Houlihan Lokey Inc

Private equity direct investments and co-investments are expected to overtake traditional fund investing as the largest capital source within five years, according to Houlihan Lokey's LP Compass, the investment bank's first survey of the combined co-investment and directs market, which polled 56 of the market's most active buyers. Some 78% of respondents expect combined volumes to set a record in 2026, beating the $215 billion Houlihan Lokey estimates the market reached last year, a record made up of $161 billion in directs and $54 billion in co-investment. The report attributes the shift to visibility, since investors can underwrite a specific asset and model its returns directly rather than committing blindly to a primary fund. Almost three in four survey respondents said they are willing to pay variable carry on co-investments tied to managers meeting certain return thresholds, while directs buyers are less willing, with 46% accepting variable carry and just 13% willing to pay more than 20%, and more than a quarter of co-investors still insisting on paying no carry at all. In Europe, appetite is reflected in fundraising for co-investment funds, commingled vehicles that invest directly in companies alongside general partners, which have already raised €6.3 billion, around $7.3 billion, so far this year, nearly on par with the €7.2 billion raised in all of last year, according to PitchBook data, though capital is increasingly concentrated as the number of funds fell for a fourth consecutive year to just 14 closes. Pantheon Global Co-investment Opportunities Fund VI was among the largest co-investment funds to close this year, raising $3.2 billion together with its related vehicles when it closed in July, following the firm's record deployment of around $1.3 billion across 30 co-investment deals last year, while Partners Capital Investment Group held the final close of Merlin IV in February, raising over $1 billion in commitments for a strategy focused on lower mid-market and mid-market buyouts.

Houlihan Lokey, the global investment bank, has appointed Jean-Baptiste Didier as a Managing Director in its Financial Sponsors Group, based in Paris, where he will lead financial sponsor coverage in France. Didier joins from Stifel, where he was Head of Healthcare Investment Banking France, and previously held senior roles at Citi, J.P. Morgan, and Morgan Stanley. His hire follows the additions of Managing Directors Martin Rezaie in Germany and Neil Price in the U.K. over the past year, part of the firm's broader expansion of its European Financial Sponsors team, which now includes more than 35 professionals across ten countries. The move builds on Houlihan Lokey's investment in France, including its acquisition of a controlling interest in Audere Partners earlier this year.

Goldman Sachs led the mergers and acquisitions financial adviser rankings by deal value in the first half of 2026, advising on $597.4 billion worth of deals, according to GlobalData. Morgan Stanley took second place with $420 billion, followed by JPMorgan with $382.2 billion, Bank of America with $230.4 billion, and Wells Fargo with $208.9 billion. Houlihan Lokey led by volume, advising on 152 deals. Goldman Sachs more than doubled its advised deal value compared to the first half of 2025, moving from third to first place.

Houlihan Lokey shares rose 3.2% after the investment bank announced an agreement to acquire Intrepid Financial Partners, an independent investment bank focused on the energy sector. The deal will add 34 financial professionals, bringing Houlihan Lokey's global energy team to more than 70 specialists. Intrepid's founder, Hugh "Skip" McGee III, will become managing director and global chairman of Houlihan Lokey's Oil & Gas Group. The acquisition is expected to close before September 30, 2026. Shares later settled at $138.30, up 3.1% from the previous close.

Fitch has withdrawn its investment-grade rating on Electronic Arts bonds tied to a planned $55 billion all-cash leveraged buyout, a move bondholders argue could trigger a premium payout under change-of-control covenants. The buyout is backed by Silver Lake, Jared Kushner's Affinity Partners and Saudi Arabia's Public Investment Fund, with JPMorgan Chase advising the buyers. Bondholders, advised by Akin Gump and Houlihan Lokey, reportedly control 75% of the 2031 notes and 90% of the 2051 notes, giving them a strong position in the months-long dispute. The consortium views the investment-grade rating as helpful but not required, arguing that defeasance could invalidate the covenants because the notes would be prepaid. The consent deadline has been extended multiple times as the deal awaits regulatory approval, with no engagement between the parties reported so far.

Morningstar is rolling out Microsoft 365 Copilot integrations that bring its research and analytics directly into tools like Outlook and Excel, while also launching new daily valuation indexes for the collateralized loan obligations market in collaboration with Houlihan Lokey. The Copilot integration aims to embed Morningstar's analyst reports, fund data, and models into the workflows of advisors and analysts, helping the company compete with data providers such as S&P Global, FactSet, and Bloomberg. The new Morningstar Houlihan CLO Indexes extend Morningstar's index business into private credit, targeting growing demand for transparency in CLOs and leveraged loans. These moves come as Morningstar's stock recently closed at $154.65, down 12.5% over the past 30 days and 50.2% over the past year.

Morningstar and Houlihan Lokey are collaborating to launch a new suite of daily valuation indexes for the collateralized loan obligation market later this year. The Morningstar Houlihan CLO Indexes will combine Morningstar's index design and governance with Houlihan Lokey's valuation framework and credit market expertise to provide reliable benchmarks in the rapidly expanding CLO market, which has grown to more than $1.5 trillion in assets and could exceed $3 trillion by 2030. The indexes aim to improve transparency and consistency in a market where the availability of frequent pricing and benchmarks has not kept pace with growth. Sanjay Arya, head of innovation for Morningstar Indexes, said the collaboration addresses a clear investor need and will bring more transparency to private markets, while Dr. Cindy Ma, managing director and global head of portfolio valuation and fund advisory services at Houlihan Lokey, noted that data, transparency, and advanced analytics are becoming critical competitive differentiators for investors.

StockStory highlights Houlihan Lokey as a cash-heavy stock to buy, while flagging G-III and Live Oak Bancshares as facing challenges. Houlihan Lokey, with a net cash position of $633.6 million representing 6.8% of its market cap, is praised for exceptional 16.9% annual revenue growth over the last two years and 29.7% annual earnings per share growth, alongside 20.1% annual tangible book value per share growth. In contrast, G-III holds $100.7 million in net cash but is seen as underperforming due to unexciting sales trends and lack of free cash flow, while Live Oak Bancshares, with $716.6 million in net cash, is cautioned against because of weak unit economics and declining earnings per share despite revenue growth.