Lazard Q4 2024 Earnings Call Transcript

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Provided by Quartr
January 30, 2025
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Operator

Good morning, everyone. Welcome to Lazard's 4th Quarter and Full Year 2024 Earnings Conference Call. This call is being recorded. Currently, all participants are in a listen only mode. Following the remarks, we will conduct a question and answer session.

Operator

Instructions will be provided at that time. Now at this time, I'll turn things over to Alexandra Deignan, Lazard's Head of Investor Relations and Treasury. Please go ahead, ma'am.

Alexandra Deignan
Alexandra Deignan
Head-Investor Relations at Lazard

Thank you, Bo. Good morning, everyone, and welcome to Lazard's earnings call for the Q4 and full year of 2024. I'm Alexandra Dagnan, Head of Investor Relations and Treasury. In addition to today's audio comments, we have posted our earnings release on our website. A replay of this call will also be available on our website later today.

Alexandra Deignan
Alexandra Deignan
Head-Investor Relations at Lazard

Before we begin, let me remind you that we may make forward looking statements about our business and performance. There are important factors that could cause our actual results, level of activity, performance, achievements or other events to differ materially from those expressed or implied by the forward looking statements, including, but not limited to, those factors discussed in the company's SEC filings, which you can access on our website. Lazard assumes no responsibility for the accuracy or completeness of these forward looking statements and assumes no duty to update them. Today's discussion also includes certain non GAAP financial measures that we believe are meaningful when evaluating the company's performance. A reconciliation of these non GAAP financial measures to the comparable GAAP measures is provided in our earnings release and investor presentation.

Alexandra Deignan
Alexandra Deignan
Head-Investor Relations at Lazard

Hosting our call today are Peter Orsiz, Lazard's Chief Officer and Chairman and Mary Anne Boetsch, Lazard's Chief Financial Officer. After our prepared remarks, Peter and Mary Anne will be joined by Evan Russo, Chief Executive Officer of Asset Management, as they open the call for questions. I'll now turn the call over to Peter.

Peter Orszag
CEO & Chairman at Lazard

Thank you, Ali, and thank you to everyone for joining us this morning. We are pleased to report strong Q4 and full year results, which reflect our teamwork across the firm and dedication to our clients as well as the improving business conditions we anticipated. Our continued momentum in executing our Lazard 2,030 strategy is producing results ahead of schedule. In Financial Advisory, our strength in franchise captured increased market share. We achieved record revenue in Europe in 2024, where our integrated leadership team and cooperation across sectors and geographies are working well.

Peter Orszag
CEO & Chairman at Lazard

While continuing to serve our long standing corporate clients, we have also expanded the ways in which we serve private capital, and that effort produced robust revenue during the year. In addition, our leading restructuring and liability management practice was a meaningful contributor to our results, supported by our improved balance between creditor and debtor work. Overall, Financial Advisory delivered strong performance in 2024, and we expect continued strong growth in 2025. In Asset Management, we produced consistent results during the year, demonstrating the resiliency of revenue generated from this business. Growth in incentive fees during 2024 resulted from the outperformance of key strategies, including our global convertible alternative strategy, Japanese equity and quant.

Peter Orszag
CEO & Chairman at Lazard

In addition, recent enhancements to the business and sales efforts in key products that took place throughout last year have enabled us to enter this year with $10,000,000,000 of 1 but not yet funded mandates, substantially higher than other recent years. These enhancements in sales efforts, along with our investments in talent, further position us to target a more balanced flow picture in 2025. I will say more on that topic later. In summary, execution against our long term growth strategy has created momentum in 2024 that is reflected in today's results. We anticipate 2025 to be an even more productive and profitable year as we continue to pursue our 2,030 objectives.

Peter Orszag
CEO & Chairman at Lazard

Let me now turn the call over to Mary Anne to provide more detail on our earnings and financial performance, and then I'll share more on the outlook. Thank you, Peter.

Mary Ann Betsch
Mary Ann Betsch
CFO at Lazard

Firm wide adjusted net revenue was $812,000,000 for the 4th quarter, up 7% from the prior year and $2,900,000,000 for the year, up 18% from 2023. These results illustrate our inflection towards growth as part of our long term strategy for Lazard. Our increase in firm wide revenue this year was primarily driven by our financial advisory business. Financial advisory adjusted net revenue was $508,000,000 for the 4th quarter, up 6% from 1 year ago and $1,700,000,000 for the full year, up 28% compared to 2023. Financial advisory teams demonstrated increased productivity and won new business across the firm.

Mary Ann Betsch
Mary Ann Betsch
CFO at Lazard

As a result, Lazard participated in a number of marquee transactions in the Q4 and into January. Recently announced transactions include Constellation Energy's $26,600,000,000 acquisition of Calpine and Berry Global's $15,000,000,000 combination with Amcor. Completed transactions include Vivendi's €9,500,000,000 spin off of Canal Plus, Havas and Louis Hachette Group and Syncora's $4,600,000,000 acquisition of Retina Consultants of America. In addition, large corporate restructuring assignments include Consolus and Enviva, while creditor and related party roles include Accuride and SVB Financial Group. We also advised on several private capital markets assignments, including Dropbox's $2,000,000,000 secured term loan led by Blackstone Credit and Insurance and EQT on its fund to fund liquidity solution and capital raise for Nord Anglia Education.

Mary Ann Betsch
Mary Ann Betsch
CFO at Lazard

Turning to asset management, adjusted net revenue was $287,000,000 for the 4th quarter, up 5% compared to 1 year ago and $1,100,000,000 for the full year, up 3% compared to 2023. Our revenues reflected resilient management fees of $258,000,000 for the 4th quarter, in line with the prior year quarter, and $1,100,000,000 in 2024, up 2% compared to the prior year. Sensitive fees were up in both the Q4 and for the full year, totaling $29,000,000 $43,000,000 respectively, highlighting the strong outperformance of several of our key strategies, as Peter mentioned. As of December 31, we reported AUM of $226,000,000,000 8% lower than December 2023 and 9% lower than September 2024. During the quarter, we had market depreciation of $2,000,000,000 foreign exchange depreciation of $9,000,000,000 and net outflows of $10,000,000,000 Average AUM for the full year was $243,000,000,000 4 percent higher than 2023.

Mary Ann Betsch
Mary Ann Betsch
CFO at Lazard

Our ability to customize strategies and solutions to meet unique client needs has resulted in several large mandates. During the Q4, new business included the initial funding of a custom global equities mandate with an additional $4,000,000,000 anticipated over the course of 2025 and several mandates that were funded in emerging markets equity, quality growth and quant strategies. Now turning to expenses. Our adjusted compensation expense was $533,000,000 for the 4th quarter and $1,900,000,000 for the full year 2024. This resulted in a full year compensation ratio of 65.9%, an improvement of 390 basis points from 2023.

Mary Ann Betsch
Mary Ann Betsch
CFO at Lazard

As we've shared previously, we continue to anticipate achieving a 60% target compensation ratio in 2025, provided our financial advisory business grows as we expect and we hire financial advisory MDs at the pace we expect. That said, we are engaged in a wide array of recruiting discussions that reflect our momentum. And if we have the opportunity to bring on even more talent this year,

Mary Ann Betsch
Mary Ann Betsch
CFO at Lazard

we will do so.

Mary Ann Betsch
Mary Ann Betsch
CFO at Lazard

Our adjusted non compensation expense was $154,000,000 for the Q4 and $575,000,000 for the full year 2024. This resulted in a non compensation ratio of 19.9% for the year, which brings us back within our target range. Our cost containment efforts have helped to offset investments in client development and technology, keeping non comp expenses nearly flat in 2024, while firm wide revenues grew 18%. Shifting to taxes, our adjusted effective tax rate for the Q4 was 18.1% compared to 16% for the prior year quarter. Our effective tax rate for the full year 2024 was 24.4%, reflecting the favorable court decision in a long standing tax matter during the year.

Mary Ann Betsch
Mary Ann Betsch
CFO at Lazard

Turning to capital allocation, we continue to balance investments in growth with returning capital to our shareholders. In the Q4 of 4, we returned $61,000,000 to shareholders, including a quarterly dividend of $45,000,000 $16,000,000 in share repurchases. For the full year 2024, we returned $303,000,000 to shareholders, including 179,000,000 in dividends, 60,000,000 in share repurchases, and 64,000,000 in satisfaction of employee tax obligations. Additionally, yesterday, we declared a quarterly dividend of $0.50 per share. During 2024, we repurchased 1,400,000 shares at an average price of $42.20 Today, our outstanding share repurchase authorization is approximately $180,000,000 Now I'll turn the call back

Mary Ann Betsch
Mary Ann Betsch
CFO at Lazard

to Peter.

Peter Orszag
CEO & Chairman at Lazard

Thank you, Mary Anne. During 2024, we made significant progress against our Lazard 2,030 goals. Financial advisory revenue for the year nearly matched our record from 2021. These results reflect the M and A cycle developing as we expected, our successful recruiting efforts and our bankers increasingly embracing our commercial and collegial culture in serving clients.

Peter Orszag
CEO & Chairman at Lazard

We had exceptional performance across Europe in 2024. For completed M and A, Lazard maintained the number one position in France, ranked number 3 in Germany, and moved up to number 4 for Europe and the Middle East overall. We also had strong performance in the Americas, with revenue growth of 41% compared to 2023. In addition, our connectivity of private capital has expanded substantially over the past few years. Revenue associated with private capital now constitutes approximately 40% of overall financial advisory revenue, up from a third a year ago, even as we experienced overall advisory revenue growth.

Peter Orszag
CEO & Chairman at Lazard

Over time, we aim to have revenue associated with private capital grow closer to 50% of total advisory revenue as market activity increases and our connectivity continues to expand. Our respected brand and long term vision for the firm are increasingly attracting exceptional talent. We remain on track to achieve our MD growth target by the end of Q1 of this year, and we are in active discussions with numerous additional potential hires. We plan to continue our investment in MD growth of 10 to 15 net additions annually. In addition, we are ahead of schedule with our efforts to raise MD productivity, another goal outlined as part of our Lazard 2,030 plan.

Peter Orszag
CEO & Chairman at Lazard

Revenue per MD was $8,600,000 for the full year 2024, 1 year ahead of our target to achieve $8,500,000 this year. As a further spur to productivity, we have now also raised our minimum fee again on each mandate. Looking ahead, the tailwinds for financial advisory continue to strengthen as technology and generative AI, the biotech revolution, ongoing expansion in energy demand, and efforts to de risk supply chains create opportunity for clients. In the US, shifts in the antitrust and regulatory environments also appear to be positively influencing M and A discussions. While a further decline in interest rates would be beneficial, would be secondary to these factors in driving activity.

Peter Orszag
CEO & Chairman at Lazard

Overall, we see an increasingly constructive environment for our advisory business this year. Turning to asset management, we have made investments to strengthen our distribution research and investment platforms that position us well for 2025. As I laid out

Peter Orszag
CEO & Chairman at Lazard

at a recent conference, our outlook for this year

Peter Orszag
CEO & Chairman at Lazard

is based on several factors. First, investments in organizational changes made to strengthen the business, plus work done to scale and position our specialty products with clients, have led us to enter 2025 with a substantial level of 1, but not yet funded mandates. In addition, new vectors of growth recently established, such as active ETFs and U. S. Wealth Management, also support our outlook, along with the potential renewed interest in stocks beyond a handful of very large U.

Peter Orszag
CEO & Chairman at Lazard

S. Equities. It is worth noting that different parts of our asset business have different characteristics, which ultimately affect flows. To be more specific, our sub advised funds associated with U. S.

Peter Orszag
CEO & Chairman at Lazard

Multi manager mandates have different dynamics from the rest of our business. These large U. S. Subsidized funds represented more than half of net outflows in the 4th quarter, but the assets in this category represent less than 5% of our asset management revenue. The other 95% of our revenue is outside of this category and includes strategies such as quant, emerging market equity, global and specialized products like Japanese equity and infrastructure.

Peter Orszag
CEO & Chairman at Lazard

This portion of our business had more balanced flow activity in the Q4, and it also represents all of the $10,000,000,000 in one, but not yet funded mandates we had entering 2025. During this year, we will continue to prioritize areas where we see opportunities for growth in asset management. This includes meeting client demand through our expanded methods of delivery, such as wealth management and active ETFs. Earlier this month, we filed our initial SEC registration statement to launch several ETF offerings later this year. Our initial lineup of ETFs showcases some of our most compelling strategies for active management across market segments in which Lazard has a long proven track record of outperformance.

Peter Orszag
CEO & Chairman at Lazard

This marks a notable next step in our shift to offer more investors access to our premier investment products through a more efficient vehicle. Overall, our Q4 and full year 2024 results demonstrate the ongoing successful execution of our long term growth strategy against an improving economic and market backdrop. Looking ahead, we anticipate an increasingly constructive environment for both of our businesses in 2025. And as always, we remain focused on helping our clients successfully navigate complex business and investment decisions and on delivering long term value for our shareholders. Now we'll open the call to questions.

Operator

Thank you very much, Mr. We'll go first this morning to Devin Ryan of Citizens JMP. Please go ahead.

Devin Ryan
Director of Financial Technology Research at Citizen JMP

Great. Good morning, Peter, Marianne and Evan. How are you?

Peter Orszag
CEO & Chairman at Lazard

Good morning.

Devin Ryan
Director of Financial Technology Research at Citizen JMP

I want to start on the asset management business. Really appreciate the detail on the $10,000,000,000 of mandates just to kind of contextualize some of the progress there. And it'd be great to just understand how that compares to prior years, how that correlates to gross flows in the year ahead? And then maybe more importantly, you did touch on at a high level some of the changes that you guys have been implementing to drive more wins there. So it would be great to hear a little bit more about how that's specifically happening?

Devin Ryan
Director of Financial Technology Research at Citizen JMP

And then where you think we are? Can $10,000,000,000 next year grow to something much higher because you're still in the early innings of kind of this kind of process change that you've been making in asset management? Thanks.

Peter Orszag
CEO & Chairman at Lazard

Yes. Let me start and then maybe Evan can add any commentary as appropriate. Look, I think there are a couple of different things to kind of peel back then, Ian, on. First, on the $10,000,000,000 that is materially higher than other recent years. We haven't released that number.

Peter Orszag
CEO & Chairman at Lazard

I'm not going to give you the exact quantum, but the reason we called it out is it is higher than it's been in recent years by a significant amount. And obviously, that is only part of the picture for the year as a whole. As you correctly noted, we were calling it out just because we're entering the year with some wind in our backs, given that amount of 1, but not yet funded mandates. But that would be the minority of the overall growth inflows for the year, because we do anticipate we have a whole plan for on the distribution side for where we think the most promising prospects are. With regard to what we're doing, I would highlight two things.

Peter Orszag
CEO & Chairman at Lazard

One is we have made significant investments in our platform, everything from new portfolio managers, small cap U. S. Equity is a good example. There are many, many others, to investing in our research team where we've brought on a series of new analysts. And I think that's what's in addition to a renewed focus from our sales and distribution teams, that's what's producing these results.

Peter Orszag
CEO & Chairman at Lazard

And obviously, we provided the second point is we provided some context on large U. S. Sub advised funds versus the rest just because the dynamics are different, the nature of decision making is different, the flow dynamics are different, and we wanted people to know, that the vast majority of our revenue is in a category that is outside of those large U. S. Sub advised funds.

Peter Orszag
CEO & Chairman at Lazard

I don't know, Evan, if you wanted to Yes. No, I think you summarized

Evan Russo
Evan Russo
Chief Executive Officer of Asset Management at Lazard

it well. It's a strong foundation that we've set over the course of the past year, Devin, to sort of lead us into 2025 with just a lot more momentum. Some of that is just stuff that was produced over the course of the year, larger some larger mandates as well that we'll fund throughout 2025. But as always, we're continuing to build upon that even as we enter the year and continuing to build that month over month as you'll see in the flows. What we're also seeing is just stronger interest across a lot of those areas that we had called out.

Evan Russo
Evan Russo
Chief Executive Officer of Asset Management at Lazard

So quant, Japan, credit, fixed income and even sub E emerging markets, which we had been talking about the last several quarters. So seeing some of that come through in gross flows and new wins, I think is a very positive sign for our business. And we're starting to see the activity level with clients pick up in areas that had certainly been slower for the last year, year and a half, where the market has significantly been focused on specifically U. S. And the growth style within U.

Evan Russo
Evan Russo
Chief Executive Officer of Asset Management at Lazard

S. So focusing on trying to find ways to capture the upside across the AI trade, which is a handful of stocks in that region. So when you start to see the clients think about diversifying outside of that trend and that trade, that's going to sit well with us given our international global emerging markets focus and our relative value and quality style of the way we invest. So those are the things that line up for us as we enter into this year, give us a lot of confidence that this we're off to a strong start, but the momentum is building.

Peter Orszag
CEO & Chairman at Lazard

And just to reconcile this final point is many of the areas where we have already seen inflows in the 4th quarter, a good example, emerging market equities, Japanese equity, those are all also areas in which we've got very strong outperformance. So there's a significant base to build upon as we enter this year.

Devin Ryan
Director of Financial Technology Research at Citizen JMP

Okay. Thank you for that comprehensive answer. A quick follow-up on Europe. And obviously, overall advisory results were very good firm wide. You called out Europe is kind of one area where activity was also strong.

Devin Ryan
Director of Financial Technology Research at Citizen JMP

And so Lazard has a obviously a pretty good window into Europe and maybe more than most. And so love to hear about how you're thinking about the outlook for M and A, specifically in Europe relative to the U. S. Market as you think about your projections over the next couple of years. Are the drivers does it feel like the same optimism or opportunity in Europe well to the U.

Devin Ryan
Director of Financial Technology Research at Citizen JMP

S. Or even more so? I'd love to hear your thoughts on that given that it is an important part of the business. Thanks.

Peter Orszag
CEO & Chairman at Lazard

Sure. So a few things. I think it's really important to note that the correlation between the sort of macroeconomic backdrop and M and A activity and M and A revenue is certainly not perfect. And all you need to do is look at 2024. 2024 was not a stellar year for the Euro European macro economy, but it was a record year for our advisory revenue, highlighting that there are a lot of puts and takes in between GDP growth to M and A and other revenue.

Peter Orszag
CEO & Chairman at Lazard

So that's the first point. The second point is there's very clearly a focus in Europe about improving that macro backdrop. So just yesterday, Ursula Venderline released a pretty comprehensive plan that follows up on the Draghi report to address regulatory burdens and other impediments to growth in Europe. I think that's very encouraging. I will say that in a variety of discussions in Davos, the biggest question was, it sounds good that the Europeans are focused on this, but how much are they going to step up and actually do?

Peter Orszag
CEO & Chairman at Lazard

So the first step in doing is to have a specific plan. That has now been put out, and now it's a question of trying to implement and pass it in the member countries. But it's still progress. And then the final point is, I guess it's related to the first, which is a lot of European companies, like companies across the globe, are looking to diversify their supply chains and are looking to diversify just their geographic mix. And so a lot of we're seeing a lot of European interest in U.

Peter Orszag
CEO & Chairman at Lazard

S. Company M and A. And I think Lazard is very well positioned to meet that demand because we are the only independent advisory firm that has strong local roots in both North America and Europe. And so as that, interest European interest in U. S.

Peter Orszag
CEO & Chairman at Lazard

Firms in particular grows and we anticipate that based on logic and the discussions we're having that, that will be a significant area of activity in 2025, we think we benefit from that.

Devin Ryan
Director of Financial Technology Research at Citizen JMP

Okay. Great color. Thank you so much. Appreciate it.

Operator

Thank you. We go next now to Brennan Hawken of UBS.

Brennan Hawken
Brennan Hawken
Senior Analyst - Equity Research at UBS Group

Good morning.

Peter Orszag
CEO & Chairman at Lazard

Hey, Brennan.

Brennan Hawken
Brennan Hawken
Senior Analyst - Equity Research at UBS Group

Hey, how are you doing?

Peter Orszag
CEO & Chairman at Lazard

Good.

Brennan Hawken
Brennan Hawken
Senior Analyst - Equity Research at UBS Group

Texture around that assumption. I'm just struggling to figure out how to get there. Is there going to be any change in the structure of comp, maybe like more deferrals or longer deferrals? What are the building blocks?

Peter Orszag
CEO & Chairman at Lazard

Well, look, I'd say a few things. First, obviously, the comp ratio has many, many different inputs into it. And the mapping I feel for you a little bit because the mapping from overall revenue growth to the comp ratio has a lot of different complexities associated with it. I'll give you just one example. We have really succeeded in shifting the distribution of Managing Directors towards if you think about the distribution across productivity, towards the more productive end of the spectrum and and reduce the share of managing directors that are at the lower end of productivity.

Peter Orszag
CEO & Chairman at Lazard

So for any given revenue amount, that shift in the distribution helps to bring down the comp ratio on average because what typically happens in most firms is the bankers that are less productive effectively get cross subsidized. And so the overall comp ratio is higher at a given level of revenue. And without that kind of detail, it's very difficult to do the mapping directly from revenue onto the comp ratio. So we remain we believe that we will be able to achieve this under the conditions that we stipulated. I'd also highlight the other factor, which is clearly this is also dependent on the hiring environment.

Peter Orszag
CEO & Chairman at Lazard

We have we will succeed in being inside our target range for sorry Q1 'twenty three to Q1 'twenty four. Based on the number of discussions that we're having that are really promising, it is possible that we're going to be higher in terms of lateral activity in 2025. There's a lot of interest in our platform now that there's a sense of momentum and inflection. And if we need to bump up the comp ratio temporarily in order to bring on more talent, we will do that because we believe that over time it will result in a lower overall comp ratio. So maybe I'll just go back to highlighting something that I've said repeatedly.

Peter Orszag
CEO & Chairman at Lazard

The absolutely core driver of the comp ratio, especially in advisory. And that is where most of the variance from year to year arises because the asset results are relatively stable. I know some people have tried to tie the comp ratio to net flows, but there's not that much

Peter Orszag
CEO & Chairman at Lazard

connectivity from one to the

Peter Orszag
CEO & Chairman at Lazard

This is really going to be dependent on what happens within the Advisory business. And I just want to pause and again highlight how important productivity per MD is because that is where you get operating leverage in the advisory business. And I've used this simple example before of make up whatever number you want to, of non MD costs per MD. Let's use $3,000,000 as an example. Dollars as an example.

Peter Orszag
CEO & Chairman at Lazard

There's a fixed cost of $3,000,000 Managing Director is generating $5,000,000 of revenue. That's a 60% non MD comp ratio. Same Managing Director or a different one, roughly the same non MD costs, generates $15,000,000 in revenue. That's a 20% non MD comp ratio. And so you can see there's just dramatic operating leverage that comes as we raise productivity, and that's what's been happening.

Peter Orszag
CEO & Chairman at Lazard

The average is going up, but also the distribution is shifting to the more productive part of the distribution.

Brennan Hawken
Brennan Hawken
Senior Analyst - Equity Research at UBS Group

Okay. Appreciate that and thanks for all that color. So I'd love to circle back though on a component of my question, which is, is there going to be any change in the compensation structure as you're Yes, sorry.

Peter Orszag
CEO & Chairman at Lazard

No. And in fact, this year, we were able to bring the deferral rate down a bit and the cash percentage up a bit. We would like to continue doing that over time if we can, but I think your question was really are we going to go in the opposite direction. We don't anticipate that. Again, this is all let me just back up.

Peter Orszag
CEO & Chairman at Lazard

This is all predicating on the operating environment developing as we expect. And then our job is within that operating environment to deliver the results. And that's exactly what happened in 2024. And assuming the operating environment cooperates with us, that's what will happen in 2025.

Brennan Hawken
Brennan Hawken
Senior Analyst - Equity Research at UBS Group

Yes. And totally get that revenue and recruiting are going to be big factors. And for what it's worth, I'm not that far from your 60.

Brennan Hawken
Brennan Hawken
Senior Analyst - Equity Research at UBS Group

I just can't get all

Brennan Hawken
Brennan Hawken
Senior Analyst - Equity Research at UBS Group

the way there. Okay.

Peter Orszag
CEO & Chairman at Lazard

So it

Peter Orszag
CEO & Chairman at Lazard

can help you, just a little bit.

Brennan Hawken
Brennan Hawken
Senior Analyst - Equity Research at UBS Group

More revenue growth than I'm underwriting certainly will help. So, I'd love to ask a question on the share count. So, I know you guys have buybacks on hold, but how is the war chest looking? Do you think at this stage you have a sufficient war chest because and maybe it'd be helpful to understand the drivers of the fully diluted share count grinding up nearly 10% here this year and what your outlook is for maybe coming back to market with buybacks to at least neutralize some

Brennan Hawken
Brennan Hawken
Senior Analyst - Equity Research at UBS Group

of this stock based comp?

Peter Orszag
CEO & Chairman at Lazard

Yes. I'd say just really briefly and then I'm going to let MaryAnne go into more detail. You should expect a change in the pace of buybacks over time, and we will be moving again, over time, it may not be immediate to offsetting all of the dilution from stock based compensation to deferred compensation moving through time to that objective and that will be the medium term objective. But Maryann?

Mary Ann Betsch
Mary Ann Betsch
CFO at Lazard

Yes, sure. So if you think about the 3 main components of the change in fully diluted shares, right, it's the amortization of awards, it's the the change in share price under the treasury stock method. And then those are offset by buybacks that we do. So thinking about 2024, we had elevated amortization because in prior years we had done some deferrals in the form of fund interest, which we didn't do starting last year. So you had more share based grants than in prior years.

Mary Ann Betsch
Mary Ann Betsch
CFO at Lazard

So you had some increase just based on elevated amortization coming in. Then you have the impact of our share price being very thankfully elevated over the course of the year, which does have an impact under that treasury stock method. It just sort of artificially or on paper increases the share count. And then the buybacks, which normally mitigate those factors, were less last year. So I think if you're thinking about that going forward, I would share price unknown, hope it keeps going up.

Mary Ann Betsch
Mary Ann Betsch
CFO at Lazard

The amortization, I think, will probably be relatively stable from year to year. And then the buybacks, as Peter said, I would expect to be higher this year than last year overall.

Brennan Hawken
Brennan Hawken
Senior Analyst - Equity Research at UBS Group

Great. Thanks for that color.

Operator

Thank you. We go next now to Brendan O'Brien of Wolfe Research.

Brendan O'Brien
Senior Vice President at Wolfe Research

Good morning and thanks for taking my questions. I guess to start just a follow-up on the comp question from earlier. I understand that the comp ratio is largely going to be driven by the improvement in the advisory business. But looking at the segment by segment disclosure in the deck, your comp ratio within asset management has increased pretty materially over the last 4 years. So I just want to get a sense as to whether you do need to see like management fee growth within the asset management business in order to get that comp ratio back down or if you fell short of that whether excess growth within advisory and that mix shift could end up getting you there anyway.

Peter Orszag
CEO & Chairman at Lazard

I would say we don't need any significant changes in the asset business to produce the result that we were talking about.

Mary Ann Betsch
Mary Ann Betsch
CFO at Lazard

I would just add on to that. If you're looking at the asset management comp ratio, the biggest change was this year and the driver of that was really the decrease in deferral rates that Peter mentioned. So we actually had a pretty significant improvement in our deferral rates year over year and that came through in the current ratios in both businesses, but it was more pronounced in Asset Management.

Peter Orszag
CEO & Chairman at Lazard

Yes. I would more characterize the underlying comp ratio adjusting for deferral rates as relatively flat.

Brendan O'Brien
Senior Vice President at Wolfe Research

Okay. That's helpful. And I guess just wanted to get a sense, you mentioned this in your prepared remarks, Peter, post election pickup in activity. Just wanted to get a sense as to how meaningful that improvement has been and whether I'll get a flavor of the difference between the level of dialogues between sponsors and strategics at the moment.

Peter Orszag
CEO & Chairman at Lazard

Yes. Look, I'd say what was happening last year, it was significant strategic activity and dialogue. And as we got into the towards the end of the year, it was very clear that private equity and alternative asset managers were coming back onto the playing field. That has definitively continued into this year. And so you've got an environment in which both strategics and sponsors seem to be quite active.

Peter Orszag
CEO & Chairman at Lazard

And we're playing to win in both categories. So I highlighted that the share of our revenue associated with private capital has risen to about 40%. And we see further room for growth there. But we also see lots of ongoing public company and strategic dialogue. So it's pretty much across the board.

Peter Orszag
CEO & Chairman at Lazard

And I think the way I would characterize it is this cycle was developing anyway. And then you layer off because of underlying drivers that I've already gone through. But if you then layer on a more accommodating regulatory environment, Especially on vertical deals, I think that's where the biggest shift is likely to occur in the antitrust environment. But just the overall atmosphere, if you will, leads to increased CEO and Board confidence to proceed. And then there are other factors that are helpful.

Peter Orszag
CEO & Chairman at Lazard

So the valuation disconnect between buyers and sellers has narrowed as the valuation ranges have come back into more normalized environment and so on and enhancing markets are generally open. So, you put all that together, it looks very constructive and that's what we're seeing. I've said this before, the advisory business is volatile. It's not going to be a linear quarter by quarter thing. But overall, we see a very constructive environment moving forward.

Brendan O'Brien
Senior Vice President at Wolfe Research

Great. Thank you guys for taking my questions.

Operator

Thank you. We go next now to Jim Mitchell of Seaport Global Securities.

James Mitchell
Senior Equity Analyst at Seaport Global Securities

Hey, good morning. Just Peter, on the it's just sort of the productivity and headcount discussion. It seems like there was sort of another step down in the headcount in the Q3. And so it seems like it would take a lot where you are today in the 4th at the end of the Q4 getting to the Q1 kind of target of 10% to 15% net growth. So is there that many new hires in the pipeline?

James Mitchell
Senior Equity Analyst at Seaport Global Securities

Or is it also you have to think about the number of promotes if maybe you can help get to 194 MDs to 210 plus would be helpful?

Peter Orszag
CEO & Chairman at Lazard

Sure. And this is why we did Q1 to Q1 as the kind of measurement period because to your point, there is a lot of fluctuation. A lot of the people that we're parting company with will be exiting they exit on this kind of seasonal pattern depending on the notice period, etcetera, etcetera. And then, to your point, the promotions coming in during the Q1, and I will just reiterate, I can say with your perfect certainty that we're going to be in the 10% to 15% net add range by the end of the Q1. So we're highly confident in that.

Peter Orszag
CEO & Chairman at Lazard

And a lot of it does have to do with just the seasonality of the departures and then the promotions.

James Mitchell
Senior Equity Analyst at Seaport Global Securities

Okay. That's great. And do you feel it seems like there has been a lot of hiring even this last year, even though headcount hasn't grown. So do you feel very positive about sort of the upgrades that you've done and the momentum from the new hires you've had already this year?

Peter Orszag
CEO & Chairman at Lazard

Massively. So a couple of comments. First, what we were able to accomplish over 2024 and then a little bit in the recent history right before that is to fill in gaps that we had in our global platform on the advisory side. So we now have a 1st rate sports media and entertainment team. We now have a 1st rate consumer and retail team.

Peter Orszag
CEO & Chairman at Lazard

We now have a 1st rate team in Germany. We now have a very strong kind of flywheel effect across PCA, the fundraising business, restructuring and liability management, sponsor coverage, Lazard Capital Solutions, etcetera, with regard to how we're interacting with the large alternative asset managers. None of that was true 2 or 3 years ago. And so the hiring that we did disproportionately in 2024 really spoke to filling in those gaps. What we're now able to do in 2025 is layer in, in a more muffled in areas where we're already strong, certain sub verticals that we see.

Peter Orszag
CEO & Chairman at Lazard

So we've got a full mapping of where we see the most promising opportunities to gain yet more wallet, and that's what we're doing. Ray McGuire is leading our MD recruiting efforts on the advisory side, doing an exceptional job, and we're getting a lot of traction and it helps. One thing, success to get success and the fact that there is this sense of momentum and inflection really helps. And then the final thing I'd say is, coming back to the distribution of productivity, we are very pleased with the progress that we've made in encouraging this commercial and collegial culture. It has resulted in 2 things.

Peter Orszag
CEO & Chairman at Lazard

1 is a shift in the distribution of managing directors towards more productive ranges and that there are a lot of different pieces that go into that. The mix of people, people that we've hired and some of the people that we've already company with shifting, mandate selection and minimum fee requirements, the emphasis on collegiality, all of that is working exceptionally well and we're seeing the results. And I think that helps explain lot of what happened in 2024 and it's why we're optimistic about 2025.

James Mitchell
Senior Equity Analyst at Seaport Global Securities

Okay, great. Thanks.

Operator

Thank you. We go next now to James Yaro of Goldman Sachs.

James Yaro
James Yaro
Vice President Equity Research at Goldman Sachs

Good morning and thanks for taking my questions. So I just want to start on secondaries. Your secondaries team recently put out an industry report suggesting that 2024 secondaries volumes were up by nearly 40% year on year. In their forecast for 2025, the growth slows notably year on year. I think in the central case, year on year growth is about 15%.

James Yaro
James Yaro
Vice President Equity Research at Goldman Sachs

A few questions here. Maybe you could just help us think about your secondaries business and how it performed relative to those industry forecasts? And was secondaries a very material contributor to results in the Q4 of 2024? And then finally, could you just comment on whether you're of the view that the growth rate in this business could slow in 2025?

Peter Orszag
CEO & Chairman at Lazard

All right. So maybe I should combine the first and third because those are kind of related. So here's what I would say. First of all, I believe that those growth rates were based on a survey of participants. So there's noise in the overall figures.

Peter Orszag
CEO & Chairman at Lazard

I think the point instead to take away is that everyone's expecting continued expansion in the secondaries market. And the reason for that is, I think there had been a view that we just experienced a rapid growth in the secondaries market only because the LPs were reluctant to sell portfolio companies. And so there was a desire for liquidity that boosted the secondary market both GP and LP sorry, the GPs were reluctant to sell the portfolio companies, boosted the demand for liquidity both among GPs and especially LPs. I don't think that that's actually the primary explanation of what's going to happen. And therefore, if you took that view, you'd see a significant slowing as the sponsors became more active in selling companies back to the M and A discussion.

Peter Orszag
CEO & Chairman at Lazard

But I don't think that that's actually the primary explanation for what's going to happen over the next year or 2. Instead, the secondaries market has grown rapidly, but it's still affecting a very small share of the private equity world. And perhaps that spur from the need for short term liquidity associated with fewer sales of portfolio companies helped to be an accelerant to the market. But what it has done is it's advertised the benefits of this structure to a wider array of sponsors. And so we anticipate continued growth in the overall market because people are now aware of this possibility, and the attractiveness and depending it's very context dependent.

Peter Orszag
CEO & Chairman at Lazard

So our teams and I think many market participants expect continued growth in the market. I'm not going to comment on survey based growth rates. I think the said point is there will we are anticipating continued growth in this market. And on the question of Lazard's performance, we have a very strong PCA team, as you know. The mix of business that they have between primary and secondaries has shifted towards secondaries, a bit.

Peter Orszag
CEO & Chairman at Lazard

We have a franchise leading practice in Europe also in this area out of Paris. And we see continued opportunities for Lazard to succeed. We have been very active on in this area over the past couple of months and see continued growth. So I think the market will continue to expand and Lazard is very well positioned under the leadership of Holcomb Green at PCA to capture additional share within it.

James Yaro
James Yaro
Vice President Equity Research at Goldman Sachs

Okay. That's very clear. Maybe just one more on the advisory revenue. You obviously had a nice sequential increase in the Q4. Maybe you could just help us think about the trajectory for the Q1 and specifically was there any material pull forward that we saw in the Q4?

James Yaro
James Yaro
Vice President Equity Research at Goldman Sachs

I think in my numbers, the multiplier relative to Geologic numbers for the Q4 was the highest since 2010.

Peter Orszag
CEO & Chairman at Lazard

Yes. Well, a few comments. So James, as you will remember, when I sat with you in mid December, our best guess at that point was a somewhat lower number than the Q4 turned out to be. What really happened between mid December and these results is that there were timing shifts, but they basically netted out to 0, in terms of things that moved out of the quarter and into the quarter. I'll come back to the pull forwards in a second, but relative to mid December, those netted out to 0.

Peter Orszag
CEO & Chairman at Lazard

And, all of the strengthened results reflected things that we had at low probability or 0 probability hitting very quickly. So I think it's reflective of a stronger overall environment. So that's point 1. Point 2 is there were pull forwards. You can see that in the geologic data, but those were largely anticipated even as of mid December, so they don't explain the delta relative to when you and I last sat down.

Peter Orszag
CEO & Chairman at Lazard

And then with regard to the year as a whole, as I've said, I'm not going to give any additional color on the quarter by quarter because it is it's not a linear process and I don't actually the experience that we just had over the past month, you and I, which we thought things would be a little bit lower in mid December and then they strengthened just illustrates the uncertainty in the advisory business. But the overall picture, and I think that's the most important thing, is one in which we see an increasingly constructive environment and one in which Lazard is hitting its stride and gaining market share within that overall more constructive environment.

James Yaro
James Yaro
Vice President Equity Research at Goldman Sachs

That's very helpful. One last one quickly, just on non comp. You had very good discipline in the quarter relative to the revenue. Maybe you could just speak to the non comp growth trajectory from here and whether you might be able to continue to grow at the mid single digit growth rate that you saw for 2024?

Peter Orszag
CEO & Chairman at Lazard

I'll let MaryAnne take that one.

Mary Ann Betsch
Mary Ann Betsch
CFO at Lazard

Sure. So we were for 2020 yes, so you're talking about the Q4, we had mid single digit growth year over year. I think that's probably a good proxy for the year ahead. We will continue to look for cost savings, but I think realistically as we continue to invest in technology, including AI and cybersecurity. We've got continued pricing pressure and market data.

Mary Ann Betsch
Mary Ann Betsch
CFO at Lazard

We've got continued increase in travel and convening events. And then we also have new buildings coming online in London and Germany. So when you look at all of that in totality, I think your estimate is probably pretty reasonable.

James Yaro
James Yaro
Vice President Equity Research at Goldman Sachs

Excellent. Thanks so much.

Operator

Thank you. We go next now to Aidan Hall of KBW.

Aidan Hall
Vice President at Keefe, Bruyette & Woods (KBW)

Great. Thanks for taking my questions. Good morning, everyone. Maybe just following up there on the mid single digit non comp guide, the comp guide for the year under the current revenue assumptions for 2020 I was just curious how you're thinking about the margins for both for the 2 businesses against the 23% in advisory this year and 24% in asset management, just given where some of the hiring is taking place and some of those dynamics playing out?

Peter Orszag
CEO & Chairman at Lazard

Well, what I would say is, again, we believe we can achieve our comp ratio objectives even while hiring at the rate that is at Body General Saar 2,030 plan. And again, the key to this all working is the ongoing improvements in productivity. We see a lot of room to continue pushing toward higher productivity levels. And that's what creates the room in the comp ratio to hire more productive bankers and bridge them over their kind of ramp period while they're getting up the productivity curve. I'd I'd also say we've got a few examples of people who are able to join the platform and become more productive quicker than in historical practice.

Peter Orszag
CEO & Chairman at Lazard

That's fantastic and that helps to even make the point more forcefully because then there's no bridging that's required or less bridging that's required. So that's, I think, the core point. And then the second one is, as we said repeatedly, if we have fantastic talent and we are seeing a lot of interest in the Lazard platform across the board, we are willing to go above our targeted range on net additions for some period of time because we think it will pay off for our shareholders and for our ability to serve clients exceptionally well over the medium term. That may mean that the comp ratio gets elevated very temporarily to kind of bridge that transition period. But ultimately, it will again lead to a shift in the overall distribution of productivity towards the more productive range, and that is core to producing a lower comp ratio over time.

Peter Orszag
CEO & Chairman at Lazard

So with regard to the margins, I think those kind of follow from the previous discussions on non comp and comp combined. And we see an ability for us to continue to push productivity higher in the Financial Advisory side of the business and associated with that is ongoing revenue growth.

Aidan Hall
Vice President at Keefe, Bruyette & Woods (KBW)

Got it. Okay. Understood. Appreciate the color. Maybe just switching gears on the Asset Management side of the business.

Aidan Hall
Vice President at Keefe, Bruyette & Woods (KBW)

The fee rate saw some nice sequential trends. And I know there's some 3Q noise with a lumpy outflow. And then it sounds like the impact of sub advised outflows in 4Q making up half. So I was just curious if you could give us a little more color on the right way to think about the fee rate. And maybe the answer is kind of in the pipeline fee rate right now as we think about some of that pipeline mandates being funded.

Peter Orszag
CEO & Chairman at Lazard

I'll let Evan take this. What I would say again is we highlighted that the $10,000,000,000 one but not funded is in the 95% of revenue category. And those on average have higher fees than the sub advised funds do, but I'll let Evan fill in additional color.

Evan Russo
Evan Russo
Chief Executive Officer of Asset Management at Lazard

Yes. Aidan, so as you said,

Evan Russo
Evan Russo
Chief Executive Officer of Asset Management at Lazard

sequentially, average fee rate was up a tad. I mean, it's been pretty flat over the course of this year, drifted a little bit higher in the back end of this year. As you mentioned, we had a couple of larger client outflows, which were in lower fee products and platforms. And then specifically geographically, we had some outflows in the U. S.

Evan Russo
Evan Russo
Chief Executive Officer of Asset Management at Lazard

Versus, Peter said, Japan, EM, which are higher fee platforms. It all comes down to that business mix, which drives the average fee rate across the entire platform. So a lot of ins and outs. I don't think the flows that come in and around have that material impact in any given quarter except when there are specifically large ones that will be significantly different than the average fee rate. So in general, it's going to be just be the continued business mix shifts that we see in the business from quarter to quarter, which is performance of the funds as well as the overall level of assets and the proportion of those assets in the different asset classes in which the clients are investing.

Evan Russo
Evan Russo
Chief Executive Officer of Asset Management at Lazard

So that's the business mix that effectively makes up the average basis points. I'd say from here, I'd probably take the average rate for 2024, the average fee rate is probably a good rate to start the next year and then continue moving from there.

Aidan Hall
Vice President at Keefe, Bruyette & Woods (KBW)

Appreciate the color. Thank you.

Operator

Thank you. We'll go next now to Ryan Kinney of Morgan Stanley.

Ryan Kenny
Ryan Kenny
Executive Director - Equity Research at Morgan Stanley

Hi, good morning. Good morning.

Peter Orszag
CEO & Chairman at Lazard

Good morning. Good morning.

Ryan Kenny
Ryan Kenny
Executive Director - Equity Research at Morgan Stanley

I wanted

Ryan Kenny
Ryan Kenny
Executive Director - Equity Research at Morgan Stanley

to dig in on productivity. Clearly, it's an important driver into the comp ratio improvement and you surpassed your 2025 target of 8,500,000 rep per MD a year early. So any thoughts on whether you can hit your 20 28 target of 10,000,000 per MD sooner? And is there a scenario that's realistic where you can surpass that bar this cycle?

Peter Orszag
CEO & Chairman at Lazard

Yes. We think we can surpass that bar. And I would say we're ahead of schedule. We'd love to stay ahead of schedule. We see lots of opportunities for further uplift.

Peter Orszag
CEO & Chairman at Lazard

And look, again, we've talked about this before, but what are the elements of this? It's we are benefiting from an ongoing improvement in the operating environment. We are benefiting from a phenomenon that I had highlighted to you all before, which is that as we move into a higher growth scenario, there's a temporary depressant on productivity because the number of bankers entering the ramp of the kind of transition onto the platform exceeds the number of bankers exiting that ramp. As we move through time, that phenomenon or that depressant erodes and goes to 0 because the number of new bankers even at the higher pace coming onto the ramp equals the number exiting the ramp. So we're benefiting from that.

Peter Orszag
CEO & Chairman at Lazard

That is not entirely exhausted yet, but it will be over the next year or 2. So there's a further uplift that will occur there. I mentioned things like mandate selection. We again raised our minimum fee requirement to both I think, the exceptional work we do on behalf of clients that help us to really focus on mandate selection. And then, we have been, from a cultural perspective, really emphasizing, including explicitly measuring the degree of collegiality at a banker by banker level and rewarding that.

Peter Orszag
CEO & Chairman at Lazard

And I think that's paying off. We see positive correlations between the more productive bankers and the more collaborative bankers, and we're going to keep pushing in that direction. And then finally, there's the mix of bankers themselves. We have parted company with a significant number of less productive bankers over the past 12 to 24 months, and we've added a lot of bankers that are already off to the races in terms of being both commercial and collegial. So all of that's going to continue, and we see significant opportunity to continue raising productivity, and we certainly hope to remain ahead of schedule.

Peter Orszag
CEO & Chairman at Lazard

And what I would say even under the original plan, 10 was an objective, not a limit. And you should, I think, reasonably expect that we'll continue to aim to improve productivity beyond that level.

Ryan Kenny
Ryan Kenny
Executive Director - Equity Research at Morgan Stanley

Okay, great. Thanks for breaking that down. And then separately, you sound still very constructive even in a range of interest rate scenarios where the forward look hasn't baked in as many rate cuts as we were originally expecting. So can you just give some color on is there any impact at all on the pipeline if we get no rate cuts this year versus 1 or 2? And are elevated 10 year yields impacting the pipeline at all?

Peter Orszag
CEO & Chairman at Lazard

Yes. What I would say is, again, I think this is a secondary factor for most M and A discussions. At the margin, would it help to have lower rates? Sure. But it's not the primary driver of most deals, especially because to your point, the rate cuts haven't even been associated with a commensurate decline effect that's gone in another direction, as you know, on the long end.

Peter Orszag
CEO & Chairman at Lazard

And the long end, it's really what it's factored into the DCF analysis, etcetera. So a rate cut that doesn't reduce the long end doesn't actually do very much for any of the M and A analytics or deal environment. So that's point 1. Point 2 is that many of our other businesses, if you want to talk about secondary or kind of marginal effects from different rate environments, go in the other direction. So again, I don't think it's the primary driver of any of this, but with regard to our Restructuring and Liability Management business, with regard to our secondaries business that we were just discussing, I mean, there are a bunch of things that even in that kind of secondary or tertiary phenomenon effects will go in the other direction.

Peter Orszag
CEO & Chairman at Lazard

So we haven't done the analysis because I don't think we can, but I don't think if you look at the overall impact of rate cuts on the advisory business, at this point, it is marginal overall because of those offsetting effects. Final thing I'd say is, I think the market is appropriately reflecting what Chair Powell has been saying about the path of inflation. And yesterday, he made it very clear that they're going to wait for incoming data with regard to the path of inflation, and it's a separate discussion we could have. But I think the most important thing is this is not the primary driver of the way the year will turn out overall.

Ryan Kenny
Ryan Kenny
Executive Director - Equity Research at Morgan Stanley

Thank you.

Operator

Thank you. We go next now to Mike Brown of Wells Fargo.

Michael Brown
Michael Brown
Equity Research Analyst - Asset Managers, Brokers and Exchanges at Wells Fargo

Great. Good morning. Thanks for taking my questions. I just wanted to circle back on the share count and maybe just put a little finer point on how to think about that for 25. So if we assume a flat share price, would that mean you could keep the share count kind of flattish year over year?

Michael Brown
Michael Brown
Equity Research Analyst - Asset Managers, Brokers and Exchanges at Wells Fargo

And obviously, hopefully, share price goes up, but just curious how to think about that in terms of maybe a framework for 25%.

Mary Ann Betsch
Mary Ann Betsch
CFO at Lazard

Yes. I'll take that one, Mike. So the one piece that you're missing is the buybacks, right, because we will have amortization come in throughout the year, which, as I said before, I think will be relatively stable versus versus last year. So if we were to buy back nothing or let's say we bought back the level that we did in 2024, I think you'd see extracting the share price impact, you'd see a similar increase in the share count over the year. But given that we do plan to increase the buybacks to the extent that we're able to, you'll see a mitigating impact there.

Michael Brown
Michael Brown
Equity Research Analyst - Asset Managers, Brokers and Exchanges at Wells Fargo

Okay, great. Okay, that's helpful.

Michael Brown
Michael Brown
Equity Research Analyst - Asset Managers, Brokers and Exchanges at Wells Fargo

And then, Peter, maybe just

Michael Brown
Michael Brown
Equity Research Analyst - Asset Managers, Brokers and Exchanges at Wells Fargo

a high level question. I guess one thing that we've been focusing on is just this capital markets recovery. But on the IPO side, that recovery has been much more tepid and some of the recent IPOs have kind of underperformed and some have broken price. So it might be too early to tell how that market will progress from here. But if the recovery is weaker or slower, do you think that's a bit of a catalyst for M and A activity for your business?

Michael Brown
Michael Brown
Equity Research Analyst - Asset Managers, Brokers and Exchanges at Wells Fargo

Has that just become a much more M and A just become a much more attractive exit strategy for sponsors and then somewhat better M and A activity overall? Or in your view, is it kind of better to see that healthy IPO market too?

Peter Orszag
CEO & Chairman at Lazard

What I would say is if you step back and look at the kind of reopening of the capital markets from the relatively constrained environment that occurred a couple of years ago, the IPO market fully reopening is the final stage of that process. Everything else has already occurred. And so debt financing is generally pretty easily available. The entry of private credit into that sphere has made the overall structure more competitive, etcetera. But yes, the IPO market fully reopening is the last stage.

Peter Orszag
CEO & Chairman at Lazard

I'm not surprised that there are bits it's a bit kind of fits and starts before it fully reopens. I anticipate that with a stable operating environment, that will occur as we go through 2025. And then yes, I guess, at the margin, to the extent that a portfolio company can't IPO, it ups the odds either that our secondaries business has that as a client or the GP associated with that or the LPs associated with that company as clients or that there's a strategic or other sponsor that's interesting in buying the company. So I think the bottom line is, so I anticipate the IPO market will kind of take hold in 2025, again, assuming that the operating environment is as we currently expect it to be. And then to your point, yes, to the extent it doesn't, that's probably a marginal benefit for various of our businesses.

Michael Brown
Michael Brown
Equity Research Analyst - Asset Managers, Brokers and Exchanges at Wells Fargo

Okay, great. Thank you for the thoughts there.

Operator

Thank you. And ladies and gentlemen, this will bring us to the conclusion of Lazard's 4th quarter and full year 2024 earnings conference call. We'd like to thank you all so much for joining us today and wish you all a great remainder of your day. Goodbye.

Executives
    • Alexandra Deignan
      Alexandra Deignan
      Head-Investor Relations
    • Mary Ann Betsch
      Mary Ann Betsch
      CFO
    • Evan Russo
      Evan Russo
      Chief Executive Officer of Asset Management
Analysts
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Earnings Conference Call
Lazard Q4 2024
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