Houlihan Lokey (HLI) Ups Private Capital Mark With Triago Buyout
Houlihan Lokey, Inc. HLI recently agreed to acquire the private equity placement agent and advisor, Triago Management Development. This strategic move is expected to broaden HLI's presence in the private capital space. The financial details of the deal are yet to be disclosed.
The move will expand Houlihan Lokey’s Private Funds Group (“PFG”), led by Andy Lund and Cristina Forcina Westermann. The acquisition is expected to make the mid-market investment bank’s PFG a fully integrated advisory platform with enhanced capabilities, which will enable it to provide clients with a comprehensive range of services, including primary, secondary, direct and general partner advisory services on a global scale.
Per the deal, Triago, with 50 workers from Dubai, London, New York, Paris and San Diego offices, will integrate with HLI’s PFG, creating a market leading private fund advisory platform. As a result, HLI’s global PFG team will have over 70 bankers in some of the major cities around the world. The combination is expected to create a one-stop shop, catering to all the financial requirements of private equity managers and investors within the fragmented industry.
The acquiree has closed more than 200 fundraisings and 30 direct financings across six continents. Its vast experience will likely boost HLI’s capabilities and services offered on a global scale. The company depends on prudent acquisitions to grow its operations inorganically worldwide. In Europe alone, within a seven-year period, it acquired seven boutique advisory firms. In July 2023, it bought 7 Mile Advisors, an independent IT advisory firm.
Antoine Dréan, the founder and chairman of Triago, is expected to assume the role of the chairman emeritus of expanded PFG, while Matt Swain, the CEO of Triago, is set to become the head of direct placements and secondaries. The deal is expected to close in the first half of 2024.
Price Performance & Zacks Estimates
Houlihan Lokey shares have gained 11% in the past three months compared with the 10.4% growth of the industry it belongs to. However, the Zacks Consensus Estimate for HLI’s current-year bottom line is pegged at $4.36 per share, indicating a 4% year-over-year decline. It has witnessed two downward estimate revisions in the past 60 days against no upward movement.
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Zacks Rank & Key Picks
Houlihan Lokey currently has a Zacks Rank #4 (Sell).
Investors interested in the broader Finance space can consider some better-ranked companies like Blue Owl Capital Corporation OBDC, Burford Capital Limited BUR and Globe Life Inc. GL. While Blue Owl Capital sports a Zacks Rank #1 (Strong Buy) at present, Burford Capital and Globe Life carry a Zacks Rank #2 (Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.
The consensus mark for Blue Owl Capital’s current year earnings is pegged at $1.91 per share, indicating 35.5% year-over-year growth. Furthermore, the consensus estimate for OBDC’s revenues in 2023 suggests 30.4% year-over-year growth.
The Zacks Consensus Estimate for Burford Capital’s current year earnings has improved 16% over the past 60 days. Also, the consensus mark for BUR’s revenues in the current year is pegged at $936 million, suggesting 193.2% year-over-year growth.
The Zacks Consensus Estimate for Globe Life’s current year earnings is pegged at $10.60 per share, which indicates 30.1% year-over-year growth. It has witnessed six upward estimate revisions against none in the opposite direction in the past 60 days. It beat earnings estimates in all the past four quarters, with an average surprise of 2.3%.
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