The mid-cap champion: How Houlihan Lokey plans to keep on growing
A stellar period for the independent investment bank, including its largest-ever acquisition, has set the scene for a strong future, according to CEO Scott Beiser. Its relentless focus on the mid-cap arena and its naturally hedged balance of businesses have created a firm that has quietly become one of the biggest advisory names in the world.
Scott Beiser sounds understandably upbeat. As the chief executive of Houlihan Lokey prepares to report the investment bank’s third-quarter earnings for the last three months of 2021 on February 8 (its financial year runs from April to April), he can reflect on record year-to-date results and the completion of the biggest acquisition the firm has ever undertaken, its purchase of Tokyo-listed tech-focused investment bank GCA in October.
Houlihan’s revenues rose 32% in the 2021 calendar year to more than $1.5 billion, with its corporate finance division up 24% – making up just over half the firm’s total. Its restructuring unit accounts for 35% of revenues, with financial and valuation advisory making up the rest. Pre-tax profits for the group rose 73% over the same period.
And the stock has been on a tear – it is up 115% since the start of 2020, after being down only about 7% at its Covid low on March 25, 2020. That's the kind of performance that most of its rivals can only dream of.