Lazard(US:LAZ)2024-07-25 17:18Financial Data and Key Metrics Changes - For the first half of 2024, total firm-wide adjusted net revenue was $1.4 billion, up 25% from the prior year [4] - Second quarter firm-wide adjusted net revenue was $685 million, up 10% from the same time last year [9] - Financial Advisory adjusted net revenue was $408 million for the second quarter, up 19% year-over-year, and a record $855 million for the first half of 2024, up 38% [9] Business Line Data and Key Metrics Changes - The Asset Management business delivered adjusted net revenue of $541 million for the first half of the year [7] - For the second quarter, adjusted net revenue for Asset Management was $265 million, down 1% compared to the second quarter last year [30] - Management fees for the second quarter increased by 1% compared to the same period last year [30] Market Data and Key Metrics Changes - As of June 30, 2024, reported AUM was $245 billion, 2% higher than June 2023 but 2% lower than March 2024 [30] - Market appreciation during the quarter was $2.5 billion, offset by foreign exchange depreciation of $1.7 billion and net outflows of $6.6 billion [30] Company Strategy and Development Direction - The company is focused on expanding its capabilities in private capital and enhancing its advisory services [12][21] - Lazard is pursuing a long-term growth strategy, with a commitment to balancing investments in growth with returning capital to shareholders [32][38] - The company is investing in new specialty products and strategies, including a U.S. small cap equity fund and a global listed infrastructure active ETF [16] Management's Comments on Operating Environment and Future Outlook - Management noted improving economic conditions and anticipated further improvement in the operating environment for both businesses due to potential Fed rate cuts [34] - The geopolitical team is generating revenue and increasing client interest, reflecting the company's strength in navigating complex risks [35] - Management expressed optimism about continued growth and market share gains, driven by a renewed ambition and strategic hiring [69] Other Important Information - The adjusted effective tax rate for the second quarter was 14%, significantly lower than 31.2% for the same period in 2023 [31] - The company returned $70 million to shareholders in the second quarter, including a quarterly dividend of $45 million [32] Q&A Session Summary Question: What is the outlook for M&A activity given the global election cycle? - Management indicated that while the election cycle presents headwinds, it could also lead to increased cross-border M&A activity due to potential tariffs [40][64] Question: How is the company expanding its Private Capital Advisory capabilities? - The company has significantly expanded its capabilities in private capital, including new hires and enhanced coverage efforts [21][74] Question: What are the expectations for the Asset Management business in light of recent flow trends? - Management acknowledged challenges in flow trends but noted a recent rotation towards value stocks, which could improve future flows [48][49] Question: How does the company view its current strengths and areas for enhancement? - Management highlighted strengths in primary and secondary fundraising within Private Capital Advisory and emphasized the need for further development in this area [83]