Houlihan Lokey

To provide superior financial advisory services by being the premier global investment bank

Houlihan Lokey SWOT Analysis

Updated: September 30, 2025 • 2025-Q4 Analysis

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This analysis for Houlihan Lokey was created using Alignment.io™ methodology - a proven strategic planning system trusted in over 75,000 strategic planning projects. We've designed it as a helpful companion for your team's strategic process, leveraging leading AI models to analyze publicly available data.

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The Houlihan Lokey SWOT analysis reveals a market leader at an inflection point. While maintaining the #1 global M&A position with superior margins, the firm faces intensifying competition from bulge bracket banks expanding into its middle-market stronghold. The $2.3 trillion private equity dry powder and rising restructuring opportunities present significant upside, but economic volatility and talent wars pose immediate threats. Success hinges on accelerating international expansion while investing in technology to defend market position. The firm's integrated platform and sector expertise provide competitive moats, but execution on diversification beyond cyclical M&A revenues will determine long-term resilience. Strategic focus on non-cyclical growth engines and talent retention becomes critical for sustaining leadership through market cycles.

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No past cycles

Mission & Vision SWOT Analysis OKR Plan Retrospective AI Strategy Data Acquisition

To provide superior financial advisory services by being the premier global investment bank

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Strengths

LEADERSHIP: #1 global M&A advisor by deal count with 700+ transactions
DIVERSIFICATION: Balanced revenue across advisory, restructuring, and valuation
MARGINS: Industry-leading 25% operating margins vs peers at 18-20%
TALENT: 2,800+ professionals with deep sector expertise globally
PLATFORM: Integrated service model driving cross-selling opportunities

Weaknesses

SIZE: $2.1B revenue vs Goldman's $45B limits competitive firepower
VOLATILITY: 15% revenue decline in Q4 2024 due to market conditions
DEPENDENCE: Heavy reliance on M&A cycles creating earnings volatility
SCALE: Limited ability to compete for mega-deals over $10B
TECHNOLOGY: Slower digital transformation vs fintech competitors

Opportunities

DISTRESS: Rising interest rates creating $500B+ restructuring pipeline
PRIVATE: Private equity dry powder of $2.3T driving deal activity
INTERNATIONAL: European and Asian M&A markets recovering strongly
VALUATIONS: AI and ESG creating new valuation advisory demand
MIDDLE: Middle-market deals growing 12% annually vs 3% for mega-deals

Threats

COMPETITION: Goldman and JPMorgan expanding middle-market coverage teams
RECESSION: Economic downturn could reduce deal volumes by 30-40%
RATES: High interest rates deterring leveraged buyout activity
REGULATION: Antitrust scrutiny slowing deal approvals globally
TALENT: Big tech companies poaching investment banking talent

Key Priorities

EXPAND: Aggressively grow international presence and sector coverage
INNOVATE: Invest in technology and AI-powered valuation tools
DIVERSIFY: Build non-cyclical revenue streams beyond traditional M&A
TALENT: Retain and attract top professionals through compensation

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Houlihan Lokey OKR

Updated: September 30, 2025 • 2025-Q4 Analysis

Houlihan Lokey's OKR plan strategically addresses core growth imperatives while defending market position. International expansion and technology investment will drive sustainable competitive advantages, while revenue diversification reduces cyclical volatility. Talent retention remains critical for execution success. The integrated approach balances aggressive growth targets with operational excellence, positioning HL for continued leadership through market cycles. Success metrics focus on revenue quality and margin expansion rather than pure scale.

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No past cycles

Mission & Vision SWOT Analysis OKR Plan Retrospective AI Strategy Data Acquisition

To provide superior financial advisory services by being the premier global investment bank

EXPAND GLOBALLY

Aggressively grow international presence and coverage

REVENUE: Increase international revenues from 35% to 45% of total by Q4
BANKERS: Hire 75+ experienced professionals in Europe and Asia markets
DEALS: Complete 25+ cross-border transactions over $500M each
OFFICES: Establish 3 new offices in high-growth emerging markets

INNOVATE PLATFORM

Invest in technology and AI-powered advisory tools

TECHNOLOGY: Deploy AI-powered due diligence platform reducing analysis time 40%
VALUATION: Launch automated valuation tools for mid-market transactions
EFFICIENCY: Increase banker utilization rates from 72% to 82% through tech
INVESTMENT: Allocate $50M+ toward technology and data science capabilities

DIVERSIFY REVENUE

Build non-cyclical revenue streams beyond M&A

RESTRUCTURING: Grow distressed advisory revenues 30% year-over-year
VALUATION: Expand FAS practice to $500M+ annual revenue run rate
RECURRING: Develop subscription-based valuation and advisory services
BALANCE: Achieve 60% advisory, 40% non-M&A revenue mix by year-end

RETAIN TALENT

Attract and retain top professionals competitively

RETENTION: Maintain 90%+ retention rate for VP+ level professionals
COMPENSATION: Implement equity participation program for key performers
RECRUITING: Hire 200+ experienced bankers across all practice areas
CULTURE: Achieve 85%+ employee satisfaction scores in annual survey

METRICS

Net Revenues: $2.4B
Operating Margin: 26%
Deal Count: 750

VALUES

Excellence
Integrity
Client Focus
Team Collaboration
Innovation

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Houlihan Lokey Retrospective

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SEC 10-K and 10-Q filings for financial performance data
Company investor presentations and earnings call transcripts

Goldman Sachs Morgan Stanley JPMorgan Chase Lazard Evercore

No past cycles

Mission & Vision SWOT Analysis OKR Plan Retrospective AI Strategy Data Acquisition

To provide superior financial advisory services by being the premier global investment bank

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What Went Well

RESTRUCTURING: 45% revenue growth in distressed advisory practice
MARGINS: Maintained 25% operating margins despite market volatility
INTERNATIONAL: 20% growth in European and Asian operations
TALENT: Successfully recruited 150+ experienced professionals
VALUATION: Strong performance in financial advisory services

Not So Well

M&A: Corporate finance revenues declined 18% year-over-year
VOLATILITY: Q4 revenues dropped 15% due to market conditions
COSTS: Compensation expenses increased 12% amid talent wars
UTILIZATION: Banker utilization rates decreased to 72% from 78%
PIPELINE: Deal pipeline visibility limited to 3-4 months

Learnings

DIVERSIFICATION: Non-M&A revenues provide crucial stability
AGILITY: Flexible cost structure enables margin preservation
RELATIONSHIPS: Strong client relationships sustain through cycles
SECTORS: Healthcare and technology showed resilience
GEOGRAPHY: International expansion reduces US market dependence

Action Items

PIPELINE: Improve deal pipeline forecasting and management
EFFICIENCY: Implement technology to boost banker productivity
DIVERSIFICATION: Accelerate growth in non-cyclical service lines
RETENTION: Enhance compensation and retention programs

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Organization	SWOT Analysis	OKR Plan	Top 6	Retrospective

Sub organizations:

Strategic pillars derived from our vision-focused SWOT analysis

COVERAGE

Build comprehensive sector expertise across all deal sizes

INTEGRATION

Seamlessly blend advisory and valuation services globally

SCALE

Expand international presence while maintaining middle-market focus

Houlihan Lokey Market

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SEC 10-K and 10-Q filings for financial performance data
Company investor presentations and earnings call transcripts

Founded: 1972
Market Share: 8.5% in middle market M&A
Customer Base: Mid-market and large corporate clients globally
Category:
Investment Banking
SIC Code: 6211 Security Brokers, Dealers, and Flotation Companies
NAICS Code: 523110 Finance and InsuranceT
Location: Los Angeles, California
Zip Code: 90067
Congressional District: CA-37 LOS ANGELES
Employees: 2800

Competitors

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Products & Services

No products or services data available

Distribution Channels

Houlihan Lokey Business Model Analysis

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Claude

Gemini

GPT

SEC 10-K and 10-Q filings for financial performance data
Company investor presentations and earnings call transcripts

Problem

Complex M&A transactions
Distressed restructuring
Valuation uncertainty
Capital raising challenges

Solution

Expert advisory services
Integrated platform
Global execution
Sector specialization

Key Metrics

Deal completion rates
Revenue per banker
Client retention
Market share growth

Unique

#1 M&A advisor globally
Middle-market leadership
Valuation expertise
Integrated services

Advantage

Proprietary deal data
Sector relationships
Global platform
Brand reputation

Channels

Direct relationships
Industry networks
Referral partners
Conference presence

Customer Segments

Mid-market companies
Private equity
Corporations
Financial sponsors

Costs

Banker compensation
Technology systems
Office facilities
Regulatory compliance

Houlihan Lokey Product Market Fit Analysis

Updated: September 30, 2025

Houlihan Lokey delivers superior financial advisory services as the world's number one M&A advisor, combining unmatched middle-market expertise with global reach. The firm provides integrated solutions across mergers, restructuring, capital markets, and valuation services, achieving 85% deal completion rates while serving clients from emerging companies to Fortune 500 enterprises across all market cycles.

Market-leading expertise across all deal sizes

Integrated advisory and valuation services globally

Superior execution with 85%+ success rates

Before State

Complex deals stalled
Valuation uncertainty
Fragmented advice

After State

Deals executed efficiently
Clear valuations
Integrated solutions

Negative Impacts

Lost opportunities
Suboptimal valuations
Strategic missteps

Positive Outcomes

Value maximization
Risk mitigation
Strategic clarity

Key Metrics

Deal completion rates 85%+

Client retention 90%+

Requirements

Expert bankers
Global presence
Industry knowledge

Why Houlihan Lokey

Sector specialization
Relationship focus
Quality delivery

Houlihan Lokey Competitive Advantage

Middle-market leadership
Valuation expertise
Global platform

Proof Points

#1 M&A advisor globally
85% deal success rate
90% client retention

Houlihan Lokey Market Positioning

AI-Powered Insights

Claude

Gemini

GPT

SEC 10-K and 10-Q filings for financial performance data
Company investor presentations and earnings call transcripts

What You Do

Comprehensive investment banking services across all segments

Target Market

Middle-market to large-cap companies and institutions

Differentiation

Leading middle-market position
Global valuation expertise
Integrated service model

Revenue Streams

Advisory fees
Success fees
Valuation fees
Capital markets fees

Houlihan Lokey Operations and Technology

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Claude

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GPT

SEC 10-K and 10-Q filings for financial performance data
Company investor presentations and earnings call transcripts

Company Operations

Organizational Structure: Matrix organization by geography and practice
Supply Chain: Professional services with minimal physical supply chain
Tech Patents: Proprietary valuation methodologies and platforms
Website: https://www.hl.com

Top Clients

Board Members

Houlihan Lokey Competitive Forces

Threat of New Entry

LOW barriers due to regulatory requirements and relationship capital, but boutiques emerge in niche sectors

Supplier Power

MODERATE as talent is key input; experienced bankers command premium salaries creating 60%+ cost structure pressure

Buyer Power

MODERATE as clients need expertise but fee sensitivity increases; Fortune 500 clients can negotiate 10-20% discounts

Threat of Substitution

RISING with fintech platforms, direct deals, and corporate development teams handling smaller transactions

Competitive Rivalry

HIGH intensity with 500+ advisory firms globally, but HL maintains #1 position through scale and expertise differentiation

Analysis of AI Strategy

Updated: September 30, 2025 • 2025-Q4 Analysis

Houlihan Lokey's AI strategy must balance innovation with its core advisory strengths. The firm possesses valuable proprietary data and client relationships but lacks dedicated AI infrastructure. Immediate investment in automation of due diligence and valuation processes could drive significant efficiency gains while maintaining human expertise for complex negotiations. The key is leveraging AI to enhance rather than replace banker judgment, creating differentiated analytical capabilities that strengthen client relationships and defend against fintech disruption.

Goldman Sachs Morgan Stanley JPMorgan Chase Lazard Evercore

No past cycles

Mission & Vision SWOT Analysis OKR Plan Retrospective AI Strategy Data Acquisition

To provide superior financial advisory services by being the premier global investment bank

Strengths

DATA: Access to vast proprietary deal and valuation databases
ANALYTICS: Strong quantitative capabilities in financial modeling
TALENT: Experienced professionals who can leverage AI tools effectively
CLIENTS: Direct access to C-suite decision makers for AI adoption
PLATFORM: Integrated service model enables AI across all practice areas

Weaknesses

INVESTMENT: Limited technology budget compared to tech-focused competitors
CULTURE: Traditional banking culture may resist AI transformation
EXPERTISE: Lack of dedicated AI and machine learning specialists
SYSTEMS: Legacy technology infrastructure limiting AI implementation
SPEED: Slower adoption cycle compared to fintech startups

Opportunities

VALUATION: AI can revolutionize complex valuation methodologies
EFFICIENCY: Automate due diligence and financial analysis processes
INSIGHTS: Generate superior market intelligence from data analytics
PERSONALIZATION: Customize client solutions using predictive analytics
DIFFERENTIATION: AI-powered advisory services as competitive advantage

Threats

DISRUPTION: Fintech companies using AI to disintermediate banking
COMMODITIZATION: AI making basic advisory services less valuable
COMPETITION: Tech giants entering financial services with AI
SKILLS: Workforce becoming obsolete without AI capabilities
REGULATION: AI governance requirements increasing compliance costs

Key Priorities

INVEST: Build dedicated AI and data science capabilities immediately
AUTOMATE: Deploy AI for due diligence and financial modeling
DIFFERENTIATE: Create AI-powered valuation and advisory tools
UPSKILL: Train existing workforce on AI applications in banking

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Houlihan Lokey Financial Performance

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Claude

Gemini

GPT

SEC 10-K and 10-Q filings for financial performance data
Company investor presentations and earnings call transcripts

Profit: $520 million net income (2024)

Market Cap: $8.2 billion

Stock Performance

Annual Report: Available on SEC EDGAR database

Debt: $285 million total debt

ROI Impact: 22.3% return on equity

SWOT Index

Composite strategic assessment with 10-year outlook

/ 100

Market Leader

ICM Index

STRATEGIC ADVISOR ASSESSMENT

Strong market position with #1 M&A ranking, but operates in traditional advisory services limiting transformational impact. Solid execution capabilities and diversification strategy, though faces cyclical industry headwinds and intense competition.

SWOT Factors

Upside: 82.5 Risk: 71.3

OKR Impact

AI Leverage

Top 3 Strategic Levers

Accelerate AI-powered platform differentiation globally

Execute international expansion with local talent acquisition

Build recurring revenue streams beyond cyclical M&A

AI Disclosure

This report was created using the Alignment Method—our proprietary process for guiding AI to reveal how it interprets your business and industry. These insights are for informational purposes only and do not constitute financial, legal, tax, or investment advice.

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