Houlihan Lokey, the investment bank, reported record dealmaking fees of $2.6bn for its fiscal year ending March 31, 2025, marking an 18% increase from the previous year. The record performance was driven by strong activity in restructuring, mergers and acquisitions (M&A), and capital markets, even as a pause in Middle Eastern deals tempered overall growth.
Record Fee Income
The advisory firm's fee income reached an all-time high of $2.6bn, up from $2.2bn in fiscal 2024. This growth was fueled by a surge in restructuring mandates, as companies sought to refinance debt amid higher interest rates, and a rebound in M&A activity in North America and Europe. Houlihan Lokey's capital markets division also contributed significantly, with increased underwriting and placement fees.
Middle East Slowdown
Despite the overall record, the bank noted a slowdown in dealmaking in the Middle East, particularly in the second half of the fiscal year. Geopolitical tensions and economic uncertainty led to a pause in several large transactions, which had been a significant source of fees in prior years. However, the firm's diversified business model helped offset this decline.
CEO Commentary: Scott Adelson, CEO of Houlihan Lokey, commented, "Our record results reflect the strength of our global platform and the dedication of our team. While we saw a temporary slowdown in the Middle East, our diversification across geographies and product lines allowed us to achieve exceptional performance."
Segment Performance
- Financial Restructuring: Fees in this segment rose 25% to $1.1bn, driven by a wave of debt restructurings in the retail, energy, and healthcare sectors.
- Mergers and Acquisitions: M&A advisory fees increased 12% to $900m, with notable deals in technology and industrials.
- Capital Markets: Fees from capital markets activities climbed 20% to $600m, led by high-yield bond and equity offerings.
The firm also reported a 15% increase in total revenue to $2.9bn, with net income rising 22% to $520m. Earnings per share (EPS) reached $7.50, up from $6.15 in the prior year.
Outlook
Looking ahead, Houlihan Lokey expects continued momentum in restructuring and M&A, though the pace of Middle Eastern deals remains uncertain. The bank plans to expand its presence in Europe and Asia to capture growth opportunities. "We remain optimistic about our pipeline and believe our strategic focus will drive long-term value for shareholders," Adelson added.
The record fee income underscores the resilience of Houlihan Lokey's business model and its ability to navigate market volatility. With a strong balance sheet and a track record of execution, the firm is well-positioned for future growth.
