Key facts
- Lazard cut over 80 managing director roles, representing about 40% of its total pool.
- The firm reported $786 million in adjusted net revenue for the second quarter.
- Financial Advisory revenue was $445 million, supported by M&A and restructuring deals.
- Assets under management reached an all-time high of $285 billion.
- Dollar-weighted conflict clearances rose nearly 40% year-over-year.
- The 2027 advisory pipeline is more than double the level seen last year.
Lazard's strategic overhaul of its advisory managing directors, which involved cutting over 40% of roles, is now yielding positive results, according to CEO Peter Orszag. The firm reported strong second-quarter financial performance, with adjusted net revenue of $786 million, driven by both its Financial Advisory and Asset Management divisions.
Financial Advisory revenue stood at $445 million, boosted by significant M&A completions and restructuring activities, including advising on NextEra's $420 billion combination with Dominion Energy and Altice France's proposed €21 billion sale of SFR. Asset Management posted $331 million, propelled by a 23% year-over-year increase in management fees and assets under management reaching an all-time high of $285 billion. The firm also achieved its best first-half net inflows in nearly two decades.
Orszag highlighted that the turnover of advisory managing directors, which initially created a headwind, has now shifted to a tailwind. This is evidenced by a nearly 40% year-over-year increase in dollar-weighted conflict clearances, with an even more significant rise of over 100% for deals exceeding $5 billion. Furthermore, the 2027 advisory pipeline is already more than double the level it was at the same point last year for the 2026 pipeline.
The firm expects a more pronounced second-half revenue seasonality, particularly in advisory, which should help reduce its compensation ratio. Lazard also announced the resumption of share buybacks under a $250 million authorization and declared a $0.50 quarterly dividend. The acquisition of Campbell Lutyens is set to close later this year, adding a private capital advisory business and expected to be accretive to earnings in 2027.