Lazard's Q2 2025: Contradictory Insights on Advisory Recovery, Compensation Targets, and M&A Activity

Advisory business recovery trajectory, compensation ratio target, M&A activity and market conditions, and private equity M&A dynamics are the key contradictions discussed in Lazard's latest 2025Q2 earnings call.



Financial Advisory Performance:
- Lazard reported a record financial advisory adjusted net revenue of $861 million for the first half of the year.
- The growth is attributed to the geographic and product diversity of their business, including strong performance in France and Germany, and increased activity in private capital and fundraising.

Asset Management Inflows and Record Gross Flows:
- Asset Management reported adjusted net revenue of $533 million for the first half of the year, with positive net inflows in the second quarter.
- The positive net inflows are a result of strong investment performance, a focus on core products, and favorable market conditions for global strategies, with record gross inflows for the first half of the year.

Expansion in Private Capital and Global Strategy Demand:
- Over the past 12 months, revenue associated with private capital exceeded 40% of total Financial Advisory revenue.
- This is due to increased emphasis and hiring in the private capital business, and the growing demand for global strategies in asset management.

Non-M&A Revenue Growth:
- Non-M&A revenue has increased, reflecting a business mix of roughly 60% M&A and 40% non-M&A.
- Growth in the non-M&A segment is driven by significant increases in restructuring, liability management, and the fundraising business.