Thank you, Todd. Good morning, and welcome to Lazard's earnings call for the fourth quarter and full year 2023. I'm Alexandra Deignan, Head of Investor Relations, Treasury and Corporate Sustainability. In addition to today's audio comments, we posted our earnings release on our website. A replay of this call will also be available on our website later today. 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 these forward-looking statements. 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. Hosting our call today are, Peter Orszag, Lazard's Chief Executive Officer; and Mary Ann Betsch, Lazard's Chief Financial Officer. Peter will begin with some brief remarks before turning the call over to Mary Ann to provide an overview of our financial results. Peter will then provide his perspective on current market conditions and the outlook for our business. After our prepared remarks, Peter and Mary Ann 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.

Thank you, Ale, and good morning, everyone. Our fourth quarter results represent a solid first step, as we execute our long-term growth plans. Activity during the fourth quarter also reinforces our confidence that the M&A cycle has turned a corner as we indicated on last quarter's call. We remain focused on providing sophisticated and differentiated advice and investment solutions for our clients, and we are well positioned for a stronger year ahead. In addition to existing mandates, the quantity and quality of our dialogues suggest a productive 2024. At the same time, there is a high degree of geopolitical uncertainty that could affect business activity. I'll share more on our outlook shortly. But before I turn to Mary Ann to discuss our fourth quarter and full year results, I'd like to extend a very warm welcome to the new members of our Board of Directors announced earlier this week. Dan Schulman, who most recently served as CEO of PayPal; and Steve Howe, former US Chairman and Managing Partner of the Americas for Ernst & Young. Dan and Steve bring broad experience as executives and directors of numerous public companies. We are excited for their leadership as we refresh and reinforce the strength of our Board and pursue our ambitions for Lazard. Now, let me turn the call over to Mary Ann.

Thanks, Peter. Today we reported firm-wide operating revenue of $761 million for the fourth quarter of 2023, up 13% from the fourth quarter of 2022. Operating revenue for the full year 2023 was $2.4 billion compared to $2.8 billion for the full year 2022. Global M&A announcements in 2023 fell to their lowest level in a decade and completions were down 32% year-over-year. Our business was affected by the slowdown. The Financial Advisory operating revenue totaled $1.4 billion for the full year 2023 compared to $1.7 billion for the prior year. Fourth quarter results, however, reflect the continued positive trend of more constructive client conversations, resulting in an increased number of announced deals. We reported Financial Advisory operating revenue of $477 million for the fourth quarter, up 18% compared to the fourth quarter of 2022. Examples illustrating this trend include several large strategic transactions announced during the fourth quarter and in January, including Iliad's proposed merger with Vodafone, Western Digital Corporation's separation of HDD and Flash businesses; Energy Exemplar's acquisition by Blackstone and Vista Equity Partners; AbbVie's acquisition of ImmunoGen; and Sanofi's acquisition of Inhibrx. Our Advisory business in Europe had a particularly strong quarter and year. Our UK office had its highest quarterly revenue ever in the fourth quarter, and in France, Lazard was ranked number one in market share for 2023. Our co-heads of Europe's Financial Advisory businesses are focused on integration and collaboration to capture cross-border opportunities and are demonstrating strong results. Our Private Capital Advisory Group has continued to deliver meaningful growth in client mandates and fee income especially in our secondaries business as investors in private equity look for sources of liquidity amidst volatile M&A and public markets. In addition, we see increasing client demand in our global restructuring and liability management group. Client activity picked up significantly during the second half of 2023 in both the US and Europe, and we see continued strong demand for our services in part because we expect interest rates to remain higher for longer. We also continue to invest in our leading Sovereign Advisory business and our team is well positioned to serve clients as they navigate this prolonged higher rate environment. Finally, heightened interest from our clients in the geopolitical landscape remains, and demand for our geopolitical advisory group services continues to increase as a result. Turning to Asset Management, fourth quarter operating revenue was $274 million, up 6% compared to the fourth quarter one year ago and up 4% from the prior quarter. Management fees for the fourth quarter were up 5% compared to the fourth quarter one year ago and down 1% from the prior quarter. For the full year 2023, management fees increased 1% compared to the full year 2022. Asset Management operating revenue was $1.1 billion for the full year, 3% lower than the prior year, reflecting incentive fees compared to 2022. As of December 31st, we reported AUM of $247 billion, 8% higher than September 30th, 2023, and 14% higher than December 31st, 2022. The sequential increase from September 30th was due to market appreciation of $16.9 billion and foreign exchange appreciation of $5 billion, offset by net outflows of $3.6 billion. Average AUM for the fourth quarter was $234 billion, an increase of 11% from the fourth quarter of 2022 and 1% lower on a sequential basis. Average AUM for the full year was $233 billion, 2% higher than 2022. During 2023, we saw positive net inflows across our global and European fundamental equity strategies, our quantitative platform, and our US and European fixed income strategies. In addition, our European and Asia-Pacific distribution teams won significant new business including mandates from a public pension scheme in France, UOB Asset Management in Asia, and Mid Wynd Investment Trust in the UK. Now, turning to expenses. Our adjusted compensation expense was $516 million for the fourth quarter and $1.7 billion for the full year 2023. Our adjusted compensation ratio was 69.8% for the full year 2023 compared to 59.8% the year prior.

Thank you, Mary Ann. On our last call, I said that the third quarter was a turning point both for Lazard and for the M&A market. Our fourth quarter results are consistent with that observation, as we increasingly build momentum and execute against our longer-term ambitions for Lazard. Looking at Financial Advisory, the interplay between headwinds and tailwinds continues to create favorable conditions for M&A activity. Tailwinds remain strong as business leaders look for opportunities to capture technological innovation, address global supply chain shifts and drive revolutions in Life Sciences and the Energy Sector. At the same time, the headwinds are increasingly subdued. While it is increasingly clear that interest rates may be higher for longer, the debate has shifted away from if rates will go up to when they will go down. And now that higher rates have been in place for a longer period of time, we are seeing buyers and sellers better align on valuations. In addition, financing markets are opening up, private equity is becoming active again and more Boards and C-suites are willing to pursue transactions in the wake of some favorable antitrust decisions by the court. As a result, we are engaged in an expanded number of client conversations. We see stronger M&A activity across the US and Europe and in a broad array of sectors including Technology, Industrials, Financial Institutions, Healthcare, and Energy, all of which are sectors where Lazard has deeply embedded networks and teams. We also see significant further revenue opportunities beyond M&A, in our capital solutions, restructuring and liability management businesses. As leaders in markets expect higher interest rates for longer and ways of debt maturities approach, clients increasingly explore solutions across the various options our teams provide. To support this growth and further build our leadership in this space, over the past two months we announced three new managing directors in our restructuring group, two in New York and one in London. In Asset Management, we began 2024 with $247 billion in assets under management, approximately 14% higher than at the start of 2023. Positive market sentiment and a widening dispersion of returns across asset classes are leading to increased activity and interest across our range of actively managed investment products. In addition, Evan's strategic plan is focused on stabilizing and optimizing the business which has helped produce improved results throughout the year. Our investment teams continue to perform well in this market environment. And we've seen significant outperformance across our emerging markets, global quant and select local strategies. We're also continuing to add talent to the business, with senior hires to our small cap equity platform in the fourth quarter and a recently announced new head of our Japanese business. During the fourth quarter we provided specific goals for our long-term plan to double revenue by 2030 and deliver an average annual total shareholder return of 10% to 15% through 2030. In Financial Advisory, we are focused on high-productivity growth. We are targeting an increase in average revenue per MD to $8.5 million by 2025 and $10 million by 2028 and a net addition of 10 MDs each year through internal promotions and lateral hires. In addition to four new MDs recently hired, which underscores our ability to attract world-class professionals to Lazard, in January we also promoted 10 new managing directors from within the firm, reflecting our long-standing strength in developing internal talent. In Asset Management, we are focused on strengthening our traditional business while adding capabilities in less liquid products, primarily through inorganic opportunities. We are targeting approximately 30% of asset management revenue from alternatives or private markets and wealth management by 2030. We will evaluate and pursue acquisitions in a programmatic disciplined manner with a focus on creating value for our shareholders. Let me now turn to the outlook for the year ahead. As we've shared previously, we expect 2024 to be better than 2023. We see continued signs of a healthy and strong economy and the tailwinds for M&A activity strengthening while headwinds abate. We also could experience an unusual environment in 2024 with increased M&A occurring alongside greater restructuring activity as rates remain high and debt maturities approach. We do note, however, that alongside these macroeconomic conditions, geopolitical uncertainty is increasingly top of mind for decision makers. I remain very focused on building a commercial and collegial culture to execute our ambitions, pursuing a strategic path to achieving our Lazard 2030 goals and creating value for our shareholders. To that end, we are pleased to have completed our conversion to a C-Corporation on January 1st. As we embark on the year ahead and our next chapter, our complementary businesses, premier brands, established global leadership, and extraordinary talent provide a strong foundation. Now let's open the call to questions.

We'll take our first question from Ryan Kenny with Morgan Stanley. Please go ahead.

Hey, good morning. Thanks for taking my question. I have a big picture question for Peter on the Lazard 2030 strategy. And slide 10 is really helpful in understanding the building blocks there. One of the drivers listed and you've talked about this before is increasing relevance. Can you help walk us through what specific changes culturally you're making to make sure that Lazard is top of mind for CEOs and Boards?

Sure. And relevance is important not just for its own sake but because it then reinforces the brand and converts into revenue. So I want to make that clear. But there are lots of things that we are doing from increased presence externally. So getting our top bankers and thinkers out in the media at conferences and so on to project the force of Lazard's insights and make it even more apparent to the world the differentiated talent and insight that we have. We are doing a lot more convening events that bring together top CEOs and thought leaders into select places so that there are conversations that can occur that again are more than what one can get out of the newspapers today. And then we're building out new capabilities that increase our relevance, a great example of that is the geopolitical team. Clearly as I said before you can't make a business decision today without geopolitical considerations being taken into account and we have a top-notch team that is helping our clients evaluate those questions.

Okay. Great. And as I just think through wallet share, you're clearly focused on increasing productivity of MDs over time. You've also taken some actions to manage headcount. So when we put those two together is the goal to keep your wallet share but get more efficient or to grow wallet share?

Our goal is to increase our wallet share. We believe that's what will occur as we execute our Lazard 2030 goals, but to do so in a way that is not just buying wallet share but doing so in a high productivity manner. And the reason that I just want to pause on is really important, which is as we raise our productivity for MD, the operating leverage that we get especially on the non-MD comp ratio is what allows us to then invest in new talent. So it's a self-reinforcing cycle that as we raise productivity, we free up room in our comp ratio to make new investments in managing directors. That leads to additional wallet share gains, additional relevance as we just discussed but doing so in a manner that still fits within our comp and margin targets.

Thank you. Our next question will come from Devin Ryan with JMP Securities. Please go ahead.

Hi. Thanks. Good morning. First question, just on those head count reductions and the projected reduction of 10% in the run rate cost base, by I guess the end of 2023. Can you guys just give us an update on where we are on all those savings? How much of that was reinvested or will be reinvested back in the business, just because there's a lot of moving parts on expenses and then also appreciate that 2024 might be a little bit of a transition year, in kind of a revenue recovery. So just trying to think through some of the moving pieces and kind of what that could mean for maybe non-comp expenses in the absolute and maybe comp ratios, on a relative basis. Thanks.

Sure. So I'll start and then maybe Mary Ann coming in. Look, let's cut through all the complexity because I think this is pretty simple. We are committed to our tradition, our long-term margin targets both on comp and on non-comp. So on comp, you should again just keep in mind that our goal is to return to those traditional targets of being in the mid- to high 50s on the comp ratio as revenue normalizes. So, all the other pieces are contributors to that. We are on target for the head count reduction that we articulated early last year, which is a 10% reduction from the first quarter of 2023 to the end of the first quarter of 2024. That is tracking. But again, it's not done for the sake of doing it, but rather to help us on our transition back to those traditional margin targets. And that's what I think you should be tracking. You're right to also point out that 2024 might be a transition year. It depends obviously on how strong the revenue environment is, but we are committed to getting back to those traditional targets over time. I don't know, Mary Ann, if you want to add.

Yes. So the one thing, Devin, you mentioned non-comp as well. So I would just say, that we've done a lot of work. We are continuing to look constantly for cost savings opportunities; we're sort of turning over every stone. And so, if you look sort of at what to expect for 2024 versus 2023, we expect to continue to see inflationary pressure and increased travel for example; occupancy costs tend to go up over time. But we really are working hard to keep expenses this year flat to maybe down a bit. So that's what I would expect there, in dollar terms, right which will get in the back.

And the ratio will come down...

Exactly.

Thank you for the follow-up, Peter. I've noticed a positive response to the C-Corp conversion and the decisive actions your team has taken, which seems to be reflected in the stock performance. However, I still have questions regarding the strategic and financial merits of combining the Advisory and Asset Management models. I understand this has been your approach, but as you continue to evaluate the situation, do you see any scenarios where separating the businesses could create more value? Are you still assessing this? I recall you mentioned that everything was on the table at the start, so I would appreciate an update on your current thoughts. Is it still undecided, or have you made a definitive choice regarding the combined business model? Thank you.

We see significant potential for growth in both areas of our business. Our goal is to create more value by capitalizing on these opportunities, which is our immediate focus. In Advisory, we plan to increase the number of managing directors and improve productivity. In Asset Management, we aim to enhance the traditional business by focusing on investment performance and upgrading our distribution team to achieve some level of growth. Market appreciation should counteract the pressures from fee compression and net outflows due to the shift towards index funds in active management and liquid markets. Additionally, we are looking to pivot and diversify into less liquid segments of the marketplace, where we believe there are significant opportunities for Lazard. This will be part of our disciplined approach to inorganic growth moving forward. Overall, we recognize substantial upside in both sectors and are also exploring compliant ways to enhance connectivity and synergies between the two businesses. This will guide our plans for the coming years.

Our next question comes from Steven Chubak with Wolfe Research. Please go ahead.

Hey, good morning. Peter, a question on just the restructuring comments you made. You noted you're anticipating higher for longer rates, certainly bodes well for the liability management business in particular, was hoping you could just speak to your outlook for the business relative to an active 2023 and how it could be impacted if we do begin to see a steady stream of rate cuts beginning in May or June of this year.

Sure. So what I would say with regard to our business is we started off at least relative to the market/some of the competition a little bit slower in 2023 in restructuring. But as we approached the end of the year activity for us picked up significantly. And that's what we're seeing coming into 2024. The team is very active. We're really pleased with the new additions, which I think gives us a lot more firepower in the sector. We're also seeing the kind of flywheel effect from the various different things that we're doing. So we – just to step back for a second, we have been diversifying the team. Historically, as you know, we were very debtor-focused. We now have a team that can very ably cover both creditors and debtors. We also have been building out our connectivity with private capital. That is important because a lot more of the restructuring and liability management activity involves private capital and private equity. And there's definitely a feedback loop from our new Lazard Capital Solutions team to restructuring and liability management also frankly, our PCA fundraising business. We've got lots of different touch points now, with private capital and we're seeing that play through also. So it looks like for now we're seeing an uptick in overall activity. I think that may well be partly because we've reconfigured our team to be able to cover to be where activity is in a very constructive way. The new additions are welcome. And with regard to whether a rate decline will change any of that in 2024, maybe at the margin but two things. One is I think the market may well still be overly optimistic about when the Fed is going to start cutting rates and we can perhaps go into that if you'd like. But secondly, the rate reductions are going to be gradual. And so I think for a lot of 2024, the type of environment that we're seeing, especially combined with the wall of maturities that are approaching is going to lead to a lot of restructuring activity.

That's really helpful, Peter. And just for my follow-up just a clarifying question around the revenue trajectory. Some of your peers have indicated they expect a slow build in fees in 2024, just given the elongated deal and conversion timelines. I wanted to get a sense given your strong backlog momentum, the tailwinds you cited in your prepared remarks entering 2024, how we should think about the revenue trajectory over the coming year? And is the expectation it's going to be a little bit more back half loaded just given some of those elongated timelines?

Well, I've spoken also before about those timelines. It does take time from conversation to announcement to completion. Each of those have variables and sometimes long lags between them. But we're moving through that process. So again, I think we're – the market has definitely turned. With regard to the kind of within the year, typically for example the first quarter is not the strongest quarter of the year and often the fourth quarter is the strongest quarter of the year. So if you just looked at history, I think that would be a reasonable pattern to project. And I guess there's nothing we're seeing that suggests that that typical historical pattern is not what to expect also in 2024.

Helpful color, Peter. Thanks for taking my questions.

Our next question comes from Brennan Hawken with UBS.

Good morning, Peter. Thank you for taking my questions. I'd like to focus on how to think about MD growth. You've shared some updates on hiring and promotions, and we've noticed that the MD headcount has decreased from the first quarter levels. I understand that the 10% figure doesn't pertain to MDs, and Mary Ann mentioned that there's still some adjustments to be made regarding headcount. How should we interpret that adjustment for the MD headcount? Additionally, what are the investing plans moving forward and the expected pace of net additions?

Sure. I think you should start with a projection of around 200 managing directors in Financial Advisory as we work through the year-end process, accounting for some departures from Lazard. Regarding our annual plan, we anticipate adding about 10 net managing directors per year, though there may be some fluctuations. This is particularly dependent on lateral hires, as finding the right fit is crucial for us. While the numbers may occasionally exceed or fall short of that target, I don't expect significant variations on a yearly basis.

Okay. Great. Great. Yes of course. But it will be around that...

Yes, around.

I would like to get a general understanding. I'm particularly interested in the expenses, especially considering your efficiency efforts and various factors this year. How should we view the fixed expense base moving forward, and what kind of difference should we expect compared to 2023? Most importantly, how much have these changes improved your level of operating leverage in what appears to be an improving environment?

Yes, I'll start and then Mary Ann can add. Let's break down the fixed costs into two parts. For the non-comp category, it should remain roughly flat in dollar terms, returning to some of our earlier comments. This includes factors that will respond to a stronger market, such as travel and entertainment, along with areas where we anticipate reductions in 2024, like professional services. Regarding the comp line, we expect fixed costs to decrease as headcount reductions take effect. Additionally, the bonuses will depend on the company's performance over the year. Mary Ann will provide more details shortly. The key takeaway is that our efforts are aimed at making Lazard more efficient and enhancing productivity, which is essential for achieving operating leverage, and we are pleased with the progress we're making. Mary Ann?

Yes. I'll just add a couple of things to that. Focusing on the fixed portion of compensation costs, there are a few different components. We expect salaries to decrease as the effects of the headcount reductions take place. Our benefits are higher than most companies due to our presence in Europe, leading to elevated benefits and social charges. These tend to fluctuate with cash bonuses, which can be unpredictable, but generally increase over time. Additionally, we have amortization of prior year awards, and as high awards have increased in the past, we see their effects in future years. This year particularly, we have several productive employees who are becoming eligible for retirement, meaning we recognize their entire award in the year it's granted since they own it fully and do not need to stay through the service period.

Got it. And just to clarify that comment on the retirement eligible, those are the new individuals who are retirement eligible this year, so it's a change compared to what the impact was before.

That's right. That's right.

Okay. Great. Thanks for that color. Really appreciate it.

Our next question comes from Jim Mitchell with Seaport Global. Please go ahead.

Good morning. Peter, you mentioned that Europe performed particularly well this year. Can you share your outlook on Europe? How much of that performance was due to your efforts in productivity and collaboration compared to the overall environment? Also, how are you approaching this for 2024?

We have new co-heads for Europe on the Advisory side, which is fantastic. Historically, one of the questions about Lazard has been the extent of Europe's integration. The co-heads are off to a great start, and we anticipate more developments from that structure as we progress. Regarding the market, there is still significant activity in M&A and restructuring in Europe. Part of the reason for this could be that the macroeconomic environment is more challenging in Europe than in the US, particularly in Germany, but also across the continent and to some extent in the UK. As companies face a tougher domestic market, they are seeking growth through inorganic options, including exploring other geographies, which aligns with our strengths. Notably, among independent firms, we are the only one with a strong presence in both North America and Europe. Therefore, when European firms are looking for North American targets, Lazard is a natural fit.

Right. Makes sense. And then just maybe on the margin targets. You talked about getting productivity per MD up to $8.5 million by 2025. Is that kind of the bogey you need to get to the 20% margin and comp ratio targets? Or just trying to triangulate what normalized you would mean for those targets?

I think there are lots of ways of hitting the normalized targets, but the plan all fits together. And so we are aiming to accomplish all of the things that we've set out productivity targets, obviously, make it easier to hit the margin targets. But I wouldn't say it's not a necessary condition. It may be partially sufficient, but it's not necessary. But we're planning on doing all of the above. So hitting the expansion in the number of MDs, the increase in productivity which then helps the finance increase in the number of MDs and be very attentive to our comp and non-comp expense ratios as the market normalizes.

Our next question comes from James Yaro with Goldman Sachs. Please go ahead.

Good morning, and thanks for taking my questions. I just wanted to touch on the Asset Management business and get your expectations for flows in the fee rate in that business over 2024 and maybe into 2025.

I'll let Evan take that.

Sure. Hi, James, this is Evan. So look I think flows as we talked about in the previous quarters we expected that flows will becoming more balanced overall for us net flows in 2023 were significantly better than in previous years, despite some of the headwinds that we've all seen in the market. We expect it to be choppy continue to be choppy month-to-month quarter-to-quarter as you know based on our business and certainly the first half of this year. A lot of that is driven by the fact that you still have a lot of money sitting on the sidelines moved into money market short-duration type instruments based on higher yields that people are getting. So there's a lot of money sitting on the sidelines that's drawing capital away from risk assets and putting new money to work. So there's a little bit less conviction that we saw. And I think that the market saw generally in Q4 and into the beginning of this year by putting new money to work. So that starts to come off the sidelines, which we expect to happen over the coming quarters ahead, we expect that to be a positive movement for us. We're seeing significantly, as Peter called out in the script, we're seeing growing interest in many of our global strategies, the quantitative platform and selectively in fixed income. I'd probably say, it's a little bit earlier for us in the emerging markets. As part of the cycle, I think investors are still as we said sitting a little bit on the sidelines waiting for that opportune moment, waiting for the right timing to go back and reallocate into EM. As you know the last probably five or 10 years, people started taking allocations down. So we see that as a potential growth option and we're definitely having more conversations with clients and allocators about the right timing of that transition back into that space. And that would obviously be a positive for us as well, but I would expect that to be playing out right over the next 12 to 18 months. But overall, I think that's the strategy that we would see continuing to work in. I think from a performance perspective, we've had a significant performance across the portfolios with significant strength in many of those areas that I called out global EM, the quantitative platform. And so as markets broaden out from what we saw in the past years, we all know the return performance beyond just seven stocks I think this moved more towards fundamentally driven markets and certainly will play to our strength and we're already seeing that in the performance that we've had in the emerging markets in many of our international strategies.

Okay. Thanks That was very helpful. Just one other one which is on your buyback. I think the size of buyback was a positive surprise in the quarter in my opinion. Maybe you could just speak to your updated thoughts on capital return priorities from here?

I will begin, and then Mary Ann can join in. Moving forward, as I have mentioned previously, we have two highly cash-generative businesses as markets stabilize. As time progresses, we will place greater emphasis on utilizing that cash flow for the inorganic opportunities we identify in asset management, in addition to the dividend. For instance, we have appointed a new Head of Corporate Development who will be starting in the next two to three weeks, enhancing our capabilities to explore the inorganic opportunities arising from our shift and diversification in the Asset Management sector. We plan to approach this with a disciplined strategy, considering how we allocate cash and capital against other possible uses, including buybacks and reducing debt. Thank you.

So a couple of points. James, just to clarify my comments on buybacks were for the full year and we did buybacks in the first quarter primarily, but not this quarter. So just to make sure that's clear. And then on the pace of buybacks going forward, as Peter just said, that's one of the uses of our excess cash and we certainly plan to offset dilution from stock comp over time. I would just sort of note that the pace may be a bit uneven based on other opportunities that we have. So it's not great for modeling, but I would expect to offset, but not necessarily immediately or as quickly as we have in the past.

Okay. That’s very clear. Thank you very much.

Thank you. Our last question will come from Mike Brown with KBW. Please go ahead.

Hi. Great. Good morning.

Good morning.

Peter, you mentioned part of the plan for the Asset Management business is to pivot and diversify into private markets. And understanding that this is going to be a multiyear process. But just wanted to hear a little bit more about that, what could acquisitions look like there? It sounds like it's early days. You mentioned that you just hired someone in the kind of CorpDev side of the business. But how do you think about bringing on the right assets to scale on the Lazard platform while also paying the right price or it can be accretive just given the valuations in the space are certainly high in the private market side?

We are approaching this with both urgency and discipline, focusing on finding the right fit instead of making acquisitions just for the sake of it. It's crucial to us not only to consider the price but also the cultural alignment, which plays a big role in ensuring the success of our inorganic strategy and programmatic M&A over time. Our primary focus is on private asset managers who have a solid track record but are still early in their asset under management (AUM) growth. These firms could greatly benefit from our well-respected brand and global distribution network, while we gain from their diverse offerings and performance. We see many opportunities to acquire firms that are in this specific size and stage, as they may not be significant enough for larger alternative asset managers but are too big to merge with much smaller firms. There exists a sweet spot for us, and while we will act with urgency, we will also take careful steps to ensure we find the right match. We are well aware of the risks involved with deals that may not work out or integration challenges. You can expect us to be programmatic in our approach; we will take our time to find the right match, but when we do, we will act decisively.

Okay. Great. Thank you for that. And just maybe one kind of follow-up on the Advisory side of the business. You had mentioned in your prepared remarks that the private equity side is getting more active. What is that starting to look like at this stage? Is it still more about kind of the dialogues? Or are you starting to see things kind of falling into place? And if you think about historically, what would be the final hurdles here that would need to get that cohort to become more active?

Let me mention a few points. First, apart from mergers and acquisitions, we have significant engagement with private capital and alternative asset managers through our Lazard Capital Solutions practice, particularly in private credit and various fundraising efforts related to our restructuring and liability management activities. Our funding business saw considerable activity last year, especially in secondary transactions, and that trend is continuing this year. Addressing your main question, we are observing a shift after a phase where private equity was somewhat inactive, especially on the sell side. Their fundamental transactional business model is starting to reemerge. It was simply a matter of time, and we're noticing this in our conversations. Leaders from major alternative asset managers indicate that they are re-entering the market. While the level of activity hasn't reached the highs of 2021, we've noticed that our discussions with strategic investors began to intensify earlier than those with private equity. However, that is now balancing out, and we are seeing an increase in conversations with private equity regarding M&A, alongside our usual interactions with them.

Okay. Great. Thank you for taking my questions.

Thank you. I will now turn the call back to Peter Orszag for any closing remarks.

Look, thank you for joining. I would just say one thing in closing, which is, it's been about four months since taking over the role of CEO, and I've been very actively meeting with our clients and our own employees and colleagues and shareholders. And the results of all of that is that my conviction about the path that we're on has only increased. It is remarkable to interact with clients who are on an unsolicited basis very complementary of the work that we do. And most importantly, this organization is united in its ambition to aim higher and achieve our Lazard 2030 goals. So, more to come, and thank you for joining us.

This does conclude today's Lazard fourth quarter and full year 2023 earnings conference call. You may disconnect your line at this time, and have a wonderful day.