Release Date: April 25, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q & A Highlights
Q: Could you provide insights on the sustainability of the record revenue levels in Q1 and your confidence in achieving the targeted comp ratio beyond 2024?
A: Mary Ann Betsch, CFO of Lazard, Inc., explained that the firm did not use the previous year's comp ratio as a proxy due to its high level and the unpredictability of the year. She emphasized the firm's focus on moving towards the target ratio and expressed hope for better performance as the year progresses, with an aim to return to the target ratio by 2025.
Q: What are the current trends in the Asset Management business, particularly regarding outflows despite improved performance?
A: Peter Orszag, CEO of Lazard, Inc., noted that the net outflows were largely due to a higher-for-longer interest rate environment causing cash to sit on the sidelines. He highlighted ongoing progress in strengthening the core business, evolving distribution channels, and moving into new opportunities, such as the strategic partnership with Elaia Partners.
Q: Can you discuss the non-comp expenses for this quarter and how we should think about them for the rest of the year?
A: Mary Ann Betsch mentioned that while the firm has implemented cost savings, there might be offsets from increases in occupancy costs, market data, and travel expenses. She advised assuming a return to normal levels adjusted for these factors.
Q: How significant is restructuring revenue as a proportion of advisory revenue, and what are the expectations for this segment?
A: Peter Orszag highlighted that restructuring and liability management revenue more than doubled compared to the first quarter of the previous year. He expects elevated activity levels to continue, driven by debt maturities and a higher interest rate environment.
Q: Could you provide your perspective on the differences in M&A activity between the U.S. and Europe?
A: Peter Orszag observed that there has been a more significant pickup in M&A activity in North America compared to Europe, although both regions are experiencing growth. He emphasized Lazard's strong presence in both markets, which provides diversification and opportunities.
Q: Regarding the corporate revenue line, can you size the gain for this quarter and discuss the sustainability of this revenue?
A: Mary Ann Betsch described the gain as sizable but not the majority of the corporate revenue for the quarter. She suggested modeling future corporate revenue based on a return on cash plus or minus investment gains on the seed portfolio.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
