the coming year - Management indicated that while 2025 was a record year for hiring, they expect a return to more normal hiring trends in 2026, with a strong pipeline of candidates [27][28] Question: Advisory revenue mix and capital return priorities - Management declined to segment advisory revenue by M&A versus non-M&A, emphasizing their problem-solving approach for clients [41] - Capital return priorities remain focused on organic investment, share count management, and dividends, with no changes anticipated [42][43]

Financial Data and Key Metrics Changes - The company reported Distributable Earnings of $0.47 per share, Adjusted Net Income of $0.20 per share, and Adjusted EBITDA of $19.5 million for the first quarter of fiscal 2026, all of which exceeded or were at the high end of expectations [4][17] - Recurring service revenues were approximately $43 million, a sequential quarter decrease of approximately $2.5 million, primarily due to the wind down of AlerisLife's business and a decrease in SVC's enterprise value [17] - The company expects recurring service revenues to decrease to approximately $41 million in the next quarter [18] Business Line Data and Key Metrics Changes - DHC sold 37 properties for gross proceeds of approximately $250 million in the fourth quarter, and a total of 69 properties for approximately $605 million in 2025 [6][7] - SVC completed the sale of 66 hotels for approximately $534 million during the quarter and sold a total of 112 hotels in 2025 for $859 million [8] - ILPT successfully refinanced over $1.2 billion of debt in 2025 and materially increased its dividend [9] Market Data and Key Metrics Changes - The company arranged nearly 10 million square feet of leasing at rental rates approximately 13% higher than previous rents for the same space [12] - The managed portfolio of RMR Residential ended the year with approximately 93% occupancy and a resident retention rate of over 70% [14] Company Strategy and Development Direction - The company is focused on enhancing its private capital growth initiatives and has hired Peter Welch to lead international capital formation [12][13] - RMR is actively exploring investment opportunities in multifamily, retail, and select development projects [30] - The company aims to raise approximately $250 million for its enhanced growth venture fundraising [15] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the performance of multifamily assets, noting strong operational results and tenant retention rates [39] - The company anticipates a challenging fundraising environment but remains focused on residential and select development opportunities [13] - Management expects to see an increase in quarterly Adjusted EBITDA from additional dividends on increased investment in Seven Hills [21] Other Important Information - The company ended the quarter with nearly $150 million of total liquidity, including nearly $50 million in cash and $100 million of capacity on its undrawn revolving credit facility [22] - OPI filed for Chapter 11 bankruptcy, with the process ongoing [10] Q&A Session Summary Question: Comments on Peter's addition and fundraising efforts - Management clarified that the addition of Peter Welch is to bolster existing fundraising efforts, focusing on both U.S. and international capital [24][25] Question: Investment products for capital raising - Management indicated a focus on multifamily, loans, and retail investments, with a strong interest in multifamily for 2026 [30] Question: Performance of multifamily assets - Management noted strong operational results and tenant retention in multifamily assets, with rent growth approaching 5% [39] Question: Transition from adjusted net income to guidance - Management explained expected headwinds from the AlerisLife contract and lower construction management fees impacting future earnings [41][42] Question: Appetite for loan investments - Management views lending as a growth engine, with expectations for an active year in new loans primarily through Seven Hills [44][46] Question: Timeline for multifamily fund capital raising - Management aims to raise capital for the multifamily fund as soon as possible, with expectations for completion within fiscal year 2026 [48]

Financial Data and Key Metrics Changes - In 2025, the company raised $112 billion of capital, reflecting strong demand from various investor types [7] - Fee-bearing capital increased by 12% year-over-year to over $600 billion, with fee-related earnings reaching a record $3 billion, up 22% year-over-year [8] - Distributable earnings were $2.7 billion, an increase of 14% from the prior year [8][26] Business Line Data and Key Metrics Changes - In renewable power, significant investments included acquiring Neoen and National Grid's US renewables platform [15] - The private equity sector saw investments in Chemelex, a global industrial technology business [15] - Infrastructure investments included Hotwire Communications and Colonial Pipeline, enhancing the company's footprint in essential services [15] Market Data and Key Metrics Changes - The company entered 2026 with a favorable market backdrop, characterized by stabilized interest rates and resilient economic growth [9] - There is renewed global demand for real assets that generate stable cash flows, particularly in the context of inflation protection [9][10] Company Strategy and Development Direction - The company aims to double its business by 2030 and achieve a 15% annualized earnings growth [10] - A significant focus is on expanding access to private assets for individual investors through retirement and long-duration savings vehicles [10] - The company is well-positioned to capture growth opportunities in infrastructure, private equity, and credit sectors [25] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about 2026, expecting strong fundraising momentum and growth across various platforms [25] - The company anticipates a record year for fundraising, particularly in private equity and infrastructure [19][25] - Management highlighted the importance of maintaining a strong balance sheet and liquidity to support growth initiatives [33] Other Important Information - The board of directors approved a 15% increase in the quarterly dividend to $0.50025 per share, payable on March 31, 2026 [34] - The company plans to enhance disclosure around partner managers to provide clearer insights into its evolving platform [26] Q&A Session Summary Question: Is secondaries a strategically important area for the company? - Management acknowledged that secondaries are a growing segment and will be opportunistic in exploring this area, focusing on highly additive opportunities [37][38] Question: Can you elaborate on the growth outlook for 2026? - Management expects growth rates in the mid- to high teens, driven by strong fundraising and deployment activity, with several initiatives expected to add $200 million to fee-related earnings [40][42] Question: How does the company view AI-related disruption? - Management sees AI as a net positive, with minimal exposure to software businesses, focusing instead on long-term contracted real assets [48][49] Question: What is the company's liquidity position? - The company has over $3 billion in liquidity, which supports growth initiatives and capital deployment [52][56] Question: How is the company positioned in the credit market? - Management noted robust demand for credit, particularly in real asset and asset-backed lending, with modest redemptions in private wealth strategies [76][77] Question: What is the outlook for the wealth channel? - The company expects continued growth in the wealth channel, driven by new product launches and strong early reception [80][81]

Financial Data and Key Metrics Changes - In 2025, the company raised $112 billion of capital, reflecting strong demand from various investor segments [5] - Fee-bearing capital increased by 12% year-over-year to over $600 billion [6] - Fee-related earnings reached a record $3 billion, up 22% year-over-year, while distributable earnings were $2.7 billion, an increase of 14% from the prior year [6][24] - In Q4 2025, fee-related earnings were up 28% year-over-year to $867 million, with margins at 61% for the quarter [23][24] Business Line Data and Key Metrics Changes - The renewable power segment saw significant investments, including acquisitions in clean power assets and a US renewables platform [13] - The private equity business raised $1.6 billion, including $900 million for a special situation strategy [27] - Infrastructure raised $7 billion, including $5 billion for the AI infrastructure fund, marking a strong fundraising quarter [26][27] Market Data and Key Metrics Changes - The company noted a constructive market environment entering 2026, with stabilized interest rates and increased transaction activity [7] - There is a growing demand for real assets that generate stable cash flows, particularly in the context of inflation protection [8][9] Company Strategy and Development Direction - The company aims to double its business by 2030 and achieve a 15% annualized earnings growth [9] - A significant focus is on expanding access to private assets for individual investors through retirement and long-duration savings vehicles [8] - The company is well-positioned to capture opportunities in AI infrastructure, with a $100 billion global AI infrastructure program [20][21] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the growth outlook for 2026, expecting it to be at or above long-term targets due to strong fundraising momentum and a robust pipeline of opportunities [23][41] - The company is prepared for a meaningful expansion of its asset management mandate and anticipates strong earnings growth driven by recent acquisitions [17][31] Other Important Information - The board of directors increased the quarterly dividend by 15% to $0.50025 per share, payable on March 31, 2026 [32] - The company announced a leadership transition, with Conor Teskey appointed as CEO, reflecting a long-term succession plan [10] Q&A Session Summary Question: Is secondaries a strategically important area for the company? - The company tracks the secondaries market closely and sees it as a potential area for future growth, but will be selective in pursuing opportunities [34][35] Question: Can you elaborate on the growth expectations for 2026? - The company expects strong growth in 2026, with initiatives like the acquisition of Oaktree contributing to FRE growth, and a favorable market environment supporting increased deal activity [41] Question: What is the company's exposure to AI-driven disruption? - The company has minimal exposure to software businesses and focuses on long-term contracted real assets, positioning itself to benefit from increased AI penetration [44][46] Question: How is the company managing liquidity and uncalled commitments? - The company maintains over $3 billion in liquidity and views its uncalled capital of approximately $130 billion as a critical component for future growth [49][53] Question: What is the outlook for credit within the portfolio? - Demand for credit remains robust, with strong inflows into well-positioned products, despite some market concerns [72]

Financial Data and Key Metrics Changes - In 2025, adjusted net revenue reached approximately $3.9 billion, up 29% year-over-year, and nearly 17% above the previous record in 2021 [5][17] - Fourth quarter adjusted net revenue was nearly $1.3 billion, marking the strongest revenue quarter in the company's history, with a 32% increase compared to Q4 2024 [5][17] - Adjusted earnings per share for the full year was $14.56, a 55% increase from the previous year [5][17] Business Line Data and Key Metrics Changes - Adjusted advisory fees for Q4 were over $1.1 billion, up 33% year-over-year, and for the full year, they were $3.3 billion, up 34% compared to 2024 [18] - Adjusted underwriting fees for Q4 were $49 million, an 87% increase from a year ago, while full-year adjusted underwriting revenues were $180 million, up 14% [18] - The wealth management business reached its highest quarter-end AUM of approximately $15.5 billion, marking a record year [13] Market Data and Key Metrics Changes - Global M&A activity rebounded significantly in 2025, with announced transactions totaling approximately $4.5 trillion, up 49% from the prior year [6] - Deal volumes in the second half of 2025 were approximately 45% higher than in the first half, indicating a shift in market sentiment [6] - Financial sponsor activity for 2025 was up 43% in dollar volume and 14% in the number of transactions, excluding deals below $100 million [11] Company Strategy and Development Direction - The company aims to continue expanding its platform across regions, sectors, and products, with a focus on building out its advisory capabilities and diversifying revenue streams [10][11] - The acquisition of Robey Warshaw is a significant step in the company's EMEA expansion strategy [10] - The company is committed to investing in talent and technology to support growth and enhance service delivery [23] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism for 2026, citing strong backlogs and a healthy environment for both M&A and restructuring activities [14][31] - The company remains mindful of geopolitical and macroeconomic risks but believes its diversified business model positions it well for future growth [15][55] - Management noted that the improving market conditions and strong equity markets contributed to the positive outlook [6][14] Other Important Information - The adjusted compensation ratio for the fourth quarter was 62%, down 320 basis points from the previous year, reflecting improved revenue and market conditions [20] - The company returned $812 million to shareholders in 2025, including $151 million through dividends and $661 million through share repurchases [25][26] - The company maintains a strong cash position of $3 billion as of year-end [25] Q&A Session Summary Question: Outlook for large deals continuing or accelerating - Management believes the environment for large deals will remain healthy, supported by strong backlogs and favorable market conditions [31] Question: Can restructuring revenue grow in 2026? - Management indicated that both restructuring and M&A activities are expected to remain strong, with high backlogs in both areas [33][34] Question: Expectations for ECM in 2026 - Management expressed confidence in the equity capital markets business, anticipating continued growth and a healthy IPO environment [59][60] Question: Recruiting environment and challenges - Management acknowledged that the recruiting environment is competitive and may require more effort and resources to attract top talent [89][90]

Group 1 - Wall Street is preparing for another year of significant mergers and acquisitions (M&A), following a record-breaking 2025 with 68 transactions exceeding $10 billion each, indicating a resurgence of confidence in corporate boardrooms [1][4] - The average transaction size in 2025 reached approximately $227 million, the highest since 1980, with large deals being a key driver of market activity [2][4] - High-profile transactions included Netflix's $72 billion acquisition of Warner Bros. Discovery's studios and HBO Max, and a $72 billion merger between Union Pacific and Norfolk Southern, showcasing the scale of recent deals [2][4] Group 2 - Electronic Arts announced plans to go private in a $55 billion deal, reflecting the increasing role of private capital in major transactions [3][4] - Despite concerns regarding geopolitical risks and President Trump's tariff regime, dealmaking momentum remained strong, even during traditionally quiet periods, with expectations for continued activity into 2026 [3][5] - The record number of high-value deals in 2025 signifies a strong rebound in the M&A market post-pandemic, suggesting a positive outlook for 2026 [4]

Germany’s government kicked off a new investment vehicle intended to attract tens of billions of euros in private capital for energy infrastructure, raw materials, defense and startups https://t.co/yMbYhF7IHI ...

China is further opening up several major state-dominated industries to private capital by raising the ownership limit and removing some investment barriers. https://t.co/iheNsbVUWy ...

Core Insights - The recent deal involving Morgan Stanley is strategically significant despite being a smaller transaction, likely under $500 million, and not the primary focus of the firm [1][2] - The deal is part of a broader strategy to entrench Morgan Stanley within the private markets ecosystem, especially as more companies remain private longer [4][6] Group 1: Strategic Importance of the Deal - The deal is seen as a continuation of James Gorman's strategy, which has included significant acquisitions like Smith Barney and E-Trade, enhancing Morgan Stanley's wealth management capabilities [2][3] - The Solium deal, which involved stock plan administration for private companies, is highlighted as a crucial but often overlooked transaction that aligns with Morgan Stanley's goals [3][4] Group 2: Wealth Management and Investment Banking Synergy - The focus on private capital offerings is essential for Morgan Stanley, as building relationships with private companies can lead to increased investment banking activity [6] - The wealth management division is critical for generating consistent fee-based revenue, which is increasingly valued by investors [7]

Core Insights - The private capital market has grown to an estimated $22 trillion by 2024, more than doubling since 2012, driven by a retreat from public markets and a significant increase in private venture-backed firms [3][4] - Private equity has outperformed the S&P 500 by six percentage points per year on average, highlighting the potential benefits of investing in private markets [2] - The shift towards private capital is reshaping how companies and investors approach growth, risk, and control, challenging the traditional dominance of public markets [4][15] Private Credit and Risks - The private credit segment, valued between $1 trillion and $3 trillion, poses risks due to its lack of transparency and rigorous oversight compared to public markets [1][5] - Analysts warn that hidden risks in private lending markets could lead to significant defaults, especially in the context of economic downturns [5][9] - The increasing reliance on private credit for funding major projects, such as data centers, raises concerns about speculative infrastructure investments outpacing real-world utility [7][8] Market Dynamics - The number of U.S.-listed companies has halved since 2000, while the number of private venture-backed firms has increased 25-fold, indicating a significant shift towards private capital [3] - Major tech companies are increasingly investing in private AI unicorns, with private credit providing two to three times the funding of public markets [6][9] - The top 120 private unicorns have a total valuation comparable to Germany's entire market cap, underscoring their influence on the global economy [13] Future Outlook - The growth of private capital is expected to facilitate the emergence of alternative investment platforms, potentially allowing for broader access to private equity investments [15][16] - Analysts believe that the ongoing transformation in finance, driven by technology and generational changes, will continue to blur the lines between public and private capital [14][17] - The private capital boom is seen as a revolution that will shape the future of economies, companies, and innovations [17][18]