Lazard profit beats estimates on dealmaking revival

By Manya Saini and Lananh Nguyen

(Reuters) -Lazard sailed past estimates for third-quarter profit on Thursday as dealmaking picked up, mirroring gains at larger Wall Street rivals.

"We see an increasingly constructive environment across all lines of our financial advisory business, rising M&A demand, strong restructuring and liability management activity," Lazard CEO Peter Orszag told journalists on a conference call.

Merger and acquisition activity has accelerated, with companies showing strong resilience to tariffs and stocks trading near record highs. Regulators under President Donald Trump's administration have also been friendly to mergers.

Lazard's adjusted financial advisory revenue jumped about 14% in the quarter to a record $422 million.

It advised on several big-name transactions during the quarter, including Ferrero's $3.1 billion acquisition of WK Kellogg Co and Corteva Agriscience on its planned separation into multiple businesses.

"In the United States in particular, the regulatory environment is more accommodating" under Trump than under former President Joe Biden, Orszag added.

"We need a dual strategy, one that deals with the career staff and the traditional world," which deals in antitrust analysis, he said. "In addition to that, you need an over-the-top White House or cabinet strategy...a lot of decision-making is made at the White House or at the cabinet, Commerce, Treasury etc. levels, so you need this dual strategy to get deals approved."

The bank's shares fell 1.8% on Thursday morning, contrasting a broader gain in bank stocks.

Earlier this month, executives from top Wall Street banks including JPMorgan and Goldman Sachs said the deals pipeline remained strong.

Lazard has hired 20 new managing directors this year, Orszag said, and it has reached its target for productivity for MDs.

The bank also runs one of Wall Street's largest restructuring advisory practices, which tends to see stronger activity when markets turn volatile or credit conditions tighten.

The bank said its restructuring and liability management practice advised several high-profile clients including Altice France and First Brands.

ASSET MANAGEMENT SHINES

Asset management revenue grew 8% to $294 million. Inflows were a company record for the third quarter.

Assets under management have climbed across the industry as a broad rally in equities pushed indexes toward record highs, lifting portfolio values and investor confidence.

Improved risk appetite has also drawn investors back to other asset classes.

Lazard posted assets under management of $265 billion as of September 30, versus $248 billion a year earlier.

Overall adjusted revenue came in at a record $725 million, up 12% from a year earlier.

The investment bank reported an adjusted profit of 56 cents per share. Analysts on average had expected 45 cents per share, according to estimates compiled by LSEG.

(Reporting by Manya Saini in Bengaluru and Lananh Nguyen; Editing by Arun Koyyur, Pooja Desai and David Gregorio)

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