Merchant Banking Fund Management and Other Revenues

Our Merchant Banking Fund Management activities currently consist primarily of management of Greenhill's private equity funds, Greenhill Capital Partners, and principal investments by Greenhill in Greenhill Capital Partners. Until recently, our investments in Greenhill Capital Partners generally were made only by our members and other professionals for their own accounts. In October 2003, we began to make principal investments in material amounts through Greenhill & Co. Holdings, LLC. Our Merchant Banking Fund Management activities historically have generated revenue almost entirely from fees earned for our management of Greenhill Capital Partners, which are calculated as a percentage of funds under management. Beginning in 2004, we expect that Merchant Banking Fund Management will also generate modest revenues from our small portion of the override of the profits over a specified threshold earned on pre-2004 investments managed on behalf of outside investors. We also expect to receive income from gains on investments of our capital in Greenhill Capital Partners, and any other principal activities. While we do not intend to participate as a limited partner in any future funds, we expect to use a portion of the proceeds of this offering to make certain principal investments in connection with our role as the controlling member of the general partner of those funds. Any losses on a fund's investments will offset any gains in that fund and reduce our Merchant Banking Fund Management revenues accordingly.

We began earning asset management fees in 2000 when we formed Greenhill Capital Partners and raised a group of funds with $424 million of investment commitments. Of that amount, 20.0% was from members and other professionals of Greenhill and does not bear management fees, and 80.0% was from outside investors and does bear management fees (typically between 1.25% and 1.50% of committed capital). Effective in 2003, the portion bearing management fees declined to 76.5% as a result of our purchase of certain outside investors' interests. Beginning July 1, 2005, which is the fifth anniversary of the establishment of the funds and the end of the commitment period, management fees on the outside investors' portion of the fund will be 1.0% of invested capital.

We had not earned any profit override as of December 31, 2003. Participation in profit overrides, calculated as a percentage (typically 20%) of the profits over a specified threshold (typically 8%) earned by outside investors in investments by Greenhill Capital Partners, historically has been assigned principally to managing directors of Greenhill, and any profit override ultimately realized in relation to such investments will be paid directly to such individuals. For investments made by Greenhill Capital Partners beginning in 2004, one-half of the profit override will be assigned to Greenhill, with the remainder to be allocated directly to individuals at Greenhill involved in managing those funds. The amount of profit override earned by Greenhill in the future will depend on the profits (if any) ultimately generated on the portion of investments made by our funds in 2004 and thereafter that are attributable to outside investors.

Prior to 2003, commitments to Greenhill Capital Partners were made by individual members and other professionals of Greenhill in their personal capacity rather than by Greenhill itself, and Greenhill had no investments in (or gains or losses from) such funds. In late 2003, we began to invest as principal alongside our outside investors, and as of March 31, 2004, we had made a total of $9.1 million of principal investments in, and $20.3 million of commitments to, Greenhill Capital Partners. Our principal investments and commitments represent approximately 13.5% of total outstanding fund commitments, reducing the portion of total outstanding fund commitments from outside investors (including Managing Directors and employees) to approximately 86.5%. See "Business—Principal Sources of Revenue—Merchant Banking Fund Management". As a result of our principal investments made to date, as well as investments to be made in future merchant banking funds that we expect to establish and fund with a portion of the proceeds of this offering, we expect to receive income from gains on such investments in future periods. No assurances can be given, however, that such gains will be realized.

In addition to our Merchant Banking Fund Management activities in connection with Greenhill Capital Partners, we have invested in and have an ongoing relationship with Barrow Street Capital, LLC, or Barrow Street Capital, a limited liability company that manages two real estate merchant

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banking funds. One of the two managing principals of Barrow Street Capital is Robert F. Greenhill, Jr., son of Robert F. Greenhill, Chairman and Chief Executive Officer of Greenhill. For a further discussion of our relationship with Barrow Street Capital, see "Certain Relationships and Related Transactions—Relationship with Barrow Street Capital".

2003 versus 2002 .    Greenhill had $5.3 million of Merchant Banking Fund Management and Other revenues in 2003 and $5.2 million of such revenues in 2002. These revenues were principally comprised of asset management fees earned from Greenhill Capital Partners of $5.0 million and $4.7 million in 2003 and 2002, respectively. In addition, Greenhill earned $0.4 million from its investment in Barrow Street Capital as compared to $0.1 million in 2002. This gain in 2003 was offset by a $0.4 million loss on Greenhill's investment in Greenhill Capital Partners. The remainder of our Merchant Banking Fund Management and Other revenue primarily reflects interest income.

2002 versus 2001 .    Greenhill had $5.2 million of Merchant Banking Fund Management and Other revenues in 2002 and $4.7 million of such revenues in 2001. These revenues were principally comprised of asset management fees earned from Greenhill Capital Partners of $4.7 million in both 2002 and 2001. In addition, Greenhill earned $0.1 million from its investment in Barrow Street Capital in 2002 as compared to a loss of $0.6 million in 2001. The remainder of our Merchant Banking Fund Management and Other revenue primarily reflects interest income.

Operating Expenses

The principal component of Greenhill's operating expenses is compensation and benefits expense. Because we have been a limited liability company, payments for services rendered by our managing directors generally have been accounted for as distributions of members' capital or minority interest expense rather than as compensation expense. As a result, our historical compensation and benefits expense has not reflected a large portion of payments for services rendered by our managing directors and therefore understates the expected operating costs to be incurred by us after this offering. As a corporation, we will include all payments for services rendered by our managing directors in compensation and benefits expense. We expect that our total compensation and benefits, including that payable to our managing directors, will not exceed 50% of total revenues each year (although we retain the ability to change this policy in the future). See "Unaudited Pro Forma Consolidated Financial Information".

Operating expenses apart from compensation have been modest in proportion to revenues, as a result of the relatively small number of staff and related costs (including travel, office space, communications, depreciation and professional services) that Greenhill bears. A portion of certain costs are reimbursed by clients under the terms of client engagements. In addition, Barrow Street Capital reimburses us for certain occupancy related costs, health care premiums and other costs incurred by us.

The following table sets forth information relating to our operating expenses, which are reported net of reimbursements, and number of employees:

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Operating Expenses and Employees

				Year Ended December 31,
				1999				2000				2001				2002				2003
				(in thousands, except employee data)
Number of Employees and Managing Directors at Year End					54				74				91				104				107
Compensation & Benefit Expense:
Employee Compensation & Benefits				$	15,314			$	21,035			$	20,935			$	18,085			$	22,089
Managing Director Compensation(a)					18,761				27,260				25,493				1,391				5,005
Total Compensation & Benefit Expense					34,075				48,295				46,428				19,476				27,094
% of Revenues					39.8	%			43.3	%			46.4	%			17.3	%			21.4	%
Pro Forma Total Compensation & Benefit Expense (unaudited)(b)					42,835				55,739				49,982				56,304				63,340
% of Revenues					50.0	%			50.0	%			50.0	%			50.0	%			50.0	%
Non-Compensation Expense:
Other Operating Expenses					7,803				11,648				15,113				13,890				15,506
Depreciation & Amortization					3,604				3,009				3,626				3,429				3,418
Total Non-Compensation Expense					11,407				14,657				18,739				17,319				18,924
% of Revenues					13.3	%			13.1	%			18.7	%			15.4	%			14.8	%
Total Operating Expenses					45,482				62,952				65,167				36,795				46,018
% of Revenues					53.1	%			56.5	%			65.2	%			32.7	%			36.3	%
Pro Forma Total Operating Expenses (unaudited)(c)					54,242				70,396				68,721				73,623				82,264
% of Revenues					63.3	%			63.1	%			68.7	%			65.4	%			64.9	%

(a)	Managing Director Compensation includes payments made to managing directors and managing director equivalents from 1999 to 2003, which were recorded as compensation expense.

(b)	Calculated as 50% of total revenues.

(c)	Pro Forma Total Operating Expenses is the sum of (i) Pro Forma Total Compensation & Benefit Expense and (ii) Total Non-Compensation Expense.

Compensation Expense

Because we have been a limited liability company, payments for services rendered by our managing directors have been accounted for as distributions of members' capital and minority interest rather than as compensation expense, except for payments of $18.8 million, $27.3 million, $25.5 million, $1.4 million and $5.0 million made to managing directors and managing director equivalents in 1999, 2000, 2001, 2002 and 2003, respectively, which were recorded as compensation expense. As a result, our pre-tax earnings and compensation and benefits expense have not reflected most payments for services rendered by our managing directors. Accordingly, pre-tax earnings understate the expected operating costs to be incurred by us after this offering. As a corporation, we will include all payments for services rendered by our managing directors in compensation and benefits expense. It is our policy that our total compensation and benefits, including that payable to our managing directors, will not exceed 50% of total revenues each year (although we retain the ability to change this policy in the future). This policy will be acknowledged by each of our managing directors in the Reorganization Agreement and Plan of Merger pursuant to which we will succeed to the business of Greenhill & Co. Holdings, LLC upon the consummation of this offering.

2003 versus 2002 .    Compensation and benefits expense increased to $27.1 million, an increase of $7.6 million over compensation and benefit expense of $19.5 million in 2002. Compensation expense for the managing directors increased $3.6 million, principally related to the treatment of a portion of our chief executive officer's earnings as compensation expense effective for 2003.

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Employee compensation and benefit expense for 2003 increased $4.0 million to $22.1 million as compared to $18.1 million for 2002. The 2003 increase in employee compensation expense related to an increase in bonus awards of $3.2 million and an increase in base salaries and benefits of $0.8 million, attributable to a slight increase in average headcount and higher total compensation paid to all employees.

2002 versus 2001 .    Compensation and benefits expense decreased $26.9 million to $19.5 million from $46.4 million in 2001. During 2001, our European managing directors were employees of Greenhill & Co. International Ltd. and all of their 2001 earnings of $25.5 million were recorded as compensation expense. Effective January 1, 2002, the European managing directors, except for a senior advisor who joined us as a partner in October 2002, became partners of Greenhill & Co. International LLP and received their allocable share of our global profits as distributions of partner capital and, accordingly, their earnings were not charged to expense. Employee compensation and benefit expense for 2002 decreased $2.8 million to $18.1 million as compared to $20.9 million for 2001. The 2002 decrease in employee compensation expense related principally to a decrease of $4.5 million in compensation expense as a result of the internal promotion of four principals to managing director as of January 2002, offset by a $1.7 million increase in total employee compensation due to an increase in the average headcount and bonus awards as compared to the prior year.

Non-Compensation Expense

Our non-compensation expense includes costs for occupancy and rental, communications, information services, professional fees, travel and entertainment, insurance, depreciation and other operating expenses. Reimbursable client expenses are netted against operating expenses.

In 2004, the New York office will complete the build-out of additional office space at its current location. We estimate costs for the additional space and related expenses for the expansion will increase our annual expenses by approximately $2.1 million.

As a result of this offering we will no longer be a private company and our costs for such items as insurance, accounting and legal advice will increase. We will also incur costs which we have not previously incurred for director fees, investor relations expenses and various other costs of a public company. In the aggregate, we estimate that we will incur incremental costs in excess of $3.1 million per year as a result of our conversion to a publicly traded company. In addition, in conjunction with this offering, we will incur certain non-recurring costs which will be recorded as operating expenses in the second quarter of 2004.

2003 versus 2002 .    Non-compensation expense as a percentage of revenue for 2003 declined 0.5 percentage points to 14.9% ($18.9 million) as compared to 15.4% ($17.3 million) in 2002. The decline in these expenses as a percentage of revenue related to our ability to hold these expenses relatively constant while our revenues increased. The increase in 2003 expenses as compared to 2002 related principally to an increase in net travel expenses of $1.0 million, an increase of $0.2 million in occupancy expense due to the November 2003 expansion of the New York office and an increase of $0.9 million in our foreign non-compensation expense resulting from the weakening dollar's impact on the foreign exchange translation, offset, in part, by a decrease in general office costs of $0.3 million.

2002 versus 2001 .    Non-compensation expense as a percentage of revenue for 2002 declined 3.3 percentage points to 15.4% ($17.3 million) as compared to 18.7% ($18.7 million) in 2001. The decline in these expenses as a percentage of revenue resulted from the benefit of increased client reimbursements over the prior year and increased emphasis on cost controls. The decrease in 2002 expenses as compared to 2001 related principally to higher reimbursements of client expenses of $1.7 million, offset, in part, by an increase in occupancy expense of $0.3 million primarily due to the expansion of the London office.

Provision For Taxes

Prior to this offering, Greenhill, as a limited liability company, was not subject to U.S. federal or state income taxes and its U.K. controlled affiliate Greenhill & Co. International LLP, as a limited

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liability partnership for 2002 and 2003 was generally not subject to U.K. income taxes. However, Greenhill was subject to the 4.0% New York City Unincorporated Business Tax on its U.S. earnings, which will no longer be applicable following our conversion to corporate form. In addition, certain of Greenhill's non-U.S. subsidiaries have been subject to income taxes in their local jurisdictions. The amount of Greenhill's provision for income and unincorporated business taxes has varied significantly from year to year depending on the mix of earnings among its subsidiaries. For information on the pro forma effective tax rate of Greenhill in corporate form, see "Unaudited Pro Forma Consolidated Financial Information".

Geographic Data

For a summary of the total revenues, income before minority interest and tax and total assets of Greenhill by geographic region, see Note 12 to the consolidated financial statements.

Cash Flows

Greenhill's historical cash flows are primarily related to the timing of receipt of advisory fees and the timing of distributions of profits to the members. In general, Greenhill collects its accounts receivable within 60 days. In certain restructuring transactions, collections may take longer due to issues such as court-ordered holdbacks. We have not had significant accounts receivable write-offs over our history.

2003

Cash increased to $26.6 million in 2003. Cash of $69.2 million was provided by operating activities, including $45.4 million from net income, $14.1 million from a decrease in accounts receivables and $2.4 million from an increase in minority interest in the net assets of our U.K. affiliate. Cash of $7.2 million was used for investing activities, primarily for the purchase from outside investors of a portion of Greenhill Capital Partners' limited partner interest and technology-related expenditures. Financing activities used $54.2 million of cash, reflecting distributions to members offset by a small increase in short-term borrowings.

2002

Cash decreased to $17.9 million in 2002. Cash of $46.4 million was provided by operating activities, including $57.8 million of net income and $7.8 million from an increase in minority interest in the net assets of a subsidiary, offset by a $22.6 million decrease in compensation payable, primarily from the elimination of compensation payments to our European managing directors. An insignificant amount of cash was used for investing activities. Financing activities used $68.8 million of cash, reflecting distributions to our members.

2001

Cash increased to $39.9 million in 2001. Cash of $29.9 million was provided by operating activities, including $35.0 million from net income and a $13.2 million increase in compensation payable, primarily from increased compensation to our European managing directors, offset by a $20.5 million increase in accounts receivable. Cash of $3.5 million was used for investing activities. Financing activities used $16.3 million of cash, reflecting distributions to members.

Liquidity and Capital Resources

We have typically had a balance sheet with assets consisting primarily of cash and accounts receivable in relation to earned advisory fees. Cash distributions to our managing directors are generally made shortly after the end of each calendar quarter. Therefore, levels of cash on hand decrease significantly after the quarterly distribution of cash to managing directors, and gradually increase until quarter end. Our liabilities have typically consisted of accounts payable and accrued compensation. At year-end 2003, we had debt of $1.5 million as a result of borrowings under our

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$16.0 million revolving credit facility. Borrowings under this facility increased to $16.0 million on March 10, 2004. Proceeds of these borrowings have been and will be applied to investments in Greenhill Capital Partners and expansion of our office space in New York. We expect to use a portion of the net proceeds from this offering to repay these borrowings.

Our liquidity position is monitored by our Management Committee, which meets monthly. The Management Committee monitors cash, other significant working capital assets and liabilities, debt, principal investment commitments and other matters relating to liquidity and compliance with regulatory net capital requirements.

Historically, we have generated enough cash each month to meet our obligations and have not needed to maintain significant cash balances. We expect this trend to continue, especially in light of the discretionary managing director compensation structure that will be implemented in connection with this offering. See "Management—Employment, Non-Competition and Pledge Agreements" for more details.

We had total commitments (not reflected on our balance sheet) relating to future principal investments of $3.9 million and $0.2 million, as of year-end 2003 and 2002. As of March 31, 2004, we had $20.3 million of total commitments relating to future principal investments. We expect to fund these commitments with the proceeds of this offering. We may be required to fund these commitments at any time through June 2005, depending on the timing and level of investments by Greenhill Capital Partners, although we do not expect these commitments to be drawn in full.

In 2004, we have made $29.5 million of cash distributions of all previously undistributed earnings to the U.S. and U.K. members relating to periods prior to December 31, 2003. Prior to the closing of this offering, we expect to distribute cash and, to the extent cash is not available, interests in certain accounts receivable to our members so as to distribute to our members all earnings related to the period from January 1, 2004 to the date of this offering. These distributions would include earnings for the first quarter of 2004 of $15.4 million, less state and local tax, as well as any additional earnings generated during the period from April 1, 2004 to the date of the closing of this offering. We are not able to quantify the exact amount of earnings that will be distributed to our members until immediately prior to the closing of this offering. See "Unaudited Pro Forma Consolidated Financial Information".

Summary of Quarterly Performance

The following tables present unaudited quarterly combined financial information on a historical basis for each of our most recent eight fiscal quarters. The operating results for any quarter are not necessarily indicative of the results for any future period.

				Three Months Ended (unaudited)
				March 31, 2003								June 30, 2003								September 30, 2003								December 31, 2003
				Total				% of full year				Total				% of full year				Total				% of full year				Total				% of full year
				(in thousands, except percentages)
Revenues				$	16,789				13.2	%		$	37,836				29.9	%		$	32,448				25.6	%		$	39,606				31.3	%
Operating Expenses					8,844				19.2	%			10,891				23.7	%			11,146				24.2	%			15,138				32.9	%
Income Before Tax & Minority Interest					7,945				9.9	%			26,945				33.4	%			21,302				26.4	%			24,468				30.3	%

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				Three Months Ended (unaudited)
				March 31, 2002								June 30, 2002								September 30, 2002								December 31, 2002
				Total				% of full year				Total				% of full year				Total				% of full year				Total				% of full year
				(in thousands, except percentages)
Revenues				$	35,407				31.4	%		$	14,705				13.1	%		$	22,359				19.9	%		$	40,137				35.6	%
Operating Expenses					8,219				22.3	%			8,486				23.1	%			10,400				28.3	%			9,690				26.3	%
Income Before Tax & Minority Interest					27,188				35.9	%			6,219				8.2	%			11,959				15.8	%			30,447				40.1	%

We have been profitable on a quarterly basis, but our revenues and income before taxes and minority interest historically have been volatile. This volatility arises from the fact that completion fees comprise the majority of our revenues and the receipt of such fees is dependent upon the successful completion of client transactions, the occurrence and timing of which is irregular and not subject to our control.

Contractual Obligations

The following table sets forth information relating to our contractual obligations as of March 31, 2004:

				Payment Due by Period
Contractual Obligations				Total				Less than 1 year				1-3 years				3-5 years				More than 5 years
				(in thousands)
Revolving Credit Facility				$	16,000			$	16,000			$	—			$	—			$	—
Operating Lease Obligations					29,260				4,404				8,627				8,390				7,839
Merchant Banking Commitments(a)					20,328				20,328				—				—				—
Total				$	65,588			$	40,732			$	8,627			$	8,390			$	7,839

(a)	We may be required to fund our merchant banking commitments at any time through June 2005, depending on the timing and level of investments by Greenhill Capital Partners, although we do not expect these commitments to be drawn in full.

Market Risk

Due to the nature of our business and the manner in which we conduct our operations, in particular our limitation of investment to short term cash investments, we believe that we do not face any material interest rate risk, foreign currency exchange rate risk, equity price risk or other market risk. As we begin to increase our principal investments in Greenhill Capital Partners and other merchant banking funds, we will face substantially greater exposure to changes in the estimated fair value of the companies in which these funds invest, which historically has been volatile. In addition, the reported amounts of our revenues may be affected by movements in the rate of exchange between the euro and pound sterling (in which 36.7% of our 2003 revenues were denominated) and the dollar, in which our financial statements are denominated. We do not currently hedge against movements in these exchange rates.

Critical Accounting Policies and Estimates

The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions about future events that affect the amounts reported in our consolidated financial statements and their notes. Actual results could differ significantly from those estimates. We believe that the following discussion addresses Greenhill's most critical accounting policies, which are those that are most important to the presentation of our financial condition and results of operations and require management's most difficult, subjective and complex judgments.

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Revenue Recognition

Financial Advisory Fees

We recognize advisory fee revenue when the services related to the underlying transactions are completed in accordance with the terms of the respective engagement letters. Retainer fees are generally recognized as advisory fee income over the period the services are rendered.

Our clients reimburse certain out-of-pocket expenses incurred by us in the conduct of advisory engagements. Expenses are reported net of such client reimbursements.

Merchant Banking Fund Management Revenues

Merchant Banking Fund Management revenue consists of (i) management fees on our merchant banking activities, (ii) gains (or losses) on investments in our merchant banking funds and other principal investment activities and (iii) merchant banking profit overrides.

Fund management fees are recognized over the period of related service.

We recognize revenue on investments in merchant banking funds based on our allocable share of gains (or losses) reported by such funds on a quarterly basis. Investments held by Greenhill Capital Partners are recorded at estimated fair value. Investments are initially carried at cost as an approximation of fair value. The carrying value of such investments is adjusted at each period end to the extent that changes in the underlying fair values are readily determinable. Public investments are valued using quoted market prices discounted for any restrictions on sale. Privately held investments are carried at estimated fair value as determined by the general partner (our affiliate) after giving consideration to the cost of the security, the pricing of other private placements of the portfolio company, the price of securities of other companies comparable to the portfolio company, purchase multiples paid in other comparable third-party transactions, the original purchase price multiple, market conditions, liquidity, operating results and other financial data.

We recognize merchant banking profit overrides when certain financial returns are achieved over the life of the funds. Profit overrides are calculated as a percentage of the profits over a specified threshold earned by such funds on investments managed on behalf of outside investors. Future underperformance by the fund may require amounts previously earned as profit overrides to be returned to the fund in future periods. Accordingly, merchant banking overrides are recognized as revenue only after material contingencies have been resolved.

Recently Issued Accounting Pronouncements

In January 2003, the Financial Accounting Standards Board, or FASB, issued Interpretation No. 46, or FIN 46, Consolidation of Variable Interest Entities, or VIEs. In December 2003, the FASB issued a revised version of FIN 46, or FIN 46-R, in an effort to clarify the application of FIN 46. The Interpretations define variable interests and specify the circumstances under which consolidation of entities will be dependent on such interests. The provisions of FIN 46 were effective after January 31, 2003 for all newly acquired or created interests in VIEs and as of December 31, 2003 for all interests in VIEs existing and owned prior to January 31, 2003. For public entities, FIN 46-R is effective for all interests in VIEs as of the end of the first reporting period ending after March 15, 2004. However, early adoption is permitted. We are currently evaluating whether the general partner of Greenhill Capital Partners meets the definition of a VIE and it is possible that we would be required to consolidate this entity into the financial statements of Greenhill on March 31, 2004. If the general partner of Greenhill Capital Partners were consolidated into our financial statements, we expect our revenues and expenses would increase in equal measure; however, we do not expect any impact from that consolidation to our net income. While the provisions of FIN 46-R may have an impact on our accounting for our future business relationships, they will not have an impact on our historical consolidated financial statements.

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BUSINESS

Overview

Greenhill is an independent investment banking firm that (i) provides financial advice on significant mergers, acquisitions, restructurings and similar corporate finance matters and (ii) manages merchant banking funds and commits capital to those funds. We act for clients located throughout the world from offices in New York, London and Frankfurt.

We were established in 1996 by Robert F. Greenhill, the former President of Morgan Stanley and former Chairman and Chief Executive of Smith Barney. We were founded on the belief that: (i) a corporate finance advisory business does not need, and indeed could benefit by separating from, the variety of other financial activities that larger, diversified investment banks pursue alongside their client advisory activities; (ii) senior professionals focused on client advisory activities but residing at the larger, diversified investment banks would be drawn to a business model where client advisory activities were at the center of the firm; and (iii) the relatively low capital and overhead requirements of a predominantly advisory business, combined with the ability to expand the business by selectively adding managing directors, allow a firm focused on client advisory activities to be highly profitable and maintain significant growth potential.

Since its founding, Greenhill has grown steadily, recruiting a number of managing directors from major investment banks (as well as senior professionals from other institutions), each with a different geographic, industry or transaction focus and each with a different set of corporate management and other relationships. As part of this expansion, we opened a London office in 1998, raised a merchant banking fund in 2000, opened a Frankfurt office later in 2000 and began offering financial restructuring advice in 2001. We have demonstrated strong financial results from serving a diverse and growing client base, producing revenue and earnings growth in a variety of economic and market conditions, including a prolonged period in which global merger and acquisition activity declined significantly. Our revenue grew from $36.9 million in 1997 (our first full year of operation) to $126.7 million in 2003, representing a compound annual growth rate of 22.8%.

We seek to differentiate ourselves from our major competitors through our independence, focus and approach to transactions. We are an independent firm, owned and managed by our managing directors, rather than part of a larger, diversified financial institution. We primarily focus on advising clients, unlike most of our major competitors who also underwrite and trade securities, make loans and prepare investment research. Our managing directors are directly and extensively involved in building client relationships and structuring and executing our clients' transactions, unlike senior bankers at our major competitors, whose size and breadth require that senior bankers dedicate substantial effort to administrative matters and cross-selling other products of their firms. In addition, we believe our independence, coupled with our multidisciplinary expertise in merger and acquisition transactions undertaken in the restructuring context, affords us opportunities to provide advice on restructuring transactions on which most of our major competitors face potential or actual statutory and other conflicts of interest with their lending, underwriting or securities trading operations, and most of our restructuring advisory competitors are limited by a lack of a broad merger and acquisition advisory capability.

In our efforts to attract and retain clients, we focus on large and mid-size corporations. We have served clients in a wide range of industries, with our most active areas being: Communications & Media; Consumer Goods & Retail; Financial Services; Technology; Energy & Utilities; Lodging & Leisure, and General Industrial. In the period from 1999 through 2003, we earned revenue in excess of $200,000 from 117 different companies. Of those, 40 companies ranked as one of our top ten revenue-generating clients for at least one calendar year during that period.

Because we believe the needs of our clients are global and that international markets have strong potential for growth in transaction activity, we have built upon our initial base in the United States to form client relationships in the United Kingdom and Continental Europe, and to pursue significant clients on an opportunistic basis in Latin America and other parts of the world. For the period from 1999 through 2003, 53.2% of our advisory revenue came from clients headquartered

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outside of the United States. In 2003, 52.2% of our advisory revenue came from non-U.S. clients. Approximately 41% of our employees were based in our London and Frankfurt offices as of December 31, 2003.

Greenhill is managed by its owners. Simultaneously with this offering, we will make equity-based awards to substantially all of our non-managing director employees. Following this offering, our managing directors and their affiliated entities will own approximately 83.3% of Greenhill. We are committed to a distinctive culture characterized by excellence in client service, collegiality in the way we work as a team to serve our clients and meritocracy in the way we recruit and reward our staff.

Immediately prior to the closing of this offering, Greenhill & Co., Inc. will succeed to the business of Greenhill & Co. Holdings, LLC. In connection with the consummation of this offering, we will complete a number of transactions culminating in the merger of Greenhill & Co. Holdings, LLC into Greenhill & Co., Inc. See "Certain Relationships and Related Transactions—Incorporation Transactions" for additional information concerning these transactions.

Industry Trends

Although we recognize that favorable macroeconomic and market environments will be subject to periodic reversals, which may significantly and adversely affect our businesses, we believe that significant growth and profit opportunities exist for firms like ours in the United States and abroad. These opportunities derive from several long-term trends, including the following:

•	Globalization. Heightened global competition has created a need for cross-border capabilities and economies of scale, resulting in increased joint venture and merger and acquisition activity;

•	Focus on Shareholder Value. Increasing focus on shareholder value has fueled an increase in M&A, restructuring and strategic initiatives, thereby yielding additional financial advisory opportunities; and

•	Consolidation. Moderate growth, limited pricing flexibility and the need for economies of scale have substantially increased consolidation opportunities in certain industries, and high levels of profit and strong stock market valuations have provided companies with the resources to pursue strategic combinations, thereby creating substantial demand for mergers and acquisitions advisory services.

Why We Are Going Public

We have decided to become a public company for five principal reasons:

•	To enhance our profile and recognition as an investment bank;

•	To expand our financial advisory business, including through the ability to create equity-based compensation plans to attract and retain talented people;

•	To expand our merchant banking fund management activities, including through the creation of new funds in which we would expect to invest collectively as a firm as well as individually as managing directors of Greenhill;

•	To extend equity ownership to substantially all of our employees; and

•	To permit the realization over time of equity value by our principal owners without necessitating the sale of our business.

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Competitive Strengths

Independence

We are an independent firm owned and managed by our managing directors, rather than part of a larger, diversified financial institution. Such institutions can develop conflicts with their corporate investment banking clients due to the large number of customers they service and the broad range of products and services they offer. We believe that awareness of these potential conflicts has been heightened by recent financial scandals in the United States and abroad and that such awareness has resulted in an increase in the demand for advice from independent financial advisors like Greenhill on large, complex merger, acquisition and restructuring transactions.

Focus on Advisory Activities

We are focused on advising clients, particularly large and mid-size corporations, rather than on a broad range of securities businesses. We believe this focus has helped and will continue to help us attract clients and recruit financial advisory professionals who want to work in enterprises where their activities are the central focus. We believe that this focus has also enabled our managing directors and other employees to be highly productive as our revenue per employee was $1.2 million in each of the years 2003, 2002 and 2001.

Breadth of Advisory Capabilities

Our origin was as an advisor on mergers and acquisitions, an area in which we have established a prominent advisory practice. In addition, we have developed considerable experience and capabilities in financial restructuring situations. The leading merger and acquisition advisory firms may be significantly constrained in their restructuring advisory activities due to actual and apparent conflicts of interest arising from their large lending, debt underwriting and trading activities. At the same time, we believe that many firms that specialize in restructuring advisory work do not have a strong reputation for advice on mergers and acquisitions, and in some cases lack specialized industry experience. Greenhill offers a full range of merger, acquisition and restructuring advisory services, with each project team staffed with professionals from the relevant advisory disciplines, industry backgrounds and geographic locations.

International Capabilities

Unlike many small investment banking firms, we have aggressively sought to develop a broad geographic scope rather than focusing on any one particular market. From 1999 through 2003, 53.2% of our advisory revenues were derived from clients based outside the United States, primarily from the United Kingdom and, to a lesser extent, continental Europe, Latin America and Canada. While many larger investment banking firms have greater presences in more international markets, we believe our small size and collegiality allow us to work as a team on cross-border transactions better than many of our larger competitors.

Experience

Our 22 managing directors have an average of 22 years of relevant experience. Prior to joining Greenhill, 17 of those individuals were managing directors at other leading financial advisory firms or occupied comparably senior roles in leading private equity firms, law firms or corporations. The remainder were recruited from other leading financial advisory firms and later promoted from within. See "Management". Our relatively small size, our narrow focus and our relatively low ratio of employees to managing directors both allow and require our managing directors to direct the great majority of their efforts toward client advisory and merchant banking fund management activities, rather than the administrative, managerial and cross-selling tasks that occupy a large portion of many managing directors' time at larger, diversified financial institutions.

Strong Corporate Culture

While Greenhill is relatively young, we have developed a strong corporate culture. We are united by our desire to build a firm where client advisory activities are at the core, and by our commitment

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to excellence in those activities. We have a disciplined approach to expansion, which we have achieved through organic growth combined with the careful addition of selected individuals. Most of our managing directors spent the bulk of their careers prior to joining Greenhill at a leading firm. Only one managing director has departed in more than seven years, and 10 of the 22 current managing directors have more than five years of tenure at Greenhill. We believe individuals are attracted to Greenhill by our focused strategy and our concentration on high margin businesses.

Strategy

By building on what we perceive as our competitive strengths, our strategy is principally to (i) enhance our position as an independent alternative to large, diversified financial institutions for advice on important merger, acquisition and restructuring transactions, (ii) grow our financial advisory business, including by continuing to recruit managing directors and other professionals and (iii) expand our merchant banking fund management business by leveraging our existing relationships and infrastructure to create additional funds and increasing our investments as a principal in such funds. We aim to maintain a balance of activities across geographic regions and to increase the stability of our earnings. Our strategy is heavily dependent on our ability to recruit additional managing directors and other senior professionals. We believe that this offering will allow us to create equity-based compensation plans to attract and retain talented professionals. In addition, we believe that this offering will enhance our profile and recognition as an investment bank, which we expect will aid our recruiting and business development efforts. See "Risk Factors—Our Conversion to Corporate Form May Adversely Affect Our Ability to Recruit, Retain and Motivate Key Employees" for a discussion of various factors that could negatively impact our ability to recruit successfully.

Expanding the Depth and Breadth of Our Advisory Business

To meet what we believe will be a continuing rebound in demand for advice on mergers, acquisitions, restructurings and similar transactions, as well as increased opportunities for independent financial advisors in such situations, we seek to recruit additional senior investment banking professionals, typically from competitor investment banks, with important relationships in industries where we either are currently under-represented or perceive strong potential growth in transaction activity. To support this expansion in our client base, we continue to seek to recruit high caliber young professionals from the most competitive universities, top graduate business schools and other leading investment banks.

Expanding the Size of Our Merchant Banking Fund Management Activities

To expand our merchant banking revenue, we seek to (i) increase the size of merchant banking funds under management by Greenhill; (ii) consider developing additional types of funds, or similar funds with different geographic focuses, to be managed by Greenhill, as those opportunities arise; and (iii) make additional principal commitments as controlling member of the general partner of our funds, while continuing to require managing directors and other senior professionals of Greenhill to invest certain minimum amounts of personal capital in our funds, both to enhance the funds' appeal, and to align the interests of the managing directors and senior professionals with those of Greenhill. We expect to use a portion of the proceeds of this offering to fund the commitments we make as controlling member of the general partner of our merchant banking funds. We believe that by making significant investments in the merchant banking funds that we manage, our ability to attract outside investors will be strengthened because of our demonstrated financial commitment to the funds and the alignment of our interests with those of our limited partners from a risk management perspective.

Maintaining a Balance of Activities Across Geographic Regions

Because the financial advisory needs of our clients are global in nature, and because we see significant potential for growth in transaction advisory activity outside the United States, we continue to seek to expand our advisory activities outside the United States by recruiting additional managing directors and other professionals for our offices in London and Frankfurt. We also intend to seek, when appropriate, to develop our merchant banking activities outside the United States.

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Increasing the Stability of Our Earnings

While our primary objective continues to be long term profit growth and shareholder value creation, we seek to gradually make our earnings more stable by: (i) increasing our client base and advisory activities by adding additional senior professionals with important client relationships; (ii) seeking further diversity of advisory fees by client, industry and geography; and (iii) adding new sources of revenue by conducting more of our merchant banking activities collectively as a firm as well as individually as managing directors of Greenhill. By focusing on these objectives, we believe the quarterly volatility of our earnings will gradually decline, although it is likely to remain substantial for the foreseeable future.

Principal Sources of Revenue

Our two principal sources of revenue are financial advisory and merchant banking fund management.

Financial Advisory

We provide a broad range of advice to U.S. and non-U.S. clients in relation to mergers, acquisitions, restructurings and similar corporate finance matters and are involved at each stage of these transactions, from initial structuring to final execution. Our focus is on providing high-quality advice to senior executive management and boards of directors of prominent large and mid-cap companies in transactions that typically are of the highest strategic and financial importance to those companies. Non-U.S. clients are a significant part of our business, generating 52.2% and 38.8% of our total revenues in 2003 and 2002, respectively.

We advise companies in a number of different situations, each of which entails the provision of a different package of services. When we advise companies in the potential acquisition of another company or certain assets, our services may include, depending on the situation:

•	evaluating potential acquisition targets;

•	providing valuation analyses;

•	evaluating and recommending financial and strategic alternatives;

•	advising as to the timing, structure and pricing of a proposed acquisition;

•	assisting in negotiating and consummating an acquisition;

•	analyzing and advising on potential financing for the transaction;

•	assisting in implementing an acquisition such as by acting as a dealer-manager if structured as a tender or exchange offer; and

•	rendering, if appropriate, a fairness opinion.

When we advise clients that are contemplating the sale of certain businesses, assets or their entire company, our services may include, depending on the situation:

•	evaluating and recommending financial and strategic alternatives with respect to a sale;

•	advising on the appropriate sales process for the situation;

•	assisting in preparing an offering memorandum or other appropriate sales materials;

•	identifying and contacting selected qualified acquirors;

•	advising as to the timing, structure and pricing of a proposed sale;

•	assisting in negotiating and consummating a proposed sale; and

•	rendering, if appropriate, a fairness opinion.

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For companies in financial distress, our services may include, depending on the situation:

•	reviewing and analyzing the business, operations, properties, financial condition and prospects of the company;

•	evaluating debt capacity;

•	assisting in the determination of an appropriate capital structure;

•	valuation analyses;

•	evaluating and recommending financial and strategic alternatives;

•	if appropriate, providing financial advice and assistance in developing and seeking approval of a restructuring or reorganization plan, which may include a plan under chapter 11 of the United States Bankruptcy Code or other similar court administered process in non-U.S. jurisdictions;

•	assisting in all aspects of the implementation of a such a plan, including coordinating with counsel;

•	advising and assisting in structuring and effecting the financial aspects of a sale or recapitalization;

•	structuring any new securities, exchange offers, other consideration or other inducements to be offered and/or issued under a reorganization plan or out-of-court restructuring; and

•	assisting and participating in negotiations with entities or groups affected by a reorganization plan.

We operate in a highly competitive environment where there are no long-term contracted sources of revenue. Each revenue-generating engagement is separately awarded and negotiated. Our list of clients, and our list of clients with whom there is an active revenue-generating engagement, changes continually. To develop new client relationships, and to develop new engagements from historic client relationships, we maintain a business dialog with a large number of clients and potential clients, as well as with their financial and legal advisors, on an ongoing basis. We have gained a significant number of new clients each year through our business development initiatives, through recruiting additional senior investment banking professionals who bring with them client relationships and through referrals from directors, attorneys and other parties with whom we have relationships. At the same time, we lose clients each year as a result of the sale or merger of a client, a change in a client's senior management, competition from other investment banks and other causes.

We staff our assignments with a team of professionals with appropriate product and/or industry expertise. Our managing directors have an average of 22 years of relevant experience, and many of them are able to use this experience to advise on both mergers and acquisitions and restructuring transactions, depending on our clients' needs. Our other professionals come from leading investment banking and educational institutions. We spend significant amounts of time training and mentoring our junior professionals. We generally provide our junior professionals with exposure to mergers and acquisitions, restructurings and merchant banking fund management to varying degrees, which provides us with the flexibility to allocate resources depending on the economic environment, and provides our bankers consistent transactional experience and a wide variety of experiences to assist in the development of business and financial judgment.

Merchant Banking Fund Management

Our merchant banking fund management activities currently consist primarily of management of and investment in Greenhill Capital Partners, a family of merchant banking funds that invest in portfolio companies. Merchant banking funds are private investment funds raised from contributions by qualified institutional investors and financially sophisticated individuals. The funds make substantial, sometimes controlling, investments, generally in non-public companies and typically with

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a view toward divesting within 3 to 5 years. We pursue merchant banking fund management activities in addition to our financial advisory activities because: (i) our senior advisory professionals, and those we seek to recruit, are attracted by the opportunity to participate in merchant banking fund management, including the ability to invest in managed funds; and (ii) it allows us to further leverage our managing directors' industry knowledge and client contacts. We believe we can pursue merchant banking opportunities without creating conflicts with our advisory clients by typically focusing on significantly smaller companies than those with respect to which we seek to provide financial advice. Our merchant banking funds typically invest in companies with valuations that are less than $200 million at the time of investment.

The Chairman of Greenhill Capital Partners is Robert H. Niehaus. Mr. Niehaus was previously a founding member and later Chief Operating Officer of the Merchant Banking Department of Morgan Stanley. Its investment committee also includes Scott L. Bok, Simon A. Borrows, Robert F. Greenhill and V. Frank Pottow. We, together with our managing directors, manage Greenhill Capital Partners through separate general partners. See "Certain Relationships and Related Transactions—Relationship with Greenhill Capital Partners' Funds".

In June 2000, Greenhill Capital Partners raised its first fund with $424 million of commitments by investors, of which $85 million was committed by our members and other professionals and $339 million was from outside investors. As of December 31, 2003, Greenhill Capital Partners had invested $220 million of the $424 million of committed capital. In January 2004, Greenhill Capital Partners invested an additional $16.6 million in a new investment. After investment capital is raised, funds are invested over time as and when opportunities arise. In the ordinary course, several years may elapse between the time capital is raised and gains or losses are realized. In the interim, the investments in the funds are adjusted to fair market value at the end of each quarter, which adjustments are reflected in our quarterly results. Greenhill is restricted from participating in the management of a new fund with similar investment objectives until the commitments to the existing funds are terminated.

Over 80% of the invested capital of Greenhill Capital Partners relates to investments in three industries: energy, financial services and telecommunications infrastructure. The chart below summarizes the investment portfolio of Greenhill Capital Partners as of December 31, 2003, separately detailing all investments which have constituted greater than 5% of total committed capital:

				Investment Date				Industry				Total Capital Invested				Capital Returned As of December 31, 2003(a)				Book Value As of December 31, 2003(b)
												(in thousands)
Global Signal Inc.(c)				November 2002				Telecommunications Towers				$	45,789			$	4,875			$	40,914
Heartland Payment Systems, Inc.				October 2001				Credit Card Processing					26,156				—				40,000
Republic Group of Insurance Companies				August 2003				Insurance					47,475				8,223				39,252
All Other Investments(d)(e)				n/a				n/a					100,163				5,711				69,205
Total Investment by Greenhill Capital Partners												$	219,583			$	18,809			$	189,371	(f)

(a)	Reflects proceeds from asset sales, refinancings, dividends, loan repayments and interest payments.

(b)	Represents fair value of investments, as determined in accordance with Greenhill Capital Partners' standard valuation policies. See "Management's Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies and Estimates".

(c)

In February 2004, as a result of a refinancing of Global Signal, Greenhill Capital Partners received an additional $31.8 million from Global Signal, of which $30.5 million was a return of capital and $1.3 million was dividends. This, in turn, reduced the carrying book value of that investment. In February 2004, Global Signal filed a registration statement for

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aninitial public offering of common stock with the Securities and Exchange Commission. The completion of such an offering could have a material effect on the book value of our investment in Global Signal but might not initially generate cash for Greenhill Capital Partners.

(d)	In January 2004, Greenhill Capital Partners invested $16.6 million in a subsequent investment.

(e)	In January 2004, we received an additional $13.2 million from an investment of which $10.1 million was return of capital and $3.1 million was investment gains. In February 2004, the cash received from this investment and the Global Signal investment was distributed to our investors.

(f)	Greenhill's share of the book value of Greenhill Capital Partners' investments as of December 31, 2003 was approximately $6.0 million.

Our merchant banking activities historically have generated revenue from fees earned for our management of Greenhill Capital Partners, which are calculated as a percentage of funds under management. Beginning in 2004, we expect that merchant banking will also generate modest revenues from our small portion of the override of the profits earned on pre-2004 investments managed on behalf of outside investors, and gains on investments of our capital in merchant banking funds and other principal activities. While we do not intend to participate as a limited partner in any future funds, we expect to make certain principal investments in connection with our role as the controlling member of the general partner of the funds. Any losses on a fund's investments will offset any gains in that fund and reduce our merchant banking revenues accordingly. For a discussion of our participation in profit overrides with respect to the funds we manage, see "Management's Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations-Merchant Banking Fund Management and Other Revenues". Merchant Banking Fund Management and Other Revenues represented 4.2% of 2003 total revenues and 4.6% of 2002 total revenues.

Prior to 2003, commitments to Greenhill Capital Partners were made by individual members and other professionals of Greenhill in their personal capacity rather than by Greenhill itself, and Greenhill had nominal capital committed to such funds. In late 2003, Greenhill purchased, for $6.7 million, limited partner interests in Greenhill Capital Partners relating to underlying investments with original invested capital of $7.2 million from outside investors. We also assumed from the same outside investors $3.9 million of related commitments to make future investments in Greenhill Capital Partners. In early 2004, we similarly purchased from an outside investor for $2.3 million an additional limited partner interest in Greenhill Capital Partners relating to underlying investments with original invested capital of $2.6 million and we assumed from the same outside investor $1.4 million of related commitments to make future investments in Greenhill Capital Partners. In addition, on January 1, 2004, we assumed from our members $15 million of their individual commitments to make future investments in Greenhill Capital Partners. As a result of the foregoing transactions, as of March 31, 2004, we had made a total of $9.1 million of principal investments in, and had $20.3 million of commitments to, Greenhill Capital Partners.

We expect to invest a portion of the proceeds of this offering in future funds raised by Greenhill Capital Partners in connection with our role as the controlling member of the general partner of those funds. We would expect any such investment to be on a basis that bore no management fees or profit override. In addition, certain of our managing directors and other professionals intend to invest in the next fund raised by Greenhill Capital Partners. Any such investment would, up to an amount per managing director to be determined, bear management fees and a profit override on the same basis as investments by outside investors. Investments above such amount would bear full management fees, but only one-half the level of profit override borne by outside investors. The terms and conditions of future investments have not been finalized, however.

In addition to our merchant banking activities in connection with Greenhill Capital Partners, we have invested in and maintain an ongoing relationship with Barrow Street Capital, LLC, a limited liability company that manages two real estate merchant banking funds. For a further discussion of our relationship with Barrow Street Capital, see "Certain Relationships and Related Transactions—Relationship with Barrow Street Capital".

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People

We believe that one of the strengths and principal reasons for our success is the quality and dedication of our people. Prior to joining Greenhill, 17 of our managing directors were either managing directors at other leading financial advisory or private equity firms (including Baring Brothers (2), Credit Suisse First Boston (2), Goldman Sachs (2), Houlihan Lokey Howard & Zukin (1), Merrill Lynch (1) and Morgan Stanley (5)) or occupied comparably senior roles in a leading private equity firm, law firm or corporations. See "Management", which contains biographical information about all of our managing directors. The remainder were recruited from other leading financial advisory firms and promoted internally. Similarly, we have recruited junior professionals from the most competitive universities, top graduate business schools and other investment banking and private equity firms.

As of December 31, 2003, Greenhill employed a total of 107 people (including our managing directors), of which 44 were based in our London or Frankfurt offices. We strive to maintain a work environment that fosters professionalism, excellence, diversity, and cooperation among our employees worldwide. We utilize a comprehensive evaluation process at the end of each year to measure performance, determine compensation and provide guidance on opportunities for improved performance.

Competition

The financial services industry is intensely competitive, and we expect it to remain so. Our competitors are other investment banking firms, merchant banks and financial advisory firms. We compete with some of our competitors globally and with some others on a regional, product or niche basis. We compete on the basis of a number of factors, including transaction execution skills, our range of products and services, innovation, reputation and price.

We believe our primary competitors in securing mergers and acquisitions and restructuring advisory engagements are Citigroup, Credit Suisse First Boston, Goldman Sachs, JPMorgan Chase, Lehman Brothers, Merrill Lynch, Morgan Stanley, UBS Investment Bank and other bulge bracket firms as well as investment banking firms such as Blackstone Group, Houlihan Lokey Howard & Zukin and Lazard.

As we expand our merchant banking business, we face competition both in the pursuit of outside investors for our merchant banking funds and to acquire investments in attractive portfolio companies.

Competition is also intense for the attraction and retention of qualified employees. Our ability to continue to compete effectively in our businesses will depend upon our ability to attract new employees and retain and motivate our existing employees.

In recent years there has been substantial consolidation and convergence among companies in the financial services industry. In particular, a number of large commercial banks, insurance companies and other broad-based financial services firms have established or acquired broker-dealers or have merged with other financial institutions. Many of these firms have the ability to offer a wider range of products, from loans, deposit-taking and insurance to brokerage, asset management and investment banking services, which may enhance their competitive position. They also have the ability to support investment banking and securities products with commercial banking, insurance and other financial services revenues in an effort to gain market share, which could result in pricing pressure in our businesses. This trend toward consolidation and convergence has significantly increased the capital base and geographic reach of our competitors.

Regulation

Our business, as well as the financial services industry generally, is subject to extensive regulation in the United States and elsewhere. As a matter of public policy, regulatory bodies in the United States and the rest of the world are charged with safeguarding the integrity of the securities

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and other financial markets and with protecting the interests of customers participating in those markets, not with protecting the interests of our shareholders or creditors. In the United States, the Securities and Exchange Commission, or SEC, is the federal agency responsible for the administration of the federal securities laws. Greenhill & Co., LLC, a wholly-owned subsidiary of Greenhill through which we conduct our U.S. financial advisory business, is registered as a broker-dealer with the SEC and the National Association of Securities Dealers, Inc., or the NASD, and as a broker-dealer in all 50 states and the District of Columbia. Greenhill & Co., LLC is subject to regulation and oversight by the SEC. In addition, the NASD, a self-regulatory organization that is subject to oversight by the SEC, adopts and enforces rules governing the conduct, and examines the activities, of its member firms, including Greenhill & Co., LLC. State securities regulators also have regulatory or oversight authority over Greenhill & Co., LLC. Similarly, Greenhill & Co. International LLP, our controlled affiliated U.K. partnership, through which we conduct our international financial advisory business, is also subject to regulation by the Financial Services Authority in the United Kingdom. Our business may also be subject to regulation by non-U.S. governmental and regulatory bodies and self-regulatory authorities in other countries where Greenhill operates.

Broker-dealers are subject to regulations that cover all aspects of the securities business, including sales methods, trade practices among broker-dealers, use and safekeeping of customers' funds and securities, capital structure, record-keeping, the financing of customers' purchases and the conduct and qualifications of directors, officers and employees. Additional legislation, changes in rules promulgated by self-regulatory organizations or changes in the interpretation or enforcement of existing laws and rules, either in the United States or elsewhere, may directly affect the mode of operation and profitability of Greenhill.

The U.S. and non-U.S. government agencies and self-regulatory organizations, as well as state securities commissions in the United States, are empowered to conduct administrative proceedings that can result in censure, fine, the issuance of cease-and-desist orders or the suspension or expulsion of a broker-dealer or its directors, officers or employees.

In 2003, we and several of our managing directors were investigated by the NASD, for failure to comply with certain continuing education requirements imposed on all registered broker-dealers and their licensed financial professionals. This investigation was resolved in January 2004 when we and two managing directors were censured and separately paid fines to the NASD of between $3,000 and $30,000. All of our managing directors are now in compliance with the NASD's continuing education requirements.

Legal Proceedings

We have not historically been involved in material legal proceedings.

As we grow our business, we may in the future become involved in litigation in the ordinary course of our business, including litigation material to our business; however, we are not aware of any material legal proceedings currently pending or threatened against us.

Properties

We occupy three offices, all of which are leased. Our headquarters are located at 300 Park Avenue, New York, New York, and comprise approximately 50,000 square feet of leased space, pursuant to lease agreements expiring in 2010 (with options to renew for five years). In London, we lease approximately 8,250 square feet at 56-58 Conduit Street pursuant to a lease agreement expiring in 2013. Our Frankfurt office is located at Neue Mainzer Strasse 52 and consists of approximately 6,000 square feet of leased space, pursuant to a lease agreement expiring in 2009. We do not anticipate a need for additional office space in the near term.

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MANAGEMENT

Directors and Executive Officers

Set forth below is information concerning our directors and executive officers. We expect to appoint additional directors over time who are not employees of Greenhill or otherwise affiliated with management.

Name				Age				Position
Robert F. Greenhill					67			Director, Chairman and Chief Executive Officer
Scott L. Bok					44			Director and Co-President
Simon A. Borrows					45			Director and Co-President
Robert H. Niehaus					48			Chairman, Greenhill Capital Partners
John D. Liu					36			Chief Financial Officer
Harold J. Rodriguez, Jr					48			Managing Director—Finance, Regulation & Operations and Chief     Compliance Officer

Executive officers are appointed by and serve at the pleasure of our board of directors. A brief biography of each director and executive officer follows.

Robert F. Greenhill , our founder, has served as our Chairman and Chief Executive Officer since the time of our founding in 1996. Mr. Greenhill has been a member of our Management Committee since its formation in January 2004. In addition, Mr. Greenhill has been a director of Greenhill & Co., Inc. since its incorporation in March 2004 and expects to stand for re-election as a director at our next annual meeting of stockholders. Prior to founding and becoming Chairman of Greenhill, Mr. Greenhill was chairman and chief executive officer of Smith Barney Inc. and a member of the board of directors of the predecessor to the present Travelers Corporation (the parent of Smith Barney) from June 1993 to January 1996. From January 1991 to June 1993, Mr. Greenhill was president of, and from January 1989 to January 1991, Mr. Greenhill was a vice chairman of, Morgan Stanley Group, Inc. Mr. Greenhill joined Morgan Stanley in 1962 and became a partner in 1970. In 1972, Mr. Greenhill directed Morgan Stanley's newly-formed mergers and acquisitions department. In 1980, Mr. Greenhill was named director of Morgan Stanley's investment banking division, with responsibility for domestic and international corporate finance, mergers and acquisitions, merchant banking, capital markets services and real estate. Also in 1980, Mr. Greenhill became a member of Morgan Stanley's management committee.

Scott L. Bok has served as our Co-President since January 2004 and as a member of our Management Committee since its formation in January 2004. In addition, Mr. Bok has been a director of Greenhill & Co., Inc. since its incorporation in March 2004 and expects to stand for re-election as a director at our next annual meeting of stockholders. From 2001 until the formation of our Management Committee, Mr. Bok participated on the two-person administrative committee responsible for managing Greenhill's operations. Mr. Bok has also served as a Senior Member of Greenhill Capital Partners since its formation. Mr. Bok joined Greenhill as a Managing Director in February 1997. Before joining Greenhill, Mr. Bok was a managing director in the mergers, acquisitions and restructuring department of Morgan Stanley & Co., where he worked from 1986 to 1997, based in New York and London. From 1984 to 1986, Mr. Bok practiced mergers and acquisitions and securities law in New York with Wachtell, Lipton, Rosen & Katz. Mr. Bok is a member of the board of directors of various private companies.

Simon A. Borrows has served as our Co-President since January 2004 and as a member of our Management Committee since its formation in January 2004. In addition, Mr. Borrows has been a director of Greenhill & Co., Inc. since its incorporation in March 2004 and expects to stand for re-election as a director at our next annual meeting of stockholders. From 2001 until the formation of our Management Committee, Mr. Borrows participated on the two-person administrative committee responsible for managing Greenhill's operations. Mr. Borrows joined Greenhill as a Managing Director in June 1998. Prior to joining Greenhill, Mr. Borrows was the managing director of Baring Brothers International Limited (the corporate finance division of ING Barings), a position Mr. Borrows had held since 1995. Mr. Borrows was a director of Baring Brothers from 1989 to 1998. Prior to joining Baring Brothers in 1988, Mr. Borrows worked in the corporate finance department of Morgan Grenfell.

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Robert H. Niehaus has served as the Chairman of Greenhill Capital Partners and as a Senior Member of Greenhill Capital Partners since June 2000. Mr. Niehaus has been a member of our Management Committee since its formation in January 2004. Mr. Niehaus joined Greenhill in January 2000 as a Managing Director to begin the formation of Greenhill Capital Partners. Prior to joining Greenhill, Mr. Niehaus spent 17 years at Morgan Stanley & Co., where he was a managing director in the merchant banking department from 1990 to 1999. Mr. Niehaus was vice chairman and a director of the Morgan Stanley Leveraged Equity Fund II, L.P., a $2.2 billion private equity investment fund, from 1992 to 1999, and was vice chairman and a director of Morgan Stanley Capital Partners III, L.P., a $1.8 billion private equity investment fund, from 1994 to 1999. Mr. Niehaus was also the chief operating officer of Morgan Stanley's merchant banking department from 1996 to 1998. Mr. Niehaus is a director of American Italian Pasta Company, Waterford Wedgewood plc, Global Signal Inc., Exco Resources, Inc. and various private companies.

John D. Liu became Chief Financial Officer and a Managing Director of Greenhill in January 2004. Mr. Liu joined Greenhill in May 1996 as an Associate. Mr. Liu was promoted to Vice President in January 2000 and to Principal in January 2002. Prior to joining Greenhill, Mr. Liu was an associate at Wolfensohn & Co., a mergers & acquisitions firm, from 1995 to 1996. Mr. Liu was an analyst in investment banking at Donaldson, Lufkin & Jenrette from 1990 to 1992. Mr. Liu is a member of the board of directors of a private company.

Harold J. Rodriguez, Jr. has served as our Managing Director—Finance, Regulation and Operations and as our Chief Compliance Officer, Treasurer and Secretary since January 2004. From November 2000 through December 2003, Mr. Rodriguez was Chief Financial Officer of Greenhill. Mr. Rodriguez has been with Greenhill since June 2000. Prior to joining Greenhill, Mr. Rodriguez was Executive Vice-President and Chief Financial Officer of MVL Group, Inc. from January 2000 to May 2000. Prior to that, Mr. Rodriguez was Vice President - Finance and Controller of Silgan Holdings, Inc., a major consumer packaging goods manufacturer, from 1987 to 2000. From 1978 to 1987, Mr. Rodriguez worked with Ernst & Young, where he was a senior manager specializing in taxation.

There are no family relationships among any of our directors and executive officers. There are no contractual obligations regarding election of our directors.

The Management Committee

In January 2004, the Management Committee was constituted as Greenhill's senior operating committee. Senior management consults with the Management Committee, which is chaired by Mr. Greenhill, regarding the strategy and management of our business. In addition to Messrs. Greenhill, Bok, Borrows and Niehaus, the members of the Management Committee are Timothy M. George, Michael A. Kramer, James R.C. Lupton and Colin T. Roy. See "Key Employees" for biographical information relating to Messrs. George, Kramer, Lupton and Roy.

Board Composition

Prior to our conversion to corporate form, we did not have a board of directors and our business was managed by our senior managing directors. Upon the consummation of this offering, our board will consist of four members, who are Messrs. Robert F. Greenhill, Scott L. Bok, Simon A. Borrows and an independent director to be named prior to the completion of this offering. During the year following this offering, we expect to appoint three additional directors who will meet the independence standards established by the applicable rules of the Securities and Exchange Commission and the New York Stock Exchange. Following such appointments, we will have a seven-member board, the majority of whose members are independent.