Lazard’s Profit Soars on Strong Advisory Performance
The investment banking landscape is abuzz with activity, and Lazard is no exception. The company’s fourth-quarter profit surged, thanks to a stellar showing from its advisory business. This uptick in dealmaking is largely attributed to the easing of borrowing costs over the past two years.
A Resurgence in Deal-Making
As interest rates continue to fall, courtesy of the Federal Reserve, and with a more favorable regulatory environment under the Trump administration, bankers are breathing a sigh of relief. This perfect storm has led to a significant increase in mergers and acquisitions, as well as renewed activity in the equity and debt markets.
Lazard’s Advisory Business Thrives
Mirroring this trend, Lazard reported a 6% rise in financial advisory revenue on an adjusted basis, reaching $508 million in the last three months of 2024. This substantial growth is a testament to the company’s strong advisory performance. CEO Peter Orszag expressed optimism about the current market conditions, stating, “We’re in the midst of a lot of different discussions, suggesting that activity is really picking up.”
A Favorable Regulatory Environment
Orszag, who previously served as director of the Office of Management and Budget in the Obama administration, praised Trump’s economic policy and personnel moves. He believes that the administration’s pro-business stance will continue to fuel the M&A cycle, with a potentially more favorable regulatory antitrust environment on the horizon.
Wall Street Rivals Also Benefit
Lazard’s success is not an isolated incident. Other Wall Street heavyweights, such as Goldman Sachs and JPMorgan Chase, also reported impressive fourth-quarter profit estimates, thanks to robust performances in their investment banking units.
Lazard’s Growth Plans
The company aims to add 10 to 15 managing directors each year through 2030, according to its earnings presentation. Its advisory unit already boasts an impressive 200 managing directors.
Asset Management Revenue Climbs
Lazard’s asset management revenue also saw a 5% increase on an adjusted basis, driven by strong equity markets and a post-election rally. However, the company did experience net outflows of $7.5 billion in August, following a client’s switch to a passive investing strategy.
A Strong Finish to the Year
Lazard closed the reported quarter with $234 billion in assets under management on average, matching the previous year’s levels. The company reported a net income of $85 million, or 78 cents per share, on an adjusted basis, for the three months ended Dec. 31, compared to $65 million, or 66 cents apiece, in the year-ago period.
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